SLB v SPB
[2012] NZHC 1405
•20 June 2012
NOTE: PURSUANT TO S 139 OF THE CARE OF CHILDREN ACT 2004, ANY REPORT OF THIS PROCEEDING MUST COMPLY WITH SS 11B TO
11D OF THE FAMILY COURTS ACT 1980. FOR FURTHER INFORMATION PLEASE SEE THE HIGH COURT OF NEW ZEALAND TAURANGA REGISTRY
CIV-2011-470-000942 [2012] NZHC 1405
IN THE MATTER OF THE CARE OF CHILDREN ACT 2004
BETWEEN SLB Appellant
ANDSPB Respondent
Hearing: 14 June 2012
Appearances: M Dodds for Respondent
R Dellow for Appellant
Judgment: 20 June 2012
JUDGMENT OF VENNING J
This judgment was delivered by me on 20 June 2012 at 3.30 pm, pursuant to Rule 11.5 of the High
Court Rules.
Registrar/Deputy Registrar
Date……………
Solicitors: Rennie Cox, Auckland
R C Mark, Kerikeri
Copy to: D Connor/R Dellow, Auckland
M B Dodds, Kerikeri.
SLB V SPB HC TAU CIV-2011-470-000942 [20 June 2012]
Introduction
[1] The parties to this appeal were formerly in a relationship. It was not a successful one. When it ended they became involved in proceedings in both the Family and High Courts in Auckland and Tauranga involving a range of issues.
[2] In one of those proceedings in the Family Court at Tauranga, Judge Geoghegan awarded costs of $16,047.00 in favour of the respondent against the appellant. The appellant appeals against that decision.
Background
[3] Following the breakdown in their relationship the principal issues the parties could not agree on were:
the paternity of the appellant’s son, C;
the care and parenting of C and the respondent’s contact with him;
thenature of their relationship and the consequent settlement of relationship property.
[4] The issues were vigorously contested by the parties. During the course of the various proceedings the respondent obtained a number of costs awards. He took bankruptcy proceedings against the appellant to enforce one of the cost awards. Those bankruptcy proceedings were settled, but in November 2010 the respondent issued a second bankruptcy notice in relation to further costs awards made in the Tauranga Family Court (in relation to the paternity proceedings) and in the High Court. That bankruptcy notice was served on the appellant in December 2010.
[5] During 2010 the parties were also involved in ongoing relationship property proceedings in the Family Court at Auckland and Care of Children Act proceedings before the Family Court at Tauranga (the Care of Children proceedings).
[6] The Care of Children proceedings were substantively determined on 16
November 2010 when the respondent resolved not to press his application for a parenting order. Judge Geoghegan dismissed the proceedings. The only matter left open was the issue of costs. The respondent sought costs.
[7] In early 2011 the parties agreed to go to mediation. They attended a mediation on 15 March 2011 at the conclusion of which they executed a settlement deed. The appellant says the settlement deed resolved the issue of costs in the Care of Children proceedings. The respondent says it did not.
The Family Court decision
[8] It is necessary to set out the background to the Care of Children proceedings in a little more detail. They followed paternity proceedings in which the respondent was successful in establishing his paternity of C. In February 2010 Judge Geoghegan had issued a judgment in the Care of Children proceedings in which the respondent sought contact with C. The Judge directed the parties engage in specialist counselling with the broad object of disclosing to C that the respondent was his father, preparing the parties and C for any issues arising out of that disclosure, and preparing the parties and C for contact between C and his father.
[9] Ultimately there was a meeting between C and the respondent. It did not go well. Despite that, the respondent initially maintained his application for a parenting order and in October 2010 Judge Geoghegan made directions allocating a one day hearing for the purpose of determining what, if any, contact should be ordered. He also made directions regarding any application for costs by the respondent in respect of the earlier hearings.
[10] Subsequent to the making of those directions, the respondent reviewed his position and advised that he did not wish to pursue the application for parenting orders. His substantive application was dismissed, but he maintained his application for costs.
[11] On 3 February 2011 the Judge heard argument on the costs issue. He did not consider he had sufficient information to make a decision. He directed the respondent to file a further memorandum by 17 February confirming details of actual and scale costs. The appellant was directed to file any reply by 3 March 2011. The respondent filed a memorandum providing the further information required.
[12] The parties went to mediation on 15 March 2011.
[13] After receiving the further memoranda and a further round of submissions as to the effect of the settlement deed on the issue of costs, the Judge issued the judgment of 20 October 2011 ordering the appellant to pay the respondent costs of
$16,047. The Judge noted that was one-half of the actual costs incurred by the respondent of $32,095 and was less than the scale costs.
The appeal
[14] The appellant appeals against the decision on two grounds:
(a) that all issues between the parties, including costs on the Care of Children proceedings in the Family Court at Tauranga, had been resolved by the terms of the settlement following the mediation; and/or
(b)if there was jurisdiction for an award the Judge had erred in taking into account irrelevant material and failing to take into account relevant considerations which militated against the making of a costs award.
Was the Judge precluded from making a costs award by the settlement?
[15] I set out the relevant provisions of the settlement deed completed by the parties at the mediation on 15 March 2011.
[16] The deed began by describing the parties and then recorded the background as:
A[The appellant and the respondent] are in a dispute concerning the status of their relationship that extended from approximately 1998 until late 2006 or early 2007.
B[The appellant and the respondent] are also in a dispute concerning the status, division and ownership of property.
C This deed is intended to fully and finally settle those disputes.
[17] The settlement deed was divided into three main sections:
Part A: Provisions Applying to All Parts of This Deed; and
Part B: Provisions Relating To Settlement of Disputed Claims; and
Part C: Provisions of General Application Including Dispute Resolution, Costs and Boiler-Plate.
[18] In Part A the following relevant provisions were included:
1.4.6the headings are for convenience only and will not affect the interpretation of this agreement.
Disputed claims were defined as:
1.1.2“Disputed claims” means each and every Claim held: (a) by [the appellant] against [the respondent]; or
(b) by [the respondent] against [the appellant];
and, in each case, which directly or indirectly relates to a Relevant
Matter];
Relevant Matter was defined as:
“Relevant Matter” means all circumstances directly or indirectly relating to [the respondent] or [the appellant’s] relationship property Claims and in that context:
(a) The relationship between [the appellant] and [the respondent] whether characterised as a de facto relationship as defined in the PRA or as a friendship or otherwise;
(b) their respective contributions (of any kind) to that relationship;
(c) their respective entitlements to any assets, land; property, chattels, rights, privileges or other benefits whether arising before, during or after, their relationship;
(d) the outstanding bankruptcy notice debt as at 15 March 2011;
(e) all issues of costs arising from the proceedings between the parties in the Family Court at Auckland.
Clause 1.2 provided:
A reference to a “Claim” or “Claims” includes any claim, counterclaim, cross claim, right of set-off or other interest, whether arising in equity, contract, tort (including negligence), statute (including the FPA, PRA and CA 93), breach of fiduciary or statutory duty, breach of director’s duty, or on any other basis, which has arisen or which may in future arise and irrespective of whether such claim, counterclaim, cross-claim, right of set-off or other interest is currently known by the claimant or any other party or person to exist (or not). For the avoidance of doubt the term “Claim” includes any claim for costs in any proceeding, intended or existing, between the parties.
[19] Part B, the operative provision of the settlement deed, provided for implementation of the settlement and recorded the following:
7. Comprehensive And Final Agreement On Property Issues
7.1The provisions of this agreement are in full and final settlement of all or any Claims or rights which either [the appellant] or [the respondent] may have against the other in relation to any Relevant Matter.
7.2Neither [the appellant] nor [the respondent] will themselves, or will permit their Related Entities to, commence, support, continue or maintain any Claim.
7.3This agreement remains binding despite the taking of property by creditors or bankruptcy, reconciliation, separation, dissolution or death. It is intended that this clause will be construed in its widest sense and not restrictively.
The appellant’s case
[20] The appellant accepts that cl 7.1 provides for a full and final settlement of relevant matters (as defined) and does not apply to the costs in the Care of Children proceedings. However, she argues that the costs awarded by Judge Geoghegan was a “claim” as defined and that cl 7.2 of the settlement deed operated to bar the respondent from continuing that “claim”.
[21] Mr Dellow referred to the principles of interpretation of contracts and deeds in Boat Park v Hutchinson1 and Investors Compensation Scheme Ltd v West Brunswick Building Society.2
[22] I agree with counsel that the matter is one of interpretation and that the relevant principles relating to interpretation as set out in Boat Park apply. The settlement deed must be interpreted against the matrix of facts that existed and was known to the parties when they concluded the deed.
[23] Importantly, the principal focus of the parties at the time they went to the mediation in March 2011 was the issue of the status of their relationship and the effect of that on their competing claims in relation to property, particularly whether or not the property they owned was relationship property and subject to the Property (Relationships) Act 1976. That is confirmed by the background the parties recorded to the settlement deed which only refers to the status of their relationship (relevant to the property issue) and property. No issues relating to C or to the Care of Children proceedings are mentioned in the background to the deed.
[24] The ambit of the deed was extended by the definition of “relevant matter”. While the focus of “relevant matter” was again on the categorisation of their relationship for the purposes of the Property (Relationships) Act, their contributions to the property and their entitlements in relation to property arising out of the relationship, the parties also went on to include the outstanding bankruptcy notice
debt (which was not in any way related to the Care of Children proceedings) and the
1 Boat Park v Hutchinson [1999] 2 NZLR 74.
2 Investors Compensation Scheme Ltd v West Brunswick Building Society [1998] 1 WLR 896.
costs in the Family Court at Auckland (the Property (Relationships) Act proceedings) as “relevant matter(s)”. Despite the express reference to the costs in the Family Court proceedings in Auckland as a relevant matter, the parties did not refer to the costs in the Care of Children proceeding as a relevant matter, even though they had had a hearing about that issue just the month before the mediation.
[25] The deed does not refer to the Care of Children Act proceedings at all. The appellant has to rely on the general reference in the definition of claim to costs “in any proceeding” to support her argument that the costs in the Care of Children proceeding are caught by cl 7.2 of the deed.
[26] While the appellant’s argument is that cl 7.2 settles additional claims other than those recorded in cl 7.1, cl 7.2 must itself be considered in the context of the deed overall and cl 7 in particular. Clause 7 is the operative settlement provision. Clause 7.1 defines the ambit or context of the settlement which significantly, is restricted to relevant matters. Clause 7.2 does not extend the ambit of the matters settled by the deed. It is no more than a mechanical provision to give effect to the settlement of the matters previously recorded in cl 7.1. Effectively cl 7.2 is to be read as:
7.2Neither [the appellant] nor [the respondent] will themselves, or will permit their Related Entities to, commence, support, continue or maintain any Claim [in relation to relevant matters].
[27] If the parties had intended that the settlement was to extend to the costs in the Care of Children proceedings then it would have been a simple matter to include those costs under relevant matters just as the costs in the other proceedings were included. For their own reasons the parties chose not to include the costs in the Care of Children Act proceedings.
[28] The plain meaning of cl 7.2 can be cross-checked by placing it in its context. Both cls 7.2 and 7.1 are within Part B of the agreement relating to the settlement of disputed claims. I note that “disputed claims” defines each and every claim which incorporates the definition of claim in relation to relevant matter. It does not include the Care of Children Act proceedings.
[29] The conclusion that the focus of the settlement agreement was on the property issues is reinforced by the fact the agreement was made under s 21A of the Property (Relationships) Act 1976 and was executed in a form to comply with s 21F of that Act.
[30] For those reasons I agree with the Judge that the settlement deed does not preclude the respondent from maintaining a claim for costs in the Care of Children proceedings or the Court making such an award.
The merits of the costs award
[31] In the alternative Mr Dellow submitted that, even if a costs award was not barred by the provisions of the settlement agreement, the Judge should not have made a costs award in this case. Counsel referred to the principles discussed by Judge Burns in GVCR v GER.3 First Mr Dellow submitted that while the Judge noted that certain issues were not relevant to the costs issues, he then went on to discuss those and must have been influenced by them, in particular, the appellant’s perceived faults.
[32] The Judge said:
[17] While it is correct that I made adverse findings against both parties the background to this case is one where [the appellant] not only denied that [the respondent] was the father of C but took what I consider to be extraordinary steps to prevent C’s paternity from being established. While these are not relevant issues in terms of a decision as to costs in the proceedings under the Care of Children Act the reality of the position and indeed my assessment of it is that when [the respondent] commenced proceedings to obtain contact with C [the appellant’s] position was an entrenched one. That entrenched position was in my assessment clearly established by the evidence heard before me.
[33] On my reading of the judgment the appellant’s submissions on this point overstate the matter. The Judge has clearly set to one side the extraordinary steps the appellant took to prevent C’s paternity from being established and accepted they were not relevant issues in terms of the decision as to costs in proceedings under the Care of Children Act, which proceeded on the basis that the respondent had been
established as C’s father. By referring to the paternity proceedings the Judge was doing no more than noting the appellant’s attitude to the paternity proceedings had been carried forward into her approach to the Care of Children proceedings.
[34] The context to the comments in [17] is to be found in the next two paragraphs of the judgment:
[18] I have referred in my judgment to [the appellant’s] response to [the respondent’s] application for contact. Her position was that she had not lived in a de facto relationship with [the respondent], that she did not know whose C’s father was, that she had brought C up as a single mother fully supporting him since birth without financial assistance from any other person, that [the respondent] had been “verbally and physically abusive” to C, that [the respondent] was a drug user resulting in him being aggressive and unstable and that [the respondent] had made verbal threats to [the appellant].
[19] It was clear from [the appellant’s] stance from the outset that a
defended hearing would be required.
[35] Next, Mr Dellow sought to rely on comments by the Court of Appeal in Shaw v Shaw where the Court reduced a costs award on appeal. The Court considered the Judge at first instance had been influenced by perceived fault in awarding costs to a successful party.4 The point is that in Shaw, the perception was unjustified, or at the least overstated. In the present case, the Judge’s view the appellant’s approach was entrenched and confrontational was available to the Judge based on the matters he
referred to in his decision.
[36] Next, Mr Dellow submitted that the Judge failed to take into account the impact of a costs order on the stability of family relations and the effect on C of re- opening the longstanding entrenched disputes between his parents regarding costs. However, the reality is that in this case there is no family relationship to be sustained. Given the present state of the relations between the parties this is not a case where the parties are likely to have any ongoing relationship.
[37] Finally Mr Dellow submitted the Judge should have done more to consider the impact of a costs award on C, whose interests were the focus of the proceedings. Again I find that the Judge correctly directed himself on that issue. He said:
[24] ... I consider an award of costs to be appropriate and consider also that [the appellant] has the means to meet such an award. I do not consider that such an award would impact unduly on C and on his mother’s care of him. I do not however consider that the circumstances require an increase in the costs which might otherwise be awarded or the imposition of indemnity costs. Not only is such an award not justified but I am of the view that it would also have the effect of impacting unduly upon C through the imposition of financial pressure upon his mother.
[38] The appellant has failed to demonstrate to this Court that the Judge took into account irrelevant factors or failed to take account of relevant factors in fixing the costs award he made.
Result
[39] The appeal is dismissed.
Costs
[40] Costs to the respondent on a 2B basis together with disbursements including travel.
Venning J
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