Houston-Quay v Henson
[2014] NZHC 2899
•20 November 2014
IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY
CIV-2014-419-93 [2014] NZHC 2899
UNDER the District Courts Act 1947 IN THE MATTER
of an appeal against the decision of the
District Court at HamiltonBETWEEN
AMANDA JANE HOUSTON-QUAY Appellant
AND
JULIAN DOYLE HENSON (AKA IAN HENSON)
Respondent
Hearing: 22 July 2014 Counsel:
KF Shaw and JK Gilby-Todd for Appellant
DG Hayes for RespondentJudgment:
20 November 2014
JUDGMENT OF BREWER J
This judgment was delivered by me on 20 November 2014 at 4:00 pm pursuant to Rule 11.5 High Court Rules.
Registrar/Deputy Registrar
Solicitors: Harkness Henry (Hamilton) for Appellant
Hunwick Law Ltd (Hamilton) for Respondent
Counsel: David Hayes
HOUSTON-QUAY v HENSON [2014] NZHC 2899 [20 November 2014]
Introduction
[1] Ms Houston-Quay and Mr Henson lived together for a time. When the relationship ended, Ms Houston-Quay moved out and took items with her.
[2] Ms Houston-Quay sued Mr Henson for $20,000 which she said she had lent to Mr Henson. Mr Henson replied that the loan was not outstanding. Further, he counterclaimed for about $26,000 which he said was owed to him by Ms Houston- Quay.
[3] Mr Henson added to his counterclaim sums which he said should be paid to him for the items allegedly taken by Ms Houston-Quay when she moved out of their home. He grouped these items in schedules 2, 3 and 4 of his counterclaim.
[4] In an oral judgment given on 11 February 2014 in the District Court at
Hamilton,1 Judge RLB Spear decided these matters as follows:
(a) Ms Houston-Quay succeeded in her claim for $20,000. However, the
Judge declined to award her costs.
(b) Mr Henson failed in his counterclaim for the approximately $26,000. (c) Mr Henson failed in his counterclaim for the items set out in schedule
2, except that the Judge directed Ms Houston-Quay to return half of one category of the items (described as “sex toys” and valued by Mr Henson at $900 in total).
(d)Mr Henson enjoyed partial success in respect of the claim for items listed in schedule 3 of his counterclaim. The Judge awarded Mr Henson one half of his claim and directed that judgment be entered in the sum of $1,150.
(e) In respect of the items listed in schedule 4 of the counterclaim, the
Judge considered them to be items of a “relatively everyday nature”
and directed Ms Houston-Quay to return to Mr Henson any of them which she retained and to reimburse Mr Henson for any of the items she might no longer have.2
[5] This judgment determines Ms Houston-Quay’s appeal against these
decisions.
Issues
[6] The issues are:
(a) Should the Judge have awarded Ms Houston-Quay costs on her judgment for $20,000?
(b) Should the Judge have directed the return of half of the sex toys?
(c) Should the Judge have awarded Mr Henson $1,150 in respect of the items listed in schedule 3 of his counterclaim?
(d)Should the Judge have directed Ms Houston-Quay to return the items listed in schedule 4 of the counterclaim or to reimburse Mr Henson for any deficiencies?
Should the Judge have awarded Ms Houston-Quay costs on her judgment for
$20,000?
[7] The basic rule is that the setting of costs is a matter of discretion for the Court.3 However, a fundamental principle applying to the determination of costs is that they follow the event.4 For the District Court, this principle was set out in r 4.2(a):
The party who fails with respect to a proceeding or an interlocutory application should pay costs to the party who succeeds.
2 At [32].
3 District Courts Rules 2009, r 4.1 (which applied at the date of judgment).
4 Manukau Golf Inc v Shoye Venture Ltd [2012] NZSC 109, [2013] 1 NZLR 305 at [8].
[8] The Judge dealt with costs in this way:5
As to costs, while Mrs Houston-Quay has largely succeeded, there has also been some slight success for Mr Henson. In the end, this is a domestic relationship that fell into difficulties and poor decisions were made by both parties. I consider the only fair outcome here is for each of the parties to bear their own costs.
[9] Mr Hayes, counsel for Mr Henson, submits that, looking at the case overall, the Judge was entitled to exercise his discretion to direct that costs lie where they fall.
[10] Mr Hayes refers in this context to [33] of the judgment:
So that is the outcome of this case which indeed should never have reached a court of law. Unfortunately, while reasonable people reach reasonable agreements, the converse is also the case. This case has already been to the High Court on one occasion and the legal costs involved, given the amount in dispute, has simply not justified that attention. It can only be hoped that the parties will now accept the judgment and move on with their respective lives.
[11] Mr Hayes submits that [33] can be interpreted to mean that the Judge considered his jurisdiction under r 4.7 should be invoked. I quote the passages of the rule to which Mr Hayes refers:
4.7 Refusal of, or reduction in, costs
Despite rules 4.2 to 4.5, the court may refuse to make an order for costs or may reduce the costs otherwise payable under those rules if—
…
(b) the property or interests at stake in the proceeding were of exceptionally low value; or
(c) the issues at stake were of little significance; or
…
(f) some other reason exists that justifies the court refusing costs or reducing costs despite the principle that the determination of costs should be predictable and expeditious.
[12] The Judge exercised a discretion when he refused to award costs. Accordingly, I approach the appeal by inquiring whether the Judge made an error of
law or principle; took account of irrelevant considerations; failed to take account of a relevant consideration; or the decision was plainly wrong.6
[13] In my view, the Judge should have looked at the parties’ positions separately:
(a) In this case, Ms Houston-Quay sued for $20,000, being a loan which was made but not repaid. She succeeded in her claim. That is not a claim to which it should be relevant that there was a domestic relationship which fell into difficulties.
(b)Mr Henson failed in his counterclaim for $26,000. The Judge is very critical of the evidence called by Mr Henson to justify the counterclaim:7
What I am also clear about is that these invoices emerged late in the piece as part of his response to the claim by his former lover for repayment of the $20,000 loan. I do not go so far as to say that I find conclusively that they are forgeries; and I do not need to do so. It can simply be put that Mr Henson has not satisfied me or proven to the required standard, that the invoices can be considered as creating a debt owing by Ms Houston-Quay to him.
Behaviour of this sort on the part of Mr Henson is not the sort of behaviour which would justify an order that costs should lie where they fall.
[14] The Judge’s reference to the case having already been to the High Court on one occasion with the amount in dispute simply not justifying that attention cannot be used to deny Ms Houston-Quay costs. The information put before me is that Ms Houston-Quay succeeded in the High Court and was awarded costs.
[15] The Judge correctly noted that Mr Henson had some slight success. It was very slight. It should not have resulted in Mr Henson being excused from paying costs to Ms Houston-Quay, particularly given his failure on his counterclaim of
$26,000.
[16] It is well established that when it comes to costs, the Court’s discretion must be exercised according to the principles set out in the applicable rules.8 As said by Chambers J in Manukau Golf, the discretion has never been unfettered and must be exercised judicially.9 Fairness is not assessed according to private opinion. It must be assessed by reference to the governing principles. The Judge did not do this.
[17] Having presided over the appeal, and as will become apparent later in this Judgment, I have sympathy for the exasperation the Judge felt over the conduct of the parties. However, where there is a successful claim in contract, and a failure to succeed in a counterclaim also brought in contract, the background of domestic discord should have been given little weight. I cannot see the r 4.7 factors referred to by Mr Hayes as being applicable.
[18] I find, on this matter, in favour of Ms Houston-Quay.
Should the Judge have directed the return of half of the sex toys?
[19] Ms Shaw for Ms Houston-Quay bases the appeal on this issue on her client’s evidence that she did not have possession of the sex toys. Ms Shaw submits that Mr Henson did not discharge the onus of proving that the appellant ever had possession of the sex toys.
[20] I will not dignify this ground of appeal by applying to it further judicial scrutiny. The attributed value of the items Ms Houston-Quay says it is not proved she possesses, is perhaps $450. She is not ordered to pay this sum. She is directed to return the items. The rule de minimus non curat lex applies. The law takes no account of trifling matters.
Should the Judge have awarded Mr Henson $1,150 in respect of the items listed in schedule 3 of his counterclaim?
[21] Ms Shaw’s submissions are to the effect that the Judge took an overly broad- brush approach. He should, first, have deducted $84 because of Mr Henson’s concession that the first item listed, Eternity perfume, was a gift. Second, the Judge
should have preferred the evidence of Ms Houston-Quay that she never allowed
Mr Henson to pay for the items listed on the basis that she would reimburse him.
[22] I agree that the Judge took a broad-brush approach. In effect, he found there was a reasonable expectation by Mr Henson that he would be reimbursed for some of his expenditures. However, the Judge was not prepared to undertake an item-by- item analysis. The Judge’s view was that dividing the sum claimed would be fair in the circumstances.
[23] I am not prepared to undertake the analysis the Judge declined to do. He heard the evidence and accepted in part Mr Henson’s evidence. I am satisfied there is no injustice in his approach. I find against Ms Houston-Quay on this aspect of the appeal.
Should the Judge have directed Ms Houston-Quay to return the items listed in schedule 4 of the counterclaim or to reimburse Mr Henson for any deficiencies?
[24] Ms Shaw’s submission is that the Judge lacked the evidence to conclude that Ms Houston-Quay had taken these items. Ms Shaw points out that Ms Houston- Quay’s evidence was taken as read and the evidence included her comments on each of the items claimed. Ms Houston-Quay was cross-examined about only one of the items in schedule 4, namely three aluminium freight chests which Mr Henson had valued at $1,500. Her evidence was to the effect that these were gifts from Mr Henson who had said he did not want them.
[25] I accept Ms Shaw’s submission. The Judge had no evidential basis to find
against Ms Houston-Quay on the items listed in schedule 4.
Decisions
[26] Ms Houston-Quay is entitled to costs on her claim for $20,000. Her appeal on this point is allowed. The case is remitted to the District Court so that the costs can be fixed.
[27] The appeal against the direction to return half the sex toys fails.
[28] The appeal against the award to Mr Henson of $1,150 in respect of the items in schedule 3 fails.
[29] The appeal against the direction to return the items listed in schedule 4 or to reimburse Mr Henson for deficiencies is allowed. The direction is quashed.
Costs
[30] I award Ms Houston-Quay costs on a 2B basis in relation to her successful appeal against the refusal to allow costs. Due to the trivial nature of the other matters, and the mixed success of the appeals thereon, I decline to award costs on those matters. The Registrar will calculate costs as awarded if the parties cannot
agree them.
Brewer J