Heremia-Graham v Williams HC Auckland CIV 2004-404-5304
[2005] NZHC 1280
•17 February 2005
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
CIV 2004-404-5304
UNDER
BETWEEN
the District Courts Act 1947
ROSINA RANGIHINGA HEREMIA-
GRAHAM AND TAKUTAIMOANA PAUL HEREMIA
Appellant AND
DEBORAH LENA WILLIAMS
Respondent
Hearing:
2 February 2005
Appearances: Barry D Hayes for appellant
Alistaire Hall for respondent Judgment: 17 February 2005
JUDGMENT OF WILLIAMS J
[appeal against costs]
In accordance with r 540(4) I direct that the Registrar endorse this judgment with the delivery time of .. 10am .. on .. Thursday .. the .. 17th .. day of .. February .. 2005.
Solicitors:
Murdoch Hall & Co, (B D Preston-Thomas) P O Box 23620 Papatoetoe, Auckland
Copy for:
Barry D Hayes, P O Box 79-374 Royal Heights, Massey, Auckland Alistaire Hall, P O Box 76-154 Manukau City.
Judge Christopher Field, District Court, Auckland
ROSINA RANGIHINGA HEREMIA-GRAHAM AND TAKUTAIMOANA PAUL HEREMIA V DEBORAH LENA WILLIAMS HC AK CIV 2004-404-5304 [17 February 2005]
Issue
[1] In a reserved decision delivered on 1 September 2004, Field DCJ dismissed one of the two claims brought by the respondent in this Court, Ms Williams, against the appellant, Ms Heremia-Graham, and dismissed the counterclaim by the latter against Ms Williams. However, he gave judgment for Ms Williams on a second causes of action against both Ms Heremia-Graham and Mr Heremia together with interest and costs.
[2] Though phrased as a general appeal, in effect this appeal was solely against the costs order.
Background
[3] In view of the limited nature of the appeal, only brief reference to the facts is necessary sufficient to aid in the comprehensibility of this judgment.
[4] The parties to this appeal were formerly friends. Ms Williams runs a child- minding centre for primary school children. She leased the property at 159 Tui Road, Papatoetoe, for her business from the Tamaki Play Centre Association, of which Ms Heremia-Graham was then secretary. Between July 2001-March 2002 she lent Ms Heremia-Graham three sums totalling $35,000 to assist Ms Heremia-Graham and her husband, Mr Heremia, buy their home. She said that when the appellants were unable to meet her requests for repayment of the funds, the parties entered into an agreement for sale and purchase whereby Ms Heremia-Graham and Mr Heremia agreed to sell their home to Ms Williams for the same sum as they had paid, the contract being subject to Ms Williams raising sufficient mortgage finance to enable her to purchase the property and with the contract also saying under “other terms of sale” : “unless $35,000 is paid within time-frame allowed and agreed on Sunday, 11th May”. Ms Williams lodged a caveat against the title through her solicitor to protect her interest.
[5] Neither the payment nor transfer eventuated and as a result Ms Williams, by then acting for herself, issued proceedings containing causes of action for repayment of the $35,000 plus interest and costs and for specific performance of the agreement for sale and purchase. As far as the latter is concerned, it is noteworthy that the claim asserted that Ms Heremia-Graham and Mr Heremia used the $35,000 to purchase the property in their joint names and the appellants acknowledged in their statement of defence and counterclaim that the “purpose of the loan was for the defendants to purchase the property”. The present appellants denied the claim for specific performance, asserted the agreement for sale and purchase was for security purposes only in relation to Family Court proceedings in which Ms Williams was involved, raised a number of other objections to the claim for specific performance including deficiencies in the contract and counterclaimed for unpaid secretarial and business services said to have been carried out by Ms Heremia-Graham for Ms Williams between 1999-2002 and valued at $25,325. They also sought damages of
$40,000 under the Land Transfer Act 1952 s 146 for wrongful lodgement of the caveat.
[6] They invoked the summary judgment procedure but that application was dismissed and the whole matter was heard on a substantive basis on 19 and 20 August 2004.
Judgment under appeal
[7] In his judgment Field DCJ briefly recounted details of the claims and counterclaim, said it was necessary to ascertain the true relationship between the parties and in particular their intention to create legal relations with each other and proceeded to review the facts. In that regard the learned Judge noted (para [6] p 2) that “the fact that $35,000 is owed to the plaintiff by the first defendant is not in dispute”.
[8] Turning to the factual background to the agreement for sale and purchase, the Judge first found (para [10] p 3) that Ms Williams had done nothing towards applying for or arranging the necessary finance and was therefore unable to prove that she was ready willing and able to settle. He accepted that any transfer of the
property was intended to be temporary because (para [11] p 3) “neither party fully understood the implications of the agreement for sale and purchase which was prepared by the parties in person” including their having used a form drawn up for an earlier and different purpose to the extent that the area of land was incorrect, the legal description was wrong and there were other deficiencies. That led the Judge to the view that no order for specific performance should be granted.
[9] He also found there was no satisfactory evidential support for the counterclaim for $25,325 because although work had been performed it was never charged for. He regarded the submission of an account as an exhibit as self-serving and unsupported by evidence and concluded (para [14] p 4) that the arrangement was not intended to create legal obligations on Ms Williams’ part and could not have been expected so to do by Ms Heremia-Graham.
[10] The Judge then rejected the damages claim in relation to the caveat, finding it had been lodged to protect what Ms Williams saw as her interest in the property at the time.
[11]The Judge’s conclusions were (paras [16]-[20] pp 4-5) :
[16] The result therefore is that the parties must be returned to the approximate position they were in at the time $35,000 was advanced to the first defendant.
[17]There will be judgment accordingly for the plaintiff in the sum of
$35,000. Interest and costs will also be awarded but on scale only.
[18]The application for specific performance is refused.
[19] Similarly, the counterclaim in respect of work carried out and damages for the lodging of the caveat are likewise dismissed.
[20] There will be no order for costs in respect of the unsuccessful counterclaim.
[12] Mr Hayes, counsel for the appellants in this and the District Court, sought re- call of the judgment on the basis that he made no submissions at the hearing in relation to quantum, interest and costs. On appeal, Mr Hayes accepted he had the opportunity at the conclusion of the District Court hearing to make those submissions to cover the possibility of the Judge finding against his clients but
omitted so to do. Mr Hall, for Ms Williams in both Courts opposed re-call on the basis that the circumstances did not come within well-known authorities on re-call, such as Horowhenua County v Nash (No.2) [1968] NZLR 632, 633; Brake v Boote (1991) 4 PRNZ 86; Ashe v Tauranga Marina (1991) 4 PRNZ 89 and Goh v BNZ
(1991) 4 PRNZ 92.
[13] On 15 September Field DCJ delivered a memorandum declining a re-call for the reasons advanced by Mr Hall.
Evidence on appeal
[14] Prior to the hearing of the appeal the appellants had filed an affidavit by Ms Heremia-Graham setting out the costs charged to her husband and herself by Mr Hayes in the District Court. There was no application for leave to adduce additional evidence on appeal and Mr Hall objected to the Court receiving the affidavit. Since it was, at best, only marginally relevant to the issue raised by the appeal, the affidavit was not received and the oral application for leave to adduce further evidence on appeal dismissed.
Submissions
[15] Mr Hayes acknowledged the appellants faced the difficulty that the costs award against them was within the Judge’s discretion and accordingly, on appeal, the appellants were required to show the Judge acted on a wrong principle, failed to take relevant matters into account, took account of irrelevant matters or was plainly wrong (May v May (1982) 1 NZFLR 165, 170; Alex Harvey Industries Ltd v Commissioner of Inland Revenue (2001) 15 PRNZ 361, 364 paras [12]-[15)).
[16] Mr Hayes submitted the judgment on costs was plainly wrong or failed to take relevant matters into account because the $35,000 claimed had throughout been admitted by the present appellants and accordingly should not have resulted in an award of costs, particularly when the substantive hearing had been almost entirely focused on the specific performance claim and counterclaims including the caveat. He said the specific performance claim occupied about two-thirds of the hearing time
in the District Court with the counterclaim occupying the balance of the time and that, had the present appellants been successful in the District Court, above scale costs would have been awarded. Mr Hayes submitted that until recent reformulation of the scale of costs in the District Courts Rules, awards of above scale costs were common. However, there was no evidence of that and Mr Hall’s view was that Mr Hayes’ submission was erroneous on that point. He submitted the result in the District Court resulting in the costs award which was not fair between the parties (Cates v Glass [1920] NZLR 37) and that this was a case where the parties were equally to blame for the litigation and accordingly no award should be made either way (Medway Oil and Storage Co Ltd v Continental Contractors Ltd [1929] AC 88).
[17] Mr Hayes additionally submitted that Ms Williams had persisted with a claim which lacked merit, the present appellants had responsibly withdrawn unmeritorious defences and he had written a Calderbank letter to Mr Hall on 16 March 2004 but Ms Williams had nonetheless continued with the specific performance claim.
[18] In Mr Hall’s submission he noted he had made full submissions on costs at the conclusion of the District Court hearing. He rebuffed Mr Hayes’ submission that the parties were equally to blame, noting no appeal had been lodged against the judgment. He submitted the manner in which the Judge dealt with questions of costs were well within his discretion and the judgment should be upheld.
Discussion
[19] This appeal does not warrant substantial discussion. The earlier summary showed that in the District Court both sides had persisted with claims which the Judge plainly regarded as unmeritorious and rejected in short order. For the reasons he detailed, the claim for specific performance always faced considerable hurdles, as did the claim for work done and the assertion the caveat was lodged without justification.
[20] However, even though the $35,000 sum for which judgment was entered was a matter of admission and was never in contention, the Judge clearly took the view
that an award of costs on that sum was appropriate given the case had occupied 2 days of hearing time and had been vigorously propounded and defended.
[21] It was open to the Judge to award Ms Williams costs for her successful defence of the counterclaim for work and services and the caveat application and to award Ms Heremia-Graham and Mr Heremia costs on their successful defence of Ms Willams’ specific performance claim plus award Ms Williams costs as on an admission on the $35,000 claim. But the way in which the Judge approached the matter was clearly within his discretion. He plainly took the view the orders he made would do substantial justice between the parties. Having regard to his overall approach, it could not be said he acted on a wrong principle, took irrelevant matters into account or overlooked relevant matters or was plainly wrong.
[22] In those circumstances, the only result open is to dismiss the appeal and it is dismissed accordingly.
[23] Mr Hall sought costs in the event the appeal was dismissed. Though it may, unfortunately, further exacerbate difficulties between these parties, there is no basis on which Ms Williams should be further penalised by the present appellants pursuing an appeal where the result which has eventuated should always have been seen as more likely than not.
[24] The respondent is entitled to costs fixed on a 2B basis with any disbursements to be fixed by the Registrar.
………………………………..
WILLIAMS J
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