Maehl v Lenihan
[2019] NZHC 1457
•26 June 2019
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2018-404-2881
[2019] NZHC 1457
UNDER Part 32 of the High Court rules BETWEEN
ANDREW ALEXANDER MAEHL and WINNIFRED CHARLESWORTH
Applicants / Appellants
AND
JOHN ROBERT LENIHAN
Respondent
Hearing: 16 May 2019 Appearances:
Z A Matheson for the Applicants / Appellants S Stienstra for the Respondent
Judgment:
26 June 2019
JUDGMENT OF WALKER J
This judgment was delivered by me on 26 June 2019 at 12 midday pursuant to r 11.5 of the High Court Rules 2016.
Registrar/Deputy Registrar
……………………………………
Solicitors:
Christopher Taylor, Auckland Counsel:
Ms Z Matheson, Barrister, Auckland Ms S Stienstra, Barrister, Auckland
MAEHL v LENIHAN [2019] NZHC 1457 [26 June 2019]
Introduction
[1] Mr Maehl and Ms Charlesworth seek special leave to appeal out of time against a costs decision of the District Court at Auckland on 23 February 2018 (“February costs decision”). In the February costs decision, Judge Dawson declined to address costs on the basis that they had not been sought or reserved at the substantive hearing under the Harassment Act 1997, or in the judgment, so there was no longer jurisdiction to make an order for costs.
[2] Although the leave application is opposed by Mr Lenihan, the parties agreed to argue the substantive appeal in conjunction with the threshold issue of leave. In short, the parties ask me to address the substantive appeal issues if I grant special leave. This is a pragmatic approach in the circumstances of this case and the protracted litigation history between the parties.
[3]In summary, the issues are:
(a)Whether leave to appeal out of time should be granted;
(b)If yes, whether the District Court had jurisdiction to award costs after delivery of the substantive judgment;
(c)If yes, whether the costs question should be remitted back to the District Court or whether I should substitute an order for costs in respect of the substantive hearing under the Harassment Act 1997.
Factual background
[4] The background is comprehensively set out in a related judgment of Wylie J dated 19 November 2018.1 I respectfully adopt that narrative.
[5] Mr Lenihan owns two adjoining properties in Paturoa Road, Titirangi. Mr Maehl and Ms Charlesworth own a neighbouring property.
1 Lenihan v Maehl [2018] NZHC 2989.
[6] Mr Lenihan’s properties are undeveloped and, in 2014, he obtained resource consent from Auckland Council, permitting him to build on his properties. The resource consent also permitted Mr Lenihan to fell a kauri tree on one of the properties.
[7] Several persons, including Mr Maehl and Ms Charlesworth, opposed the felling of the kauri tree. One protester trespassed on Mr Lenihan’s property and resided in the kauri tree for several days. As a result, the matter attracted some media attention.
[8] In December 2015, Mr Maehl and Ms Charlesworth filed an application to review the grant of the resource consent. That application was part heard in November 2016. The hearing was due to resume in May 2017 but, shortly beforehand, Mr Lenihan surrendered the resource consent. As a result, the judicial review was discontinued.
[9] This, however, was not the end of the dispute between the parties. There have been several other matters in issue between them:
(a)Mr Maehl and Ms Charlesworth obtained an injunction and an interim enforcement order, preventing any construction works on Mr Lenihan’s properties.
(b)In May 2017, Mr Maehl and Ms Charlesworth brought enforcement proceedings in the Environment Court against Mr Lenihan.
(c)Mr Lenihan issued trespass orders against Mr Maehl and Ms Charlesworth.
(d)Mr Lenihan commenced proceedings in the Disputes Tribunal against Mr Maehl and Ms Charlesworth seeking that they contribute to the costs of construction of a fence between the respective properties.
(e)In May 2017, Mr Lenihan (and his partner) sought civil restraining orders against Mr Maehl, Ms Charlesworth and a third party under the Harassment Act 1997. Some 28 acts of harassment were alleged
against Mr Maehl, Ms Charlesworth and the third party. The orders sought to require the respondents to cease posting articles on Facebook about Mr Lenihan and to stop a security camera located on the common fence between the properties being pointed towards Mr Lenihan’s property.
(f)The proceedings under the Harassment Act were set down for hearing as a simplified trial in the District Court at Auckland on 21 and 22 November 2017, to be held in accordance with rr 10.1 and 10.5-10.7 of the District Court Rules 2014.
(g)Shortly before the hearing, Mr Lenihan settled his claim against the third party. He then filed a table listing the allegations he wished to continue to pursue against Mr Maehl and Ms Charlesworth. The hearing proceeded before Judge N R Dawson. It occupied one-and-a- half days. Judge Dawson delivered a reserved judgment on 30 November 2017.2 He dismissed Mr Lenihan’s application in its entirety.
(h)Neither party appealed this decision.
Costs – the judgment of 30 November 2017
[10] Judge Dawson, in his decision of 30 November 2017, did not reserve costs; he did not request memoranda in relation to costs; he did not refer to costs in his reserved judgment at all. As Wylie J recorded in his judgment, Mr Lenihan’s initial application for a restraining order did not seek costs. Nor did an amended application filed in May 2017. The notice of defence filed by Mr Maehl, Ms Charlesworth and the third party did not seek costs. 3 Neither party sought costs in their respective submissions and there was no reference to costs in the evidence called before Judge Dawson.
[11] It remains common ground between counsel that the reserved judgment of 30 November 2017 has not been sealed.
2 Lenihan v Maehl [2017] NZDC 26577.
3 Lenihan v Maehl [2018] NZHC 2989 at [14].
Costs – subsequent developments
[12] On 21 December 2017, Mr Maehl and Ms Charlesworth, through their counsel, filed a memorandum as the successful parties in the substantive proceeding, seeking costs on a 2B basis. Costs in the sum of $13,330 were sought. There was no claim for disbursements.
[13] A reply memorandum was filed on behalf of Mr Lenihan on 25 January 2018. That memorandum noted that Judge Dawson had not invited an application for costs in his judgment of 30 November 2017. It did not, however, otherwise raise the issue of the Court’s jurisdiction to award costs. Rather, it submitted that the correct categorisation of costs was category 1A, and that, if the Court was minded to grant costs, the correct sum calculated on that basis was $3,450. The memoranda were referred to Judge Dawson by the Registrar on 12 February 2018 and the Judge issued handwritten and signed directions on 23 February 2018. Those handwritten directions were transcribed by the Registrar and he wrote to counsel for both parties on 23 February 2018. The directions were in the following terms:
“The following minute/directions was made in the above matter By Dawson DCJ
On 23 February 2018 Costs
Costs were not reserved at the end of the hearing on in the decision of this Court. There is a clear line of authority that a costs order cannot be made at this stage.
See: Thomson v Thomson [1993] NZFLR 315; O’Neil v Toogood [2017] NZHC 795; Fernandez v Fernandez [2015] NZHC 3048.”
[14] On 7 March 2018, Mr Maehl and Ms Charlesworth filed a further memorandum, through counsel, taking issue with Judge Dawson’s minute and suggesting that a costs award could and should be made in their favour. Counsel sought to distinguish the cases referred to by Judge Dawson in the minute.
[15] Counsel for Mr Lenihan responded in a memorandum dated 16 March 2018. Among other things, counsel asserted that if Mr Maehl and Ms Charlesworth were not
happy with the Court’s decision on the issue, they had the right to appeal the issue to this Court. It was submitted that Judge Dawson had exercised his discretion and determined not to award costs, and that the issue of costs was therefore closed.
[16] On 23 April 2018, Judge Dawson issued the costs decision which became the subject of the appeal before Wylie J.4 Judge Dawson had changed his view. Contrary to his earlier minute, he found that the Court still had a discretion to award costs, referring to r 14.2(a) of the District Court Rules and the decision of the Supreme Court in Manukau Golf Club Inc v Shoye Venture Ltd.5 He noted that the substantive decision had not been sealed. He awarded costs in Mr Maehl’s and Ms Charlesworth’s favour, on a 2B basis, in the sum of $13,330. The Judge commented that costs in this amount reflected the relative complexity and significance of the case.
[17] The costs judgment was sealed on 18 May 2018 by Mr Maehl and Ms Charlesworth, without prior notice to Mr Lenihan.
[18] Mr Lenihan filed notice of appeal and application for review challenging Judge Dawson’s costs judgment dated 23 April 2018. Mr Lenihan’s appeal was not filed within the requisite 20 working day period, specified under r 20.4(2)(b) of the High Court Rules 2016. None of the steps required under r 20.6(1) to bring the appeal were taken within the 20-day working period. Mr Lenihan then sought leave to appeal. Counsel for Mr Maehl and Ms Charlesworth did not take issue with the late service of the notice of appeal and responsibly advised that her clients accepted there was no prejudice to them.
[19] On 19 November 2018, Wylie J delivered his decision setting aside the cost judgment dated 23 April 2018.6 He awarded costs to Mr Lenihan as the successful party but reduced the award to reflect the abandonment of a primary ground of the appeal.7 The costs award was $9,366.
4 Lenihan v Maehl [2018] NZDC 7751.
5 Manukau Golf Club Inc v Shoye Venture Ltd [2012] NZSC 109; [2013] 1 NZLR 305.
6 Lenihan v Maehl [2018] NZHC 2989.
7 Lenihan v Maehl [2018] NZHC 3331.
[20] Having successfully defended the Harassment Act application, Mr Maehl and Ms Charlesworth were left in a position of having received no costs award and instead owe Mr Lenihan costs for his successful appeal. They therefore commenced this appeal before me against the first costs decision in the District Court – the February costs decision – and seek leave of this Court to extend the time for bringing the appeal.
[21] Before turning to the threshold issue of whether leave should be given to bring this appeal out of time, it is necessary to review the judgment of Wylie J to ensure that all issues before me on this application are legitimately live issues.
Judgment of Wylie J dated 19 November 2018
[22] The key issue in the appeal before Wylie J was whether the February costs decision precluded the District Court from changing its mind and issuing a conflicting costs decision in April 2018.
[23] Importantly, Wylie J did not try to resolve the issue of whether it was open to Judge Dawson to make the February costs decision when he had not reserved costs in the substantive decision delivered in November 2018.8 He held that it was not appropriate to try to resolve the different approaches taken in the authorities since the issue remained live between the parties. He further held that the February costs decision was a decision within the inclusive definition of that term under s 123 of the District Court Act 2016.9
[24] It followed that the February cost decision was one which could not be revisited by the District Court and was only amenable to recall, appeal or review.10 As such, there was no jurisdiction to issue the conflicting costs decision in April 2018 and the District Court erred in doing so.11
8 Lenihan v Maehl [2018] NZHC 2989 at [43].
9 At [49].
10 At [48].
11 At [53].
This appeal
[25] On 21 December 2018 Mr Maehl and Ms Charlesworth filed an appeal against the February 2018 costs order and an accompanying application for special leave to appeal out of time under r 20.4 of the High Court Rules 2016. The appeal and application were served on Mr Lenihan on 21 December 2018.
[26] The succinct ground of appeal relied on is that the Judge Dawson did have jurisdiction to make a costs order because costs are supplemental and the principle of finality of judgments is not infringed where the substantive decision of November 2017 is silent on costs and not sealed.
Issue 1: Should I grant leave to bring the appeal out of time?
[27] I have traversed in some detail the chronology of events and the decision of Wylie J, as these matters bear on the exercise of my discretion to grant leave to appeal out of time. Whether or not the February cost decision is one in which appeal rights lie has already been determined by Wylie J. It was fundamental to allowing Mr Lenihan’s appeal against the costs decision of 23 April 2018.
[28] Section 34 of the Harassment Act 1997 provides a right of appeal. The Act does not specify a period for bringing an appeal. Similarly, the Act does not prohibit a grant of extension of time. Rule 20.4 of the High Court Rules 2016 provides:
20.4 Time for appeal if there is right of appeal
(1)This rule applies if a party has a right of appeal to the court.
(2)An appeal must be brought—
(a)within the specified period if the enactment that confers the right of appeal specifies a period within which the appeal must be brought; or
(b)in every other case, within 20 working days after the decision appealed against is given.
(3)By special leave, the court may extend the time prescribed for appealing if the enactment that confers the right of appeal—
(a)permits the extension; or
(b)does not limit the time prescribed for bringing the appeal.
(4)An application for an extension—
(a)must be made by an interlocutory application on notice to every other party affected by the appeal; and
(b)may be made before or after the expiry of the time for appealing.
[29] An appeal within time against the February costs decision would have been brought by 23 March 2018. Instead, Mr Maehl and Ms Charlesworth, through counsel, challenged the February costs decision by filing a further memorandum to the District Court on 7 March 2018, prompting Mr Lenihan’s counsel to respond on 16 March 2018. This exchange of memoranda led to the issue of the minute of 23 April 2018 - the subject of the appeal before Wylie J.12
[30] Ms Matheson, for Mr Maehl and Ms Charlesworth, submits that leave to extend time for bringing an appeal should be granted for the following reasons:
(a)While at first blush the appeal was brought nine months out of time, once the District Court revised its view as to jurisdiction to make an award of costs, and went on to do so, an appeal was redundant. It was only when Mr Lenihan’s appeal against that decision was successful that a need to appeal the February costs decision arose.
(b)Mr Maehl and Ms Charlesworth filed their appeal less than a week after the costs decision by Wylie J in respect of his 19 November 2018 judgment. While not stated as such, it was once this costs judgment was delivered that the appellants faced the unpalatable position that, having won the harassment proceedings, they were now without a costs award in their favour and subject to an adverse costs award.
(c)There is no prejudice to Mr Lenihan if time is extended.
12 For the sake of completeness, I note Ms Stienstra’s submission that the absence of express reference to her memorandum in the Court minute of 23 April 2018 indicates that it may not have been placed before Judge Dawson.
(d)Mr Lenihan’s contention that the Court ought not allow this appeal because there has already been significant litigation between the parties is inconsistent with his response to Mr Maehl’s and Ms Charlesworth’s proposal to resolve all issues of costs by letting them lie where they fall.
(e)It would be unjust for Mr Lenihan as the unsuccessful applicant for restraining orders to escape costs because of procedural irregularities.
(f)Mr Maehl’s and Ms Charlesworth’s prima facie entitlement to costs from a successful defence of the harassment proceeding ought not be denied because of the procedural quagmire.
[31]In response, Ms Stienstra, for Mr Lenihan, contends that:
(a)The appellants’ unorthodox approach to costs caused their situation; and
(b)Granting an application for leave so long after resolution of the matters would create a hazardous precedent.
[32] The parties are largely agreed as to the relevant considerations. These include the length of delay and reasons for it; the parties’ conduct; the extent of prejudice caused by the delay; the prospective merits of the appeal; and whether the appeal raises any issue of public importance.13
[33] Weighing these considerations, I consider it appropriate in the special circumstances of this case to grant special leave to appeal out of time. My reasons are:
(a)No specific prejudice to Mr Lenihan is identified; indeed, the notice of opposition does not rely on the ground of prejudice.
13 See My Noodle Ltd v Queenstown-Lakes District Council [2009] NZCA 224, (2009) 19 PRNZ 518 at [19].
(b)While Mr Lenihan’s appeal succeeded, the reasons for his success say nothing about the merits of a costs award made, but set aside.
(c)In my view there was no reason to consider an appeal against the February costs decision until the 23 April 2018 cost order was set aside on 19 November 2018. I acknowledge that there is no explanation for the absence of an appeal between 23 March 2018 and 23 April 2018, but this is a relatively short period and, in my view, leave to appeal would almost certainly have been granted had it been sought at that time.
(d)I accept that Mr Maehl and Ms Charlesworth, through counsel, tried to deal with the issue of costs economically and expeditiously by filing a memorandum. They also elected to challenge the February costs decision by memorandum, explaining their reasons in the memorandum. While, in retrospect, that may be described as assuming the risk of an erroneous process, the District Court did not indicate to counsel at that point that the Court was functus officio. On the contrary, and understandably in view of the apparently conflicting authorities, the District Court issued the 23 April 2018 costs order. It was not surprising that the appellants sought to rely on that costs order and oppose the appeal brought by Mr Lenihan. I find that these are extenuating circumstances which explain the delay.
(e)Finally, the issue arising on the substantive appeal is capable of serious argument in the light of two potentially conflicting lines of authority.
[34] Accordingly, I grant special leave to appeal pursuant to r 20.4(3) of the High Court Rules 2016. I extend the time for filing the notice of appeal to 21 December 2018, being the date of service of the notice of appeal.
Issue 2: Did the District Court have jurisdiction to award costs after delivery of the substantive judgment?
[35] The answer depends on the interplay between the costs regime in the District Court and the principle of functus officio.14
[36] The term “functus officio” is defined as an “expression applied to a judge who has given a decision so that his or her authority is exhausted.”15 The rationale for the doctrine of functus officio is that:
... for the due and proper administration of justice, there must be finality to a proceeding to ensure procedural fairness and the integrity of the judicial system.
[37] Nakhla v McCarthy, a decision of the Court of Appeal, reflects the principle of finality in its statement that: 16
... there can be no challenge to the right of a Judge to ensure by correction that the transcript of the reasons for the order or determination he has pronounced is not wrong…it is equally clear that in general what a judge cannot and must not attempt to do is modify or change the effect of the determination or order or judgment once it has been formally made and perfected. He is then functus officio.
[38] The importance of the functus officio doctrine is illustrated by s 116 of the District Courts Act 2016, which provides that a judgment or an order of the court is final and conclusive between the parties, and the operation of rr 11.9 and 11.10 of the District Court Rules 2014. Rule 11.9 - the recall rule - provides that a judgment may be recalled before a formal record of it is drawn up and sealed. Recall is no longer available once a judgment is sealed. The purpose of the recall jurisdiction is to reconcile the broad ends of justice in relation to the particular case and the desirability of finality in litigation. On one view, this rule indicates that the judge at first instance is not functus officio until a judgment is sealed and until that point it can be altered,
14 Doucet-Boudreau v Nova Scotia (Minister of Education) [2003] 3 SCR 3 at [114].
15 Peter Spiller Butterworths New Zealand Law Dictionary (9th ed, LexisNexis, Wellington, 2005).
16 Nakhla v McCarthy [1978] 1 NZLR 291 (CA) at 296.
and, in theory, even reversed.17 However, case law illustrates that recall is only available in limited circumstances. Three situations are identified:18
(a)Where there has been an amendment to a relevant statute, regulation, or a new judicial decision of higher authority since the judgment;
(b)Where counsel have neglected to direct the Court’s attention to a statute, regulation, or judicial decision of plain relevance;
(c)Where for some other very special reason justice requires that the judgment be recalled.
[39] The Court of Appeal has indicated that the third circumstance – the special reason category - is also intended to be narrow.19 It has encompassed situations where the Judge has failed to determine an issue properly put or misapprehended counsel’s submission;20 where the Judge has overlooked a matter and where judgment has been given without consideration of the interests of an affected person.21
[40] Rule 11.10 of the District Court Rules 2014 is the “slip” rule. It provides for the correction of accidental slips or omissions and extends to corrections of sealed judgments but not to corrections of the content of judgment. The overriding criteria is that the slip rule may only be invoked if the judgment does not reflect the intent of the judgment maker.22
[41] There are further circumstances where a Court has a power to revisit its decision after the decision has been sealed, but only in exceptional circumstances. These include where a judgment has been obtained by fraud;23 if the order sealing the judgment is properly regarded as a nullity, for example as a result of a procedural
17 White v NZ Stock Exchange [2001] 1 NZLR 683, per Thomas J.
18 Horowhenua County v Nash (No 2) [1968] NZLR 632 (SC) approved in Rainbow Corp Ltd v Ryde Holdings Ltd (1992) 5 PRNZ 493 (CA).
19 Unison Networks Ltd v Commerce Commission [2007] NZCA 49.
20 Cynotech Securities Limited v People Limited (No 2) HC Auckland CIV-2008-404-1559, 4 March 2009.
21 McDonald v Simmons (1994) 8 PRNZ 12 (HC).
22 Govan v Patel HC Wellington CIV-2005-485-487, 10 October 2005.
23 Ongley v Brdjanovic [1975] 2 NZLR 242 (SC).
irregularity;24 or where a substantial miscarriage of justice would result if a fundamental error in procedure is not corrected and there is no alternative effective remedy reasonably available.25
The costs regime
[42] The costs regime in the District Court is set out in Part 14 of the District Court Rules 2014. Rule 14.1 provides that:
14.1 Costs at discretion of court
(1)All matters are at the discretion of the court if they relate to costs—
(a)of a proceeding; or
(b)incidental to a proceeding; or
(c)of a step in a proceeding.
(2)Rules 14.2 to 14.10 are subject to subclause (1).
(3)The provisions of any Act override subclauses (1) and (2).
[43] Rule 14.2 sets out the principles applying to the determination of costs. The principles in r 14.2 mirror the costs principles of the High Court Rules 2016. The overall structure of the costs regimes means “there is a strong implication that a Court is to apply the regime in the absence of some reason to the contrary”.26 While the principles are subject to the Court’s overriding discretion, the discretion must be exercised judicially.27 The first fundamental principle is that the party who fails with respect to a proceeding or any interlocutory application should pay costs to the party who succeeds.
Analysis
[44] There is no provision in the Harassment Act 1997 which overrides r 14.1. In my view, there is nothing in the costs provisions in the District Court Rules 2014 which explicitly or implicitly require costs to be dealt with at the substantive hearing, in the substantive judgment or reserved in such judgment. This is in contrast with a
24 AIC v DE (No 2) [2013] NZHC 2663.
25 R v Smith [2003] 3 NZLR 617 (CA).
26 Mansfield Drycleaners Ltd v Quinny's Drycleaning (Dentice Drycleaning Upper Hutt) Ltd (2002) 16 PRNZ 662 (CA) at [27]; followed in Manukau Golf Club Inc v Shoye Venture Ltd [2012] NZSC 109; [2013] 1 NZLR 305 at [7].
27 Manukau Golf Club Inc v Shoye Venture Ltd [2012] NZSC 109; [2013] 1 NZLR 305 at [7].
line of authority holding that the former Planning Tribunal was functus officio once a decision has been delivered unless costs have been reserved; Petone Borough Council v Treadwell and Fyfe v Devonport Borough Council.28 Decided by reference to the jurisdiction of the Planning Tribunal to award costs under s 147(1) of the Town and Country Planning Act 1977, Greig J in the Petone Borough case stated:29
There is no express power which would permit the Tribunal or the Planning Judge to deal with any application for costs after the decision of the Tribunal has been completed and issued. That may well conclude the matter unless it can be said that there is some inherent power in the Tribunal to deal with the question afterwards…There is an implication that that which has not been expressed is not part of the jurisdiction or authority of the Tribunal.
Moreover, that exclusion is in my opinion given further emphasis by s 147, which provides that the jurisdiction to award costs is “in any proceedings”. That has a connotation of continuity and does not include the giving of costs after and not in or during any proceedings. There can be no doubt that on the issue of the sealed decision and its promulgation to the parties the proceedings are at an end [emphasis my own].
[45] The statutory scheme changed under the Resource Management Act 1991 and the jurisdiction of the Environment Court (formerly the Planning Tribunal) to award costs was expressed differently. That fact, combined with s 278(1) of the Resource Management Act which provided that the Environment Court had the general powers and jurisdiction of the District Court in the exercise of its civil jurisdiction, led to a different result in National Investment Trust v Christchurch City Council.30
[46] National Investment Trust considered whether the Environment Court could deal with costs after delivering a judgment in which costs were not addressed, when the parties had been given a chance to apply for and be heard on costs by the Judge and they failed to take it. The practice of the Environment Court was that such decisions are authenticated with its seal, a form of perfecting the judgment.
[47] William Young J held that the legislative changes to the Resource Management Act 1991 meant that the previous authorities no longer operated to restrict the jurisdiction of the Environment Court to award costs after a decision has been
28 Petone Borough Council v Treadwell (1986) 11 NZTPA 366; Fyfe v Devonport Borough Council
(1990) 15 NZTPA 26.
29 Petone Borough Council v Treadway (1986) 11 NZPTA 366 at 4.
30 National Investment Trust v Christchurch City Council [2001] NZRMA 289, (2000) 7 ELRNZ 17.
delivered. The slip rules of the District Court Rules applied to the Environment Court. It followed that, if costs had not been sought due to an oversight or mistake of counsel, or, if costs although sought had not been addressed due to the mistake or oversight of the court, the matter could be remedied under those rules. In short, Young J determined that the Judge was not functus officio after delivery of the substantive judgment.31
[48] Judge Dawson was not referred to National Investment Trust when he reached the view that he was functus officio and unable to make a costs determination. He relied on Thomson v Thomson,32 and two cases which, in substance, applied Thomson; Fernandes v Fernandes and O’Neil v Toogood.33 These are also the first of two lines of authority referred to in the judgment of Wylie J in the first cost appeal between Mr Maehl and Ms Charlesworth and Mr Lenihan.
[49] Thomson was an appeal against a costs order made by a Family Court Judge in custody proceedings nearly 12 months after the sealing of a custody and access order by consent. The consent order had made no provision as to costs.
[50] Notably, the costs encompassed by the Family Court order were not properly procedural costs in the Family Court. Rather, they comprised legal fees and disbursements incurred in a related proceeding in the United Kingdom and the travel costs incurred in uplifting the child from its father in the United Kingdom. On the issue of what power the Family Court had to pronounce on matters of costs after the sealing of the consent order, Greig J held:34
Where, as here, questions of costs are not reserved, no pronouncement is made about them and the order is perfected, there can be no power to reactivate the judgment and alter it by adding a new matter as to costs. This must be more so when the question is not raised for almost twelve months and the order is, in any event, one made by consent, drafted by counsel, and agreed to by the parties.
31 National Investment Trust v Christchurch City Council [2001] NZRMA 289, (2000) 7 ELRNZ 17, at [25]-[26].
32 Thomson v Thomson [1993] NZFLR 315 at 318.
33 Fernandes v Fernandes [2015] NZHC 3048; O'Neil v Toogood [2017] NZHC 795.
34 Thomson v Thomson [1993] NZFLR 315 at 318.
[51] And, further on the question of the nature of the costs subject to the Family Court costs order, he recorded:35
Any question of costs relates to the costs in the proceedings. What was sought here was not party and party costs, Court fees, or witnesses’ expenses, or even disbursements necessarily incurred in the process of the proceedings, but were expenses incurred elsewhere and, indeed, in other proceedings in another jurisdiction which arose because of the deliberate breach of the Court’s order by the appellant.
[52] In my view, Thomson is distinct from the matter at hand for three reasons. First, the consent order was sealed nearly 12 months before the application for costs was made in the Family Court. Second, the costs awarded were not costs in the proceeding in respect of which any presumption that costs follow the event may come into play; nor could they be properly described as consequential or incidental to the judgment. Third, the fact that the substantive order made by the Family Court was one made by consent, drafted by counsel, and agreed to by the parties. Revisiting the issue of those costs would undoubtedly infringe against the principle of finality.
[53] The second line of authority referred to in the judgment of Wylie J is Wilson v Selwyn District Council.36 This is a costs judgment of Fogarty J on the papers. After successfully appealing a decision of the Environment Court, the appellant sought costs. Costs had not been included as relief sought in the appeal, no application for costs had been included in the written or oral submissions and the judgment did not make an order for costs or reserve the question of costs.
[54] On the issue of whether the Court was functus officio, Fogarty J observed that there was no authority bearing directly on the point. He then referred to a brief judgment of the Court of Appeal in Moring v Reeves Moses Hudig where the Court of Appeal held costs should not be awarded when the respondent’s counsel did not seek costs at the hearing and the question of costs was not reserved.37 The Court of Appeal stated:38
35 At 318.
36 Wilson v Selwyn District Council (2004) 17 PRNZ 461 (HC).
37 Moring v Reeves Moses Hudig CA 249/97; 29 September 1998.
38 At 2.
... The appropriate time to attend to this matter was at the hearing of the application [for special leave to appeal out of time]. That was not done, and we do not consider that the Court is now in a position to rectify the omission.
[55] While not expressly distinguishing Moring, Fogarty J held that hearing an application for costs when the main judgment is silent on costs does not amount to varying or altering a judgment already given and therefore does not undermine the need for finality of litigation.39 Fogarty J drew an analogy with the later decision of the Privy Council in Dymocks Franchise Systems (NSW) Pty Limited v Todd (No 2).40 In that case a cost order was made against a non-party after final judgment had been given and sealed, and an award of costs made against the unsuccessful party. Adopting the reasoning of the Full Court of the Federal Court of Australia in Caboolture Park Shopping Centre Pty Ltd (In Liq) v White Industries (Qld) Pty Ltd,41 the Privy Council said that the critical issue for determining whether the Board was functus officio was whether the application for costs was one which varied or altered an initial order.42 If so, the finality principle would be infringed. If not, and the order sought was supplemental, there was no infringement of the finality principle and the Board was not functus officio.
[56] A review of cases before and since Wilson provides some additional guidance on the question of when a court is functus officio after delivery of judgment:
(a)Generally speaking, a judgment once delivered must stand for better or worse subject to appeal;43
(b)Once a matter has been disposed of, and the order in council acted upon, it is impossible to grant costs.44
39 Wilson v Selwyn District Council (2004) 17 PRNZ 461 (HC) at [14].
40 Dymocks Franchise Systems (NSW) Pty Limited v Todd (No 2) [2004] UKPC 39; [2005] 1 NZLR 145.
41 Caboolture Park Shopping Centre Pty Ltd (In Liq) v White Industries (Qld) Pty Ltd (1993) 45 FCR 224 (FCA).
42 Dymocks Franchise Systems (NSW) Pty Limited v Todd (No 2) [2004] UKPC 39; [2005] 1 NZLR 145 at [13].
43 Horowhenua County v Nash (No. 2) [1968] NZLR 632 (HC) at 633.
44 Lindo v Barret (1865) 9 Moore 456; 14 ER 371.
(c)If counsel advise the Court they do not seek costs even in error, and the judgment records this, the Court is functus officio. There is no reason to require recall of the judgment and the slip rule is not applicable.45
(d)Modifying, or changing the effect of a judgment once delivered, is not permitted once that judgment is formally made and perfected;46
(e)When costs are sought before judgment but omitted in the judgment and it remains unsealed, there is still jurisdiction to make a costs order because there is no re-exercise of the power to award costs.47
(f)While it is not open to a party to seek to vary or alter a judgment, in a proper case, further or consequential relief may be sought including an order for costs;48
(g)Although there may be jurisdiction, once a costs order is sealed, there are good reasons why a Court should discourage applications for supplementary orders for costs against non-parties which are made as an afterthought, when it should be obvious that the costs would not be met.49
Decision
[57] Considering the underlying rationale for the functus officio principle, and the authorities, I have concluded that the District Court was not functus officio on 23 February 2018 when the Judge declined to make an award of costs. His jurisdiction had not been spent, as his costs discretion had not yet been exercised. The position was very different on 23 April 2018 when, in a second costs decision, he reversed his decision on costs. At that point, as Wylie J found, Judge Dawson was functus officio
45 Minister of Education and Others v McKee Fehl Constructors Limited [2018] NZHC 1647 at [8].
46 Nakhla v McCarthy [1978] 1 NZLR 291 (CA) at 593.
47 Sao Paulo Apargatas SA v But Fashion Solutions Comercio E Industria de Artigos Em Pele LDA
[2013] NZHC 602 at [7]-[8].
48 B v B HC, Dunedin CIV-2011-412-328, 26 September 2011 at [43].
49 Packing In Limited (In Liq) v Chilcott (2003) 16 PRNZ 958 (CA).
in respect of costs as reversing the February costs decision did undermine the finality principle.
[58]My reasons for reaching this view are:
(a)The substantive judgment was not sealed and so had not been formally perfected. Mr Maehl and Ms Charlesworth could have relied on the recall option although, in my view, this was not strictly necessary in respect of an order incidental or supplemental to the substantive judgment;50
(b)The costs provisions in the District Court Rules 2014 do not provide, expressly or impliedly, that costs must be sought at the hearing or after issue of the judgment if expressly reserved;
(c)There is no provision in the Harassment Act 1997 determining the procedure for seeking costs nor the time at which costs applications are to be made;
(d)The District Court has a broad discretion on questions of costs although that discretion is not unfettered and must be exercised judicially;51
(e)There is a strong implication that a Court is to apply the costs regime in the absence of some reason to the contrary.52 The fundamental starting point of the costs regime is a presumption that a party who fails in respect of a proceeding is to pay costs to the successful party.53 In practice, this means costs are a live issue unless a party indicates at the hearing that it does not seek costs. It also underscores the nature of applications for costs as incidental or supplementary to the substantive outcome;
50 B v B HC Dunedin CIV-2011-412-328, 26 September 2011; Snow v Rovida [2018] NZHC 1586 at [34]; Dunsford v Shanley [2012] NZHC 2375 at [5]-[9].
51 Manukau Golf Club Inc v Shoye Venture Ltd [2013] 1 NZLR 305.
52 At 308
53 District Court Rules 2014, r 14.2(a).
(f)The principle of finality would be an obstacle if a party had indicated at the hearing that it would not be seeking costs and then changed its mind. However, that did not occur in this case;
(g)Provided costs have not expressly been disavowed by a party, there is no infringement of the principle of finality in seeking costs prior to sealing of the substantive judgment. Where the substantive judgment is silent on costs, the costs discretion has not been exercised in the first place;
(h)The language of the Court of Appeal in Moring is sufficiently equivocal as to whether the Court was exercising its discretion not to deal with costs after the hearing rather than opining on whether it had jurisdiction. The approach in the later Privy Council decision in Dymocks permitting supplementary orders, even after sealing of a substantive judgment, supports my conclusion.
[59]I therefore allow the appeal.
Issue 3- Having allowed the appeal, what is the appropriate course? Remit to the District Court or substitute my own order for costs?
[60] This court has broad corrective powers on appeal by s 28 of the District Courts Act 2016. This includes jurisdiction to make any decision it thinks should have been made.
[61] In the ordinary course, I would be inclined to remit the decision on costs back to the District Court which heard the harassment proceeding. This is the course advocated for by Ms Stienstra for Mr Lenihan. In the alternative, she challenges the 2B categorisation because of the simplified procedure adopted in the District Court harassment hearing and advocates for costs to be assessed on a 1A basis. This produces a costs quantum of $3,450.00 as set out in the memorandum of counsel dated 25 January 2018.
[62] Remitting to the District Court is the fall-back position of Mr Maehl and Ms Charlesworth in the event I am not prepared to make an order for costs.
[63] In the special circumstances of this case, including its protracted history, I consider nothing would be gained by remitting the issue to the lower court. First, too much time has passed since the substantive proceedings and this litigation needs to be concluded. Secondly, Judge Dawson has already provided guidance on the issue of costs. While his costs decision of 23 April 2018 (the second cost decision) was set aside, the reasons for setting it aside do not impugn the reliability of his assessment. After presiding over the harassment trial for one-and-a-half days, Judge Dawson was best placed to determine the appropriate level of costs reflecting the complexity and significance of the proceeding. He did so and awarded 2B costs of $13,330.
[64] I make that order for costs accordingly in respect of the substantive proceeding in the District Court rather than require the parties to go to the trouble and expense of remitting the question of costs back.
Costs on the application for leave and appeal
[65] My preliminary view is that there should be no costs award on the application for leave due to the significant overlap with the substantive appeal issues. As for the substantive appeal, I am minded to award 2B costs to the appellants subject to submissions from the parties. If the issue of costs cannot be agreed, then I direct as follows:
(a)Any application for costs and/or disbursements to be filed within 10 working days of the date of this judgment;
(b)Any reply is to be filed within a further 10 working days;
(c)Memoranda are not to exceed 3 pages;
[66] I will then deal with the issue of costs and disbursements on the papers unless I require the assistance of counsel.
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Walker J
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