IN THE HIGH COURT OF NEW ZEALAND ROTORUA REGISTRY

I TE KŌTI MATUA O AOTEAROA
TE ROTORUA-NUI-A-KAHUMATAMOMOE ROHE	
CIV-2017-463-97
[2019] NZHC 545	

BETWEEN	WARREN ONSLOW BEAN

Appellant	
AND	CHERIE MARION BEAN

First Respondent

CHERIE MARION BEAN WARREN ONSLOW BEAN WILLIAM JOHN LYNCH

Second Respondents	

Hearing:	On the papers	
Counsel:	J Hosking for appellant S Scott for respondents	
Judgment:	22 March 2019	

JUDGMENT OF KATZ J
[Costs]

This judgment was delivered by me on 22 March 2019 at 2:00pm Pursuant to Rule 11.5 High Court Rules

Registrar/Deputy Registrar

Solicitors:	The Law Shop, Rotorua
Chris Rejthar & Associates, Tauranga

Counsel:	J Hosking, Barrister, Rotorua
S Scott, Barrister, Tauranga

BEAN v BEAN [2019] NZHC 545 [22 March 2019]

Introduction

[1]	Cherie Bean filed an application in the Family Court, under the Family Protection Act 1955, seeking further provision from the estate of her late mother. Cherie’s brother, Warren Bean, applied to strike out the proceeding on the ground that no reasonable basis for the application is disclosed.1

[2]	Judge Brown declined Warren’s strike-out application.2 Warren then appealed that decision to this Court. I allowed the appeal and struck out Cherie’s Family Court proceeding.3 Warren now seeks an award of costs in respect of both the Family Court proceeding and the appeal to this Court.

Costs

Family Court

[3]	Both parties filed submissions on costs in the Family Court, but no costs decision was given by that Court, as a consequence of Warren appealing the Family Court’s decision to this Court. Warren claims the following costs in relation to the Family Court proceeding, in accordance with Schedule 3 of the District Court Rules 2009. (I note that this legislation is no longer in force, however, the costs sought are accurate, in accordance with Schedule 5 of the District Court Rules 2014).

Item	Particulars	Allocated days
(at $1780 per day)	Amount	
9.10	Preparing	and	filing	interlocutory application and supporting affidavits	0.4	$712.00	
9.12	Preparing written submissions	1	$1,780.00	
9.14	Appearance at hearing of defended interlocutory application for sole or principal counsel	0.5	$890.00	
	Total days at $1780	1.9	$3,382.00	
	Disbursements:	Binding		$35.95	
	Total	$3,417.95	

1	Family Court Rules 2002, r 193(1)(a).
2	Bean v Bean [2018] NZFC 5920.
3	Bean v Bean [2019] NZHC 20

High Court

[4]	Warren claims the following costs in the High Court, on a 2B scale basis:

Item	Particulars	Allocated days
(at $2330 per day)	Amount	
52	Commencement of appeal or cross- appeal	1	$2,230.00	
10	Preparation for first case management conference	0.4	$892.00	
11	Filing	memorandum	for	first	case management conference	0.4	$892.00	
13	Appearance at first case management conference	0.3	$669.00	
55	Preparation of Case on Appeal	1	$2,230.00	
56	Preparation of written submissions	3	$6,690.00	
57	Appearance at hearing for sole or principal counsel	0.5	$1,115.00	
	
Total days at $2230	
6.6	
$14,718.00	
	Disbursements:	Filing		$540.00	
		Scheduling Fee		$640.00	
		Binding		$29.97	
	
Total	
$15,924.97	

[5]	A 50 per cent uplift is also sought for items 55 and 57, on the basis that those attendances were incurred after Warren had made a relevant settlement offer.4 Accordingly, the total costs sought in respect of the appeal are $24,379.95.

4	High Court Rules 2016, r 14.6(3)(b).

Should costs in the Family Court be awarded?

[6]	Mr Scott, on behalf of Cherie, submitted that Beirne v Kidd,5 relied upon by Warren, is only authority for the proposition that a Court can determine the costs of a successful party in an inferior Court, rather than remitting the issue back to that Court for determination. He submitted that it is not authority for the appellate Court awarding costs to the unsuccessful party in the inferior Court as if it had won in that Court.

[7]	I reject that submission. Beirne v Kidd is consistent with previous authority (and longstanding practice) that an appellate court may make an order that a successful appellant is to receive costs on the appeal and in the court below.6 The rationale for such an order was explained by Leggatt J in Kuwait Airways Corporation v Iraqi Airways Co and Anor (No 2):7
When this court allows an appeal and reverses the order for costs which a judge has made, it is usually demonstrable that the party in the court below should have won, and that the order for costs should therefore have been in his favour.

[8]	This Court has jurisdiction on an appeal to make any appropriate order as to costs, including costs in the Court below.8 Rule 20.19(1)(a) specifically provides for an appellate Court to make any order it thinks should have been made in the court or tribunal appealed from. If the Court considers the decision under appeal to be in error, it will ordinarily follow that any costs award will have been based on an incorrect premise.9 Rule 20.19 provides:
20.19 Powers of court on appeal
(1)	After hearing an appeal, the court may do any 1 or more of the following:
(a)	make any decision it thinks should have been made:

(b)	direct the decision-maker—

(i)	to rehear the proceedings concerned; or

(ii)	to consider or determine (whether for the first time or again) any matters the court directs; or

5	[2015] NZHC 3118.
6	Matthew Casey and Others Sim's Court Practice (NZ) (online loose-leaf ed, LexisNexis) at HCR14.1.4.
7	Kuwait Airways Corporation v Iraqi Airways Co and Another (No 2) [1994] 1 WLR 985 (CA); cited in Beirne v Kidd [2015] NZHC 3118 at [11].
8	See for example Waitakere City Council v Brunel HC Auckland CIV-2006-404-4504, 5 September 2008 and Young v KPSS New Zealand Limited [2012] NZHC 305
9	See for example Murray v Morel and Co Ltd [2008] NZCA 124.

(c)	make any order the court thinks just, including any order as to costs.

…

(4) The court may act under subclause (1) in respect of a whole decision, even if the appeal is against only part of it.

…

[9]	Costs are, however, always at the discretion of the Court. What is required is that the award does justice as between the parties.10 In Beirne v Kidd, both parties could claim some success in the proceedings, therefore it was held that the fairest outcome was to let costs in the lower court lie where they fell.11

[10]	The outcome in this case is much more clear cut. Warren was successful on appeal. It necessarily follows that he should have been successful in the Family Court. I am accordingly satisfied that costs in the Family Court should be awarded to Warren. Determining the quantum of costs in the Family Court is straightforward. Nothing would be gained by remitting the issue of costs to that Court for determination.

[11]	Cherie did not dispute the categorisation or quantum of the Family Court costs sought by Warren. I am satisfied that the costs and disbursements sought are appropriate.

Did Cherie pursue an argument that lacked merit, justifying an uplift to any costs awarded in respect of the High Court appeal?

[12]	Warren submits that Cherie contributed unnecessarily to the time of the proceeding by pursuing an argument that lacked merit,12 namely pursuing a fundamentally flawed argument in that the application did not contain the pre-requisites of a Family Protection Act claim.13

[13]	To justify increased costs the proceeding must lack merit, or there must be a failure to accept legal argument without reasonable justification.14 Most cases are reasonably arguable either way, even if one party’s arguments may be stronger than those of the opposing party. Accordingly, before increased costs can be justified, the

10	Beirne v Kidd [2015] NZHC 3118 at [12].
11	At [24]-[25]
12	High Court Rules 2016, r 14.6(3)(b)(ii).
13	Bean v Bean [2019] NZHC 20 at [32].
14	Hight Court Rules 2016, r 14.6(3)(ii) and (iii).

lack of merit must be both obvious and incontrovertible, so that there is no possibility that the Court might form a different view.15 Something more than a mere failure of a factual or legal argument is necessary for there to be increased costs.16

[14]	The major difficulty with Cherie’s claim was that her primary complaint did not appear to be that her mother failed to make adequate provision for her, in breach of her moral duty, but rather that her mother’s will did not reflect her true testamentary intentions and that she had intended to change her will prior to her death.17 That does not found a proper basis for a claim under the Family Protection Act. A further (and related) difficulty with Cherie’s claim was that she did not plead in her application that she had any financial need that would require maintenance or support over and above that already provided in her mother’s will.18

[15]	Cherie’s claim was seen as having enough merit, however, to initially survive the strike out application in the Family Court (albeit her claim was seen as weak). The Judge concluded that it was not possible, at that preliminary stage, to conclude that her claim was doomed to fail at trial. Although I reached a different conclusion on appeal, I am not satisfied that the lack of merit in the claim was so obvious and incontrovertible as to justify an award of increased costs.

Did Cherie fail to accept an offer of settlement without reasonable justification, warranting an uplift to the High Court costs?

[16]	Warren submits that Cherie failed, without reasonable justification, to accept an offer of settlement.19

[17]	Rule 14.6(3)(b)(v) of the High Court Rules provides that the court may order a party to pay increased costs if that party has failed, without reasonable justification, to accept an offer of settlement.20 The rationale behind awarding increased costs to a party who fails, without reasonable justification, to accept an offer of settlement is that:21

15	N-Tech Ltd v Abooth Ltd [2012] NZHC 1167 at [97] and [108].
16	Nandro Homes Ltd v Datt HC Auckland CIV-2008-404-6676, 13 July 2009 at [11].
17	Bean v Bean [2019] NZHC 20 at [32].
18	At [34].
19	High Court Rules 2016, r 14.6(3)(b)(v)).
20	Rule 14.6(3)(b)(v).
21	BlueStar Print Group (NZ) Ltd v Mitchell [2010] NZCA 385, (2010) 9 NZELC 93 588 at [20].

The scarce resources of the Courts should not be burdened by litigants who choose to reject reasonable settlement offers, proceed with litigation and then fail to achieve any more than was previously offered.

[18]	The relevant offer, however, must be a settlement offer. The rule does not apply to a letter, even if “detailed and intelligent”, sent for the justifiable purpose of trying to stop the litigation and save further costs, but not containing an actual offer.22 In Nandro Homes Ltd v Datt, rejection of such a letter did not constitute a failure to accept an offer of settlement.23

[19]	The correspondence relied on by Warren to show that he made serious efforts to “streamline” the proceedings does not contain an actual settlement offer. For example, in a letter dated 10 October 2016, Warren’s counsel states that, in her view, a two day arbitration would resolve all issues and that “if [Cherie] genuinely wishes to have matters resolved then I would have thought she would support the arbitration process…”.

[20]	The refusal of an ultimately unsuccessful party to engage in pre-trial alternative dispute resolution is not readily susceptible to an expression of the Court’s disapproval through an uplift in costs.24 Refusal to attend arbitration is not one of the matters referred to in r 14.6.3. The reasons why a party might reasonably decline an invitation to engage in pre-trial alternative dispute resolution are infinitely various and not necessarily related to an unreasonable attitude on the part of the litigant.25

[21]	For these reasons, I have not been persuaded that an uplift from 2B scale costs is justified in respect of the appeal.

[22]	Cherie did not dispute the categorisation or quantum of Warren’s High Court costs. I have reviewed the costs and disbursements claimed (as set out at [4] above) and am satisfied that the quantum sought is appropriate.

22 Nandro Homes Ltd v Datt HC Auckland CIV-2008-404-6676, 13 July 2009.
23 At [13].
24 Glaister v Amalgamated Dairies Ltd (2003) 16 PRNZ 536 (HC), affirmed in Glaister v  Amalgamated Dairies Ltd (2003) 16 PRNZ 840 (CA); Leaderbrand Produce Ltd v Danfoss (New Zealand) Ltd & Anor HC Auckland CIV-2006-404-6531, 19 June 2008; and Body Corporate 198900 Ltd v Bhana Investments Ltd [2015] NZHC 2787 at [9].
25 Body Corporate 198900 Ltd v Bhana Investments Ltd [2015] NZHC 2787 at [10].

Result

[23]	I order that the respondent, Cherie Bean, is to pay the following costs and disbursements to the appellant, Warren Bean:

(a)	$3,417.95 in respect of costs and disbursements in the Family Court;

(b)	$15,924.97 in respect of costs and disbursements in the High Court.

Katz J