Thompson v Thompson

[2015] NZHC 1167

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV 2013-404-002616 [2015] NZHC 1167

UNDER

the Property (Relationships) Act 1976

BETWEEN

CHRISTINE HAMILTON THOMPSON Appellant

AND

MICHAEL LEITH THOMPSON First Respondent

MICHAEL LEITH THOMPSON, DEAN ALAN ELLWOOD AND BRUCE KENNETH DELL

Second Respondent

On the papers
Counsel:	S H Ambler for Mrs Thompson Lady D A Chambers QC for Mr Thompson
Judgment:	28 May 2015

JUDGMENT (No. 3) OF ANDREWS J [Costs]

This judgment is delivered by me on 28 May 2015 at 11.30 am pursuant to r 11.5 of the High Court Rules.

..................................................... Registrar / Deputy Registrar

THOMPSON v THOMPSON (Costs) [2015] NZHC 1167 [28 May 2015]

Introduction

[1]      On 30 August 2013, I allowed Mrs Thompson’s appeal against a judgment of the Family Court, to the extent that payment for a restraint of trade covenant given by Mr Thompson upon the sale of a business established and built up during their marriage did not represent compensation for Mr Thompson’s loss of future earnings.1

[2]      Mrs Thompson had applied for an order staying execution of a consent order made in the Family Court on 7 December 2011, under which Mrs Thompson was to pay Mr Thompson $2,209,130 on final settlement of the division of certain property (“the stay application”). On 2 August 2013, following a brief hearing at the conclusion of the substantive appeal hearing, I made an order in an oral judgment staying execution of the consent order (“the stay order”).2

[3]      Both Mr and Mrs Thompson applied for leave to appeal to the Court of Appeal.   Leave was  granted, on the papers, on 8 October 2013.3     In the same judgment, I confirmed and extended the stay order.4

[4]      In  a  judgment  delivered  on  8 April  2014,  the  Court  of Appeal  allowed Mr Thompson’s  appeal  and  reinstated  the  Family Court  decision  that  the  entire restraint of trade payment was to be treated as his separate property.  The Court of Appeal also discharged the stay order.5   In a judgment delivered on 13 March 2015, the Supreme Court allowed Mrs Thompson’s appeal and declared that the entire restraint of trade payment is relationship property.6

[5]      As directed by the Supreme Court, costs in relation to the hearing in this Court must now be determined.  Submissions have been received from Ms Ambler on behalf of Mrs Thompson, and from Lady Chambers on behalf of Mr Thompson. Ms Ambler also filed reply submissions.  I record that Mrs Thompson does not seek

any order for costs against the second respondent trustees.

1      Thompson v Thompson [2013] NZHC 2001.

2      Thompson v Thompson [2013] NZHC 1946.

3      Thompson v Thompson [2013] NZHC 2607.

4      Thompson v Thompson, above n 3 at [16].

5      Thompson v Thompson [2014] NZCA 117.

6      Thompson v Thompson [2015] NZSC 26.

Costs on the substantive appeal

[6]      It is agreed that the substantive appeal is appropriately categorised as a 3B proceeding.      Ms   Ambler   sought   an   order   for   costs   totalling   $26,680.50. Ms Chambers submitted that the calculation of scale costs should be $23,667.

[7]      The first disputed claim is item 10 ($1,176) for “preparation for first case management conference”.  Ms Chambers submitted that Mrs Thompson had double counted this item, as she also claimed the same amount  under item 11 (“filing memorandum for case management conference”).  While acknowledging that both items are included in Schedule 3 to the High Court Rules, Ms Chambers submitted that the Schedule 3 items are directed at normal civil proceedings, and are not appropriate for an appeals case management conference.   Ms Ambler submitted in reply that Ms Chambers had put forward an overly restrictive interpretation of items

10 and 11, which was at odds with the plain meaning of the words used in schedule 3 of the High Court Rules.

[8]      There  may  be  some  support  for  Ms  Chambers’  submission  in  that  the equivalent provision in Schedule 2 to the Court of Appeal Rules allows for (item 11) “preparation for and attendance at pre-hearing or case management conference”. There are no separate provisions for preparing for a case management conference, filing  a  memorandum  for  a  case  management  conference,  and  appearing  at  a callover, as there are in Schedule 3 to the High Court Rules (items 10, 11, and 12). However,  Schedule 3  to the High  Court  Rules  also  provides  under the hearing “Appeals” at item 54: “case management conference (as for ordinary proceeding)”. Given the wording of item 54, it is clearly contemplated that separate awards may be made in respect of items 10, 11 and 12, on an appeal.

[9]      In the present case, I accept that it is appropriate to allow recovery for one of items 10 and 11, but not both.  It is appropriate to allow the claim for item 11, but not item 10.

[10]     The second dispute concerned Mrs Thompson’s claim for second counsel at the  appeal  hearing  (item  58,  $1,837.50).    Ms  Chambers’ challenge  was  on  the grounds that second counsel had not been certified for, and that Mr Thompson had

been represented by one counsel, throughout.   Ms Ambler properly noted in reply that the reason that there had been no certification for second counsel is that costs had not yet been determined in this Court.  I am satisfied that the claim for second counsel is appropriate.

[11]    Ms Chambers then submitted that, in this case, Mrs Thompson had not succeeded in all of the issues argued in the High Court (or on appeal), and that the claim  on  which  she  was  ultimately  successful  (the  application  of  s 9(4)  of  the Property (Relationships) Act 1976) had occupied less than half of the hearing time in the High Court.   On that basis, she submitted that the award of costs should be reduced by 50 per cent, under r 14.7(d).

[12]     I accept Ms Ambler’s submission that a reduction in costs is not appropriate. Mrs  Thompson  obtained  from  the  Supreme  Court  a  declaration  that  the  entire restraint of trade payment was relationship property.  The Supreme Court also held that s 8(1)(l) of the Act was “directly applicable” to the restraint of trade payment.7

I do not accept that Mrs Thompson’s failure on one of her arguments “significantly increased” costs, such that a reduction is required.

[13]     I also accept Ms Ambler’s submission that no reduction is required in respect of the trustees’ participation in the proceeding.   The trustees sought costs against Mrs Thompson in the Court of Appeal, and it was held that the “fair outcome” was an order that Mr and Mrs Thompson equally bear the costs of the trustees’ participation.8

Costs on the stay application

[14]     As noted earlier, the Court of Appeal discharged the stay order made in this

Court.  I note that the stay order was not referred to in the judgment of the Supreme

Court.

7      Thompson v Thompson, above n 6 at [68].

[15]     Mr Thompson claims costs against Mrs Thompson, in the sum of $8,855. Ms Ambler submitted that Mrs Thompson is entitled to costs against Mr Thompson for the stay application, in which she succeeded in this Court.

[16]     Ms Ambler submitted that there is no basis on which Mr Thompson could be awarded costs in the High Court as, notwithstanding that Mr Thompson succeeded in his appeal against the stay order, that Court did not remit the matter back for the High Court to award costs in his favour.  She further submitted that Mrs Thompson had paid costs as ordered by the Court of Appeal.  In the event that this Court were to consider Mr Thompson’s claim for costs, Ms Ambler submitted that it was overstated and that the amount properly payable is only $1,691.50.

[17]     I do not accept Ms Ambler’s submission that this Court cannot  consider Mr Thompson’s claim for costs in respect of the stay application.  In its judgment, the Court of Appeal said that:9

All questions of costs in the High Court and the Family Court are to be determined in those courts in the light of the judgment of this Court.

[18]     I accept that as Mr Thompson succeeded in his appeal against the stay of execution granted in this Court, he is entitled to an award of costs in respect of the stay application.  It was agreed that the appropriate categorisation is 2B.

[19]     I have determined that Mr Thompson is entitled to costs on the stay as follows:

Item 22	Filing  of  notice  of  opposition  to application   for   stay   of   execution (dated 6 June 2013)	$1,194.00
Item 26	Appearance at hearing of application for  stay  of  execution  on  2 August 2013	$497.50
Filing     memorandum     dated     3 September  2013   in   opposition   to extension of stay order	$597.00
TOTAL:	$2,288.50

[20]     For clarification, I note as follows:

(a)      No written submissions as to the stay application were filed before the hearing on 2 August 2013.

(b)A  memorandum  dated  30  August  2013  filed  by  Lady  Chambers simply advised that a further memorandum would be filed.

(c)      The reference to “preparation of submissions in regards to grant of a stay of consent orders dated 21 January 2014” appears to be an error. The Court has no record of any such document being filed in this proceeding.

Disbursements

[21]     Mrs Thompson is entitled to recover disbursements on the substantive appeal.

These  are  set  out  in  schedule A to  Ms Ambler’s  reply  submissions,  and  total

$5,615.08.

[22]     Mr Thompson is entitled to disbursements in relation to the stay application. [23]     In both cases, disbursements are allowed as fixed by the Registrar.  The

Registrar may refer any matters, as appropriate, to me.

Result

[24]     Mr Thompson is ordered to pay costs to Mrs Thompson on the substantive appeal in the sum of $25,204.50, together with disbursements as fixed by the Registrar.  I certify for second counsel.

[25]     Mrs Thompson is ordered to pay costs to Mr Thompson the stay application in the sum of $2,288.50, together with costs as fixed by the Registrar.

Andrews J