Van Selm v Van Selm

[2014] NZHC 1993

IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY

CIV-2014-419-000170 [2014] NZHC 1993

BETWEEN

JACQUELINE ANNE VAN SELM AND

PUAWAI ORMSBY as trustees of the estate of JACK ORMSBY

Appellants

AND

JAKE VAN SELM as trustee of the estate of ELIZABETH PARETUARANG ORMSBYI

First Respondent

ALAN ORMSBY Second Respondent

Hearing:	21 August 2014
Counsel:	RL Scott for Appellants JP Koning for Respondents
Judgment:	22 August 2014

JUDGMENT OF FOGARTY J

This judgment was delivered by me on 22 August 2014 at 4.30 p.m., pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date: ………………………….

Solicitors:           Norris Ward McKinnon, Hamilton

Koning Webster Lawyers, Papamoa

VAN SELM AND ORMSBY v VAN SELM [2014] NZHC 1993 [22 August 2014]

Introduction

[1]      The appellants have applied to extend time for paying security for costs or, in the alternative, for leave to appeal out of time.  The second respondent opposes both applications.

[2]      The  appellants  have  appealed  the  costs  judgment  of  Judge  RH  Riddell delivered in the Family Court at Hamilton on 2 April 2014.  This decision arose out of an earlier substantial decision on cross-claims under the Property Relationships Act 1976.

[3]      Elizabeth and Jack Ormsby were married for about 50 years.  Elizabeth had inherited  about  half  of  the farm  and  acquired  the other half  by way  of family dealings.  The couple had worked on the farm for many years but also, in the latter years of their marriage, left the farm to reside in Te Kuiti.  As a result, there was no farm homestead issue.

[4]      The farm issue as to relationship property centred upon the acquisition of the second half of the farm.  Four other property issues were conceded at the start of the substantial hearing when it was agreed that the following property would be shared equally between the parties:

(a)      Fonterra shares

(b)      King Country Energy shares (c)      The family home at Te Kuiti (d)      Ms Ormsby’s bank account

[5]      Judge Riddell took the sum of $270,000 as being the amount awarded to the applicant (appellants in this proceeding because of the hearing outcome).   Judge Riddell held that, that aside, the substantial part of the hearing concerned the applicant’s claim for $1,128,333 under ss 8 and 9 of the Act and a further claim of

$1,128,333 under s 17 of the Act.  The claims under ss 8 and 9 were successfully

defended.  The claim under s 17 was successful but only to a very limited extent and an adjustment of $50,000 was awarded.

[6]      Judge Riddell went on to conclude that the second respondent, Elizabeth and Jack’s son, Alan, was substantially successful in these proceedings and therefore considered a costs award in his favour was appropriate. That he was entitled to costs calculated on a 3C basis in the sum of $67,850, plus disbursements as fixed by the Registrar.

[7]      The estate of the late Jack Ormsby filed an appeal against the order for costs arguing that costs should lie where they fall.  The pleadings do not specifically seek any relief in the alternative.

[8]      At the first case management conference in the High Court in regard to this appeal, the Court ordered that the security for costs be paid not later than ten days after the conference.   That made security due for payment not later than 4 July. Security was not paid until 8 July.  It is agreed that the funds for security were in the appellant’s solicitor’s trust account.   It was a slip by the solicitors not to pay the security for costs in time.

[9]      By application of s 74 of the District Court Act, it is agreed that the appeal has been deemed to be abandoned.

[10]     This is the context of the application now before the Court that the would-be appellants have the time extended retrospectively for paying security for costs, alternatively, for leave to appeal out of time.  The argument that they should have time to extend the time for paying security for costs on a retrospective basis was scoped by Heath J in Graham v Mills.1   However, the recent decision of the Supreme

Court in Siemer v Heron2  has cast doubt on the ability to outflank s 74 in this

manner.3   It is arguable that both sets of dicta are obita.

1      Graham v Mills (2006) 18 PRNZ 157.

2      Siemer v Heron [2012] 1 NZLR 309.

3      See Blanchard J’s judgment [35] – [36] and [39] and William Young J [59].

[11]     Counsel before me agreed, however, that there was power for this Court to engaging with Graham or Seimer by granting leave to appeal the decision of Judge Riddell, relying on the decision of the Court of Appeal in Humphries v Carr.4

[12]     The second respondent opposes this Court granting leave, arguing that the would-be appellants must satisfy this Court that there are compelling reasons why leave should be granted.   Mr Koning, for the second respondent, argues that the appeal is unmeritorious.  He submits that the test is correctly set out in Gatehouse v Middleton.5    In that case Allan J relied upon a Court of Appeal decision, Creser v

Creser.6   In [12] Allan J observed:

[12]      …  the  Court  of Appeal  said  that  where,  in  consequence  of  the deemed abandonment of an appeal for non-payment of security for costs an appeal must be treated as having been abandoned, an application may nevertheless be brought for extension of time to appeal under r 6(3).  In such circumstances, the Court said:

[2]       The test to be applied in circumstances such as these is well established.   This court held in Air Wok (NZ) Limited v Vertical Flight Management [1999] 1 NZLR 29 at 31 that the power to grant special leave under r 5 following a deemed abandonment is unlikely to be exercised “save in exceptional circumstances”, an approach further approved by this court in State Insurance Limited v Brooker (2001) 15 PRNZ 4932 at [8].  Ultimately the test is whether granting leave would meet the overall interests of justice (B Bullock and Co Ltd v Matthews (1988) 13 PRNZ 505 (CA)) but it must always be remembered that an important “interest of justice” is the interest in finality of litigation.

[3]       An applicant for special leave must always demonstrate a satisfactory explanation for the delay and an arguable appeal point. Normally this court considers those matters in that order.   In this case, we can go immediately to consider the merits of the proposed appeal, as we are satisfied it has no merit.  The court should never grant an indulgence in circumstances where a proposed appeal which cannot be brought as of right [is] unmeritorious.

[13]     I refer to [3] of Creser v Creser judgment quoted above.   The would-be appellants, as applicants with special leave, have demonstrated a satisfactory explanation for the delay.   The question is whether they have an arguable appeal

point.  If they have, then the proposed appeal cannot be regarded as unmeritorious.

4      Humphries v Carr [2009] NZCA 608. See the majority judgment [14] and judgment of William

Young J [27].

5      Gatehouse v Middleton HC Hamilton CIV-2006-419-808, Allan J.

6      Creser v Creser CA110/04, 2 September 2004.

[14]     Mr Koning argued that the essential ground, distilled from the four grounds of appeal in the notice of appeal in this case, is that the would-be appellants were successful  in  some  claims  and  therefore  costs  should  lie  where  they   fall. Mr Konning added:

As noted above, the appellants did not claim that Judge RH Riddell erred in calculating the quantum.

[15]     Rather, my interpretation of the grounds of appeal is that where an appellant seeks a remedy that costs should lie where they fall, it is open to the Court on appeal to provide relief somewhere between leaving the costs award intact and, at the other extreme, ruling that costs should lie where they fall.   Judges on appeal can make awards between the sums pleaded as the remedies sought.

[16]     Judge Riddell awarded:

(a)       scale costs on a 3C basis of $67,850 to the second respondent; (b)           disbursements to be fixed by the Registrar.

[17]     Counsel confirmed that the costs were calculated on the schedules.   The calculation was not available to the Court.  Counsel did not suggest that the costs were calculated solely on the schedule items for the hearing.  Therefore I draw the normal inference that the schedule of costs were calculated in the normal way and so include the prehearing attendances.

[18]     There  is  no  doubt  that  the  second  respondent  was  substantially,  but  for

$50,000,   successful   in   the   dispute   such   as   remained   unresolved   at   the commencement of the hearing.  But that prior to the commencement of the hearing, there was a settlement under four heads, set out above, resulting in the intended appellants recovering $270,000.  There is an argument in such a case that the scale costs of preparation prior to the hearing costs should be adjusted to reflect the fact that these pre-trial costs included attendances in regard to these four disputes settled at the Court door.

[19]     Second, there may be an argument that costs should not follow the event because of the nature of this dispute, including the unusual circumstances of trustees conducting  a  relationship  property  dispute  where  both  husband  and  wife  are deceased.

[20]     For these reasons, I am satisfied that this application for leave to appeal meets the criteria in [3] of Creser v Creser.  The appeal is not meritorious.

[21]     For these reasons, I do not think that the slip by the solicitor in paying the security for costs should stand in the way of the appellants exercising their otherwise right  to  appeal  to  the  High  Court  the  costs  decision  of  the  Family  Court. Accordingly, leave is granted to pursue this appeal.  Payment of the security for costs is a formality.  Security for costs must be paid within five working days upon release of this judgment.

[22]     In the circumstances, costs lie where they fall.