Oakland Dairy Limited v Flooks - [2023] NZHC 3223

IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY

I TE KŌTI MATUA O AOTEAROA KIRIKIRIROA ROHE

CIV-2023-419-000013

[2023] NZHC 3223

UNDER Part 19 of the High Court Rules 2016 and under section 109 of the Property Law Act 2007

BETWEEN

OAKLANE DAIRY LIMITED

Applicant

AND

KATHRYN LYNETTE FLOOKS, TRACEY MAY FLOOKS, MANDY LEE ROHRLACH,

TREVORD EDGARD FLOOKS and BARRIE WAYNE PRICE

as administrators in the Estate of KEVIN STANLEY FLOOKS

First Respondent

TRACEY MAY FLOOKS

Second Respondent

Hearing: [On the Papers]

Appearances:

A A Low and L W Dixon for Applicant

A M Cameron for Second-named First Respondent and Second Respondent

G H J Brant and A K H McManus for First-named First Respondent

Judgment:

15 November 2023

JUDGMENT OF EDWARDS J

[re Costs]

This judgment was delivered by me on 15 November 2023 at 3.00 pm pursuant to r 11.5 of the High Court Rules.

Registrar/Deputy Registrar

[1] The applicant (Oaklane) and first-named first respondent (Kay) seek orders of costs against the second respondent (Tracey).1 The application follows my judgment dated 17 July 2023.2

[2] Oaklane was successful in obtaining a declaration that all sums owed to the estate of Mr Kevin Flooks had been repaid in full and the estate’s half share of a mortgage should be discharged. Kay, who was a joint mortgagee with the estate, supported Oaklane’s application. The key issues in the proceeding concerned oral variations to the interest rates and loan expiry date of the mortgage.

[3] A family dispute forms the backdrop to the proceeding. The late Kevin Flooks was married to Kay. Their son (Trevor) and his wife purchased the shares in Oaklane in 2008 thereby obtaining ownership of the family farm. Tracey and Debra are the daughters of Kevin and Kay. As recorded at [16] of the judgment, they commenced Family Protection Act 1955 proceedings challenging, amongst other things, the arrangement in relation the family farm.

[4] Kay, and three of her four children (Trevor, Tracey, and Mandy) were appointed executors of Kevin’s estate. The fifth executor is the family accountant. Tracey was the only executor who challenged Oaklane’s repayment of the mortgage and refused to consent to a discharge.3

[5] Oaklane and Kay both seek indemnity costs incurred after 21 March 2023, and two-thirds of actual solicitor-client costs for time incurred prior to this date. The 21 March 2023 date is the date that Kay provided her affidavit in this proceeding confirming Oaklane’s evidence regarding the variations to the interest rates and loan expiry date. Oaklane and Kay also seek an order that Tracey meets her costs personally, rather than having recourse to her indemnity as an executor of the estate.

1      Due to the family connection between the parties, I will refer to them by their first names to avoid confusion. I mean no disrespect in doing so.
2      Oaklane Dairy Ltd v Flooks [2023] NZHC 1852.
3      The notice of opposition to the originating application was filed by Tracey on behalf of herself and her sister…

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 3223
Decision Date: 15 November 2023

CaseChat Overview and Summary

In the High Court of New Zealand, the case of Oakland Dairy Limited v Flooks involved the applicant, Oaklane Dairy Limited, and the first-named first respondent, Kay Flooks, who sought orders of costs against the second respondent, Tracey Flooks. The dispute centered around a mortgage over a family farm and the repayment of sums owed to the estate of Kevin Flooks. Kay supported Oaklane's application for a declaration that the mortgage had been fully repaid and should be discharged. The primary issues were oral variations to the interest rates and the loan expiry date of the mortgage. The court had to determine whether increased or indemnity costs should be awarded to Oaklane and/or Kay, and whether Tracey should bear her own costs or be indemnified from the estate.

The court found that Tracey’s conduct, while not meeting the threshold for indemnity costs, did exhibit unreasonableness, particularly after she received Kay’s affidavit confirming the oral variations. This unreasonableness warranted a 20% uplift to the scale allowances for preparation and hearing steps, as Tracey’s conduct contributed to the preparation time and hearing time. Costs were to be calculated on a schedule 2B basis with the specified adjustments. Both Oaklane and Kay were entitled to their reasonable disbursements. Regarding Tracey’s personal liability for costs, the court ruled that Tracey should bear her own costs for the steps taken after 21 March 2023, when her opposition became more self-interested, but could access the executor’s indemnity for the steps taken before this date.

The court ordered that Oaklane be awarded costs of $17,447 and Kay be awarded costs of $11,233. Tracey was to access her executor’s indemnity for the costs related to steps taken on and before 21 March 2023 but was to bear all remaining costs personally. The costs of the respective cost applications were to lie where they fell.

Orders