Siddiqui v Siddiqui
[2021] NZHC 2822
•21 October 2021
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2018-404-000798
[2021] NZHC 2822
BETWEEN ASHISH SIDDIQUI AND YASHIKA SIDDIQUI
Applicants
AND
AMIN AZHAR SIDDIQUI AND USHA AMIN SIDDIQUI
Respondents
Hearing: On the papers Counsel:
G D Stringer & R Rao for Applicants
J S Cooper QC, A E Hansen & L A Sheppard for Respondents
Judgment:
21 October 2021
JUDGMENT OF PAUL DAVISON J
[Re: Application for Stay of Costs Order]
This judgment was delivered by me on 21 October 2021 at 2:00 pm pursuant to r 11.5 of the High Court Rules.
Registrar/Deputy Registrar
Solicitors:
Heimsath Alexander, Auckland Inder Lynch, Manukau, Auckland
SIDDIQUI v SIDDIQUI [2021] NZHC 2822 [21 October 2021]
Introduction
[1] Following my judgment dated 28 May 2021 in which I found in favour of the respondents (the substantive judgment),1 by a further judgment delivered on 31 August 2021 I ordered the applicants to pay costs to the respondents of $67,820.63 and disbursements of $11,390.00 being a total of $79,210.63 (the costs judgment).2
[2] The applicants have appealed the substantive judgment.3 However, no appeal has been filed against the costs judgment.
[3] By application dated 28 July 2021 the applicants applied for an order staying execution of the substantive judgment. By judgment dated 15 October 2021, I declined to make an order staying execution of the substantive judgment, dismissed the application, and ordered the applicants to pay costs to the respondents to be fixed following the filing of memoranda by the parties.4
[4] By an amended interlocutory application dated 7 September 2021 the applicants also applied for an order to stay execution of the costs judgment pending determination of their appeal. The respondents oppose the making of an order staying execution of the costs judgment pending the outcome of the appeal.
[5] The parties have filed written submissions and are agreed that the matter is appropriately determined on the papers.
[6]This judgment determines that application.
Submissions
The applicants
[7] Mr Stringer for the applicants submits that given the applicants’ appeal of the substantive judgment and the intertwined nature of the orders made with the costs
1 Siddiqui v Siddiqui [2021] NZHC 1234.
2 Siddiqui v Siddiqui [2021] NZHC 2270.
3 Notice of Appeal dated and filed 24 June 2021: CA 376/2021
4 Siddiqui v Siddiqui [2021] NZHC 2776.
judgment, it is in the interests of justice for an order to be made staying enforcement of the costs judgment until the outcome of the appeal is determined. Counsel submits that the substantive judgment provides for the Gloucester Road property to be transferred to the respondents and the costs judgment orders the applicants to pay the respondents the sum of $92,582.00. Mr Stringer notes that the relief sought by the applicants in their appeal includes sums claimed as credits or set-offs to be ordered in favour of the applicants.
[8] Counsel says that, should their appeal succeed, the applicants are concerned as to their ability to unwind the financial steps required to implement the orders made by substantive judgment requiring them to transfer the property to the respondents. Mr Stringer says that if the respondents also execute the costs judgment prior to determination of the applicants’ appeal the anticipated difficulties will be compounded.
[9] Moreover, should the applicants succeed in their appeal, their ability to recover the costs paid to the respondents will be uncertain. Mr Stringer notes that the respondents have themselves referred to their uncertain future financial position due to their ages and employment situations. He says that if the costs judgment is enforced and the costs paid by the applicants, the respondents may not be able to repay the money should the applicants succeed in their appeal. Mr Stringer submits that a stay of the costs judgment will not significantly prejudice the respondents as the applicants’ appeal is presently well advanced. He also notes that the respondents have been granted legal aid for the appeal, so that the delay in payment of the costs pursuant to the costs judgment will not prejudice their ability to conduct their opposition to the appeal.
[10] He submits that the intertwined nature of the orders made in the substantive and costs judgments, along with the credit/set-off remedies sought by the applicants favour a stay of the costs judgment on the overall balance of convenience. The applicants say that it would be preferable for all and any financial transactions and adjustments to be carried out contemporaneously once a final adjustment sum can be determined following the outcome of the appeal.
[11] Mr Stringer acknowledges that the applicants have not appealed against the costs judgment but submits that the Court nevertheless has jurisdiction to make an order to stay execution of the costs judgment either under rule 12 of the Court of Appeal (Civil) Rules 2005, or pursuant to its inherent jurisdiction.
The respondents
[12] Ms Cooper QC for the respondents submits that the applicants’ appeal of the substantive judgment will not be rendered nugatory in the absence of an order staying execution of the costs judgment. She submits that a stay of the costs judgment would not preserve the applicants’ position in any relevant way, because the costs award is separate from the subject matter of the dispute between the parties.
[13] Ms Cooper submits that this is not one of the very rare cases where a costs award is so great that it might be just for the Court to treat it as akin to the subject matter of the substantive judgment. Counsel says that it is also relevant to note that the respondents do not say that the costs awarded to them by the costs judgment will render them unable to prosecute their appeal of the substantive judgment. Ms Cooper notes that in Ashish Siddiqui’s affidavit filed in support of the application for an order staying execution of the substantive judgment, he states that he and his wife Yashika own other properties and have sufficient financial means to pay any costs or damages for which they may be found liable in relation to their application for a stay of execution.
[14] Ms Cooper says that the respondents will however, be injuriously affected by an order for stay of the costs judgment. She says that the respondents were required to take on debt to fund the High Court proceeding, including by means of a grant of legal aid which they are required to repay. The terms of the legal aid grant require the respondents to pay interest on the debt commencing six months after the date of approval by Legal Services of the final invoice rendered by the respondents’ solicitors and counsel in relation to the High Court proceeding. Ms Cooper says that if execution of the costs judgment is stayed, the respondents will not be able to repay the legal aid debt before interest on it starts to accrue.
[15] The respondents submit that the overall balance of convenience favours the Court making an order dismissing the application to stay the costs judgment and thereby enabling the respondents to obtain the fruits of the costs judgment without being delayed and required to await the outcome of the applicants’ appeal of the substantive judgment.
[16] Responding to the applicants’ submission that the costs judgment and substantive judgment are “intertwined” such that it is appropriate to stay both judgments until the appeal is determined, Ms Cooper submits that a staying of the costs judgment needs to be considered separately on its own merits. She submits that the costs judgment is a money judgment, and provided there is an appropriate assurance of repayment if the appeal is successful, then the party successful at first instance should have its money at once.
[17] Counsel further submits that should the applicants fail to succeed in their application to stay execution of the substantive judgment, it should follow that they will also have failed to make out the grounds for a stay of execution of the costs judgment. Conversely, should the applicants succeed in obtaining an order staying execution of the substantive judgment, the respondents should not be prevented from recovering their costs and disbursements straight away and without having to await the outcome of the appeal. Ms Cooper says that as the applicants accept that the respondents are at least part beneficial owners of the Gloucester Road property, it is reasonable to assume that the value of their share of the property will exceed the amount of the costs judgment, so that the applicants could be assured of recovering the amount the costs paid to the respondents, should their appeal succeed.
Law and principles
[18] Rule 12(3)(a) of the Court of Appeal (Civil) Rules 2005 contains the power for a court appealed from, to order a stay of the execution of a decision under appeal.
[19]Rule 12 provides:
(1)None of the matters referred to in subclause (2) operate as—
(a)a stay of a proceeding in which a decision was given; or
(b)a stay of execution of that decision.
The matters are—
(a)an application for leave to appeal; or
(b)the giving of that leave; or
(c)an appeal.
(3)Pending the determination of an application for leave to appeal or an appeal, the court appealed from or the Court may, on application, —
(a)order a stay of the proceeding in which the decision was given or a stay of the execution of the decision; or
(b)grant any interim relief.
(4)An order or a grant under subclause (3) may—
(a)relate to execution of the whole or part of the decision or to a particular form of execution:
(b)be subject to any conditions that the court appealed from or the Court thinks fit, including conditions relating to security for costs.
(5)If the court appealed from refuses to make an order under subclause (3), the Court may, on application, make an order under that subclause.
(6)If the court appealed from makes an order under subclause (3), the Court may, on application, vary or rescind that order.
(7)The Court may, at any time, vary or rescind an order made by it under this rule.
[20] Referring to applications for a stay brought under r 12(3) the Court of Appeal in Keung v GBR Investment Limited explained:5
In determining whether to grant a stay, the Court must weigh the factors “in the balance” between the successful litigant’s rights to the fruits of a judgment and “the need to preserve the position in case the appeal is successful”.6 Factors to be taken into account in this balancing exercise include:7
(a)Whether the appeal may be rendered nugatory by the lack of a stay;
5 Keung v GBR Investment Ltd [2010] NZCA 396 at [11].
6 Duncan v Osborne Buildings Ltd (1992) 6 PRNZ 85 (CA) at 87.
7 Dymocks Franchise Systems (NSW) Pty Ltd v Bilgola Enterprises Ltd (1999) 13 PRNZ 48 (HC) at [9].
(b)The bona fides of the applicant as to the prosecution of the appeal;
(c)Whether the successful party will be injuriously affected by the stay;
(d)The effect on third parties;
(e)The novelty and importance of questions involved;
(f)The public interest in the proceeding; and
(g)The overall balance of convenience.
That list does not include the apparent strength of the appeal but that has been treated as an additional factor.8
[21] Rule 12(3) contains the power for the Court appealed from to order a stay of the proceeding in which the decision was given or a stay of the execution of the decision; or grant any interim relief.
[22] As I have noted, the applicants have not appealed the costs judgment and the question arises as to whether the Court has the power to stay execution of a judgment in the absence of an appeal against it. This issue arose in Sullivan v Wellsford Properties Limited where the plaintiffs sought a stay of a costs judgment in circumstances where they had appealed against the substantive judgment but not the costs judgment.9 Justice Gordon noted the observations of Smellie J in Pinson v Pinson that the Court “has jurisdiction to make any order necessary to enable it to act effectively even in respect of matters regulated by rules of Court so long as it does not contravene those rules”.10 Justice Gordon concluded:11
Without deciding whether r 12 in fact applies, I proceed either under r 12 or if it does not apply, under this Court’s inherent jurisdiction.
[23] In my view however, the power conferred by r 12(3)(b) on the Court to grant “any interim relief” pending determination of an appeal of a decision of the Court is sufficiently broad in its scope to encompass the granting of a stay of an order for costs made in respect of a decision of the Court under appeal. I consider that the order for
8 Body Corporate No 188529 v North Shore City Council (No 6) HC AucklandCIV-2004-404-3230, 11 February 2009.
9 Sullivan v Wellsford Properties Ltd [2018] NZHC 708.
10 Pinson v Pinson (1991) 5 PRNZ 177 (HC) at 178.
11 Sullivan v Wellsford Properties Ltd, above n 9, at [19].
costs made by the costs judgment is an intrinsic aspect of the proceeding and decision now under appeal and falls within the scope of r 12.
[24] Accordingly, I do not consider that it is necessary to have recourse to the Court’s inherent power to make an order to stay execution of the costs judgment pending determination of the appeal. In this context I also note that r 17.29 of the High Court Rules 2016 confers power on the Court to stay enforcement of a judgment where it is satisfied that a substantial miscarriage of justice would be likely to result if the judgment were enforced.
[25] As regards the issue of whether the respondents should be delayed in recovering the costs awarded to them and a stay of enforcement ordered pending the outcome of an appeal it is relevant to recognise that generally speaking a successful party should be able to recover their costs notwithstanding that the substantive decision is to be appealed. As observed by Osborne AJ in Walker v Castlereagh Properties Ltd :12
[44] Where the unsuccessful party appeals a substantive judgment, the justice in relation to identifying who should be out of pocket for awarded costs in the interim will most often (albeit not invariably) favour the successful respondent. The respondent has had to bear costs in either suing the other party or defending the other party’s unsuccessful claim. That stage of the litigation is over. If the unsuccessful party elects to embark on a further stage of litigation through appeal it will generally be just that the successful party (through the payment of costs) is reimbursed in the interim for the costs awarded and fixed pursuant to its success.
[45] Such an approach will by the nature of the balancing exercise remain subject to influence by factors of particular relevance in an individual case.
…
Analysis
[26] In my judgment declining the applicants’ application for stay of the substantive judgment I held that the balance of convenience favoured the respondents being able to enforce the judgment to require the applicants to transfer the Gloucester Road property to them now as they are presently in a position to obtain the necessary bank
12 Walker v Castlereagh Properties Ltd [2015] NZHC 907, [2015] NZAR 944 at [44].
mortgage finance and that any further delay in transferring the property would be likely to frustrate and prevent them from doing so in the future. I said:13
When these two competing scenarios are weighed, I consider that the real risk that the respondents’ claim to ownership of the property could be entirely frustrated due to the delay that will occur before a transfer of the property to the respondents was required to be implemented by the applicants, significantly outweighs the purely financial consequences for the applicants should they succeed in their appeal and seek to recover an additional sum of money from the respondents.
[27] As I explained, in my view the determining factor was the present ability of the respondents to obtain the bank mortgage finance necessary to enable them to complete the settlement of a transfer of Gloucester Road to them, and the likelihood that further delay caused by awaiting the outcome of the applicants’ appeal, may lead to them being unable to obtain the necessary bank finance at a future date.
[28] That compelling factor does not apply to the order for costs, made in the costs judgment pursuant to which the applicants were ordered to pay costs and disbursements to the respondents totalling $79,210.63. This costs award is of course directly related to the outcome of the dispute between the parties as determined by the substantive judgment. In the event of the applicants’ appeal being successful either in whole or in part that outcome will inevitably affect the award of costs made by the costs judgment.
[29] I agree with Mr Stringer that the costs order made by the costs judgment is so closely connected with the outcome of the appeal against the substantive judgment that it would be inappropriate to treat it separately and enforce it prior to determination of the appeal. I note that the scope of the appeal includes both the determination that applicants are holding the Gloucester Road property on trust for the respondents, and also a number of set-offs and claims made by the applicants which if upheld on appeal would require financial adjustments to be made between the parties.
[30] While the respondents would obviously wish to be able to enforce the order for costs and disbursements now and before they proceed to settle the transfer of Gloucester Road so as to be able to apply the amount of the costs payable by the
13 Siddiqui v Siddiqui, above n 4, at [28].
applicants towards the settlement sum, I consider that their ability to do so would be largely a matter of financial convenience. I note that the respondents received a grant of legal aid in respect of their legal costs for the High Court trial, and although they are required to repay Legal Services and will be required to pay interest on the debt after a period, they are not presently under any pressing obligation to repay the legal aid debt and are unlikely to be at least until after the applicants’ appeal has been determined.
[31] I also agree with the applicants’ submission that having regard to the possibility of a successful appeal resulting in further financial adjustments being required to be made, and having regard to this unfortunate dispute being between family members, it would be preferable for this to take place after all such sums and adjustments, including High Court and Court of Appeal costs are determined so as to achieve finality in the matter.
[32] While the applicants’ appeal would not be rendered entirely nugatory were they required to pay the costs awarded to the respondents by the costs judgment, and having regard to the relevant factors set out in Keung, I am satisfied that in the circumstances of this case, the balance of convenience in relation to the costs orders clearly favours the making of an order to stay execution of the costs judgment pending determination of the applicants’ appeal.
Result
[33] I make an order staying execution of the costs judgment pending determination of the applicants’ appeal in CA 376/2021.
[34] The applicants having succeeded in their application for an order for stay of the costs judgment are entitled to costs and reasonable disbursements.
[35] I reserve determination of the costs until the outcome of the applicants’ appeal is determined.
Paul Davison J
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