Mikkelsen v P & D Mikkelsen Partnership - [2023] NZHC 1855

IN THE HIGH COURT OF NEW ZEALAND ROTORUA REGISTRY

I TE KŌTI MATUA O AOTEAROA

TE ROTORUA-NUI-A-KAHUMATAMOMOE ROHE

CIV-2022-463-100

[2023] NZHC 1855

UNDER the Partnership Act 2019

BETWEEN

DEBORAH HELEN MIKKELSEN (nee ANDERSON)

Applicant

AND

P & D MIKKELSEN PARTNERSHIP

First Respondent

PHILLIP LEO MIKKELSEN

Second Respondent

Hearing: 22 March 2023

Appearances:

Kate Cornegé for the Applicant

Peter Hardie for the Second Respondent

Judgment:

18 July 2023

COSTS JUDGMENT OF ASSOCIATE JUDGE C B TAYLOR

This judgment was delivered by me on 18 July 2023 at 3:00pm
pursuant to Rule 11.5 of the High Court Rules

…………………………. Registrar/Deputy Registrar

Solicitors:
Tompkins Wake (Kate Cornegé/Olivia Morgan) , Tauranga, for the Applicant Jones Howden (Peter Hardie), Matamata, for the Respondents

MIKKELSEN v MIKKELSEN [2023] NZHC 1855 [18 July 2023]

[1] The Court delivered a judgment in this matter on 11 May 2023, granting the applicant’s (Ms Anderson) application to set aside the second respondent’s (Mr Mikkelsen) protest to jurisdiction.1 At [49] of the judgment, the Court directed that the parties endeavour to agree costs within 20 working days of the date of the judgment and file memoranda if costs cannot be agreed.

[2] The parties have been unable to agree costs as directed in the judgment and counsel for Ms Anderson has filed a memorandum as to costs dated 16 June 2023, and counsel for Mr Mikkelsen has filed a memorandum in response dated 22 June 2023.

Ms Anderson’s submissions

[3] Ms Cornegé, on behalf of Ms Anderson submits that costs should follow the event, and the primary principle is that “the party who fails with respect to … an interlocutory application should pay costs to the party who succeeds”.2

[4] Ms Cornegé submits there should be exceptional reasons for departing from the primary principle that costs follow the event and this accords with the intent of the Rules to provide reliable and expeditious costs decisions and to do justice to the parties.3

[5] Accordingly, Ms Cornegé therefore submits that costs should be awarded to Ms Anderson on a 2B basis as Ms Anderson was successful in her application to set aside Mr Mikkelsen’s protest to jurisdiction and she is entitled to costs for those steps that relate to the interlocutory application. She seeks costs of $8,604.00 as set out in the Schedule to her memorandum.

1      DH Mikkelsen v P & D Mikkelsen Partnership and PL Mikkelsen [2023] NZHC 1006.
2      High Court Rules 2016, r 14.2(1)(a).
3      High Court Rules 2016, r 14.2(1)(g).

Mr Mikkelsen’s submissions

[6] Mr Hardie, on behalf of Mr Mikkelsen, submits the Court has discretion whether or not to award costs and that the ultimate objective is to achieve an outcome that best meets the interest of justice as between the parties. He submit that although Ms Anderson was technically successful, it was a pyrrhic victory and the pursuit of the application to dismiss the protest after 7 February 2023 can be described as unnecessary, unreasonable and an entirely fruitless…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2023] NZHC 1855
Decision Date: 18 July 2023

CaseChat Overview and Summary

The High Court of New Zealand was called upon to determine the issue of costs following an earlier decision to set aside a protest to jurisdiction in a case involving a dispute between Deborah Helen Mikkelsen (nee Anderson) and the P & D Mikkelsen Partnership, with Phillip Leo Mikkelsen as a respondent. The earlier judgment had already granted Ms Anderson's application to set aside Mr Mikkelsen's protest to jurisdiction, and the subsequent costs application was a direct consequence of the parties' inability to agree on the cost allocation as directed.

The primary legal issue before the Court was whether the successful party in the interlocutory application, Ms Anderson, should be awarded costs on a standard basis, or whether there were exceptional circumstances that warranted a departure from this principle. Ms Anderson's counsel argued for a standard cost order based on the principle that the unsuccessful party should bear the costs of the successful party. Conversely, Mr Mikkelsen's counsel argued that despite Ms Anderson's success, the continuation of the application to set aside the protest after a certain date was unnecessary, unreasonable, and fruitless, thus justifying a departure from the usual cost-bearing rule.

The Court found that while Mr Mikkelsen's counsel made a compelling argument about the unnecessary continuation of the application, there were no exceptional circumstances that would warrant a departure from the primary principle that costs should follow the event. The Court reasoned that either Mr Mikkelsen could have withdrawn his opposition, avoiding the costs of a hearing, or the outcome of the application to appoint a receiver remained uncertain. Therefore, the Court concluded that the interests of justice did not favour allowing the costs to lie where they fell. Consequently, the Court awarded costs to Ms Anderson on a standard basis, as sought in her counsel's memorandum.

In conclusion, the Court ordered that Mr Mikkelsen pay costs to Ms Anderson in the amount of $8,604.00 as set out in her counsel's memorandum. This decision reinforces the principle that the unsuccessful party in an interlocutory application should bear the costs of the successful party, unless there are exceptional circumstances to justify a different outcome.

Orders