Si'itia v Matamu
[2018] NZHC 1436
•15 June 2018
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2014-404-000170
[2018] NZHC 1436
BETWEEN VA’AIMALU SI’ITIA, MARY MCEWING, REVEREND ALISA LASI, REVEREND
and SALAPO RAPITI TUIA
First, Second, Third, Sixth named First Defendants / First Counterclaim Plaintiffs
AND
TUI’IMALO MATAMU, TALAOALI’I NASERI, MALIELEGAOI AUMUA, SAENI PITA and TOFA TOFIA TOFA
Plaintiffs / First Counterclaim Defendants
ASORA AMOSA
Second Counterclaim DefendantPACIFIC ISLAND CHURCH AVONDALE TRUST
Third Counterclaim Defendant
AOGA AMATA PACIFIC ISLAND CHURCH AVONDALE TRUST
Fourth Counterclaim Defendant
Hearing: 18 May 2018 Appearances:
Richard Pidgeon for the First Counterclaim Plaintiffs Olinda Woodroffe for the Second to Fourth Counterclaim Defendants
Judgment:
15 June 2018
JUDGMENT OF MOORE J
[Costs]
This judgment was delivered by me on 15 June 2018 at 4:00 pm pursuant to Rule 11.5 of the High Court Rules.
Registrar/ Deputy Registrar Date:
SI’ITIA & ORS v MATAMU & ORS [2018] NZHC 1436 [15 June 2018]
Introduction
[1] Members of a parish once a model of unity remain locked in an acrimonious and drawn out dispute. This decision represents the latest iteration in what is a most unfortunate and, in my view, avoidable battle.
[2] In the substantive proceeding I dismissed the plaintiffs’ causes of action.1 Earlier, the defendants had discontinued a counterclaim. This decision relates only to costs on the discontinuance which, perhaps unsurprisingly given the progress of this matter from the outset, was hotly contested.
Background, in brief
[3] The Avondale Union Parish (“AUP”) was established in 1972 when several Presbyterian and Methodist congregations in the area united. It grew to include a large Samoan component, reflected in separate services being conducted in English and Samoan for the English speaking fellowship (“ESF”) and Samoan speaking fellowship (“SSF”) respectively.
[4] In October 2012, the national governing body of the Presbyterian Church established a Pacific Islanders’ Synod in recognition of the need to meet the spiritual needs of the Pacific Island congregations within the Church. Over the course of 2013, certain factions within the SSF agitated to establish themselves as a separate congregation operating under this Synod. This group is represented by the plaintiffs in the substantive proceedings. After escalating tensions, at a meeting on 5 December 2013 the AUP Parish Council passed a resolution denying the plaintiffs’ group future use of the Parish premises because they had already abandoned their commitment to and membership of the AUP.
[5] The plaintiffs commenced proceedings on 31 January 2014, challenging their ousting. These were defended. In a counterclaim dated 19 June 2014 the defendants alleged breach of trust, breach of contract and breach of fiduciary duty on the part of the plaintiffs and further counterclaim defendants associated with the substantive
1 Matamu & Ors v Si’itia & Ors [2016] NZHC 2516.
proceeding. They sought to litigate ancillary issues to the underlying disagreement between the branches of the AUP.
[6] A five day fixture was initially allocated, commencing on 23 March 2015, for the claim and counterclaim. It was vacated by Venning J on 25 February 2015, but the matter was called before Woolford J on 26 March 2015. Woolford J heard argument on three outstanding interlocutory applications: strike out of certain defendants; strike out of the counterclaim; and particular discovery on the counterclaim. He recorded in his Minute of the same day:
“[9] When the matter was called on 26 March 2015, the Court commenced to hear argument in relation to three outstanding interlocutory applications. After discussion with the Court and an adjournment to take instructions, counsel for the first defendants sought leave to withdraw the counterclaim and interlocutory application for particular discovery against the plaintiffs/first counterclaim defendants and the other counterclaim defendants.”
[7] Woolford J granted leave. He accordingly made directions for the hearing of the substantive claim.
[8] On 19 May 2015 Duffy J heard the claim and issued an interim decision. She adjourned the claim in part because she considered oral evidence was required to resolve an outstanding factual issue, namely whether by the time of the resolution the plaintiffs’ group had already left the AUP.
[9] It then came before me. In my judgment of 21 October 2016 I found the resolutions were valid because by the time of the Parish Council’s vote the plaintiffs’ group had left the AUP. As such, their claims in breach of contract and fiduciary duties failed. I indicated the defendants, as the successful parties, were entitled to costs.
[10] Subsequently, on 19 December 2016 I delivered a costs judgment and concluded the plaintiffs (that is, the first counterclaim defendants) were entitled to costs on the counterclaim pursuant to the ordinary rule that a party who discontinues a proceeding must pay costs to the defendant up to and including the discontinuance.2
2 High Court Rules 2016, r 15.23.
Quantum remained unresolved by 21 December 2017. I accordingly directed a hearing to be held.
Costs on the counterclaim: the issues
[11]That hearing was held on 18 May 2018.
[12] All the counterclaim defendants seek costs against the counterclaim plaintiffs on the discontinued counterclaim (that is, the defendants in the substantive proceeding, who I refer to in this judgment as the counterclaim plaintiffs).
[13] Mr Pidgeon for the counterclaim plaintiffs submits costs on the discontinuance should lie where they fall because that is the just and equitable result given the conduct of the first counterclaim defendants in this proceeding.
The relevant rules
[14] The central rule is r 15.23 of the High Court Rules 2016, which articulates a presumption that a plaintiff who discontinues a proceeding must pay costs to the defendant of and incidental to the proceeding up to and including the discontinuance:
“15.23 Costs
Unless the defendant otherwise agrees or the court otherwise orders, a plaintiff who discontinues a proceeding against a defendant must pay costs to the defendant of and incidental to the proceeding up to and including the discontinuance.”
[15] The guiding principles emerge from a number of decisions in this Court and the Court of Appeal.3 In short the defendant has the advantage of a presumption that even where there has not been unreasonableness, they are entitled to costs. The rule at 15.23 is designed in the interests of certainty and predictability, but it may be displaced if there are circumstances which make it just and equitable that it should not apply.
3 See Kroma Colour Prints Ltd v Tridonicatco NZ Ltd [2008] NZCA 150, (2008) 18 PRNZ 973; FM Custodians Ltd v Pati [2012] NZHC 1902; and Opus International Consultants Ltd v Colac Bay Vision Ltd [2015] NZHC 1782.
[16] In considering whether the rule is displaced the court will not generally consider the merits of the respective cases, but it will focus on the reasonableness of the stance of both parties up to the point of discontinuance, conduct prior to the commencement of the proceeding, and the reason for discontinuing.
[17] Additionally, the court’s general discretion at r 14.1 on questions of costs may override the general discontinuance principles.
Assessment
[18] Despite Mr Pidgeon’s submissions, I did not merely indicate the first counterclaim defendants were entitled to costs in my decision of 19 December 2016.
I awarded them:4
“The reasonable costs associated with the discontinued counterclaim before Woolford J on 26 March 2015 are awarded in favour of the plaintiffs against the first, second, third and sixth named first defendants.”
[19]That decision cannot seriously be relitigated now.
[20] It also has important consequences for the position of the second to fourth counterclaim defendants. It would be an unusual result for the second to fourth counterclaim defendants to not enjoy the benefit of a costs award because the first counterclaim defendants have acted unreasonably throughout the prosecution of their substantive claim. That is particularly so given the second to fourth counterclaim defendants were not party to the substantive proceedings. Accordingly I also consider the second to fourth counterclaim defendants are entitled to costs on discontinuance.
[21] As for quantum, the following sums are sought in respect of each counterclaim defendant:
(a)first counterclaim defendants – $6,281.50;5
(b)second counterclaim defendants – $7,786.50;
4 Matamu v Si’itia [2016] NZHC 3137 at [31].
5 No recent amount has been specified, so I rely on the amount stated in counsel for the first counterclaim defendants’ letter to Mr Pidgeon of 20 February 2017.
(c)third counterclaim defendants – $7,786.50; and
(d)fourth counterclaim defendants – $7,786.50.
[22]The total amount sought is $29,641.
[23] I agree with Mr Pidgeon that a substantial reduction is warranted. But I prefer to approach the reduction in a global way. There are two factors justifying a reduction of about 50 per cent.
[24] First, in his submissions Mr Pidgeon focused on duplication in the costs claimed in respect of each separate counterclaim defendant. Separate statements of defence to the counterclaim were filed, and separate lists of documents, even though Ms Woodroffe represented all counterclaim defendants. Moreover, for all subsequent steps including preparation of submissions they are content to apportion costs between each counterclaim defendant. I agree that a reduction for this factor is warranted, particularly given the simplicity of some of the counterclaims and the paucity of the lists of documents filed. This reduction also covers filing fees and associated disbursements.
[25] Second, taking a step back, the circumstances of the discontinuance as a whole and in particular the conduct of the respective parties calls for a substantial reduction. The decision by the counterclaim plaintiffs to discontinue their counterclaim was made in the interests of advancing the substantive dispute and bringing these proceedings to an end. That was a responsible decision, and not one which reflected the merits of their case so much as their desire to narrow the issues, reduce hearing time and draw matters to a close in a more timely fashion.
[26] Unfortunately, as history now reveals, this measure did not achieve its intended outcome. The plaintiffs in the substantive dispute appealed all the way to the Supreme Court, where leave was refused. They are now seeking to bring their case to the Human Rights Committee of the United Nations. Additionally they have not paid any costs except in the Court of Appeal; an award met by security for costs paid into the Court. That has given rise to the need for an examination, scheduled for 29 June 2018.
I consider my award of costs on the discontinuance should reflect these nuanced features of this proceeding and the conduct of the parties generally.
[27]Accordingly, as indicated, I consider a reduction of 50 per cent is warranted.
[28] As an addendum I record that when I inquired of Ms Woodroofe why the outstanding costs had not been paid she replied that the available funds were frozen. I assume this was a reference to the freezing orders made in this Court on the defendant’s (AUP’s) application. Those funds were frozen because the AUP was concerned that despite being combined funds, the property of the AUP, the plaintiffs were using or intending to use them for their own purposes. It is difficult to see how these funds may now be used by the unsuccessful plaintiffs to meet their cost obligations.
Order
[29]In set off, the first counterclaim defendants are entitled to $3,140.75.
[30] The remaining counterclaim defendants are entitled to $11,679.75 in costs, apportioned between them.
Moore J
Solicitors/Counsel:
Ms Woodroffe, Auckland Mr Pidgeon, Auckland
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