Woolf v Kaye

[2018] NZHC 3426

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2015-404-1043

[2018] NZHC 3426

BETWEEN

VIRGINIA WOOLF

First Plaintiff

VIRGINIA WOOLF as Executor of the Estate of Noel Bernard Woolf

Second Plaintiff

AND

ALWYN BERNARD KAYE (previously known as ALWYN BERNARD WOOLF

First Defendant

MARK WILLIAM SYDNEY CLARK as

Executor of the Estate of Violet Isabel Woolf Second Defendant

Hearing:

On the papers

Appearances:

G A Keene for the Plaintiffs

A Gilchrist and C Fry for the Defendants

Judgment:

20 December 2018

JUDGMENT OF GORDON J

[Costs on stay application]

This judgment was delivered by me

on 20 December 2018 at 11 am, pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar Date:

Solicitors:           Foy Halse, Auckland

Richard Wood, Auckland

Counsel:G A Keene, Auckland A Gilchrist, Auckland

WOOLF v KAYE [2018] NZHC 3426 [20 December 2018]

Introduction

[1]                   On 24 August 2018, I gave judgment in favour of the first defendant, Mr Kaye, against his sister, the first plaintiff, Ms Woolf.1 I made a range of orders relating to a property in which Ms Woolf lives and of which Mr Kaye is the sole registered proprietor.2

[2]                   On 13 November 2018, I granted Ms Woolf an order staying execution of several of the orders made in my substantive judgment pending her appeal of that judgment to the Court of Appeal.3

[3]                   I expressed a preliminary view that Ms Woolf was entitled to costs on her stay application.4 I held that costs on the application should be determined at this stage, not reserved pending the outcome of Ms Woolf’s appeal.5

[4]                   The parties have been unable to come to an agreement on costs. They have each filed separate memoranda.

Principles

[5]                   Costs are at the discretion of this Court.6 The High Court Rules (the Rules) provide guidance as to how that discretion might be exercised.7

[6]                   The general principle is that the party who fails with respect to a proceeding should pay costs to the successful party.8 The successful party should be awarded costs on a scale basis.9 But when applying the scale costs regime, the court must consider each formal step individually for the purposes of assessing the appropriate time band. A blanket approach is not appropriate.10

1      Woolf v Kaye [2018] NZHC 2191.

2 At [381].

3      Woolf v Kaye [2018] NZHC 2940.

4 At [65].

5 At [64].

6      High Court Rules, r 14.1(1).

7      Rules 14.2-14.7.

8      Rule 14.2(1)(a).

9      Manukau Golf Club Inc v Shoye Venture Ltd [2012] NZSC 109, [2013] 1 NZLR 305 at [8].

10     Paper Reclaim Ltd v Aotearoa International Ltd [2007] NZCA 544 at [35].

[7]                   Ultimately, the overriding consideration when exercising the discretion to award costs is that any award ought to do justice between the parties.11

Submissions

[8]Mr Keene, on behalf of Ms Woolf, seeks costs on a 2B basis in the sum of

$6,690. I set out the claimed costs in Annexure A to this judgment.

[9]                   Mr Keene also submits that an award of increased costs is appropriate. He seeks a 50 per cent uplift on scale costs. He refers to a Calderbank letter dated 3 October 2018. He submits that Mr Kaye acted unreasonably in refusing the offer contained in the letter.

[10]               Mr Gilchrist, on behalf of Mr Kaye, submits that the appropriate sum of costs on a 2B basis is $5,575. He submits that an award of increased costs is inappropriate in the circumstances of this case. In the alternative, he submits that there is a basis for an award of reduced costs.

[11]               Mr Gilchrist further submits that once any costs amount is fixed, its enforcement should be stayed pending the outcome of Ms Woolf’s appeal. He notes that Mr Kaye has judgments in these proceedings against Ms Woolf in the sum of

$518,808.45, which Mr Kaye has undertaken not to enforce, pending the outcome of her appeal. He submits that Mr Kaye would clearly be entitled to offset any costs award that was made against him against such sum.

Discussion

Individual steps

[12]               Mr Gilchrist opposes Mr Keene’s claims for a second affidavit and reply submissions. He submits that Mr Keene is effectively making two claims under both items 22 and 24, and further submits there is no allowance for additional affidavits to be filed.

11     Packing In Ltd (in liq) v Chilcott (2003) 16 PRNZ 869 (CA) at [5].

[13]               Rule 14.2(1)(c) of the Rules provides that costs “should be assessed by applying the appropriate daily recovery rate to the time considered reasonable for each step reasonably required in relation to the proceeding or interlocutory application”.

[14]These proceedings have been categorised as 2B. Rule 14.5(1) provides:

(1)For the purposes of rule 14.2(c), a reasonable time for a step is—

(a)the time specified for it in Schedule 3; or

(b)a time determined by analogy with that schedule, if Schedule 3 does not apply; or

(c)the time assessed as likely to be required for the particular step, if no analogy can usefully be made.

[15]               This illustrates that the costs of a proceeding are assessed objectively. The actual time spent and costs incurred are strictly irrelevant.12 The party is entitled to recover the amount specified for the step in sch 3 of the Rules. As the Court of Appeal has explained:13

[27]     … there is a strong implication that a Court is to apply the [costs] regime in the absence of some reason to the contrary …

[16]               It is not suggested that there is such a reason in the present case. Therefore, Ms Woolf is not entitled to recover twice (for filing an additional affidavit) under step 22.

[17]               I disallow the second claim under step 22. I disallow Ms Woolf’s second claim (for reply submissions) under step 24 for the same reason.

Increased costs

[18]Mr Keene seeks increased costs under r 14.6(3)(b)(v), which provides:

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

…

12     Andrew Beck and others McGechan on Procedure (online looseleaf ed, Thomson Reuters) at [HR14.2.01(2)].

13     Mansfield Drycleaners Ltd v Quinny's Drycleaning (Dentice Drycleaning Upper Hutt) Ltd (2002) 16 PRNZ 662 (CA) at [27].

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

…

(v) failing without reasonable justification, to accept an  offer of settlement whether in the form of an offer under rule 14.10 or some other offer to settle or dispose of the proceeding …

[19]               As noted, Mr Keene relies on a Calderbank letter dated 3 October 2018. In the letter, Ms Woolf offered to pay $300 per week in rent if she were permitted to stay in the property through until 28 February 2019. She also offered to pay that amount if she were permitted to stay in the property through until 23 December 2018, if that were preferable to Mr Kaye.

[20]               Ultimately, the effect of this offer is at my discretion.14 In Xiao v Sun, I recently summarised the relevant principles:15

[25] … The reasonableness of a party’s rejection of an offer must be assessed at the time the offer was made and declined, not against the subsequent result. It will depend on the circumstances of the case, including the size and timing of the offer, the reasonable expectations of the party refusing the offer and on the parties’ ability, at the time of the offer, to assess the merits of the case.

(Citations omitted)

[21]               It cannot be said that the rejection of the offer contained in the letter dated 3 October 2018 was unreasonable. Mr Kaye did not act unreasonably in refusing an offer that would see him make a loss of $360 a week, given my findings in the substantive judgment and the evidence at the time of the offer was that the property was currently rentable at a rate of $660 per week. It was not until the stay application that there was evidence to suggest that such a weekly rate would not be achieved (because the property is not currently rentable without certain remedial work being undertaken).

[22]Therefore, I decline to order increased costs.

14     See High Court Rules, rr 14.10 and 14.11.

15     Xiao v Sun [2018] NZHC 1334.

Conclusion

[23]               Ms Woolf is entitled to costs of $5,575. I set out the costs as awarded in Annexure B to this judgment. Given I have awarded costs in the sum suggested by Mr Gilchrist, it is unnecessary to address his alternative submission concerning reduced costs.

[24] I make an order accordingly. But, for the reasons advanced by Mr Gilchrist and noted at [11] above, I stay enforcement of this judgment pending Ms Woolf’s appeal to the Court of Appeal.

[25]I do not make any order for costs on the costs application.

Gordon J

Annexure A – Ms Woolf’s claimed costs

Item	Description	Category 2 Daily Rate	Band B	Total
22	Filing interlocutory application for stay of execution with affidavit in support	$2,230.00	0.6	$1,338.00
11	Filing memorandum for case management conference	$2,230.00	0.2	$446.00
13	Telephone conference	$2,230.00	0.2	$446.00
22	Second affidavit of first plaintiff, leave granted at telephone conference	$2,230.00	0.2	$446.00
24	Plaintiff’s submissions in support of application	$2,230.00	1.5	$3,345.00
24	Plaintiff’s reply submissions	$2,230.00	0.3	$669.00
Total costs	$6,690.00
50 per cent uplift	$3,345.00
Grand total	$10,035.00

Annexure B – Costs awarded

Item	Description	Category 2 Daily Rate	Band B	Total
22	Filing interlocutory application for stay of execution with affidavit in support	$2,230.00	0.6	$1,338.00
11	Filing memorandum for case management conference	$2,230.00	0.2	$446.00
13	Telephone conference	$2,230.00	0.2	$446.00
24	Plaintiff’s submissions in support of application	$2,230.00	1.5	$3,345.00
Total costs	$5,575.00