Mortenson v Tui [2019] NZHC 1033

Mortenson v Tui [2019] NZHC 1033 [13 May 2019]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYI TE KŌTI MATUA O AOTEAROATĀMAKI MAKAURAU ROHECIV-2019-404-14[2019] NZHC 1033UNDER the Property Law Act 2007IN THE MATTER of an application for an order for sale unders 339BETWEEN PENEUILA MORTENSONApplicantAND HENRY TUI as executor of the will ofNAUMALILA LEOTA aka PEPENAUMALILA TUIRespondentHearing: On the papersCounsel: SC Munro for applicantSI Perese for respondentJudgment: 13 May 2019JUDGMENT OF FITZGERALD J[As to costs]This judgment was delivered by me on 13 May 2019 at 11.30am,pursuant to Rule 11.5 of the High Court Rules.Registrar/Deputy RegistrarDateSolicitors: Galbraiths Lawyers, AucklandSaseve Solicitors, Auckland (T Saseve)Introduction[1] In my judgment dated 5 March 2019, I made orders under s 339 of the PropertyLaw Act 2007 for the sale of a property of which the applicant and respondent are co-owners.1 Those orders were in fact made by consent. Having been served with theproceedings, the respondent did not file any opposition and agreed to the propertybeing sold.[2] The applicant now seeks costs in relation to the commencement of theseproceedings.Factual background and costs submissions[3] The background to the proceedings is set out in my substantive judgment.2 Butin short, the applicant held the majority share in the property, at 70 per cent. Therespondent held the remaining 30 per cent as executor of his late mother's will, whichrequired he distribute his mother's estate equally among his siblings. Obviously, therespondent would not be able to do so without the property being sold.[4] The applicant filed an affidavit in support of her application to the effect thatshe had difficulties communicating and dealing with the respondent (her brother) inorder to progress and arrange the sale. She said the proceedings therefore had to befiled as a "last resort", in response to which the respondent consented to the orders.Counsel for the applicant says that in those circumstances, the proceedings werewholly unnecessary, and costs should follow the event in the ordinary way (on a scale2B basis).[5] The respondent disputes that the applicant was "forced" to make an applicationto the Court. In a memorandum filed in opposition to the costs application, therespondent disputes that he had been difficult in terms of communicating on the saleof the property. Counsel for the respondent states that once the application had beenserved on the respondent, he cooperated fully and promptly, such that a costs award isnot necessary.1 Mortenson v Tui [2019] NZHC 338.2 At [3]-[8].Discussion[6] Having considered the matters raised by the parties, I am clear that costs shouldfollow the event in the ordinary way. Ultimately, proceedings were commenced andserved, and the applicant has been wholly successful on them. The very fact that therespondent's consent to a sale only came about in response to formal court proceedingsleads me to infer that but for the proceedings, there would have continued to be delaysin the sale of the property.[7] In addition, the sworn affidavit material before me (rather than statements in acosts memorandum) indicates there were difficulties in progressing the matterpromptly in the absence of court proceedings.[8] I am not persuaded, however, that costs ought to be awarded on a scale 2Bbasis. The proceedings were extremely straightforward, and the formal courtdocuments are very brief; the affidavit in support is only 10 relatively shortparagraphs.[9] I consider these proceedings ought to be categorised as category 1 proceedings,namely being proceedings of a straightforward nature able to be conducted by counselconsidered junior in the High Court. In addition, the steps ought to be categorised byreference to Band A. Given the straightforward nature of the proceedings and theappropriately brief materials filed in support, a comparatively small amount of timewould have been reasonable.[10] There is accordingly a costs order in favour of the applicant against therespondent for those steps set out in the applicant's memorandum on costs dated21 March 2019, on a scale 1A basis. This produces a costs award of $2,072. There isalso an award of those disbursements claimed in the memorandum totalling $1,055.This produces a total costs and disbursement award of $3,127.[11] Counsel for the respondent states that the applicant has not attached to her costsmemorandum an invoice of fees actually incurred. He queries whether actual costswould exceed the 2B costs claimed, stating that a party cannot claim costs that havenot been billed.[12] Invoices of fees actually incurred are not ordinarily produced when scale costsare sought, given actual fees are irrelevant to the scale costs calculation. It is clear,however, that pursuant to r 14.2(1)(f), scale costs cannot exceed actual costs paid. Thisis referred to as the "non-profit rule".3[13] Plainly if the costs award in favour of the applicant calculated on a scale 1Abasis is greater than her actual costs incurred, then only the actual costs would bepayable. There is no basis to suggest in this case, however, that the applicant's actualcosts do exceed scale costs on a 1A basis. Further, the courts expect and understandthat counsel do not advance scale costs claims on their client's behalf which exceedactual costs incurred.____________________Fitzgerald J3 McGechan on Procedure (online looseleaf ed, Thomson Reuters) at [HR14.2.01(6)].