Monaghan v Mineral Park Limited - [2021] NZHC 1872

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2020-404-1316

CIV-2019-404-1333 [2021] NZHC 1872

BETWEEN
COLIN JOHN MONAGHAN and MARIA TE RANGIMARIA BROWN

Plaintiffs

AND

MINERAL PARK LIMITED

First Defendant

AND

ERIC YIN CHIC LIU and DAISY FANGYUE LIU

Second Defendants

Hearing: On the papers

Appearances:

MC Josephson for the Plaintiff B Murray for the Defendants

Judgment:

23 July 2021

JUDGMENT OF FITZGERALD J

[As to costs]

This judgment was delivered by me on 23 July 2021 at 12.30pm, pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date………………….

Solicitors: T M Bates & Co, Auckland
Vallant Hooker & Partners, Auckland

To: M Josephson, Auckland

MONAGHAN v MINERAL PARK LIMITED [2021] NZHC 1872 [23 July 2021]

Introduction

[1]By judgment delivered on 15 June 2021,1 I:

(a)stayed the enforcement of a default judgment obtained by Mineral Park Limited and Mr and Mrs Liu (collectively, Mineral Park) against Mr Monaghan and Ms Brown on 19 September 2019;

(b)ordered that the stay of enforcement be on the condition that Mr Monaghan and Ms Brown pay $15,000 by way of security for costs within 20 working days of my judgment; and

(c)ordered that should security for costs not be paid within 20 working days, the stay of enforcement of the default judgment would lapse.

[2] At the conclusion of my judgment, I observed that as both parties had had a measure of success on their respective applications, I considered it appropriate that costs on the applications were to lie where they fell. I noted that, if despite that indication, either party sought costs, memoranda were to be filed.

[3] Mineral Park seeks a contribution to its costs on both applications. Costs are sought on the basis that the outcome in my substantive judgment effectively mirrored a proposal made by Mineral Park prior to the hearing of the applications. Mr Monaghan and Ms Brown, on the other hand, submit that costs should lie where they fall.

Parties’ submissions – more detail

Mineral Park’s submissions

[4] Counsel for Mineral Park, Mr Murray, notes that in a proposal made on behalf of Mineral Park on 22 February 2021 (the Offer), it was suggested that:

1 Monaghan v Mineral Park Ltd [2021] NZHC 1407.

(a)Mr Monaghan and Ms Brown pay $17,000 by way of security for costs (to cover certain steps including discovery), with Mineral Park having leave to renew the application for further security if required;

(b)the default judgment be stayed on conditions;

(c)Mineral Park be permitted to file and serve applications to adjudicate Mr Monaghan and Ms Brown bankrupt, based on the default judgment, but those applications would be adjourned by consent;

(d)Mr Monaghan and Ms Brown would have nine months within which to pay the security for costs, otherwise the bankruptcy applications could proceed;

(e)in those circumstances, the parties were to be free to take any further steps they wished;

(f)if the Offer was accepted, the parties would bear their own costs of…

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: [2021] NZHC 1872
Decision Date: 23 July 2021

CaseChat Overview and Summary

The High Court of New Zealand was presented with a case where Colin John Monaghan and Maria Te Rangimaria Brown sought to challenge a default judgment obtained by Mineral Park Limited and Eric Yin Chic Liu and Daisy Fangyue Liu against them. The initial judgment issued on 15 June 2021 stayed the enforcement of the default judgment, provided the plaintiffs paid $15,000 as security for costs within 20 working days, or the stay would lapse. Mineral Park subsequently applied for a contribution to its costs on both applications, arguing that their pre-hearing proposal, which was rejected by the plaintiffs, should influence the costs awarded. The plaintiffs, on the other hand, argued that costs should lie where they fell.

The legal issue at the heart of this case revolved around the proper allocation of costs between the parties, particularly in light of Mineral Park’s pre-hearing proposal. The court had to decide whether this proposal, marked as "without prejudice except as to costs," should factor into the costs determination. The court needed to determine if Mineral Park was entitled to costs for the steps taken after their proposal was made, given that the outcome of the substantive judgment mirrored certain aspects of the proposal.

The court concluded that the pre-hearing proposal by Mineral Park should indeed be taken into account when determining the costs. Despite the final judgment ordering a lower amount of security for costs than proposed, the extended payment period offered in the proposal provided a significant benefit to the plaintiffs, which counterbalanced the lower amount. The court found that the plaintiffs' impecuniosity did not absolve them of the need to contribute to the costs, especially considering the substantial claims they had made against Mineral Park. Accordingly, the court awarded costs to Mineral Park in the amount of $4,880 plus GST and disbursements, totaling $5,688.32.

The final orders of the court were that Mineral Park was entitled to a costs award of $5,688.32 against the plaintiffs, Colin John Monaghan and Maria Te Rangimaria Brown, on a joint and several basis. This decision underscored the importance of pre-hearing offers in the context of costs determination and highlighted the court’s discretion in balancing the factors relevant to such awards.

Orders