Leggett v Coley

[2022] NZHC 3297

IN THE HIGH COURT OF NEW ZEALAND WHANGAREI REGISTRY

I TE KŌTI MATUA O AOTEAROA WHANGĀREI-TERENGA-PARĀOA ROHE

CIV-2022-488-000031

[2022] NZHC 3297

BETWEEN

KERRIE ROSE LEGGETT

Applicant

AND

CLARKE SALVATORE COLEY (as named

administrator of the Estate of Wayne Harris Coley)
First Respondent

CLARKE SALVATORE COLEY

Second Respondent

Hearing:	On the papers
Appearances:	J G A Day for the Applicant R Mark for the Respondent
Judgment:	8 December 2022

COSTS JUDGMENT OF ASSOCIATE JUDGE GARDINER

This judgment was delivered by me on 8 December 2022 at 12.00 p.m. pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar Date.......................................

Solicitors:

Law North Ltd, Kerikeri R C Mark, Kerikeri

LEGGETT v COLEY [2022] NZHC 3297 [8 December 2022]

Introduction

[1]                 On 16 July 2021, the applicant, Ms Leggett, registered a caveat over a property in Kerikeri formerly owned by her stepfather. Mr Coley, the respondent, is the registered proprietor. Ms Leggett asserts an interest in the property on the basis that her stepfather had made assurances to her that she would be entitled to a share of it after his death. She intends to bring proceedings alleging breach of contract, a testamentary promise under the Law Reform (Testamentary Promises Act) 1949, and estoppel.

[2]                 The parties attempted to reach agreement on the removal of the caveat in exchange for certain undertakings. Those attempts were unsuccessful and Mr Coley applied to lapse the caveat. Ms Leggett subsequently filed an application without notice to sustain the caveat on 7 June 2022. Venning J made an interim order sustaining the caveat on 7 June 2022 and set the application down for a hearing on 15 August 2022.

[3]                 Counsel filed a joint memorandum dated 11 July 2022 recording that the parties had agreed to remove the caveat provided both gave the listed undertakings. Ms Leggett undertook to remove the caveat and issue her substantive proceedings within 30 days. Among other things, Mr Coley undertook to list the property for sale as soon as practicably possible and to hold 50 per cent of the net proceeds of sale in his solicitor’s trust account pending the outcome of Ms Leggett’s proceedings. Moore J granted those orders by consent in a minute dated 12 July 2022.

[4]                 Mr Coley seeks costs on the basis that he has been the successful party in getting Ms Leggett to agree to a settlement. He states that before applying to lapse the caveat, he made several settlement offers to Ms Coley, which she rejected. He suggests that she acted unreasonably in doing so though he does not seek increased costs.

[5]                 Ms Leggett however submits that costs should lie where they fall because the matter was resolved by a settlement in which both parties made concessions. She says that she should not have to pay costs as she was successful in achieving a settlement which protects her interests, such settlement being more than what Mr Coley had

offered  prior  to the proceeding.    She says that she acted reasonably in filing the application to sustain and her application had merit.

Legal principles

[6]                 The general principle under the High Court Rules 2016 is that costs follow the event, so the party who fails pays the costs of the party who succeeds.1 This principle applies to the outcome of an interlocutory application as well as whole proceedings (with some exceptions). In this case, there has been no determination by the Court of the merits of the application.

[7]                 As this Court recently recognised, there is no rule that costs cannot be awarded where the parties have settled.2 In some cases, the pleadings or terms of the settlement may disclose a winner and loser. In other cases, the facts will be not be clear enough or the settlement will represent compromise rather than the success of one party over the other. Where a “perusal of the papers” reveals no good reason to award costs, the “fall-back position” is to let costs lie where they fall unless there is some other compelling reason to make an award.3

Discussion

[8]                 I consider Mr Coley’s submission that he should receive costs because he succeeded in getting Ms Leggett to agree to settle unpersuasive. However, I am not convinced that Ms Leggett is properly characterised as the successful party either. In my view, the undertakings each party gave make it apparent that the settlement represented a compromise.

[9]                 There has been no decision on the merits of the application and the Court is not in a position to determine a winner or loser. I agree with Ms Leggett that which party would have succeeded in the proceeding is not something that can be

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

2      Li v Xie [2022] NZHC 2471 at [19]; Edmonds v Holland [2021] NZHC 504 at [8]; Hobson Views Ltd v Hayward [2020] NZHC 595 at [15].

3      Li v Xie, above n 2, at [20], citing Ng v Pauatahanui GS Ltd [2014] NZHC 3396 at [8] and [11]; citing in turn Brawley v Marczynski (No 1) [2002] EWCA Civ 756, [2003] 1 WLR 813; and BCT Software Solutions Ltd v Brewer & Sons Ltd [2003] EWCA Civ 939.

“confidently predicted”4 on the papers alone. It is impossible to speculate whether the Court would have exercised its discretion to sustain or remove the caveat. Further, I can find no other compelling reason to award costs one way or the other. There is nothing in the evidence available that shows that either party acted unreasonably in filing their respective applications or in negotiating with each other.

[10]              In these circumstances where the issues were resolved by agreement between the parties, I am satisfied that an award of costs would be inappropriate.

Result

[11]Costs are to lie where they fall.

Associate Judge Gardiner

4      Ng v Pauatahanui GS Ltd, above n 3, at [7].