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 exercise.

[7]                 Mr Hardie submits it is an established principle that where an application or proceeding is continued in circumstances that render its pursuit unnecessary or unreasonable then, even when a party has been successful, the Court is entitled to decline to award costs to that party. He relies on the decision in Water Guard NZ Limited v Midgen Enterprises Limited.4

[8]                 In elaborating his submissions, Mr Hardie submits that the interlocutory application to set aside the protest to jurisdiction is obviously and inseparably connected to Ms Anderson’s application to appoint receivers to sell the farm property. He submits that by 7 February 2023 it had become clear that the application to appoint receivers ought to have been discontinued and in the unlikely event that any issues were to have arisen that could not have been agreed between the parties, it would necessarily have fallen to be determined within Mr Mikkelsen’s extant application to the Family Court for interim or ancillary orders relating to the farm sale. He submits that as at February 2023, there was no justification for continuing with the application to appoint receivers to sell the farm, and therefore no justification for continuing with the application to set aside the protest.

[9]                 Accordingly, Mr Hardie submits that costs should lie where they fall or, alternatively, for the award of costs to be limited to the step taken by Mr Mikkelsen on 13 December 2022 of filing an application to set aside the protest.

4      Water Guard NZ Limited v Midgen Enterprises Limited [2017] NZCA 36.

Decision

[10]             In my view, Ms Anderson is entitled to costs on a 2B basis as sought in counsel’s memorandum of 16 June 2023. As noted in Ms Cornegé’s submissions, the starting point is that the successful party is entitled to costs unless there are good reasons for departing from that primary principle. While Mr Hardie submits that the application to appoint a receiver became unnecessary and therefore the application to set aside the protest to jurisdiction was unnecessary, in my view there are two responses to this:

(a)Mr Mikkelsen could have withdrawn his opposition to Ms Anderson’s application to set aside the protest, and avoided the costs of a hearing;

(b)While Mr Hardie asserts that the application to appoint a receiver became unnecessary, this matter has not been heard and therefore the outcome of that application remains uncertain.

[11]             For these reasons, the interests of justice do not favour allowing costs to lie where they fall.

Order

[12]             I order that the second respondent, Mr Mikkelsen, pay costs to the applicant, Ms Anderson, of $8,604.00 as sought.

…………………………….. Associate Judge Taylor