Lascarides v Kelly

[2024] NZHC 765

IN THE HIGH COURT OF NEW ZEALAND DUNEDIN REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTEPOTI ROHE

CIV-2023-412-065

[2024] NZHC 765

BETWEEN

SOPHIE ROSE LASCARIDES

Plaintiff

AND

MICHAEL DE LAUTOUR KELLY

Defendant

Hearing:	On the papers
Counsel:	C A Darling for Plaintiff Mr Kelly appears in person
Judgment:	11 April 2024

JUDGMENT OF ASSOCIATE JUDGE PAULSEN

(Costs)

This judgment was delivered by me on 11 April at 11.30 am pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date:

LASCARIDES v KELLY [2024] NZHC 765 [11 April 2024]

[1]                 The plaintiff filed this proceeding seeking by way of summary judgment an order for the sale of a property jointly owned by the plaintiff and the defendant under s 339 of the Property Law Act 2007.

[2]                 On 14 December 2023, I directed the sale of the property on terms to be determined at a later hearing.1  Following that hearing on 23 February 2024, I issued a judgment on 22 March 2024 making orders for the sale of the property by auction and division of the proceeds of sale.2

[3]                 The plaintiff seeks an award of costs on a category 2 band B basis plus reasonable disbursements. The defendant opposes any order for costs in favour of the plaintiff. He says no costs should be awarded because:

(a)he has been willing to resolve the dispute between the parties amicably;

(b)he made financial contributions to the property;

(c)the plaintiff has not been fair and transparent in negotiations between the parties; and

(d)legal precedents and principles do not support the making of an order for costs.

Costs principles

[4]                 All matters of costs are discretionary,3 but the discretion must be exercised on a principled basis and having regard to the relevant provisions of the High Court Rules 2016.4

[5]                 The determination of costs, so far as possible, should be both predictable and expeditious.5

1      Lascarides v Kelly HC Christchurch CIV-2023-412-65, 14 December 2023 (Minute).

2      Lascarides v Kelly [2024] NZHC 639.

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

4      High Court Rules, pt 14.

5      High Court Rules, r 14.2(1)(g).

[6]                 The party that has lost should pay the costs of the party that has won, unless there are exceptional reasons to the contrary.6

[7]                 The amount of an award of costs is usually determined by an appropriate daily recovery rate to the time considered reasonable for each step reasonably required in relation to a proceeding or interlocutory application. The applicable daily recovery rate depends upon the nature of the proceeding. This is clearly a category 2 proceeding, being a proceeding of average complexity in the High Court.7 Time allocations for steps in any proceeding or interlocutory application are set out in sch 3 of the High Court Rules.

Analysis

[8]                 The Court granted the plaintiff’s application for a sale of the property and she was the successful party. It follows that she is in the ordinary course entitled to an award of costs unless there are exceptional reasons to deprive her of such an award. As noted, the defendant raises four matters and I will deal with each in turn.

[9]                 The defendant says he attempted to resolve the dispute “outside the courtroom” and adopted an attitude of conciliation and negotiation that was not reciprocated by the plaintiff.   In support of that submission, he has provided a copy of a letter of    29 May 2023 sent by his then solicitors to the plaintiff’s solicitors but without identifying how that letter supports his position.

[10]             The plaintiff’s counsel has provided further correspondence that passed between the parties and their solicitors, both prior to and after the commencement of the proceedings. Far from supporting the defendant’s position, the correspondence shows that the plaintiff made determined efforts to resolve the dispute between the parties prior to the commencement of the proceeding, including making proposals to acquire the defendant’s interest in the property on terms that would have seen him in a substantially better position than is now likely to be the case.

6      High Court Rules, r 14.1(1)(a); Shirley v Wairarapa District Health Board [2006] NZSC 63, [2006] 3 NZLR 523 at [19].

7      High Court Rules, r 14.3(1).

[11]             The letter relied upon by the defendant of 29 May 2023 does not demonstrate a willingness on his part to resolve matters amicably rather, in circumstances where the plaintiff clearly wished to bring an end to the parties’ co-ownership of the property, his preferred position was that the parties should wait for further information to be received before having further discussions about the sale of the property.

[12]             Furthermore, after the proceedings had been issued the defendant sought to accept a previous settlement offer made by the plaintiff and then, after counsel had prepared a settlement agreement to give effect to it, withdrew from the negotiations.

[13]             I note also that, when an order for sale was made, there was correspondence indicating the defendant would not immediately co-operate to comply with the directions of the Court in respect to the appointment of a solicitor to act for the parties on the sale of the property. Rather, he advised:

Whilst I realise it is immaterial I would nonetheless prefer to hear the outcome of the courts decision on awarding costs before agreeing on which firm we use.

[14]             I am satisfied that the issuing of these proceeding was an entirely reasonable and appropriate response by the plaintiff to resolve the dispute that had arisen between them.

[15]             The defendant then says that he has shouldered financial responsibilities associated with the property since the dissolution of the parties’ relationship. This is not relevant to the issue of costs. The purpose of costs is to compensate a party for steps taken in the proceeding.

[16]             The third matter raised by the defendant is that the plaintiff was not fair or transparent in negotiations.   The allegation appears to be that, following receipt of   a registered valuation of the property, the plaintiff altered her stance that the property should be sold on the open market to aggressively pursuing the purchase of the property for herself at a low valuation figure.

[17]             The correspondence provided satisfies me this assertion is incorrect. The plaintiff’s solicitors had, in May 2023, offered to purchase the property from the

defendant at the full value of the mortgage secured against it which, it turns out, is significantly higher than its apparent market value today. The correspondence also makes it clear that if that approach was not acceptable to the defendant, the plaintiff was proposing the property be placed on the open market for sale. Further, in her court proceeding the plaintiff sought to either have the opportunity to buy out the defendant’s interest or have the property sold on the open market.

[18]             The last matter is that legal precedents and principles do not support the award of costs. The principles that apply are those that relate to the awarding of costs in court proceedings to which I have referred. The plaintiff has satisfied me those principles support granting her an award of costs.

[19]I therefore reject all the matters raised by the defendant in opposing costs.

[20]             The plaintiff has submitted costs be awarded on a 2B basis. The plaintiff has provided a full schedule of the costs claimed. I have perused the schedule and am satisfied the amounts claimed are appropriate. Disbursements have also been claimed which were both necessary and reasonably incurred.

Result

[21]The plaintiff is awarded costs against the defendant in the amount of

$16,491.00 and disbursements of $1,922.45.

O G Paulsen

Associate Judge

Solicitors:
Wilkinson Rodgers Lawyers, Dunedin

Copy to: Mr Kelly