Neal v Neal

[2025] NZHC 474

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2021-404-1294

[2025] NZHC 474

BETWEEN

VANESSA ROSEMARY NEAL

Plaintiff

AND

COLIN ASHLEY NEAL

First Respondent

COLIN ASHLEY NEAL and POLAR
CAPITAL TRUSTEES LIMITED as trustees of the COLIN NEAL FAMILY TRUST

Second Respondents

Hearing:

On the papers

Appearances:

J McCartney KC, J Cox and S Round for Applicant V Crawshaw KC and S Caradus for First Respondent

A S Ross KC and T Castle for Second and Third Respondents I Rosic and Z Brentnall for Fourth Respondent

Judgment:

11 March 2025

COSTS JUDGMENT OF HARVEY J

This judgment is delivered by me on 11 March 2025 at 4.00 pm pursuant to r 11.5 of the High Court Rules

……………………………… Deputy Registrar

Counsel/Solicitors:

J McCartney KC, Auckland Rennie Cox, Auckland
V Crawshaw KC, Auckland Duncan Cotterill, Christchurch A Ross KC, Auckland

Burley Castle Hawkins, Lawyers, Tauranga Gilbert Walker, Auckland

NEAL v NEAL [2025] NZHC 474 [11 March 2025]

Introduction

[1]    On 15 August 2024, judgment was issued on the plaintiff’s application for directions on purported breaches of consent orders to settle proceedings between parties.1 The plaintiff claimed the defendants were in breach of their obligation to provide financial accounts from the Colin Neal Family Trust according to the terms of the consent order. The application was declined but the defendants were ordered to confirm the completion date for the final accounts. This was done by a memorandum dated 29 August 2024.

[2]    Counsel were invited to submit costs memoranda by 30 August 2024.2 The plaintiff filed submissions on 5 September 2024 and on 19 September 2024 filed a reply memorandum to the second defendants’ 12 September 2024 memorandum. The plaintiff seeks costs on a 2B basis, and disbursements, totalling $24,362.98. The second defendants seek indemnity costs on a solicitor-client basis, seeking $42,372.50. They also seek costs on a 2B basis, totalling $8,723.50.

[3]    On 19 December 2024, I declined the plaintiff’s 11 September 2024 application for leave to appeal my substantive judgment. Counsel were invited to exchange costs memoranda by 10 February 2025.3 The plaintiff contended that costs on the leave application should lie where they fall. Alternatively, the plaintiff seeks costs on a 2B basis, totalling $4,154. The second defendants seek costs on a 2B basis as they successfully opposed the plaintiff’s application for leave. They seek a total of $5,162.

Legal principles

[4]    It is trite that costs awards are at the discretion of the Court, which is guided by the general principles in rr 14.2 to 14.5 of the High Court Rules 2016.4 Rule 14.2(1) provides that the unsuccessful party should generally pay the costs of the prevailing party. The rules are intended to create a framework for determining costs in individual

1      Neal v Neal [2024] NZHC 2297.

2 At [46].

3      Neal v Neal [2024] NZHC 3953.

4      High Court Rules 2016, r 14.1.

cases that is both “predictable and expeditious”.5 The overriding consideration is that any award ought to do justice between the parties.6

[5]Indemnity costs are provided for in r 14.6 of the Rules:

(4)The court may order a party to pay indemnity costs if—

(a)the party has acted vexatiously, frivolously, improperly, or unnecessarily in commencing, continuing, or defending a proceeding or a step in a proceeding; or

…

(f) some other reason exists which justifies the court making an order for indemnity costs despite the principle that the determination of costs should be predictable and expeditious.

[6]    The Court of Appeal in Bradbury v Westpac Banking Corporation confirmed that generally indemnity costs may be ordered where a party has behaved either badly or very unreasonably.7 The threshold for the award of indemnity costs is high and, as observed by Fitzgerald J in AFI Management Pty Ltd v Lepionka and Co Investments Ltd, indemnity costs are reserved for “egregious conduct”.8

Submissions on costs

[7]    The plaintiff submitted that she is entitled to costs as she “successfully challenged the accounts” and should not have had to go to such lengths to obtain them. She says that there was a contractual obligation and a Court order requiring the provision of the accounts and that there has never been any evidence corroborating the trustees’ assertion that completion of the subsidiaries’ accounts had some bearing on or prevented the provision of final accounts. The plaintiff argued that she was “required to persist through the Court to get a level of compliance from the trustees” and is consequently entitled to costs.

[8]    The second defendants submitted that the plaintiff is seeking to relitigate issues that have already been resolved. As to costs, the second defendants contended, among

5      Rule 14.2(g).

6      Middeldorp v Avondale Jockey Club Inc [2021] NZCA 238 at [31].

7      Bradbury v Westpac Banking Corporation [2009] NZCA 234, [2009] 3 NZLR 400 at [27].

8      AFI Management Pty Ltd v Lepionka and Co Investments Ltd [2018] NZHC 1285 at [17], cited in

Minister of Education v James Hardie New Zealand [2018] NZHC 2960 at [7].

other things, that the plaintiff attempted to justify her application by raising allegations about the Colin Neal Family Trust’s (CNFT) solvency and pursued that argument for some time, before abandoning it at the hearing. The second defendants argued that this caused significant and unnecessary costs. In addition, the second defendants submitted that the plaintiff’s claim that my order concerning confirmation of the completion date for the final accounts amounted to a success is incorrect.

[9]    The second defendants contended that CNFT never resisted their obligation to provide accounts and had attempted to settle the issue prior to the hearing. They argued that the plaintiff in any case rejected their attempts at settlement. The plaintiff disputed this and argued that the second defendants failed to respond to an offer to negotiate made in response to their attempt to settle.

Discussion

[10]   The second defendants were successful and are entitled to costs. The issue is simply the category and quantum of those costs. As foreshadowed, indemnity costs are exceptional. I note Fitzgerald J’s comment in James Hardie, that detailed or significant analysis of why the other party’s conduct appropriately falls within the limited circumstances in which indemnity costs are appropriate is necessary.9 The analysis of the plaintiff’s conduct justifying indemnity costs is brief and does not meet the high threshold of indemnity costs. While I acknowledge that the plaintiff’s conduct in these proceedings added unnecessarily to the costs, I do not consider it meets the high bar of “egregious conduct”. Accordingly, I decline to award indemnity costs.

[11]   However, I consider there is a basis to award an increase on the 2B scale costs as sought in the alternative by the second defendant. Increased costs are awarded on a lower threshold than indemnity costs and may be awarded where a party has not acted reasonably.10 I consider the plaintiff acted unreasonably in these proceedings for two reasons. First, as set out at [40] of my substantive judgment, the proper avenue for the plaintiff regarding the Agreement would have been to apply for variation of the order. Second, the plaintiff added unnecessary steps into the proceedings that

9      Minister of Education v James Hardie New Zealand, above n 8, at [7].

10     Bradbury v Westpac Banking Corporation, above n 7, at [27].

increased the time and financial expense of all parties. I accept that a costs award on a 2B basis is appropriate, and with an uplift of 25 per cent to reflect the unnecessary expense incurred in responding to the plaintiff’s unreasonable conduct.11 The total award to the second defendants is $10,904.37.

Submissions on the leave application costs

[12]   The plaintiff submitted that her application for leave to appeal was not without merit and costs should lie where they fall. Alternatively, she contended that costs awarded to the second defendants on a 2B basis should be reduced to take account of how the latter “failed” to comply with the Court’s order to provide financial accounts on 30 June 2023 and continued to refuse to provide the accounts. The plaintiff argued, had the second defendants complied with that order, all costs would have been avoided.

[13]   The second defendants submitted that they successfully opposed the application for leave, that costs should follow the event, and that they should be awarded on a 2B basis.

Discussion

[14]   I consider that costs follow the event. The second defendants successfully opposed the leave application and are entitled to costs. In the absence of exceptional circumstances, I award costs as sought on a 2B basis, totalling $5,162.

Decision

[15]The plaintiff is ordered to pay the second defendants $16,066.37, being

$10,904.37 on the substantive application and $5,162 on the leave application.

Harvey J

11     I note that in Holdfast NZ Ltd v Selleys Pty Ltd (2005) 17 PRNZ 897 (CA) at [48], the Court considered that an uplift of more than 50 per cent would generally be excessive.