Ward v Ward

[2020] NZHC 844

IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY

I TE KŌTI MATUA O AOTEAROA KIRIKIRIROA ROHE

CIV-2018-419-374

[2020] NZHC 844

UNDER

the Wills Act 2007 and the Trustee Act 1957

BETWEEN

RUSSELL STUART WARD

Plaintiff

AND

CHRISTOPHER ALLAN WARD

First Defendant

DIANE LORRAINE JAMES

Second Defendant

CIV-2019-419-81

BETWEEN

CHRISTOPHER ALLAN WARD and DIANE LORRAINE JAMES

Plaintiffs

AND

RUSSELL STUART WARD

Defendant

Hearing:

On the papers

Appearances:

Plaintiff in CIV-2018-419-374 and Defendant in CIV-2019-419-81 in person

Mr K I Bond and A M Kalinowski for the Defendants in CIV-2018-419-374 and Plaintiffs in CIV-2019-410-81

Judgment:

30 April 2020

JUDGMENT OF GAULT J

(Costs)

This judgment was delivered by me on 30 April 2020 at 11:00 am pursuant to r 11.5 of the High Court Rules 2016.

Registrar/Deputy Registrar

……………………………………

WARD v WARD and JAMES [2020] NZHC 844 [30 April 2020]

[1]    In my judgment of 14 January 2020,1 I indicated that Allan and Diane are entitled to costs in relation to Russell’s summary judgment application and their summary judgment application, and that no costs would be awarded in relation to the two strike out applications. The security for costs application was deferred and costs reserved. I timetabled the filing of memoranda, and indicated in my memorandum of 23 March 2020 that I would deal with costs on the papers.

[2]Allan and Diane seek costs on the two summary judgment applications of

$19,717.50 on the basis of a 50 per cent uplift from 2B scale costs. Increased costs are sought on the grounds that Russell contributed unnecessarily to the time and expense of the proceeding by failing to comply with the High Court Rules 2016 and directions, and by pursuing arguments that lacked merit and failing to accept arguments.

[3]    Russell opposes any award of costs on the basis that an award of costs is judicial discrimination, in breach of the New Zealand Bill of Rights Act 1990 (NZBORA) and international human rights conventions, as a lay litigant cannot claim costs. He submits that this makes my judgment a nullity and void ab initio, and that the High Court Rules are also void if applied to a lay litigant.

Discussion

[4]    Russell objects to an award of costs against him on the basis that a lay litigant cannot claim costs. The Supreme Court has recently confirmed that there is a primary rule, required to be applied unless legislatively altered, that a successful litigant in person is entitled to recover disbursements but not costs.2 The law is not settled as to whether this primary rule may be departed from in “exceptional circumstances”.3  The possibility of an exceptional circumstances exception and its application do not arise in this case because the issue is whether Allan and Diane can recover costs, not Russell. Whether they can recover costs in this case depends on the application of normal cost rules and principles binding on this Court irrespective of whether Russell

1      Ward v Ward [2020] NZHC 11. As in the judgment, I will refer to the parties by their names used in the evidence (Russell, Allan and Diane).

2      McGuire v Secretary for Justice [2018] NZSC 116 at [88].

3      At [55], n 42.

as a lay litigant could recover costs in the event of a different outcome. No issues of judicial discrimination, breach of NZBORA or breach of international conventions arise.

[5]    A general principle applying to the determination of costs is that costs follow the event – the party who fails with respect to a proceeding or an interlocutory application should pay costs to the party who succeeds.4

[6]    The approach is somewhat different on a plaintiff’s unsuccessful application for summary judgment, where costs are usually reserved.5 That practice may be departed from as appropriate, in exceptional cases involving abuse of the summary judgment procedure, where an order for costs can be made against a plaintiff at the summary judgment stage.6

[7]    In relation to increased costs, that is costs awarded above the scale calculated according to the High Court Rules 2016, r 14.6(3) relevantly provides:

The court may order a party to pay increased costs if—

…

(b)the party opposing costs has contributed unnecessarily to the time or expense of the proceeding or step in it by—

(i)failing to comply with these rules or with a direction of the court; or

(ii)taking or pursuing an unnecessary step or an argument that lacks merit; or

(iii)failing, without reasonable justification, to admit facts, evidence, documents, or accept a legal argument; or

…

(d) some other reason exists which justifies the court making an order for increased costs despite the principle that the determination of costs should be predictable and expeditious.

4      High Court Rules 2016, r 14.2(1)(a); and Manukau Golf Club Inc v Shoye Venture Ltd [2012] NZSC 109, [2013] 1 NZLR 305 at [8].

5      NZI Bank Ltd v Philpott [1990] 2 NZLR 403 (CA).

6      At 407.

[8]    Increased costs may be ordered where there is a failure by the paying party to act reasonably.7 Only to the extent that the failure to act reasonably contributed to the time or expense of the proceeding is any percentage uplift from scale justified.8

[9]    Dealing first with Russell’s application for summary judgment, I consider this is a case where a departure from the practice of reserving costs on a plaintiff’s unsuccessful application is appropriate. My judgment recorded that Russell’s claim was clearly not suitable for summary judgment – the claim had legal and evidential difficulties (and he failed to file written submissions).9 His statement of claim did not comply with the High Court Rules.10 I consider he failed to act reasonably in pursuing summary judgment, and an award of costs is justified.

[10]   But as this is already a departure from the normal practice in the case of a plaintiff’s unsuccessful application for summary judgment, and the judgment was of course not a substantive determination of his claim, I do not consider an uplift is necessarily justified. I consider the extent to which Russell’s failure to act reasonably in pursuing summary judgment contributed to the time and expense of the proceeding should be left until determination of the substantive proceeding in the same way that costs on the unsuccessful summary judgment application would normally be reserved.

[11]   Turning to Allan and Diane’s application for summary judgment, they were substantially successful and are entitled to costs. However, Russell’s failures in relation to his own pleading and summary judgment application do not themselves justify an award of increased costs in relation to Allan and Diane’s application for summary judgment.

[12]   Russell opposed that application on the relatively narrow ground that it should not be determined until after his claim. That turned on whether his claim to a one- third share in the property gave rise to a possible defence. I determined that Russell’s claim to a one-third share, assuming it is successful, is not a proprietary claim giving

7      Bradbury v Westpac Banking Corp [2009] 3 NZLR 400 (CA) at [27(b)].

8      Commissioner of Inland Revenue v Chesterfields Preschools Ltd [2010] NZCA 400, (2010) 24 NZTC 24,500 at [165].

9      Ward v Ward [2020] NZHC 11 at [34]-[38].

10     At [42]-[43].

rise to an interest in the property. It is a money claim which provides no basis for a right to occupy or possession of the property. His remedy is for damages if his claim is successful. Therefore, his claim to a one-third share does not entitle him to occupy the property.

[13]   I do not consider that Russell acted unreasonably in opposing Allan and Diane’s application for summary judgment. I therefore conclude that increased costs should not be awarded on this application either.

Result

[14]Allan and Diane are entitled to 2B scale costs of $13,145.

Gault J

Solicitors / Parties:

Mr R S Ward

Ms A Kalinowski, Smith and Partners, Henderson, Auckland