Billington v Morton [2018] NZHC 3212 (7 December 2018)

Last Updated: 18 March 2019

NOTE: PURSUANT TO S 169 OF THE FAMILY PROCEEDINGS ACT 1980, ANY REPORT OF THIS PROCEEDING MUST COMPLY WITH SS 11B, 11C AND 11D OF THE FAMILY COURT ACT 1980. FOR FURTHER INFORMATION, PLEASE SEE https://www.justice.govt.nz/family/about/restriction-on-publishing-judgments/

NOTE: PURSUANT TO S 35A OF THE PROPERTY (RELATIONSHIPS) ACT 1976, ANY REPORT OF THIS PROCEEDING MUST COMPLY WITH SS 11B, 11C AND 11D OF THE FAMILY COURT ACT 1980. FOR FURTHER INFORMATION, PLEASE SEE https://www.justice.govt.nz/family/about/restriction-on-publishing-judgments/

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2018-404-751 [2018] NZHC 3212

IN THE MATTER	Of the Family Proceedings Act 1980 and the Property (Relationships) Act 1976
BETWEEN	MALCOLM HAROLD BILLINGTON Appellant
AND	DEBRA CHARLOTTE MORTON First Respondent
AND	WILSON McKAY TRUSTEE COMPANY LIMITED Second Respondent

Hearing:	(On the Papers)
Appearances:	M H Billington (self-represented) K E Swadling for First Respondent
Judgment:	7 December 2018

JUDGMENT OF NICHOLAS DAVIDSON J (COSTS)

BILLINGTON v MORTON [2018] NZHC 3212 [7 December 2018]

Introduction

[1] This judgment addresses costs sought by the first respondent, Ms Morton, following delivery of judgments given on appeal from a costs decision of the Family Court,¹ and on an application for recall of the judgment given.²

[2] Mr Billington was not successful in his appeal against the costs decision of His Honour Judge Maude, nor was he successful on his application for recall of the costs judgment on appeal.

Mr Billington’s position

[3] By memorandum of 26 November 2018, Mr Billington says that his costs appeal was based on legal advice, and that the security for costs paid into court was thought to be sufficient to meet any costs order. The Registrar of the Auckland High Court holds $3,000.00 as security for costs and there is some interest accrued, about $15.00.

[4] Mr Billington submits that he has reached an age where he has no work income, and has a dependent son. He suffers acute long-term stress. He says he relies on a benefit which does not meet his living expenses. Otherwise, he says he has no financial assistance from the Billington Dromorne Trust which has figured prominently in the litigation. He has depleted funds, and has rates and other debts to pay. He did not qualify for legal aid. He says he has shown ‘compassion’ to Ms Morton in other proceedings by not seeking costs and consent orders in the High Court, provided that costs lie where they fell (as agreed).

[5] By a second memorandum of 27 November 2018, Mr Billington says there will be funds available to him when the trust property is sold and he wants any costs ordered to be treated as an adjustment in the final settlement of all relationship property issues. On that basis, he says that costs can be ‘agreed’.

¹ Billington v Morton [2018] NZHC 2530.

² Billington v Morton [2018] NZHC 3084.

Ms Morton’s position

[6] Ms Swadling, counsel for Ms Morton, by memorandum of 27 November 2018, addresses costs on the costs appeal and the recall. Costs are sought according to scale. Hinton J categorised the proceeding 2B under HCR 14.3. Ms Swadling reminds me that the costs are to be determined on a principled and not on a broad discretionary basis. On the application for recall, including for 2.65 days engaged, costs come to
$5,909.50. For the costs appeal, a total of 5.15 days engagement comes to $11,484.50.

[7] Ms Swadling opposes any concession to Mr Billington based on financial hardship, and says if he does not qualify for legal aid that means he has some financial resource. She refers to properties to which Mr Billington had, or would have access, in particular three unencumbered properties, two in Silverdale and one in Wainui. Those properties are said to be worth some $2,800,000.00. She says that Mr Billington has a pension in the UK not yet drawn down, and for relationship property purposes it was valued at £116,612.00. He was the sole beneficiary of his mother’s estate which comprised an unknown cash amount and a house property in the UK. He had the occupation of the Billington Dromorne Trust property in Dromorne Road until after the decision of Judge Maude in 2017. He has had the use of other property.

[8] Ms Swadling says the final wash up between the parties will occur once the Dromorne Road property is sold so he then will have funds even if he does not have access to other funds as Ms Swadling contemplates. It is a reasonable submission by Ms Swadling that these other assets should be brought to account, because Mr Billington’s fundamental position is that he is financially stretched. Mr Billington will certainly have funds once the Dromorne Road property is sold (see below), but when, and how much, is uncertain.

[9] I do not hold it against Mr Billington that he was required to use his best endeavours to rent the Silverdale property, so income could be shared. I do not know why that property has not been let. There seems to be a problem over the listing and sale process of Dromorne Road and Ms Swadling says that Court directions have been required because Mr Billington seeks an unrealistic price and meanwhile Ms Morton has had to advance funds to the Billington Dromorne Trust. The consent memorandum
in the High Court provided for equalisation of bank accounts and other assets, and a proposal has been made in that regard, but there has been no response by Mr Billington.

[10] All this comes down to Ms Swadling saying there should be no relief from an orthodox costs judgment based on Mr Billington’s asserted financial position. She says he lost the costs appeal and his application for recall was unmeritorious, she says an abuse of process, so Ms Morton should simply be seen as the successful party and should have costs. Ms Swadling opposes any delay in receipt of the payment of costs until sale of the Dromorne Road property, as there is simply no indication when Ms Morton might receive payment of previously ordered costs. Apart from that, she seeks a direction that interest accrue on the costs outstanding from time to time, until the date of payment. She seeks an order for payment out of the costs held as security.

Mr Billington’s response

[11] Mr Billington takes issue with Ms Swadling’s submissions, generally denying the allegations in her memorandum, adding that Ms Morton vacated the Trust property in June 2017, and can use it. He attaches a letter from Wilson McKay of 26 October 2018 which records that neither Ms Morton nor Mr Alex Billington wish to occupy the property, as the trustee (Mr Clark) understands the position. There are outstanding rates referred to in this letter and it seems action may be taken if the rates remain unpaid. Ms Morton is attending to a leak at the property. The trustee will resign, conditional upon the consent of all beneficiaries, and payment of all outstanding costs owing to the trustees. Ms Morton,does not want the trustee to resign, so this issue appears to be at a stalemate. There is no formal listing of the Trust with any agency because there is no marketing budget. This also appears to be a stalemate.

Costs outcome

[12] Ms Morton succeeded on the costs appeal, and the recall application. The costs she seeks are entirely in order. She is entitled to them, and I cannot find a principled basis to temper the wind to Mr Billington, based on the material put to me by Ms Swadling which he has simply denied without further explanation. I am not prepared to go into this further, although I can see he is sorely affected. I have a level
of sympathy for him because I can see he has been beaten down by the litigation, but so too I expect has Ms Morton suffered through this protracted and determined process, which appears still some way from final resolution.

Disposition

[13] Given the history of the litigation, I do not want to see yet more costs incurred by Ms Morton seeking to recover the costs ordered by this judgment and others.

(1) Mr Billington is ordered to pay $5,909.50 costs on the recall application and $11,484.50 on the costs appeal.

(2) Interest is to run at Judicature Act rates from the date of this costs order until the date of payment.

(3) The Registrar is ordered to pay to Ms Morton, as requested by Ms Swadling, the full sum held as security with interest, to be set off against the costs orders under this judgment, to produce the net costs obligation which will carry interest to the date of payment.

Conclusion

[14] There appear to be sources from which Mr Billington could pay these costs if Ms Swadling is right, but I am not certain of that. Otherwise, there will be funds available when the Trust property is sold. The parties are urged to reach agreement on a marketing budget for the property, so funds will be released by sale in due course. I repeat there should really be no more costs incurred by either party in getting these matters to a conclusion. Both parties should be able to move on.

Solicitors:

M H Billington, Auckland Richard S Wood, Auckland cc counsel:

K E Swadling, Barrister, Auckland

.......................................

Nicholas Davidson J