Koromako v Uluiviti
[2019] NZHC 2234
•6 September 2019
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2018-404-1982
[2019] NZHC 2234
UNDER Incorporated Societies Act 1908 IN THE MATTER
of the Fiji Community Association of Auckland Inc
BETWEEN
RATU ISOA SOQOSOQO KOROMAKO, PENAIA DRIU SAMUSAMUVODRE, JOSAIA KOROIWAQALEVU, JOHN KOTOISUVA and LIVIANA HIDE;
First Plaintiffs/First Applicants
FIJI COMMUNITY ASSOCIATION OF AUCKLAND INC
Second Plaintiff/Second Applicant
AND
ADI ASENACA ULUIVITI
Defendant/Respondent
Hearing: On the papers Counsel:
Appearance:
RS Pidgeon for plaintiffs/applicants
AA Uluiviti, defendant/respondent in person
Judgment:
6 September 2019
JUDGMENT OF FITZGERALD J
[As to costs of summary judgment application]
This judgment was delivered by me on 6 September 2019 at 11:30am, pursuant to Rule 11.5 of the High Court Rules.
Registrar/Deputy Registrar………………………… Date………………………
Solicitors: Grant SCK Sidnam, Auckland To: A Uluiviti, Auckland
Koromako v Uluiviti [2019] NZHC 2234 [6 September 2019]
Introduction and background
[1] As I noted in my substantive judgment delivered on 6 June 2019, the matters the subject of this proceeding represent the latest round in an unfortunate series of disputes between two factions vying for control of the Fiji Community Association of Auckland Inc (FCAA).1
[2] In the context of those ongoing disputes, in September 2018, it became necessary for the plaintiffs to commence these proceedings to support an urgent application for interim relief. By way of background, the plaintiffs’ position was that, as at September 2018, they were the validly elected members of the FCAA’s Executive Committee. The defendant, Ms Uluiviti, had also been elected a member of the Committee, and indeed as its Vice President. But she did not accept the process by which the other Committee members had been elected (or co-opted onto the Committee), and refused to attend Committee meetings as a result. She failed to attend three consecutive Committee meetings. The plaintiffs, in reliance on the FCAA’s Constitution and Rules (Rules), considered this justified Ms Uluiviti’s removal from the Committee.
[3] Despite this, Ms Uluiviti maintained in her possession or control various items of property belonging to the FCAA, as well as codes necessary to access its online (Xero) accounting records. She was also concerned at the Executive Committee’s delay in calling an Annual General Meeting (AGM), when one was due to be held in September 2018. She accordingly took it upon herself to issue a notice calling an AGM, despite it being tolerably clear under the Rules that she was not entitled to do so (even if she had remained on the Committee). The plaintiffs responded by applying for urgent interim relief, including restraining Ms Uluiviti from proceeding with the proposed AGM, and seeking orders that she deliver up, inter alia, the codes necessary to access the FCAA accounts.
[4] As matters transpired, the interim relief application was largely dealt with by consent and Muir J made orders in this context on 19 September 2018. This included Ms Uluiviti agreeing to return the FCAA’s property and to provide access to the online
1 Koromako v Uluiviti [2019] NZHC 1268.
accounting records. She was also ordered to send a notice to those to whom she had sent her earlier notice proposing to convene an AGM, confirming that the AGM would not take place until November 2018.
The plaintiffs’ summary judgment application
[5] Despite the above progress, the plaintiffs nevertheless continued to a hearing of their application for summary judgment on the underlying claims, namely breach of contract (alleging breach of an implied term that FCAA members not a part of the Executive Committee would not seek to exercise powers of the Committee) and conversion (in relation to FCAA property said to remain in Ms Uluiviti’s possession or control, despite Muir J’s earlier orders).
[6] By the time the application came before me for hearing, the plaintiffs confirmed they did not pursue the damages aspects of their claims by way of summary judgment, or certain aspects of the conversion claim. In my substantive judgment, I granted summary judgment on the liability aspects of the plaintiffs’ breach of contract claim but declined the application in relation to the claim in conversion. I noted that the question of damages and other relief sought on the breach of contract claim, and the cause of action in conversion, would need to proceed to trial.
[7]Given, however:
(a)Resolution of the most pressing issues between the parties by way of Muir J’s orders in September 2018;
(b)Mr Pidgeon’s advice at the hearing that fresh elections for the Executive Committee had been conducted in the intervening period in any event;
(c)That it seemed most of the FCAA property had since been returned by Ms Uluiviti, or at least, at the hearing of the summary judgment application before me, the plaintiffs were not able to identify with any specificity what property they said remained in Ms Uluiviti’s possession; and
(d)It was difficult to discern, at that stage at least, that the FCAA would have suffered any significant financial loss as a result of Ms Uluiviti’s actions,
I observed that the plaintiffs would no doubt want to carefully consider whether they progressed the matter to a full trial. Mr Pidgeon, in his submissions on costs, confirms that, once costs on the summary judgment application have been determined, the substantive proceedings may well be discontinued.
[8] At the conclusion of my substantive judgment, I encouraged the parties to agree costs on the summary judgment application. They have been unable to do so. The plaintiffs seek costs on their application on a scale 2B basis, reduced by 25 per cent to reflect the application was unsuccessful on the conversion cause of action.2
[9] Ms Uluiviti, who represented herself throughout the proceedings, seeks an order that costs lie where they fall.
Ms Uluiviti’s costs submissions – more detail
[10]Ms Uluiviti advances four reasons why costs ought to lie where they fall.
[11] First, she says the proceedings concerned a matter of genuine public interest, given the need for a correct interpretation of the rules of incorporated societies such as the FCAA. She says the Court ought to exercise its discretion not to award costs to the plaintiffs given that genuine public interest. She also says that her position had merit, due to the ongoing delays by the Executive Committee in calling an AGM, and as such was of general importance beyond her own personal interests.3
2 Mr Pidgeon confirms that attendances on the application for interim relief and a contempt issue are excluded from the present application for costs. Mr Pidgeon notes if the proceeding is discontinued (which, as noted, is likely after costs are determined), those aspects would be permanently omitted.
3 Relying in this context on Belgiorno-Nettis v Auckland Unitary Plan Independent Hearings Panel
[2018] NZHC 926 at [16].
[12] Second, Ms Uluiviti says that the litigation would have easily been avoided altogether had the Executive Committee called a “reconciliation meeting” as earlier agreed.
[13] The background to this submission is that in settlement of an earlier, more major piece of litigation between the vying factions of the FCAA, the parties to that litigation had agreed that fresh elections for a new Executive Committee would be held, and the new Executive Committee would hold a reconciliation meeting at the earliest practical time thereafter. Despite those elections having been conducted in late June 2018, and the new Executive Committee having held its first meeting on 5 July 2018, by the time these proceedings came before the Court in mid-September 2018, no reconciliation meeting had been held (or was imminent). In his minute of 19 September 2018, Muir J expressed his concern at this delay. Despite this, however, by the time the summary judgment application came before me in February this year, the reconciliation meeting had still not been held. Despite finding that Ms Uluiviti’s actions which led to the present proceedings were unjustified, she was justified in her concern at the ongoing failure to hold a reconciliation meeting.4 Whether a timely reconciliation meeting would have avoided the need for these proceedings at all is speculative; but without it, there was no prospect of reconciliation. As Muir J had noted:5
Only in the spirit of reconciliation can this much divided Association begin to fulfil the charitable objectives to which it subscribes.
[14] Third, Ms Uluiviti says the plaintiffs could have filed their claim in the District Court as a category 1 proceeding. As such, and pursuant to r 14.13 of the High Court Rules 2016, she submits any costs to be paid to the plaintiffs must not exceed the costs and disbursements that they would have recovered in the District Court if the proceeding could have been brought there, unless the Court otherwise directs.
[15] Finally, Ms Uluiviti notes she is a community member serving her Fiji community without remuneration or financial reward. She says she has no means to
4 I also expressed my concerns at the hearing before me in February this year.
5 Koromako v Uluiviti HC Auckland CIV-2018-404-1982, 19 September 2018 (Minute of Muir J), at [18].
pay the costs claimed by the plaintiffs, or to retain a lawyer in these proceedings. She further notes that she and her fellow respondents in the initial round of High Court litigation are still paying legal fees in relation to that matter.
Discussion
[16] Dealing with Ms Uluiviti’s last point first, impecuniosity is not a ground in and of itself to order that costs ought to lie where they fall. Costs in High Court proceedings are expected to be predictable, and parties who engage in formal court proceedings, irrespective of their financial means, must be alive to the risk of adverse cost awards if they are unsuccessful. Further, while I accept Ms Uluiviti’s actions in the latter part of September 2018 were no doubt carried out in good faith, the plaintiffs’ contractual claim (on which it was successful) was relatively clear-cut and straightforward. It must, or ought, to have been plain to Ms Uluiviti that, even if she had still been a member of the Executive Committee, it was not possible for her to unilaterally convene an AGM.
[17] Nor am I persuaded that costs ought to be capped by the scale for District Court proceedings. These proceedings were ultimately commenced to support an urgent application for interim relief, which was largely resolved in the plaintiffs’ favour by consent. In this context, I do not consider it unreasonable or inappropriate for the plaintiffs to have commenced the proceedings in the High Court. Certainly the High Court is well-placed to deal with urgent interlocutory matters, including urgent applications for interim relief.
[18] I am also not persuaded that the matter was of sufficient “public interest”, at least in the sense required to abrogate the normal approach to costs. While there was potentially some (marginal) benefit in clarification of the FCAA’s Rules, those aspects relevant to the plaintiffs’ contractual claim were tolerably clear in any event. In other words, I do not consider there was any real dispute on the face of the Rules that Ms Uluiviti’s actions in purporting to call an AGM were invalid.
[19] For these reasons, costs should follow the event in the ordinary way, with a costs award in the plaintiffs’ favour. I agree that scale costs on a 2B basis is appropriate.
[20] There remains the question of what reduction, if any, should be made to the costs award to reflect the plaintiffs were not successful on all aspects of their summary judgment application.
[21] As noted, the plaintiffs propose a 25 per cent reduction. I consider that insufficient:
(a)First, the plaintiffs gave notice shortly before the hearing that they did not pursue their damages claims by way of summary judgment, or aspects of their conversion claim.
(b)Second, the plaintiffs were unsuccessful in obtaining summary judgment on the conversion claim.
(c)Third, I consider the conversion claim wholly unsuited to summary judgment in any event. There remained a number of factual differences between the parties on the claim, including as to what property, if any, remained in Ms Uluiviti’s possession or control. The plaintiffs did not present any clear evidence on that issue on the application in any event. Nor did they address in their submissions how the various elements of a claim in conversion were met on the evidence which was presented.
(d)Fourth, given those matters set out at [7] above, the need to proceed with the summary judgment application (either at all, or instead of seeking to bring all issues to trial as quickly as possible) is questionable.
[22]I consider a reduction of 50 per cent from scale costs is appropriate.
[23] I am also concerned at the plaintiffs’ failure to lead a reconciliation meeting at the earliest practical time, as had been agreed in the earlier settlement agreement. As noted, it is unclear whether such a reconciliation meeting would have avoided the need for these proceedings altogether; but even if not, it may well have narrowed the matters in issue. I note that in Goodwin v Rocket Surgery Ltd, the Court of Appeal declined to award costs to the successful appellant, given the litigation had been generated and
prolonged by the appellants’ failure to honour the spirit of a family arrangement.6 I do not consider it can be said here that the failure to call a reconciliation meeting “generated” or “prolonged” these proceedings; ultimately Ms Uluiviti’s own actions were the genesis of the plaintiffs’ need to seek urgent relief, and there was no undue delay in the hearing of the application for summary judgment. But the failure to convene a reconciliation meeting certainly fuelled the (existing) tension between the two vying factions, which no doubt led to Ms Uluiviti’s actions in the latter part of 2018. I accordingly propose to reduce the costs award by a further 10 per cent to reflect these matters.
[24] There is accordingly an award of scale costs in the plaintiffs’ favour on a 2B basis, reduced by 60 per cent.
[25] In terms of the steps for which costs are to be awarded, it is not appropriate to include in the present award the step of commencing the substantive proceedings and initial case management conferences. The current costs application concerns the plaintiffs’ application for summary judgment only. At least as matters presently stand, the substantive proceedings remain on foot. Costs for commencement of the proceedings and case management conferences are properly considered in the context of the costs of the proceedings overall (i.e. after the conclusion of any substantive hearing). Nor is the Court aware of any “post hearing memorandum” relating to the summary judgment application (i.e. rather than memoranda concerning progress of the underlying proceedings). This item is also excluded from the costs award. For the same reasons, only disbursements relating to the summary judgment application itself are to be included in this costs award.
Result
[26] There is a costs award on the application for summary judgment in the plaintiffs’ favour against Ms Uluiviti in the sum of $3,077.40, as set out in the attached
6 Goodwin v Rocket Surgery Ltd [2013] NZCA 172.
schedule, plus disbursements associated with the summary judgment application. If the parties do not agree those disbursements, they are to be fixed by the Registrar under High Court Rule 14.12(4).
Fitzgerald J
SCHEDULE
Costs Step Description Allocated days Costs payable 22 Filing interlocutory application 0.6 $1,338.00 24 Preparation of written submissions 1.5 $3,345.00 25 Preparation by applicant of bundle for hearing 0.6 $1,338.00 26 Appearance at hearing 0.75 $1672.50 Total scale costs: $7,693.50 Less 60 per cent: $3,077.40
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