Time v Fagalilo [2011] NZCA 605 (1 December 2011)

Last Updated: 7 December 2011

IN THE COURT OF APPEAL OF NEW ZEALAND

CA191/2010 [2011] NZCA 605

BETWEEN SENETI TIME Appellant

AND LUAIVA FAGALILO Respondent

Court: O'Regan P, Heath and Lang JJ

Counsel: R J Buchanan for Appellant O Woodroffe for Respondent

Judgment: 1 December 2011 at 2.30 pm

JUDGMENT OF THE COURT

1. We order that the respondent pay the appellant costs for a standard appeal on a Band A basis plus usual disbursements.
2. We ask the Registrar to refund the appellant’s security for costs.

_______________________________________________________________

REASONS OF THE COURT

(Given by O’Regan P)

Introduction

[1] In our judgment of 22 August 2011[1] we reserved costs. We have received submissions from both parties and now give our decision on costs. There was some delay in the parties’ costs submissions being drawn to our attention which has contributed to some delay in the issuing of this decision, for which we express our regret. In the judgment, we use the same definitions and refer to the parties, witnesses and counsel in the same way as in the principal judgment.
[2] The appellant seeks standard costs with an uplift for increased costs. He asks this Court to make an order that the Trust Board[2] is liable to pay those costs, along with the respondent. He also seeks a return of his security for costs.

Costs

[3] Ms Woodroffe for the respondent submitted that the cultural realities of this appeal mean the Court should exercise its discretion under r 53F of the Court of Appeal (Civil) Rules 2005 (the Rules) not to award costs. We do not agree. There is nothing to suggest that a costs award would further the schism between these two groups. The appellant is entitled to recover costs as he succeeded on both grounds of appeal in this Court.
[4] We are satisfied that the appeal is appropriately classified as a standard appeal rather than a complex appeal. Costs should be calculated on a Band A basis.

Increased costs

[5] Mr Buchanan for the appellant submitted that increased costs were appropriate under r 53E of the Rules because the appellant had acted reasonably throughout and made overtures for settlement to the respondent, which had all been rejected. He said that the respondent would have been significantly better off if one of those offers had been accepted, when compared to the outcome of this Court’s judgment.
[6] The following details the settlement efforts that were made:

• (a) After the High Court hearing but before judgment: an email sent by Mr Buchanan on 12 February 2010 to Ms Woodroffe offering to split the assets of the Trust Board 50/50 between the two parties, with adjustments for any reduction in the overall level of debt of the Trust Board to the date of the offer and rental payments which the appellant’s group had incurred in hiring premises from the time they were excluded in October 2005. In addition, indemnity costs to the appellant or costs as determined in the High Court were required. This was rejected by the respondent.
• (b) During the lunch adjournment at the hearing in this Court, 25 July 2011: an open offer by the appellant that the trust property be valued and that the appellant and his group pay a sum equal to 30 per cent of the current market value of the property to the respondent and his group (payable over a ten year period) if the respondent vacated the premises within 14 days. The appellant would be entitled to costs on appeal, and not be required to pay costs in relation to the recall application. This was rejected by the respondents, who said it was a “take it or leave it offer”.
• (c) After the hearing in this Court but before judgment: an offer by the appellant and his group to meet the respondent and his group without lawyers to try and reach an amicable solution. This offer was contained in emails dated 27 July 2011 and 3 August 2011. This was rejected on 4 August 2011, with the respondents indicating they would prefer to await the decision and then seek reconciliation.
• (d) Following the release of the judgment of this Court on 23 August 2011, a letter by Ms Woodroffe to Mr Buchanan suggesting the parties take the dispute to mediation. This was rejected by the appellant, who indicated that his group would not be prepared to incur further cost mediating matters that were resolved by this Court’s decision.

[7] The appellant received a substantial costs award in the High Court, where he won in law, although not (as it turned out), in substance. The costs award included an uplift for the fact that the respondent had “ignored” an attempt early in the piece to resolve the dispute.[3] Thus the appellant has already received some credit recognising his attempts to settle matters.
[8] In Bradbury v Westpac Banking Corp, this Court stated that “increased costs may be ordered where there is failure by the paying party to act reasonably”.[4] It cannot be said that the respondent acted unreasonably in refusing to settle matters in this Court. Although the respondent lost on its legal arguments in the High Court, the decision was favourable to him.[5] All members of the church as at 1 March 2005 were entitled to vote for the trustees on the High Court’s decision, and members of the respondent’s group won this vote. This meant that the respondent would have retained full control of the Trust Board and its property. Seen in this context, it was not unreasonable for the respondent to reject the offer made by the appellant in the adjournment of the Court of Appeal hearing to settle for 30 per cent of the current market value of the property.
[9] We do not see the attempts to find an alternative way to reconcile after the Court of Appeal hearing as relevant to an uplift for costs. By that stage, the costs associated with the hearing had been fully incurred and in any case, no formal offer was made at that stage.
[10] Accordingly, the application for increased costs is declined.

Costs award as against the Trust Board

[11] The appellant sought an award for costs as against the Trust Board under s 71 of the Trustee Act 1956. In the High Court, the costs awards were made jointly and severally against the Trust Board and against the respondent. We are not satisfied that it is appropriate to make an award against the Trust Board here. In particular, we note that the trust (currently managed by Public Trustees) is likely to become subject to the control of the appellant in due course, and also that it was not separately represented at the hearing.
[12] No award of costs is made as against the Trust Board. The costs award is made as against the respondent only.

Security for costs

[13] The appellant also sought release of the security for costs paid on filing the appeal. We agree that the amount posted as security should now be returned to the appellant.

Orders

[14] We order that the respondent pay the appellant costs for a standard appeal on a Band A basis plus usual disbursements.
[15] We ask the Registrar to refund the appellant’s security for costs.

Solicitors:
Buchanan Gray, Wellington for Appellant
Woodroffe Law Partnership, Auckland for Respondent

---

[1] Time v Fagalilo [2011] NZCA 402 (“the principal judgment”).
[2] The Green Valley Samoan Assembly of God Property Trust Board.
[3] Time v Fagalilo HC Wellington CIV-2008-485-540, 27 July 2010.
[4] Bradbury v Westpac Banking Corp [2009] NZCA 234, [2009] 3 NZLR 400 at [27].
[5] See principal judgment at [24]—[27].