Minehan v McGuigan

[2020] NZHC 2361

IN THE HIGH COURT OF NEW ZEALAND GREYMOUTH REGISTRY

I TE KŌTI MATUA O AOTEAROA MĀWHERA ROHE

CIV-2019-418-000001

[2020] NZHC 2361

UNDER

section 339 of the Property Law Act 2007

BETWEEN

DEA MARIE MINEHAN

First Plaintiff

JULIE MARIE MINEHAN
Second Plaintiff

AND

BEDE CHRISTOPHER McGUIGAN

First Defendant

KIERAN HUGH McGUIGAN

Second Defendant

On the Papers

Counsel:

D L Bell for the Plaintiffs

No appearance for the Defendants

Judgment:

10 September 2020

JUDGMENT OF DOOGUE J

(Costs)

This judgment was delivered by Justice Doogue on 10 September 2020 at 3.00 pm.

pursuant to Rule 11.5 of the High Court Rules.

Registrar/ Deputy Registrar Date:

Solicitors:

Parry Field Lawyers, Christchurch

MINEHAN v McGUIGAN [2020] NZHC 2361 [10 September 2020]

Introduction

[1]    The plaintiffs sought and obtained an order under s 399(1)(c)  of  the  Property Law Act 2007 (the Act), requiring them to purchase the first defendant’s interest in the relevant properties at a fair and reasonable price, and binding the defendant to give effect to the order by transferring his interests in the properties to the plaintiffs.

[2]    The first defendant did not take any steps in the matter and the claim proceeded by way of formal proof on 8 July 2020.

[3]    I delivered my judgment on 14 July 2020 and I made the following orders and directions:1

(a)An order requiring the plaintiffs to purchase the first defendant’s one quarter share in the properties WS1A/1016, WS3A/640, WS3A/397, WS2D/174, WS2C/1187, WS2A/947, WS1B/1313, and WS1A/554 (part cancelled).

(b)The plaintiffs shall obtain an updated valuation of the properties from a registered valuer and file that in Court.

(c)A costs order will issue in favour of the plaintiffs. The quantum will be determined after the Court receives the memorandum directed in (d).

(d)The plaintiffs shall submit a memorandum itemising the legal costs and disbursements they submit should be paid by the defendant on a 2B basis.

(e)Such costs as the Court determines are proper shall be deducted from the purchase price.

(f)The Court will then calculate the precise amount owed by the plaintiffs to the first defendant, to purchase his share in the properties.

(g)Leave is reserved to the plaintiffs to apply for other orders as may be necessary to give effect to these orders.

Appointment of Registrar as attorney

[4]    Pursuant to the leave granted to the plaintiffs, they now seek an order that the Registrar is appointed as attorney for the first defendant for the purposes of giving

1      Minehan v McGuigan [2020] NZHC 1686 at [68].

effect to the said sale. Counsel provided the Court’s decision on 14 July 2020 to counsel for the first defendant who sought instructions from the first defendant. Counsel for the first defendant has advised that he has currently no instructions to comply with the sale order and is doubtful as to whether his client would agree to signing the necessary documents. In those circumstances, I am satisfied that the order should issue in the face of the intransigence of the first defendant.

Costs

[5]    That intransigence also needs to be reflected in the costs to be awarded to the plaintiffs.

[6]    In Bradbury v Westpac Banking Corp, the Court of Appeal described increased costs as warranted where “there is failure by the paying party to act reasonably” and indemnity costs “where that party has behaved either badly or very unreasonably.”2

[7]    The High Court Rules 2016 provide that the Court may order a party to pay increased costs if it fails, without reasonable justification, to accept an offer of settlement.3

[8]    When considering a decision on costs, the Court may need to analyse the facts to ascertain what has given rise to the litigation, and take into account whether the conduct of one of the parties has contributed to costs.4

[9]    Maiden  v  Body  Corporate   46112  concerned   an   application   by   a Body Corporate for the appointment of an administrator.5 That application was rendered necessary due to the disruptive and unreasonable actions of one unit owner, Mr Gregan, which rendered the Body Corporate dysfunctional. The Body Corporate had been unable to perform its duties for around seven years. Mr Gregan appeared in person but, as he had not filed a notice of opposition, the application proceeded by way of formal proof. Thomas J found that Mr Gregan bore sole responsibility for the

2      Bradbury v Westpac Banking Corp [2009] NZCA 234; [2009] 3 NZLR 400 at [27].

3      High Court Rules 2016, r 14.6(3)(b)(v).

4      Maiden v Body Corporate 46112 [2018] NZHC 1219 at [61].

5      Maiden v Body Corporate 46112, above n 4.

need for the applicants to bring the proceedings, and therefore awarded increased costs of 50 per cent against him.6

[10]   Greenhalgh v Body Corporate 330324 also dealt with an application for the appointment of an administrator.7 This followed a breakdown of the relationship between a group of unit owners and their body corporate managers. The Court awarded cots on a category 2B basis with a 50 per cent uplift, principally because the body corporate manager was given an opportunity to cooperate and was repeatedly warned that a lack of cooperation would result in proceedings being issued, which would include an application for indemnity costs.

[11]   As in Greenhalgh v Body Corporate 330324 and Maiden v Body Corporate 46112, the sole need for this proceeding was the first defendant’s refusal to engage in settlement negotiations or work with the plaintiffs to ensure the effective operation of the properties. The first defendant has been given extensive opportunities, and the formal proof hearing only occurred as a last resort.

[12]   The plaintiffs made various offers to the first defendant over the last six years of negotiations. These offers matched or exceeded the payment ordered.

[13]   The first defendant’s conduct has been unreasonable and is the reason for these proceedings. Scale costs on a 2B basis are $17,803.50. A 50 per cent uplift is warranted and amounts to $26,705.25.

Orders

[14]   The Registrar is appointed as attorney for the first defendant for the purposes of giving effect to the said sale of his interest to the plaintiffs in the following properties:

(a)       WS1A/1016;

(b)       WS3A/640;

6 At [84].

7      Greenhalgh v Body Corporate 330324 HC Auckland CIV-2008-404-1854, 2 July 2008.

(c)       WS3A/397;

(d)      WS2D/174;

(e)       WS2C/1187;

(f)       WS2A/947;

(g)WS1B/1313; and

(h)WS1A/554 (part cancelled).

[15]The plaintiffs shall have costs from the first defendant, in the sum of

$26,705.25 together with disbursements of $4,150 (totalling $30,855.25).

Doogue J