Sue v Sue
[2025] NZHC 323
•27 February 2025
IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY
I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE
CIV-2022-454-32
[2025] NZHC 323
UNDER THE Property Law Act 2007 IN THE MATTER OF
an application for an order for sale
BETWEEN
PANATAHI SUE
Applicant
AND
TANYA JANE SUE
Respondent
Hearing: On the Papers Counsel:
G P Mason for Applicant M J Leggat for Respondent
Judgment:
27 February 2025
JUDGMENT OF CHURCHMAN J
[Costs]
Introduction
[1] Panatahi Sue commenced proceedings against Tanya Sue (her daughter) in relation to a jointly owned property at Colyton (the Property).
[2] Following a defended hearing on 3 — 4 November 2024, I issued a reserved decision on 18 December 2024.
[3] Panatahi Sue was successful, and I ordered that the defendant purchase her share in the Property on the basis of a valuation. In the alternative I directed that if the defendant did not wish to buy the plaintiff’s half share in the Property, the Property was to be sold and the net sale proceeds divided equally.
SUE v SUE [2025] NZHC 323 [27 February 2025]
[4]I made a timetable order for filing memoranda in relation to costs.
The plaintiff’s application
[5] By memorandum dated 23 December 2024 the plaintiff sought costs in accordance with a schedule provided. A number of contentious issues were covered by that application including the extent to which the plaintiff was entitled to costs in respect of a security for costs application brought by the defendant some 18 months after the proceeding began; what the effect of a Calderbank offer would be; whether increased costs should be awarded; what costs were appropriate in respect of the defendant’s counter claims and the effect of certain delays that occurred during the course of the proceedings.
[6] The plaintiff’s claim for total costs and disbursements was $83,870.20 (including an uplift). If calculated on a 2B basis, costs and disbursements were said to be $64,738.25.
[7] The plaintiff filed a further memorandum of 30 January 2025 responding to certain documents filed by the defendant in her memorandum of 23 January 2025 and also commented on matters of discovery, what was said to be late disclosure, and other issues raised by the defendant.
The defendant’s response
[8] Counsel for the defendant/counter claim plaintiff has filed three memoranda. The first was dated 9 January 2025 and sought an extension on the time the defendant was required to file a memorandum (from 10 January to 21 January 2025). The second memorandum of 23 January 2025 dealt with the substantive claim and a third memorandum of 31 January 2025 essentially objected to the plaintiff’s memorandum of 30 January 2025.
[9] The defendant’s memorandum of 23 January 2025 was unusual in two respects. The first of those respects was that it seemed to be an attempt to relitigate issues that had been determined against the defendant. A costs memorandum is not the place for challenging the Court’s findings. The second unusual aspect of the memorandum is
that it referred to documentation which the defendant had only just provided. That documentation was attached to the memorandum.
[10] As counsel for the defendant properly acknowledges, that documentation could not be said to be evidence which was not available to the defendant on diligent inquiry prior to the trial. Notwithstanding that, counsel submitted that it should be looked at in relation to the issue of costs. The plaintiff opposes that on the basis that the evidence is not clear on its face, it has not been subject to cross-examination and the plaintiff has not had the opportunity of filing clarifying evidence.
[11] The defendant objected to the plaintiff/s memorandum of 30 January 2025 on the basis that the Court had not specifically reserved leave for a memorandum in reply. In the situation where the defendant has filed new documentation attached to her costs memorandum and asserted the Court should have regard to it in fixing costs, it is not unreasonable for the plaintiff to file a further memorandum. The other matters referred to in the memorandum were responses to issues raised by the defendant. The absence of leave being specifically reserved for the filing of a reply does not, in the circumstances of this case, justify the Court in disregarding it.
[12] A costs application is not the appropriate place to tender information which could and should have been discovered and placed before the Court at the hearing. The Court is in no position, in the absence of cross-examination, to determine exactly what its significance is. I therefore put this information to one side.
[13] The memorandum of counsel for the defendant accepted that Category 2 was appropriate, and that Band B was generally appropriate subject to some qualification.
[14]The qualifications refer to:
(a)The fact that discovery and inspection were said to be “light”.
(b)A reduction of the claimed time for the listing of documents at 2.5 days and inspection of documents at 1.5 days was sought.
[15] The defendant acknowledged that she disclosed some documents on the first morning of the trial but submits that no significant additional time resulted from the late provision and no additional costs should ensue. The defendant refers to what was said to be the plaintiff’s inadequate and non-compliant original affidavit of documents and the non-disclosure of one document. This was said to justify a total claim of 1.5 days in respect of discovery rather than the four days claimed.
[16] In relation to the defendant’s notice to the plaintiff to answer interrogatories. The defendant submits that the answer to one of the interrogatories relating to the plaintiff’s assets was wrong and says that the plaintiff should not be entitled to costs in relation to interrogatories at all.
[17] The defendant does not accept that the security for costs application she brought was unjustified. That application had been argued on 11 April 2024 but, without the need for a decision, the plaintiff’s son (Peter Sue) put up security and cash that was acceptable to the defendant. Costs on that application were reserved.
[18] The defendant claims she should be entitled to costs in relation to the security for costs application and seeks $7,050.50 to be set off against costs awarded to the plaintiff.
[19] In relation to item 33 (preparation of briefs, list of authorities and the agreed common bundle) at 2.5 days, with a further 0.5 days for briefs, authorities and the bundle, the defendant says that the witness briefs were relatively short and did not involve the normal amount of time for a High Court proceeding of Category 2 complexity. It was said that the list of authorities index only cited two cases and that this was also relevant. The bundle was conceded to be “about average for a High Court Category 2 proceeding” but was said to have included very many documents which were never referred to. It was submitted that no more than two days should be allowed.
[20] The defendant objected to any uplift on the Category 2 allowances. It was said that no detail of the plaintiff’s actual costs in the proceedings was provided and it was therefore not possible to establish relativity between the actually incurred costs and
claimed costs or to ascertain whether what was claimed was more than the plaintiff’s actual costs.
[21] The increased costs claimed by the plaintiff principally related to the effect of Calderbank offers. The plaintiff refers to a letter of 27 September 2024 from the defendant’s solicitor offering the plaintiff an opportunity to walk away from the proceeding without costs. The plaintiff offered settlement by letter of 4 November 2024 on the basis of a one third/two third split of the Property in the defendant’s favour. That offer was rejected by the defendant. That is the relevant Calderbank offer.
[22] The plaintiff’s offer was better than any offer by the defendant and was less than the plaintiff achieved in the proceedings. The plaintiff therefore seeks an increase in costs pursuant to r 14.6(3)(b)(v) of the High Court Rules (HCR). The plaintiff seeks an order that costs to 4 November 2024 be increased by 30 per cent and that costs for steps after 4 November 2024 receive an uplift of 50 per cent. In relation to step 33, (preparation of briefs, lists of issues, authorities and agreeing on common bundle) an uplift of 40 per cent is sought on the work which covered the period before 4 November as well as afterwards.
[23] The defendant had pleaded five causes of action by way of counterclaim two of which were abandoned shortly before the hearing.
[24] The application to strike out the counterclaims was based on limitation issues and the plaintiff’s application to strike out two of the causes of action was withdrawn in the face of an amended counterclaim raising a constructive trust claim which was not amendable to a strike out for limitation. It was agreed that costs would lie where they fell on that application.
[25] The plaintiff submits that a security for costs application should never have been made and notes it was only bought after the proceedings had been on foot for some 18 months and that it needed to be considered in the context of the animosity between the defendant and the plaintiff’s son. The memorandum also attached copies
of the fees charged which show that total fees excluding court costs and disbursements amounted to $105,376.80 including GST.
[26]In relation to disbursements, the plaintiff sought a process server’s fee of
$143.75 and $500 towards counsel’s Wellington accommodation costs (the hearing was in Wellington and the parties, and counsel for the plaintiff resided in Palmerston North).
Analysis
[27]The starting point is that the proceedings are appropriately categorised as 2B.
[28] The law in relation to Calderbank offers is set out in HCR 14.10. This provides that a party to a proceeding may make a written offer to another party that is expressly stated to be “without prejudice accept as to costs”. HCR 14.11(1) says that the effect that the making of an offer of this nature has on the question of costs is at the discretion of the Court. The entitlement set out in HCR 14.11 is independent of HCR 14.6 which provides for increased or indemnity costs.
[29] The purpose behind the rule relating to Calderbank offers is to create an incentive for parties to make and accept offers of settlement by penalising a failure to accept offers which would have been more favourable to them than the ultimate result that they obtained in the proceedings.
[30] In the present case, it is clear that the plaintiff’s offer to the defendant of 4 November 2024 was more advantageous than the result ultimately achieved by the defendant. The Court therefore needs to consider what uplift may be required to reflect that fact.
[31] In addition to seeking an uplift of 50 per cent on costs for work undertaken after 4 November 2024, the plaintiff also seeks an increase of 30 per cent on costs incurred prior to that date as well as 40 per cent in relation to Step 33 costs incurred both before and after 4 November 2024.
[32] I think that justice can be achieved between the parties by not uplifting those costs for work completed prior to 4 November 2024 but fixing them in accordance with 2B. That includes costs in respect of the counterclaim.
[33] However, the policy underlying HCR 14.10 needs to be recognised by way of an uplift for costs incurred since that date.
[34] The High Court in Weaver v HML Nominees Ltd1 listed a number of factors that may be taken into account on considering an uplift. Relevant to the present case are the factors that the offer made was substantially better than the result achieved by the defendant; this was not an area of law which could have said to have been uncertain; the defendant was in a position to assess the merits of the offer when it was received and would have been able to assess the offer. In all the circumstances a 30 per cent uplift in respect of work completed after 4 November 2024 is appropriate. In respect of the item 33 work where it is not possible on the information available for me to apportion exactly what was done before 4 November and what afterwards, a 15 per cent uplift in respect of the item 33 work is applicable.
[35] There is no basis for a cost award in favour of the defendant regarding the counterclaims. None of the counterclaims succeeded. Two were withdrawn.
[36] The plaintiff seeks costs in respect of the security for costs application by the defendant. The defendant opposes the application and says that there was reason to believe that the plaintiff would not be able to pay costs if her claim was unsuccessful. The defendant notes that the security for costs application was argued on 11 April 2024 but was resolved without the need for a decision when the plaintiff’s son, Peter Sue, put up an agreed level of security in cash.
[37] The defendant also points out that the plaintiff had, at a time proximate to the hearing of the security for costs application, received some $207,500 into her bank account. She claims that the plaintiff was “therefore very well able to put up a satisfactory level of security for costs”. It was also noted that if the plaintiff had
1 Weaver v HML Nominees Ltd [2016] NZHC 473 at [30].
disclosed this sum an application for security for costs may not have needed to proceed.
[38] HCR 5.45 gives a Judge the discretion to order that, where there is reason to believe that a plaintiff would be unable to pay the costs of a proceeding if unsuccessful, to order the giving of security for costs.
[39] Such applications involve a two stage test: firstly ascertaining whether the threshold (in this case of being unable to pay the costs of the defendant) is met and secondly whether it is just in all the circumstances to make an order for security and, if so, what sort of order.
[40] In approaching this matter the Court balances the defendant’s interests in being protected from a barren costs order and the plaintiff’s right of access to the Court.
[41] Applications for security for costs are generally made promptly after the filing of a statement of claim although HCR 5.45(5) says that a Judge may make an order even if a defendant has taken a step in the proceedings before applying for security. Any aspect of delay in applying for security for costs is a factor to be brought into account in the Court’s exercise of its discretion.2
[42] Here the defendant delayed for some 18 months. The ultimate application also seems to have been coloured by the defendant’s firm view that the plaintiff was bringing these proceedings not of her own volition but was effectively being controlled by her son (Peter Sue). There was an evident high degree of animosity between the defendant and Peter Sue. It is difficult to avoid the conclusion that without the defendant’s particular views as to who was driving these proceedings, no security for costs application would have been made. That is also relevant to the exercise of discretion.
2 See Jo v Johnston [2013] NZHC 552 at [18].
[43] The merits of the plaintiff’s claim and the prospects of success are also relevant and the Judge considering the security for costs application would have needed to explore those.3 Here the merits of the plaintiff’s case were strong.
[44] One other relevant aspect of this matter is the familial relationship between plaintiff and defendant. The defendant would, from day one, have had a much more accurate understanding of the plaintiff’s financial position than would normally be the case with unrelated parties. Not only was the plaintiff her mother but the plaintiff and defendant had been involved in a number of business ventures together. In that context the 18 month delay in the defendant seeking security for costs supports the conclusion that the application was more likely to have been motivated not so much because of a genuine concern as to the plaintiff’s impecuniosity but because of factors to do with the relationship between the defendant and Peter Sue.
[45] The defendant is correct that, on the basis of information now discovered, the plaintiff was not impecunious and accordingly there was no basis for the Court making an order for security on that ground. Whether that would have obviated the application is less clear given the significance in this case of the animosity between the defendant and Peter Sue.
[46] The costs in relation to the defended security for costs hearing were reserved. They are costs in the case and, as the successful party, the plaintiff is entitled to claim them. However, given the facts discussed above, it would be appropriate for the costs in respect of this application to be fixed on a 2B basis without any uplift.
[47] In terms of costs relating to discovery the defendant says that the plaintiff’s affidavit of documents listed only 163 documents and that many were of a routine nature. The defendant’s affidavit listed some 73 documents. Counsel acknowledges that the defendant found some documents immediately prior to trial and they were disclosed only on the first day of trial. The defendant even discovered further documents in support of her costs submssions. The defendant also notes that the plaintiff hadn’t disclosed receipt of the sum of $207,500 on 20 December 2023 until 7 November 2024 which was less that two weeks prior to the original scheduled trial
3 See Ambrose v Pickard [2009] NZCA 502 at [32].
date. There were faults on both sides in relation to discovery. Both parties omitted to disclose relevant documents.
[48] The plaintiff attached to the memorandum of 30 January 2025 a copy of counsel’s invoice to the plaintiff’s solicitor which detailed work in relation to discovery. The costs total some $4,437.62. Also attached was correspondence passing between counsel on discovery issues which indicated that it was necessary to respond to various queries.
[49] I am not satisfied that there is any basis for reducing the standard allocation of time in relation to discovery.
[50] The defendant chose to administer interrogatories. The plaintiff says they were on irrelevant issues. The defendant says the answer to one question (question 14) was wrong and says that this means the plaintiff should not be entitled to costs on the interrogatories at all. There is some substance in the plaintiff’s contention that the interrogatories were, on the whole, irrelevant to the matters in issue. The defendant chose to administer them. The standard time allocation should apply. The plaintiff is entitled to costs in respect of them.
[51] In relation to disbursements, where counsel has had to travel from the registry where the proceedings were issued and closest to where the parties reside to another venue for the hearing, it is appropriate for reasonable travel costs to be reimbursed. There was no challenge to the $500 claimed and that is approved as is the disbursement for the process servers fee and the various other court fees.
[52] The plaintiff is invited to submit for approval and sealing an amended costs memorandum in accordance with this decision.
Churchman J
Solicitors:
Terrace End Law, Palmerston North for Applicant Michael Leggat, Wellington for Respondent
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