Sawyer v Homewood

[2015] NZHC 2781

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2015-404-1809 [2015] NZHC 2781

UNDER	the District Courts Act 1947
IN THE MATTER OF	an appeal against a decision of the District Court at Waitakere
BETWEEN	BELINDA MARIE SAWYER AND MICHAEL ANDREW SAYWER First Appellants
AND	JENNIFER MARY POWELL Second Appellant
AND	ROBERT BERNARD HOY Third Appellant
AND	AMANDA ROSEMARY HOMEWOOD First Respondent
AND	ROBBIE KAIVITI Second Respondent

Hearing:	5 November 2015
Appearances:	E J Grove for the Appellants Respondents in person
Judgment:	10 November 2015

JUDGMENT OF THOMAS J

This judgment was delivered by me on 10 November 2015 at 2.30 pm pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date:………………………….

Counsel:

E J Groove, Auckland.

SAWYER AND SAYWER v POWELL [2015] NZHC 2781 [10 November 2015]

Introduction

[1]      The appellants appeal against the decision of a District Court Judge who declined to award costs in favour of the appellants.

[2]      As a preliminary matter, the appeal was brought approximately seven days out of time.  At the hearing, I gave leave to commence the appeal out of time given that the length of delay was minimal; there was no prejudice arising to the respondents from the delay; and the appeal has merit.

Background

[3]      The respondents applied for restraining orders in the District Court against the appellants pursuant to the Harassment Act 1997.

[4]      The Judge dismissed the application on the grounds of a lack of jurisdiction because the appellants were considered to be “in a domestic relationship” with the respondents, as defined in s 4(1)(b) of the Domestic Violence Act 1995.   In any event, the Judge was not satisfied that the alleged complaints amounted to acts sufficiently serious to warrant the making of orders sought.

[5]      The Judge did not make an award for costs.  He referred to the respondents’

submission that a costs order would cause them hardship.  He then said:

Having given the matter some thought I am of the view that it is not appropriate to make an award of costs in this case.   There is already considerable tension, and dissension in this family and I am of the view that an order for costs would unduly exacerbate an already unsatisfactory state of affairs.

[6]      The appellants’ submission is that the Judge was wrong both in law and in

fact in declining to award costs. The appellants seek costs on a 2B basis. [7]           The respondents are self-represented and oppose the appeal.

Approach on appeal

[8]      The  appeal  against  a  costs  decision  is  an  appeal  against  an  exercise  of discretion.    The  Court  of Appeal  in  Acernus  Aero  Ltd  v  Vincent  Aviation  Ltd confirmed that the assessment of costs is essentially a matter for the Judge who has the conduct of the case: “[i]n defence to the special advantage enjoyed by a trial judge, this Court is slow to upset costs awards”.1

[9]      An appellate court will not interfere unless satisfied that the Judge who made the order acted on a wrong principle, or failed to take into account some relevant matter or took account of some irrelevant matter, or was plainly wrong.2

[10]      The Supreme Court in Shirley v Wairarapa District Health Board said that although the costs jurisdictions is discretionary,3 it is not unfettered.  The discretion is to be exercised generally in accordance with the rr 14.2 to 14.10 of the High Court Rules (Rules).4   Rule 14.2(a) reflects the longstanding principle that, unless there are exceptional reasons, costs should follow the event.  It states:

(a)       the party who fails with respect to a proceeding or an interlocutory application should pay costs to the party who succeeds:

[11]     Then there is the general principle under r 14.2(g) which states that costs should be predictable and expeditious.

[12]     Rule 14.7 then provides:

Refusal of, or reduction in, costs

Despite rules 14.2 to 14.5, the court may refuse to make an order for costs or may reduce the costs otherwise payable under those rules if—

(a) the nature of the proceeding or the step in a proceeding was such that the time required by the party claiming costs would have been substantially less than the time allocated under band A; or

(b) the property or interests at stake in the proceeding were of exceptionally low value; or

1      Acernus Aero Ltd v Vincent Aviation Ltd [2014] NZCA 246 at [8].

2      Shirley v Wairarapa District Health Board [2006] NZSC 63, [2006] 3 NZLR 523 at [15].

3      District Court Rules, r 14.1.

4      The District Court Rules are identical to the High Court Rules in respect of the rules relevant to this decision.

(c) the issues at stake were of little significance; or

(d) although the party claiming costs has succeeded overall, that party has failed in relation to a cause of action or issue that significantly increased the costs of the party opposing costs; or

(e) the party claiming costs has contributed unnecessarily to the time or expense of the proceeding or step in the proceeding by—

(i) failing to comply with these rules or a direction of the court; or

(ii) taking or pursuing an unnecessary step or an argument that lacks merit; or

(iii)   failing,   without   reasonable   justification,   to   admit   facts, evidence, or documents or accept a legal argument; or

(iv) failing, without reasonable justification, to comply with an order for discovery, a notice for further particulars, a notice for interrogatories, or any other similar requirement under these rules; or

(v) failing, without reasonable justification, to accept an offer of settlement, whether in the form of an offer under rule 14.10 or some other offer to settle or dispose of the proceeding; or

(f) some other reason exists that justifies the court refusing costs or reducing costs despite the principle that the determination of costs should be predictable and expeditious.

[13]      McGechan on procedure identifies three categories of exceptions:5

(a)   Split trials: Where liability is determined separately and in advance of quantum, the Judge may either award costs following the liability trial or reserve them until after the quantum trial: Cousins & Associates v FM Custodians Ltd [2013] NZCA 99 at [16] (liability admitted two weeks before liability trial. Award of costs on the liability trial upheld).

(b)   Partial success: The approach where the costs-claiming party has been only partially successful, or where each party has had similar success, is outlined by the Court of Appeal in Packing In Ltd (in liq) formerly known as Bond Cargo Ltd v Chilcott (2003) 16 PRNZ 869  (CA) at [5].

(c)   Indulgence: Conventionally, the grant of an indulgence to a party is at the expense of a costs award against that party: Cunningham v Butterfield [2014] NZCA 213 at [52]. However, there is no general rule that costs will usually be granted in favour of a lessor who has unsuccessfully opposed an application for relief against forfeiture made by a lessee: Cunningham v Butterfield at [57].

[14]     Other cases include where the case is brought in the public interest,6  and where the successful party behaves reprehensibly.7

5      McGechan on Procedure (online looseleaf ed, Brookers) at [HR14.2.01].

Analysis

[15]     Ms Homewood, on behalf of the respondents, emphasised that they had acted in good faith in bringing the application for a restraining order.   They had sought advice from a Community Law Centre.

[16]     Furthermore, in her opinion, the Judge seemed to consider there was some merit in the respondents’ position.  She described his offering them words of comfort and suggesting a remedy in that he instructed the appellants’ lawyer to tell the appellants not to have contact with the respondents.

[17]     Ms Homewood explained that at the heart of the matter was the way in which an enduring power of attorney was being exercised.  All the respondents seek is the ability to have access to Mrs Hoy (Mr Hoy, who is one of the appellants, holds an enduring power of attorney for Mrs Hoy).

[18]     Whilst having to deal with family disputes and accelerating tensions within a family is often difficult for a Judge, any discretion in respect of costs must be exercised on a principled basis.

[19]     I am satisfied that the discretion was not exercised generally in accordance with the Rules.   The Judge should have started from the principle that the unsuccessful party should pay costs to the successful party.  By refusing to make an order for costs, the Judge was required to act under r 14.7(f) that is, that some other reasons existed which justified the Court refusing costs.

[20]     Although the Judge referred to the financial hardship of the respondents, it appears there was no consideration or enquiry about the financial position of the appellants who, unlike the respondents, were legally represented.

[21]     More importantly, however, in referring to the justification that an award of costs would unduly exacerbate an already unsatisfactory state of affairs, the Judge

6      See, for example, New Health New Zealand Inc v South Taranaki District Council [2014] NZHC

993 at [8]-[10].

7      Vulcan Steel Ltd v McDermott [2013] NZHC 3232 at [31].

did not examine the circumstances which could lead to that conclusion.  There was

no evidence that the Judge took into account the following relevant considerations:

(a)	The   application   for   a   restraining   order   was   brought   by   the respondents.  They were wholly unsuccessful both as to jurisdiction
and as to merit.
(b)	The appellants took legal advice and incurred costs as a result in
defending the proceedings.  They were successful but, as a result of the Judge’s decision, were out of pocket.
(c)	Even if the Judge were correct in considering the escalation of family tensions a relevant consideration as to whether to award costs, the
impact    on   the    appellants    should   have    formed   part   of   that consideration.
[22]	I  am	satisfied  that  the  Judge  either  took  into  account  an  irrelevant

consideration, failed to take into account relevant considerations or indeed, was plainly wrong. The appellants were entitled to costs in the District Court.

What costs should have been awarded?

[23]     Rule 14.2(b) reflects the principle that an award of costs should reflect the complexity and significance of the proceeding, assessed objectively.   Rule 14.2(c) provides that costs should be assessed by applying the appropriate daily recovery rate at the time considered reasonable for each step reasonably required in relation to the proceeding. Actual time spent and costs incurred are strictly irrelevant.

[24]     The “appropriate daily recovery rate” is applied to the categories from r 14.3:

Category 1 proceedings           Proceedings of a straightforward nature able to   be   conducted   by   counsel   considered junior.

Category 2 proceedings           Proceedings of average complexity requiring counsel of skill and experience considered average.

Category 3 proceedings           Proceedings that because of their complexity or   significance   require   counsel   to   have special skill and experience.

[25]     The  categories  respond  to  the  skill  and  experience  requirement  of  the proceeding (and not the skill and experience possessed by counsel acting).

[26]     The “time bands” are the second of the two classifications central to the

routine working of the costs rules. The time bands are provided for under r 14.5:

14.5 Determination of reasonable time

(1) For the purposes of rule 14.2(c), a reasonable time for a step is –

(a) the time specified for it in Schedule 4; or

(b) a time determined by analogy with that schedule, if Schedule 4 does not apply; or

(c) the time assessed as likely to be required for the particular step, if no analogy can usefully be made.

(2) A determination of what is a reasonable time for a step under sub clause

(1) must be made by reference –

(a) to band A, if a comparatively small amount of time is considered reasonable; or

(b) to band B, if a normal amount of time is considered reasonable; or

(c) to band C, if a comparatively large amount of time for the particular step is considered reasonable.

[27]     Given  the  nature  of  the  proceedings  and  the  relatively  straight  forward jurisdictional issue, I categorise the proceedings as category 1 band B.

[28]     The appellants are also entitled to costs on the appeal which I set at the same rate.

Thomas J