Young v Young

[2021] NZHC 369

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2019-404-1079

[2021] NZHC 369

UNDER

the Property Law Act 2007

BETWEEN

ELLA VICTORIA YOUNG

Plaintiff

AND

SHANE MATIU YOUNG

First Defendant

JINA KIM

Second Defendant

CIV-2019-404-2029

UNDER

the Property (Relationships) Act 1976

BETWEEN

JINA KIM

Plaintiff

AND

SHANE MATIU YOUNG

First Defendant

ELLA VICTORIA YOUNG

Second Defendant

Hearing:

On the papers

Appearances:

R G Evans for Ella Young

B N Snedden for Shane Young A G Rowe for Jina Kim

Judgment:

4 March 2021

JUDGMENT OF GORDON J

This judgment was delivered by me on 4 March 2021 at 10 am, pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar Date:

YOUNG v YOUNG [2021] NZHC 369 [4 March 2021]

Introduction

[1]    This is an application by  Ella Young  for costs  following  my  judgment of 19 November 2020.1 That judgment determined two separate, but related, proceedings. Both proceedings concerned a residential property (the property) held by Mrs Young and her son, Shane Young, as joint tenants.

[2]    In proceeding CIV-2019-404-2029, Jina Kim, Shane’s former wife, claimed Shane’s half-share in the property was relationship property under the Property (Relationships) Act 1976 and should be divided equally between the two of them. The proceeding was transferred to this Court from the Family Court. Mrs Young was joined as a party prior to the transfer to this Court. Mrs Young and Shane defended this proceeding.2

[3]    In proceeding CIV-2019-404-1709 (brought as a consequence of Ms Kim’s claim in the proceeding commenced in the Family Court), Mrs Young argued she was the beneficial owner of all of the property. She sought an order under s 339(1)(b) of the Property Law Act 2007 vesting the entire property in her. She also sought an order under s 142 of the Land Transfer Act 2017 for removal of a Notice of Claim registered by Ms Kim. Shane supported his mother’s case.3

[4]    I found for Mrs Young in both proceedings. I granted the orders she sought and dismissed Ms Kim’s Property (Relationships) Act claim, save for an order by consent under s 33(c) vesting specified items in Shane and Ms Kim under their names as separate property.4

1      Young v Young [2020] NZHC 3054.

2 At [7].

3      At [2]–[6].

4      At [92] and [93].

Costs claimed and submissions

Applicant submissions

[5]    As the successful party in both proceedings, Mrs Young seeks costs against Ms Kim.5

[6]    In respect of the Property Law Act proceeding, Mrs Young seeks costs against Ms Kim on a 2B basis in the sum of $44,329.00. No security for costs was available to Mrs  Young.6 Mrs Evans for Mrs Young submits the schedule attached to Mrs Young’s costs memorandum reflects the complexity and significance of the work performed.7 Counsel further submits no issue has been taken by counsel for Ms Kim regarding this schedule.

[7]A copy of the schedule is annexed to this judgment.8

[8]    Because the two proceedings were for the most part heard and determined together in the High Court, Mrs Young does not claim the costs of the Property (Relationships) Act proceeding after its transfer to this Court by order of a Family Court Judge on 19 September 2019.

[9]    In respect of the Property (Relationships) Act proceeding, Mrs Young seeks costs against Ms Kim in the sum of $5,516.00. This number reflects the legal aid costs Mrs Young must reimburse to the Ministry of Justice Legal Aid Department for Family Court attendances predating the removal of the proceeding to the High Court.

[10]   Mrs Evans submits the sum Mrs Young claims for costs in the Property (Relationships) Act proceeding is minimal and much less than any entitlement she may have against Ms Kim in accordance with the Family Court Rules 20029 and the District Court Rules 2014.10

5      High Court Rules 2016, r 14.2(1)(a).

6      Rule 5.45.

7      Rule 14.2(1)(b).

8I have added a reference in Mrs Young’s schedule to the appropriate item in Schedule 3 to the High Court Rules which corresponds to each item claimed.

9      Rule 207.

10     Rules 14.2–14.12 and schs 4 and 5.

[11]   For the preparation and filing of her costs memorandum, Mrs Young seeks costs against Ms Kim on a 2B basis in the sum of $1,195.00.

[12]   Finally, for the receipt and review of Ms Kim’s costs submissions and the preparation and filing of a further costs memorandum in response, Mrs Young seeks costs against Ms Kim on a 2B basis in the sum of $1,195.00.

[13]The total sum Mrs Young claims against Ms Kim is $52,235.00

[14]   Counsel submits that if Ms Kim is not legally aided, her financial position is not relevant to whether an order for costs should be made against her.

Respondent submissions

[15]   Mr Rowe, counsel for Ms Kim, submits she has no means to  pay costs.     Ms Kim is insolvent — her debts greatly exceed her assets.

[16]   Mr Rowe submits that in respect of the Property (Relationships) Act proceeding, the Court may make any such order as to costs as it thinks fit.11

[17]   Mr Rowe further submits that in the Property Law Act proceeding, costs are at the Court’s discretion.12 The general principle is the party who fails with respect to a proceeding should pay costs to the successful party.13

[18]   Mr Rowe says Ms Kim instructs  a summary of her circumstances  as of     11 February 2021 is as follows. Her total assets amount to $5,639.58 against her total liabilities of $106,489.00 (almost entirely legal fees). Her total fortnightly income is

$1,580.50 against total fortnightly expenses of $1,540.00

11     Property (Relationships) Act 1976, s 40.

12     High Court Rules, rr 14.1, and 14.2–14.7.

13     Rule 14.2(1)(a).

Quantum of costs

[19]   As the successful party, Mrs Young is entitled to an award of costs against  Ms Kim. Costs break down as follows.

Property Law Act proceeding

[20]   The Property Law Act proceeding was of average complexity and required counsel of average skill and experience.14 Each of the steps itemised in Mrs Young’s schedule, objectively viewed, would reasonably take a normal amount of time.15 Assessment of costs on a 2B basis is, therefore, appropriate.

[21]   I am satisfied the schedule Mrs Young has produced (reproduced in the annexure to this judgment) accurately reflects the steps her counsel has taken in the Property Law Act proceeding but for one item. Mrs Young claims for obtaining judgment without appearance (item 28). In this case counsel appeared at a two day hearing and Mrs Young has claimed appropriately for that appearance. I will disallow the claim under item 28 ($712.00).

[22]   There are also two items where the number of days claimed is incorrect. The Property Law Act claim involved witness briefs, not affidavits. Under item 33, two days may be claimed, not three days. The correct amount is therefore $4,780.00 (not

$7,170.00). The second item is preparation for a hearing. Under item 33B (preparation for a witness hearing) the correct claim is for two days not three days. The amount should be $4,780 (not $7,170.00).

[23]   I further note an apparent arithmetic error in Mrs Young’s schedule. Disclosure of documents is listed as having a time allocation of 2.5 days. That time allocation is consistent with sch 3 of the High Court Rules 2016.  The claimed figure, however, is

$4,780.00. Applying the category 2 daily recovery rate of $2,390.00, as prescribed in sch 2 of the High Court Rules, the correct figure for that line item should be $5,975.00.

14     Rule 14.3.

15     Rule 14.5.

[24]   Factoring in the adjustment for the arithmetic error, the deduction of $717.00 for item 28 and the deduction of $2,390 for each of items 33 and 33B, the correct quantum of costs and disbursements in respect of the Property Law Act proceeding is the sum of $40,027.00.

Property (Relationships) Act proceeding

[25]   The Family Court proceeding was transferred to the High Court by an order made under s 38A(1) of the Property (Relationships) Act. The proceeding is then deemed to have commenced in this Court.16

[26]   This Court, therefore, has jurisdiction to award costs in respect of the phase of the proceeding that took place in the Family Court.

[27]   Mrs Young claims costs of $5,516.00 in respect of this proceeding. She was legally aided for the Family Court phase of the proceeding, and states the claimed figure reflects her required repayment for attendances in the Family Court. Mrs Evans for Mrs Young submits if Mrs Young were to claim costs in respect of the totality of proceedings the amount would be far greater. Mrs Young does not provide any calculations to support that assertion.

[28]   The proceeding in the Family Court commenced in February 2018. As is apparent from the Family Court file, which is available to me, Mrs Young filed her opposition in August 2018. Various steps were taken in the Family Court up to the point of transfer to this Court on 19 September 2019.

[29]   Section 40 of the Property (Relationships) Act provides that subject to any rules of procedure made for the purposes of the Property (Relationships) Act, in any proceedings under that Act the Court may make such order as to costs as it thinks fit. However, as is apparent from a number of judgments of this Court and the Court of Appeal discussed in Campbell v Campbell-Goldie,17 costs decisions in relationship property cases are to be treated in the same way as costs decisions in ordinary civil proceedings.

16     Property (Relationships) Act, s 38A(4).

17     Campbell v Campbell-Goldie [2019] NZHC 1573 at [32]–[47].

[30]   Although Mrs Evans did not provide the Court with her calculation of scale costs, I accept that schedule costs in the Family Court and High Court together would exceed the amount claimed. I also accept that from the time the proceeding was transferred to this Court (when Mrs Young was responsible for her own costs) the steps taken would result in a sum greater than the amount of $5,516.00 claimed.

[31]   The principles governing the exercise of the discretion to award costs include the principle that there is a strong implication that the Court is to apply the regime in the High Court Rules in the absence of some reason to the contrary. I consider that a claim for a lesser amount of costs is a good reason to the contrary. Accordingly I award the sum of $5,516.00 as costs in the relationship property proceeding.

Costs memoranda

[32]   The courts do not usually award costs on costs applications.18 I do not consider the present application presents sufficiently exceptional circumstances to depart from that practice.

[33]Accordingly, I do not award the costs Mrs Young claims under this head.

Ms Kim’s impecuniosity

[34]I accept Ms Kim’s submission she has not the means to pay costs.

[35]   Financial hardship, however, is not an answer to a claim for costs.19 Costs must be at a meaningful level, even against an impecunious party.20 Abatement of costs because of personal circumstances is exceptional.21

[36]   Ms Kim does not provide a basis to enable the Court to consider an abatement. I make no reduction in the award of costs on this basis.

18See, for example, Strata Title Administration Ltd v Body Corporate Administration Ltd [2014] NZCA 96 at [10]–[14].

19     Chesterfields Preschools Ltd v Commissioner of Inland Revenue [2011] NZCA 640 at [7].

20Te Whare O Te Kaitiaki Ngahere Incorp Society v West Coast Regional Council [2014] NZHC 2969 at [16]; and Tuck v Keedwell [2016] NZHC 794 at [11].

21     Foni v Foliaki [2018] NZHC 3126 at [11].

Result

[37]I make an order awarding costs in favour of Mrs Young in the sum of

$45,543.00 being the total of $40,027.00 in the Property Law Act proceeding and

$5,516.00 in the relationship property proceeding.

Gordon J

ANNEXURE

Date	Step	Time allocation — allocated days or part days	Category 2B Cost — daily recover rate $2,390.00
12 June 2019 (item 1)	Commencement of proceedings by Ella Young	3	$ 7,170.00
12 June 2019 (item 22)	Interlocutory application to join defendants	0.6	$ 1,434.00
10 July 2019 (items 11 and 13)	First Case Management Conference — Memorandum and appearance	0.7	$ 1,673.00
15 August 2019 (items 11 and 13)	Second Case Management Conference — Memorandum and appearance	0.7	$ 1,673.00
26 September 2019 (item 11)	Third Case Management Conference — memorandum filed no appearance	0.4	$     956.00
17 October 2019 (item 15)	Fourth Case Management Conference — memorandum and appearance by telephone	0.5	$ 1,195.00
4 March 2020 (items 11 and 13)	Fifth Case Management Conference — memorandum and appearance	0.7	$ 1,673.00
Various (item 20)	Disclosure — including list of documents, affidavit of documents	2.5	$ 4,780.00
Various (item 33)	Preparation of affidavits, briefs of evidence, authorities and agreeing common bundle	322	$ 7,170.00
Various (item 33B)	Preparation for hearing	323	$ 7,170.00
6 and 7 October 2020 (item 34)	Attendance at hearing	2	$ 4,780.0024
19       November 2020 (item 28)	Obtaining Judgment without appearance	0.3	$     717.00
(item 29)	Sealing Order or Judgment	0.2	$     478.00
Disbursements	Filing fee on applications	$     740.00
Filing fee amended statement of claim	$     110.00
Scheduling fee	$     640.00
Hearing fee	$ 1,920.00
Sealing fee	$     50.00
TOTAL:	$ 44,329.00

22     The correct number of days is two days.

23     The correct number of days is two days.

24     The correct amount should be $5,975.00