Johnson v Johnson HC Auckland CIV 2011-404-001767

[2011] NZHC 1919

NOTE: PURSUANT TO S 35A OF THE PROPERTY (RELATIONSHIPS) ACT 1976, ANY REPORT OF THIS PROCEEDING MUST COMPLY WITH SS 11B TO 11D OF THE FAMILY COURTS ACT 1980.  FOR FURTHER INFORMATION PLEASE SEE THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV 2011-404-001767

UNDER  the Property (Relationships) Act 1976

BETWEEN  LINDA CLARE JOHNSON Appellant

ANDCLIVE ASHLEY JOHNSON Respondent

Hearing:         (On the papers)

Counsel:         S Abdale for the Appellant

R Gay for the Respondent

Judgment:      29 November 2011

[COSTS] JUDGMENT OF WYLIE J

This judgment was delivered by Justice Wylie

On 29 November 2011 at 12.00 pm

Pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar

Date:

Distribution:
S Abdale: [email protected]

R Gay:  [email protected]

JOHNSON V JOHNSON HC AK CIV 2011-404-001767 29 November 2011

[1]      I issued a reserved judgment in this matter on 6 October 2011.   At [48], I

directed the parties to file memoranda in relation to costs. [2] Those memoranda have now been filed.

[3]      The respondent seeks costs on the appeal.  He submitted that in most material respects, he was the successful party, and that additional costs were incurred because the appellant failed to comply either with the relevant High Court Rules, or with timetable orders put in place by the Court.  He argued that he is entitled to costs for those matters on which he did succeed.  He did acknowledge that the appellant may be entitled to a minor costs award in respect of the one matter on which she succeeded.

[4]      The appellant submitted that she was partially successful with her appeal, and that costs should lie where they fall.   In relation to the various interlocutory steps that were taken, she noted that the respondent did not oppose her application to file the appeal out of time, and that accordingly, costs should also lie where they fall in that regard.

Analysis

[5]      Costs are at the discretion of the Court – r 14.1(1).

[6]      This general discretion is qualified by the specific costs rules, rr 14.2 to

14.10, and is exercisable only in situations not contemplated by those specific rules, or which are not fairly recognised by them.[1]    However the discretion is there, and where Judges are satisfied that it is appropriate to do so, they ought not to hesitate to resort to the use of the discretion, in a considered and particularised way.[2]

[1] Glaister v Amalgamated Dairies Ltd [2004] 2 NZLR 606.

[2] Ibid at [28].

[7]      Generally, a party who fails with respect to a proceeding or an interlocutory application  should  pay  costs  to  the  party  who  succeeds.[3]      However,  in  certain

circumstances, the Court may refuse to make an order for costs or may reduce the costs otherwise payable under the rules.[4]

[3] Rule 14.2(a).

[4] Rule 14.7.

[8]      In the present case, costs can be determined by reference to the rules and it is not necessary to resort to the discretions contained in r 14.1.

[9]      The appellant raised two main points on appeal.  First, she submitted that the Family Court Judge erred in findings about a debt secured over an EMW motor vehicle.   Secondly, she argued that the Judge erred in declining to consider her claims about various business interests with which the respondent was associated.

[10]     The appellant was partially successful in relation to her first point raised on appeal.  I held that the debt in relation to an EMW vehicle, valued at $69,000, should be reduced from $45,000 to $40,000, with the result that the net equity in the vehicle was $29,000, and the appellant’s half share was $14,500.  The Family Court Judge had held that the respondent was entitled to deduct the debt in the sum of $45,000 from the value of the vehicle, and that the outstanding equity of $24,000 should be split equally between the parties.

[11]     While the appellant succeeded to this limited extent, her primary argument was that there was no debt properly outstanding against the vehicle, because the debt had been incurred after the date of separation.  I rejected this primary submission, and agreed with the respondent that the matter had been finally determined by the late Judge P J McAloon in a Family Court decision dated 14 May 2003.  I held that the starting point was Judge McAloon’s decision, that he had finally determined the issue, and that his findings were res judicata as between the parties.   I noted that neither   the   appellant   nor   the   respondent   had   appealed   that   aspect   of Judge McAloon’s decision, and that it was not now open to either of them to seek to reopen his findings in relation to the motor vehicle.

[12]     As an alternative argument, the appellant did submit that the debt ought to be fixed at $40,000 and not $45,000.  However, this was very much a fallback position

for the appellant.  Her primary argument failed.  The respondent was in reality, the successful party.[5]

[5] Waihi Mines Ltd v AUAG Resources Ltd (1999) 13 PRNZ 372 at [5].

[13]     The appellant also asserted that the Family Court Judge was wrong at law when  he  declined  to  interfere  with  Judge  McAloon’s  decisions  about  various business interests owned by, or associated with, the respondent.

[14]    Judge McAloon left it open for the parties to seek further directions to implement issues arising out of his judgment, and reserved leave for them to make any application within three months from the date of his judgment.   That three- month period expired on 13 August 2003.  The appellant’s application for leave to seek further directions out of time was not filed until 8 February 2010.

[15]     The Family Court Judge did not expressly deal with this application, although it was arguably implicit from his decision that he granted the application, because he went on to decline to interfere with Judge McAloon’s decision.

[16]     I held that the application for leave to seek further directions out of time must fail, and noted that even if I had been minded to extend time, the prospect of the appellant’s application succeeding was minimal.

[17]     Again, the respondent succeeded.   He argued that the issues raised by the appellant were res judicata, and that it was simply too late for the appellant to seek to reopen the same.  I accepted that analysis.

[18]      Accordingly, the respondent is entitled to costs pursuant to r 14.2(a).

[19]     As noted above, the appellant was partially successful with her alternative argument in relation to the quantum of the debt secured against the EMW vehicle. However, I do not consider it helpful to focus too closely on this limited success for

the following reasons:[6]

[6] Packing In Ltd (in liquidation) formerly known as Bond Cargo Ltd v Chilcott (2003) 16 PRNZ 869 at [5].

a)        the alternative argument was a fallback position for the appellant, argued at least in part because I raised it with the appellant’s counsel;

b)the alternative argument was inconsistent with the appellant’s primary submission that she could revisit Judge McAloon’s decision; and

c)        the amount put in issue by the alternative argument was only $5,000.

The maximum amount the appellant stood to gain was $2,500.  That is “exceptionally low”.  Had that been the sole matter in issue, it would not have justified the appeal.  The matter could have been settled short of a defended appeal hearing.

In the circumstances, I decline to award any costs to the appellant in regard to her partial success on one of her points of appeal pursuant to r 14.7(b).

[20]     Mr Gay,  on  the respondent’s behalf,  filed  a schedule  detailing the  costs sought by the respondent.  Ms Abdale for the appellant did not specifically challenge that schedule.   Nor did either party challenge my assessment that costs should be fixed on a 2B basis.  The total amount sought is $8,366.  In addition, Mr Gay sought disbursements for photocopying, in the total sum of $69.75.

[21]     A  number  of  the  steps  itemised  in  Mr  Gay’s  schedule  are  taken  from Schedule 3 in the High Court Rules.   There can be no argument with those costs. They are provided for by r 14.2(c).  In addition, Mr Gay sought costs for steps taken which are not detailed in Schedule 3.  These amounts were sought by reference to analogous amounts permitted by the High Court Rules.  This is appropriate pursuant to r 14.5(1)(b).

[22]     I have considered the amounts claimed for each step taken by the respondent in respect of which Mr Gay seeks costs, and consider that the same are appropriate.

[23]     This proceeding was dogged by the appellant’s failure to take the appropriate steps prescribed by the Rules or by Court directions in a timely fashion.  As a result, the respondent had to take a number of additional steps.  For example, the appellant

failed to serve her notice of appeal promptly.  This required the respondent to take various steps.  The matter came before Ellis J on 3 May 2011.  The appellant did not promptly comply with directions that Her Honour put in place.   In the event, the respondent did not oppose the application for special leave to appeal out of time, but the respondent was put to additional costs in addressing the matter.   By way of further example, on 7 June 2011, I put in place a timetable designed to ensure that the  appeal  was  ready  to  be  heard.    The  appellant  did  not  comply  with  those directions.  There were numerous requests for extensions of time, or to amend the directions that I had made.  The respondent had to respond to each of those requests, and was put to extra cost.

[24]     The additional costs sought by the respondent are appropriate.  They reflect the  time  taken  to  deal  with  each  matter,  determined  by reference  to  like  steps covered by Schedule 3.

[25]     Accordingly, I fix costs in favour of the respondent in the sum of $8,366.  In addition, the respondent is entitled to recover his costs in arranging for the supplementary bundle to be photocopied, in the total sum of $69.75.

[26]     The sum of $3,760 has been paid into Court as security for costs.   The

Registrar is directed to release that sum to the respondent’s solicitors, Wadsworth

Ray, attention Mr Ray.

Wylie J