Johnson v Johnson

[2024] NZHC 2001

IN THE HIGH COURT OF NEW ZEALAND PALMERSTON NORTH REGISTRY

I TE KŌTI MATUA O AOTEAROA TE PAPAIOEA ROHE

CIV-2023-454-072

[2024] NZHC 2001

BETWEEN

HENRY JOHNSON

Appellant

AND

DONNICE DENISE JOHNSON

Respondent

Hearing:

On the papers

Counsel

G A Paine for Appellant

C S W Leathart for Respondent

Judgment:

19 July 2024

JUDGMENT OF CHURCHMAN J (COSTS)

[1]                 The appellant appealed a decision of the Family Court under s 24(2) of the Property (Relationships) Act 1976 granting an extension of time for the respondent to file relationship property proceedings despite a delay of 18 years.1

[2]                 After a hearing on 27 June 2024, I dismissed the appeal. I invited the parties to agree costs. They have not been able to do so but they have both filed submissions.

Respondent’s position

[3]                 The respondent calculated scale costs on a 2B basis as being $10,158 and offered to settle costs with the appellant for payment in that sum. That offer was not accepted.

1      Johnson v Johnson [2023] NZFC 7452.

JOHNSON v JOHNSON [2024] NZHC 2001 [19 July 2024]

[4]The respondent’s actual costs and disbursements were $13,820.71.

[5]                 The respondent seeks either an award of that sum or an increase on scale costs. The amount of the increase sought is unspecified.

[6]                 The appellant does not challenge the respondent’s calculation of costs on a 2B basis but says that he should not have to pay any costs because the respondent was granted an indulgence in seeking leave in the Family Court to bring proceedings out of time. He submits that costs should be reserved pending the outcome of the substantive proceedings or alternatively that a direction should be made that costs lie where they fall.

Analysis

[7]                 The appellant’s submission has conflated the proceedings in the Family Court with the appeal to this Court. In determining costs in this Court, the Court is not concerned with the nature or merit of the respondent’s application in the Family Court. Costs are to be assessed only in relation to the appeal itself. The fact that the respondent was granted an indulgence in the Family Court does not automatically mean that the appeal had merit or even that it should be treated in the same way as costs in the substantive proceedings in the Family Court.

[8]                 Costs are at the discretion of the Court.2 The exercise of the Court’s discretion is normally guided by the following general principles:3

(a)the party who fails with respect to an appeal should pay costs to the party that succeeds;

(b)an award of costs should reflect the complexity and significance of the appeal;

2      High Court Rules 2016, r 14.1(1).

3      Rule 14.2(1).

(c)costs should be assessed by applying the appropriate daily recovery rate to the time considered reasonable for each step reasonably required in relation to the appeal;

(d)an appropriate daily recovery rate should normally be two thirds of the daily rate considered reasonable in relation to the appeal;

(e)what is an appropriate daily recovery rate and what is a reasonable time should not depend on the skill or experience of the actual lawyer involved, or on the time actually spent by the lawyer involved or on the costs actually incurred by the party claiming costs;

(f)an award of costs should not exceed the costs incurred by the party claiming costs; and

(g)so far as possible the determination of costs should be predictable and expeditious.

[9]                 Indemnity or increased costs may be awarded in various circumstances including where the party opposing costs has contributed unnecessarily to the time or expense of an appeal by:4

(a)failing to comply with the rules or direction of the court, or

(b)taking or pursuing an unnecessary step or argument that lacks merit, or

(c)failing, without reasonable justification to accept legal argument, or

(d)failing, without reasonable justification, to accept an offer to settle or dispose of the appeal.

[10]             The respondent says that the appellant acted vexatiously, frivolously, improperly and unnecessarily in pursuing the appeal5 and that the appellant

4      Rule 14.6(3)(b).

5      See Rule 14.6(4)(a).

disregarded known facts and clearly established law and unduly prolonged the proceedings by groundless contention. In short, the respondent contends that the appeal was hopeless.

[11]             Counsel also places some weight on the fact that the reserved decision was able to be issued promptly after the conclusion of the hearing. That fact reflects that this was a straightforward appeal with both counsel having filed written submissions in advance and making short oral submissions on the day of hearing. There is no necessary connection between the prompt availability of the judgment and the merits of the appeal.

[12]             The overall merits of the appeal were weak but, by a small margin, could not be described as having been hopeless.

[13]             The appeal is appropriately categorised as 2B for costs purposes. Although the offer of the respondent to settle costs on a 2B basis was not formally described as a Calderbank offer, it was of that nature. It should have been accepted by the appellant. However, the failure to accept it did not cause the respondent any further or additional expenditure other than the cost of counsel preparing and filing a brief costs memorandum.

[14]             I am not persuaded that any aspect of this case justifies either indemnity or increased costs. However, it is appropriate that, having brought the appeal and lost, the appellant pay costs to the respondent on a 2B basis in the sum of $10,158. I so direct.

Churchman J

Solicitors:

Brittens Solicitors, Palmerston North for Appellant J B Morrison Solicitors, Wellington for Respondent