COOKE v BUTLER [2023] NZHC 3153

COOKE v BUTLER [2023] NZHC 3153 [9 November 2023]IN THE HIGH COURT OF NEW ZEALANDCHRISTCHURCH REGISTRYI TE KŌTI MATUA O AOTEAROAŌTAUTAHI ROHECIV-2021-409-124[2023] NZHC 3153UNDER Part 18 of the High Court Rules 2016IN THE MATTER OF an application for determination of abeneficiary's claim under a constructive trustBETWEEN JANET MARIE COOKE, SHARON MARIECOOKE and STANLEYCHARLES BARKER, as trustees of TheCooke Family TrustPlaintiffAND PENNY LEE-ANNE BUTLERFirst DefendantCHARLES ANDREW AXELSEN BUTLERSecond Defendantcontinued overHearing: On the papersCounsel: RA Hearn for PlaintiffsS M Grieve KC and C Mo for the DefendantsJudgment: 9 November 2023JUDGMENT OF ASSOCIATE JUDGE BRITTAIN[costs]This judgment was delivered by me on 9 November 2023 at 2.30 pm.Pursuant to Rule 11.5 of the High Court Rules...Registrar/Deputy RegistrarSolicitors/Counsel:Corcoran French, Christchurch SaundersCo, ChristchurchS M Grieve, Barrister, ChristchurchCIV-2021-409-152BETWEEN JANET MARIE COOKE, SHARONMARIE COOKE and STANLEYCHARLES BARKER, as trustees ofThe Cooke Family TrustPlaintiffsAND PENNY LEE-ANN BUTLERFirst DefendantCHARLES ANDREW AXELSENBUTLERSecond DefendantIntroduction[1] On 28 September 2023, I gave judgment dismissing the defendants'interlocutory application for judgment against the plaintiffs on admission of facts.1The background is set out in that judgment and need not be repeated. In this judgment,I determine costs in respect of the unsuccessful application.[2] The plaintiffs submit that costs should follow the event. Costs are sought onan indemnity basis, or alternatively on a 2B basis with an uplift, on the ground that theapplication for judgment was hopeless.[3] The defendants submit that the Court should reserve costs, to be determinedonce the substantive proceeding has been dealt with, so that costs in respect of myjudgment can be considered in the context of the entire proceeding, including theparties' positions in respect of various settlement offers made.[4] Costs have previously been reserved in respect of other interlocutoryapplications in this proceeding:(a) the plaintiffs' unsuccessful application for summary judgment;(b) the defendants' successful application for particular discovery andmodification of privilege; and(c) the plaintiffs' unsuccessful application for further discovery.Legal principles[5] Under r 14.2(1)(a) of the High Court Rules 2016, the unsuccessful party on aninterlocutory application should pay costs to the successful party. Under r 14.8, costsshould be fixed when the application is determined, and become payable when theyare fixed, unless there are special reasons to the contrary. What will constitute aspecial reason is highly case dependent.1 Cooke v Butler [2023] NZHC 2716.[6] The defendants' application for judgment was akin to an application forsummary judgment, to which the presumption in r 14.8 does not apply.2 In the contextof a failed application for defendant summary judgment, the Court has frequentlyreserved costs until final determination of the proceeding.3 There are, however,instances where the Court has allowed costs to follow the event.4[7] Rule 14.7(f)(v) provides the Court with a discretion to refuse or reduce costs ifthe party claiming costs has contributed unnecessarily to the time or expense of a stepin the proceeding, by failing, without reasonable justification, to accept an offer ofsettlement.Discussion[8] The plaintiffs are the successful party, and the starting point is that they areentitled to costs.[9] I reject counsel for the plaintiffs' submission that the application was sohopeless as to justify either indemnity costs or an increase in costs. The applicationfor judgment was based on a memorandum of counsel for the plaintiffs dated 28 March2023, and contemporaneous emails between counsel, which comprised an open offerto settle the proceeding. These documents effectively conceded the defendants'counterclaim, although not in a form that amounted to an admission of facts sufficientto justify entry of a judgment.[10] Before awarding costs to the plaintiffs, the Court must consider any argumentsavailable to the defendants under r 14.7(f)(v). The application of that rule to thepresent case will require a careful analysis of the long history of offers and counter-offers between the parties, to determine whether the plaintiffs acted unreasonably andwithout justification in declining the defendants' offers. That is particularly so in thiscase, where the parties agreed nearly all terms of settlement other than inter partescosts.2 High Court Rules 2016, r 14.8(3).3 See, for example, EBS v CAS [2014] NZHC 2929 at [90]; and Rhodes v Shaw [2015] NZHC 1530,(2015) 16 NZCPR 326 at [31].4 See, for example, Judge v Dempsey [2014] NZHC 2864 at [57].[11] Some of the related correspondence between the parties, and draft settlementagreements, were without prejudice. Most of this material is not before the Court.[12] The review of the history of the negotiations, including the plaintiffs' actionsin declining any offer by the defendants, is best undertaken once. It is appropriate thatthis be at the conclusion of this proceeding, when all relevant material is before theCourt and when the Court determines costs on the substantive proceeding, includingthe other interlocutory applications determined to date.[13] In my view, that amounts to a special reason justifying costs being reserved inrespect of the application for judgment.Result[14] Costs on dismissal of the defendants' application for judgment on admissionof facts are reserved.______________________Associate Judge Brittain