EDMONDS v HOLLAND [2021] NZHC 504

EDMONDS v HOLLAND [2021] NZHC 504 [15 March 2021]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYI TE KŌTI MATUA O AOTEAROATĀMAKI MAKAURAU ROHECIV-2020-404-001820[2021] NZHC 504UNDER Section 339 of the Property Law Act 2007BETWEEN JUAN RICARDO EDMONDSPlaintiffAND ANNE HELEN HOLLANDDefendantHearing: (On the papers)Counsel: Rajiv Rao for the PlaintiffDeepal Kumar for the DefendantJudgment: 15 March 2021[COSTS] JUDGMENT OF MOORE JThis judgment was delivered by me on 15 March 2021 at 11:00 ampursuant to Rule 11.5 of the High Court Rules.Registrar / Deputy RegistrarDate:Introduction[1] On 11 February 2021, I made orders by consent for the sale of a property inPakuranga Heights ("the Property") jointly owned by the parties under s 339 of theProperty Law Act 2007.1[2] I reserved the issue of costs and in accordance with my directions, JuanEdmonds, the plaintiff, filed a memorandum seeking scale costs on a 2A basis of$4,780.00, together with a sole disbursement of $1,350.00.Background[3] Mr Edmonds and his mother Anne Holland, the respondent, lived in theProperty as joint tenants until their relationship broke down irrevocably in June 2020.Mr Edmonds sought to sell his half share in the Property to Ms Holland. He also gaveMs Holland the opportunity to buy his share or consent to the sale of the Property.Ms Holland purportedly agreed to sell the Property but was dilatory in taking thenecessary steps to effect sale. Mr Edmonds believed the only way to achieve the salewas by an order of the Court.[4] Ms Holland accepted that joint ownership of the Property was no longertenable and that the Property had to be sold as neither party had the financial means topurchase the other party's share. Ms Holland's dispute was solely with the conditionsof sale and the timeframe.[5] The claim was scheduled to be heard on 3 May 2021. However, prior to that,the parties filed a joint memorandum on 11 February 2021 seeking entry of orders byconsent. The parties reached settlement on all matters except costs. In accordancewith my orders, they have filed memoranda on costs.1 Edmonds v Holland HC Auckland CIV-2020-404-1820, 11 February 2021 (Minute of Moore JCivil List Judge (Dealt with on papers)).Principles[6] The principles relating to costs are set out Part 14 of the High Court Rules 2016("the Rules"), with the general principles set out at r 14.2. The starting point is thatgenerally "the party who fails with respect to a proceeding or interlocutory applicationshould pay costs to the party who succeeds",2 and that "so far as possible thedetermination of costs should be predictable and expeditious."3 Rule 14.7 sets out thecircumstances in which a Court may reduce or refuse an order for costs. Rule 14.7(g)is a "catch-all" exception which allows Courts to reduce or refuse to award costs wherea good reason has been identified to depart from the general principles.4[7] Where, as in this case, there has been no judicial determination reached in theproceedings, this Court has held that costs may be awarded against one of the partiesif it is obvious they would have failed with respect to the proceeding.5[8] Clark J helpfully summarised the approach to costs where there has been nojudicial determination of the proceedings in the following way:6"(a) The court has power to make a costs order when the substantiveproceedings have been resolved without trial but the parties have not agreedon costs. There is no tradition of "no order as to costs" merely because adispute has been settled except as to costs. That said, if it is not possible forthe Judge to say what the likely outcome would have been, that in itself is apossible order.(b) The overriding objective is to do justice between the parties withoutincurring unnecessary court time and consequent additional costs.(c) At each end of the spectrum will be cases where the merits and likelysuccessful party will be obvious. In between, to differing degrees, there willbe cases that are less clear. How far the court will be prepared to inquire intothe unresolved substantive issues will depend on the circumstances of the case.(d) In the absence of a good reason to make any other order the fall-backposition is to make no order as to costs."2 High Court Rules 2016, r 14.2(1)(a).3 Rule 14.2(1)(g).4 Taylor v District Court at North Shore (No 2) HC Auckland CIV-2009-404-2350, 13 October 2010at [9].5 Ng v Pauatahanui GS Ltd [2014] NZHC 3396, at [11].6 Byrne v Rose [2017] NZHC 2886, at [14].Submissions[9] Mr Edmonds submits that he should be considered the successful party andcosts should be awarded in his favour. He says that the consent order for sale wasgranted on largely the same terms as those he sought in his statement of claim. Further,Mr Edmonds submits that the proceedings needed to be issued to provide the impetusfor the resolution of the dispute.[10] Ms Holland submits that she would suffer financial hardship if the Courtgranted a costs order against her. She says that she is a 77-year-old pensioner of limitedfinancial means. She submits the financial position of herself and her husband hasbeen worsened by Mr Edmonds' conduct which resulted in criminal charges and aprotection order being made against him. She says that the proceedings wereunnecessary and the dispute could have been resolved privately between the parties.Discussion[11] In her statement of defence, Ms Holland offered no alternative conditions ortimeframe to those proposed by Mr Edmonds. As Mr Edmonds submits, the draftorders contained in the joint memorandum of counsel were broadly consistent withthose in his statement of claim. Had the parties not settled, it appears likely similarorders would have been made by the Court.[12] This Court has previously found that financial hardship may be consideredunder r 14.7(g) when determining whether to reduce or refuse a costs award if there isevidence of limited financial means in a sworn affidavit.7 However, a reduction ofcosts due to financial hardship will not typically be justified under the Rules, and thediscretion under r 14.7(g) should be reserved for exceptional cases.8[13] Ms Holland's submission that she is of limited financial means is thus oflimited relevance, particularly in absence of evidence to support her submission.Furthermore, as the consent order for sale stipulates, any award of costs would bededucted from the net sale proceeds of the Property. There is no mortgage on the7 Lowe v Auckland Family Court [2017] NZHC 656, at [5].8 Foni v Foliaki [2018] NZHC 3126, at [11].Property and it will be sold at auction with a reserve of $1.2 million. Assuming a saleat or about that sum, I regard it as unlikely an award of costs would cause Ms Hollandfinancial hardship.Result[14] Mr Edmonds is awarded costs on a 2A basis and may recover this amount, andthe disbursement, from Ms Holland's share of the net sale proceeds pursuant to theorders for sale.Moore JSolicitors:Inder Lynch, ManukauMr Kumar, Auckland