BURGESS V BEAVEN HC CHCH CIV-2010-409-000876

BURGESS V BEAVEN HC CHCH CIV-2010-409-000876 [24 August 2012]NOTE: PURSUANT TO S 35A OF THE PROPERTY (RELATIONSHIPS)ACT 1976, ANY REPORT OF THIS PROCEEDING MUST COMPLY WITHSS 11B TO 11D OF THE FAMILY COURTS ACT 1980. FOR FURTHERINFORMATION PLEASE SEEWWW.JUSTICE.GOVT.NZ/FAMILY/LEGISLATION/RESTRICTIONS.IN THE HIGH COURT OF NEW ZEALANDCHRISTCHURCH REGISTRYCIV-2010-409-000876[2012] NZHC 2341BETWEEN GARY OWEN BURGESSAppellantAND SUSAN NATALIE BEAVENRespondentHearing: 22 August 2012(By way of telephone conference and written submissions)Appearances: Appellant in PersonA M Corry for the RespondentJudgment: 24 August 2012JUDGMENT OF HON JUSTICE FRENCHas to CostsIntroduction[1] In my judgment of 4 October 2010, I dismissed Mr Burgess's appeal against aFamily Court decision. The decision concerned a notice of claim which had been lodged by Ms Beaven against a property called Medbury. The Family Court had refused to grant Mr Burgess an order removing the notice. I upheld the FamilyCourt's decision and expressed a provisional view that Mr Burgess should pay costs on the appeal on a 2B basis.[2] Mr Burgess then applied for leave to appeal my decision to the Court of Appeal. I declined leave and awarded Ms Beaven costs on the leave application on a2B basis. I also awarded 2B costs in respect of an unsuccessful application brought by Mr Burgess to remove Ms Corry as counsel.[3] Dissatisfied with that outcome, Mr Burgess applied to the Court of Appeal for special leave to appeal my decision. The Court of Appeal dismissed that application.[4] The appeal proceeding was one of three streams of litigation between Mr Burgess and Ms Beaven regarding division of relationship property. There have been several Family Court decisions, three High Court decisions, a Court of Appeal decision and a Supreme Court decision.[5] The Supreme Court decision1 has finally resolved the division of relationship property. The decision notes that there are still two outstanding costs issues relating to the appeal proceeding I heard. They are the costs awarded by me on the leave and removal applications but not yet sealed, and the costs relating to the appeal itself. The Supreme Court considered it did not have jurisdiction to deal with either matter and confirmed that Ms Beaven was free to pursue an application for costs.[6] As regards the unsealed costs orders, Mr Burgess accepts there are no grounds why those orders should not be sealed.[7] Mr Burgess does, however, oppose Ms Beaven being awarded costs on the appeal. He does so principally on the grounds that her counsel, Ms Corry, misled the Court.[8] Concerns about incorrect information given to the Court also prompted Mr Burgess to file applications of his own for recall of my judgment, an order removing Ms Corry and an order for costs as a sanction.[9] During a conference call, Ms Corry acknowledged she had indeed provided incorrect information and explained what had happened. As a result of her acknowledgment, Mr Burgess then responsibly withdrew his applications.1 [2012] NZSC 71[10] The only live issue is therefore the costs on the substantive appeal.[11] In order to address the arguments raised by Mr Burgess, it is necessary for me to set out the background history in more detail.Factual background[12] A Family Court Judge, Judge Strettell, had ordered unequal sharing in favour of Ms Beaven. The Judge directed that Medbury was to be sold unless Mr Burgess gave notice of intention to retain it, in which case he had 28 days to make payment of the judgment sum to Ms Beaven.[13] Mr Burgess, who wanted to retain Medbury, filed an appeal in the High Court against the Judge's decision.[14] He also obtained without notice a stay of the decision pending determination of his appeal to the High Court. The stay was granted on condition he undertake to pay all outgoings on the Medbury property.[15] Matters became complicated because, before Mr Burgess's High Court appealcould be heard, the Southland Building Society which held a mortgage over Medbury issued a default notice. Mr Burgess proposed refinancing and obtained a loan offer from another bank. However, in order to take up the new loan and repay the Southland Building Society, he needed the property to be in his sole name instead of joint names.[16] Negotiations then took place between the lawyers acting for Mr Burgess and Ms Beaven. Those negotiations resulted in an agreement, the terms of which were recorded in a consent memorandum dated 9 September 2008.[17] The joint memorandum which is addressed to the Court was signed by the lawyers on behalf of their respective clients. It requested the Court to make consent orders in terms of the memorandum.[18] Under the agreement, Ms Beaven was entitled to file a notice of claim against the title to the Medbury property. The agreement also provided that she was required to withdraw the notice once her interest in the property had been satisfied by payment of the amount due under the judgment and by payment of all costs awards.[19] In accordance with the terms of the consent memorandum, title to the Medbury property was duly transferred into the sole name of Mr Burgess, the new loan was drawn down, the monies were used to repay the Southland Building Society and a notice of claim in favour of Ms Beaven was registered. Mr Burgess subsequently paid the judgment sum.[20] Although Mr Burgess's appeal to the High Court about the division ofrelationship property was unsuccessful, the Court of Appeal granted him special leave.[21] That prompted Mr Burgess to apply to the Family Court for an order that Ms Beaven remove the notice of claim so he could use the Medbury property for a loan to enable him to pay the setting down fee for his appeal to the Court of Appeal and to meet security for costs.[22] Ms Beaven opposed the application for removal on the grounds that the notice was the only security she had left for some unpaid costs and any future ordered unpaid costs.[23] The application for removal of the notice was heard by another Family court Judge, Judge Somerville.[24] At the hearing before Judge Somerville it emerged, contrary to the parties'understanding, that consent orders had never been made. The memorandum was not on the file.[25] Judge Somerville dismissed Mr Burgess's application to remove the notice. He did so on the grounds that the agreement only required removal on payment not just of the judgment sum but also of all outstanding costs. The Judge's view was thatMr Burgess had taken the benefit of the agreement and should be held liable to the agreement he had made.[26] Mr Burgess then appealed Judge Somerville's decision to this Court.[27] By the time of the hearing before me, there had been a significant change of circumstance. Mr Burgess had defaulted on his payments to the bank and Medburyhad been sold in a mortgagee sale. The mortgagee sale resulted in Ms Beaven'snotice of claim being discharged.[28] Notwithstanding that, Mr Burgess still wished to pursue the appeal.[29] During the course of the hearing before me, Ms Corry told me from the Barthat it was Mr Burgess's previous lawyer who was supposed to file thememorandum. Ms Corry, Mr Burgess and Ms Beaven had all assumed it had been done.[30] I dismissed Mr Burgess's appeal on a number of grounds. A central pointwas that the agreement was more than a bare agreement to seek consent orders. It was an agreed means of formalising an already concluded agreement which had been part performed.[31] It now transpires that, contrary to what Ms Corry told me at the hearing, the consent memorandum was filed. Further, it was Ms Corry herself who filed it. She then appears to have received a request from the Family Court Registry for draft orders to be filed.[32] Ms Corry says she only realised this was the correct position when she came to search the Family Court file in the course of preparing for the Supreme Court hearing. She is unsure now whether she did ever file the draft orders.Discussion[33] The situation is unsatisfactory, not least of all because a transcript of the Family Court hearing records Ms Corry as having told Judge Somerville the consent memorandum had been filed promptly. She does not expressly say who had filed it but the implication is that she did.[34] Notwithstanding these contradictions, I am satisfied that Ms Corry did not deliberately mislead me but simply made an honest mistake.[35] Having regard to the passage of time and the volume of paperwork that must have been generated by this case, the mistake is understandable. Compounding the confusion was the fact the consent memorandum was not on the Family Court file when Judge Somerville searched it. Ms Corry's more recent search suggests it hadgone to the High Court and had been temporarily mislaid.[36] The error is unfortunate.[37] However, I am satisfied that it is not grounds for denying Ms Beaven costs.[38] I say that for the following reasons:(i) Ms Corry did not deliberately mislead the Court.(ii) My decision did not turn on whether or not the consent memorandum had been filed. Even if I had been told the correct position from the outset, my decision would still have been the same.(iii) The error, while understandably of concern to Mr Burgess, has not prejudiced him.(iv) The reason the Court of Appeal denied Mr Burgess special leave to appeal my decision was because the Court found he should never have pursued his appeal in the first place. The mortgagee sale had rendered the issue academic.[39] In my view, there is no reason to displace the usual rule that a successful party is entitled to costs. Other grounds raised by Mr Burgess are either attempts to re-litigate the merits of his appeal, or relate to the fact he was successful in the Supreme Court. However, as the Supreme Court decision makes clear, this appeal proceeding is a separate stream of litigation. It was an appeal initiated by Mr Burgess himself. It was an appeal which the Court of Appeal has said should never have been pursued. The Supreme Court indicates a similar view.[40] I therefore order Mr Burgess to pay Ms Beaven's costs in respect of theappeal on a 2B basis.[41] There will be no order for costs in relation to the applications withdrawn by Mr Burgess.Solicitors:Dawson Innes, ChristchurchCopy to:Mr Burgess, Christchurch