Oloapu v Vilitama [2018] NUCA 1; Land Division 11001 (19 June 2018)

IN THE COURT OF APPEAL NIUE (LAND DIVISION)
Application No. 11001
IN THE MATTER OF		Lot 1 and Lot 2 Part Funiu, Mutalau District
BETWEEN		KILI OGOTAU OLOAPU and TAONEFOOU OGOTAU FALESIMA Appellants
AND		FASELETAMA ETTIE VILITAMA First Respondent
AND		TOM TOMA and FUATATOA TAPATUETOA Second Respondents
Court:	P J Savage CJ C T Coxhead J S F Reeves J
Counsel:	M Solomon for the Appellants I Tongatule for the First and Second Respondents
Judgment:	19 June 2018

DECISION OF THE COURT OF APPEAL

Introduction

[1] On 14 February 2014, Kili Ogotau Oloapu and Taonefoou Ogotau Falesima filed an appeal against an Order made by Judge Isaac, on 19 December 2013, determining Hakegutu Matamea to be the common ancestor for Lot 1 and Lot 2 Part Funiu, Mutalau District and appointing Fisi Tauetau as Leveki Mangafaoa for the land.
[2] On 2 March 2016, we granted the appellants leave to withdraw the appeal and reserved the issue of costs.
[3] The Respondents now seek costs in respect to the rehearing proceedings in the lower court, totalling $12,603.63 and costs for the appeal proceedings totalling $24,673.00.

Background

[4] In 2008, Judge Isaac heard the application for determination of the common ancestor of the land and the appointment of a leveki mangafaoa. On 21 January 2009, he determined Hakegutu Matamea to be the common ancestor for the land and appointed Fisi Tauetau as Leveki Mangafaoa.
[5] A rehearing of the matter was granted on 13 November 2010, limited to evidence previously given and genealogy to be produced at the hearing.
[6] The rehearing took place on 20 March 2013 and on 19 December 2013 Judge Isaac determined Ikihega Koukouiki Hiligutu to be the common ancestor of the land and appointed Faseletama Ettie Vilitama as Leveki Mangafaoa.
[7] The Appellants subsequently appealed and sought leave to file further evidence on appeal. On 20 March 2014 the Respondents then filed a notice of opposition and an application for security of costs on the basis that the Respondents had already incurred significant costs in obtaining legal representation and travelling to Niue for the rehearing proceedings.
[8] On 13 August 2015, I directed counsel for the Appellant to file indicative briefs and full submissions regarding the application to file further evidence within 14 days of that direction. Counsel for the Appellant was subsequently granted an extension to December 2015 to file that material.
[9] The appeal was initially set down to be heard on 19 October 2015 however due to counsel for the Appellant being unavailable it was adjourned and eventually set down for April 2016.
[10] On 5 February 2016, we declined to allow further evidence on appeal. On the issue of security of costs we directed both counsel to file submissions on the estimated level of costs likely to be incurred.
[11] On 2 March 2016, we granted the appellants leave to withdraw the appeal and reserved the issue of costs. Submissions as to costs were filed by Respondents on 17 March 2016, following which the Respondent was directed to file further submissions addressing the reasons why this Court would consider lower court costs, and to provide a bill of costs in relation to both the lower court and appeal proceedings. Those submissions were filed on 18 March 2016. The Appellant’s submissions in response were filed on 8 April 2016.
[12] In May 2018 a further direction was issued that counsel for the First and Second Respondents file copies of his tax invoices pertaining to this matter. That information was filed on 14 May 2018.

Respondents submissions

[13] The Respondents seek costs in the sum of $12,603.63 for the lower court rehearing application and $24,673.00 for the appeal proceedings.
[14] Ikipa Tongatule, for the Respondents submits the following:

• (a) The Respondents have filed two previous applications for security of costs in respect to this appeal. The first, on 20 March 2014 and the second on 15 February 2016 and the issue of costs must now be addressed.
• (b) Although the appeal was eventually withdrawn it was done so at late notice, and after the Respondents had already expended costs in preparing for the hearing. This included researching the Niuean custom of gifting land, an issue for which there is no legal precedent.
• (c) In 2011, the parties convened a meeting in Auckland to settle the matter. The Appellants were not represented independently but agreed to a resolution of the matter. At the subsequent hearing in November 2011 the Appellants changed their minds. Both counsel were directed to file submissions to the Court based on new evidence presented at that hearing. As a result of that hearing and the evidence produced a ruling was made in favour of the Appellants.
• (d) The Appellants sought and were granted leave to file further evidence, following which the Court would decide on whether to allow the evidence or not. Counsel for the Appellants was not able to file on time and an extension was required. This delayed proceedings. When the evidence was eventually filed it did not demonstrate the essential elements of Niuean custom of gifting land.
• (e) Pursuant to r 14.2 of the High Court Rules (NZ) these proceedings should be categorised as category 3 proceedings, being complex in nature.
• (f) Regard should be had to r 15.23 of the High Court Rules (NZ) which provides that an Appellant must pay costs incidental to proceedings up to and including a discontinuance.
• (g) In line with r 20.19 of the High Court Rules (NZ), and the New Zealand High Court decision in Waitakere City Council v Brunel,^[1] this Court may determine costs incurred in the lower court.

Appellants submissions

[15] Maui Solomon for the Appellants submits that the Appellants have acted in good faith, that each party should bear its own costs for the lower court proceedings and no award of costs should be made in respect to the appeal proceedings. He states that if this Court is minded to award costs, it should be minimal and in relation to the appeal only.
[16] Mr Solomon further submits:

• (a) That s 79 of Te Ture Whenua Māori Act 1993 is comparable to r 35 of the Niue Land Court Rules 1969 and this Court should be guided by the rulings of the Māori Land Court as to costs given that, like the Māori Land Court, this Court is dealing with indigenous land matters and matters of custom.
• (b) No award of cost should be made for the lower court proceedings as the Appellants were successful in the 2009 decision and the Respondents were successful in the 2013 proceedings.
• (c) It is not clear what counsel for the respondent refers to, in terms of an agreement, if counsel is referring to the document signed by his clients, who were at the time unrepresented, then Mr Solomon suggests that the Appellants may have been co-erced into signing a document however there was no settlement of the matter.
• (d) The appeal was withdrawn at the first available opportunity, following the decision by the Court not to allow the additional evidence. During the weeks following, the Appellants had significant health problems and it was only with reluctance that they decided to withdraw the appeal.
• (e) The claim by the Respondents for $18,000 for research and preparing briefs of evidence is excessive and would be punitive to the Appellants. The Respondents should have waited until the Court had issued its decision on whether to grant leave to file further evidence before undertaking extensive research and the costs could have been mitigated through cross examination at the hearing;
• (f) The Appellants acted reasonably and in good faith based on their genuine belief that the land on which their homes are situated was gifted to them. This Court should have regard to the fact that the parties have an ongoing relationship and are closely related and it would be inappropriate to award costs in the circumstances.
• (g) There has not been any prejudice to the Respondents caused by the delay in proceedings, the Appellants have been unwell and the leave to withdraw was filed at the earliest opportunity once the Court made its ruling on filing further evidence.

Law

[17] Section 35 of the Niue Land Court Rules 1969 provides:

35 Costs

In any proceedings the Court may make such order as it thinks fit for the payment of the costs thereof, any matters inci incidental or preliminary thereto, by or to any person who is a party to the proceedings, whether the parties d to all costs are so made payable articlrticles in the same or different rent interinterests.

[18] In Hekau v Tongahai this Court adopted the two-step approach to costs.^[2] Firstly, should costs be awarded? Second, if costs are to be awarded what amount of costs should be awarded?
[19] The following principles are relevant when considering whether costs should be awarded:^[3]

• (a) Costs usually follow the event;
• (b) Costs are a discretionary measure available to the Court;
• (c) In a community such as Niue, the Court plays a role in facilitating amicable and ongoing relationships between parties, particularly in regard to land ownership, and as such costs may not be considered appropriate in some circumstances;
• (d) A successful party should be awarded a reasonable contribution to the costs that were actually and reasonably incurred;
• (e) Where proceedings involved counsel, and where parties pursued and contested litigation within a relatively formal framework, an award of costs should be made;
• (f) There is no basis for a departure from the ordinary principles of costs, where the proceedings were difficult and hard fought, and where a party succeeded in the face of serious and concerted opposition;

[20] In determining the level of costs that should be awarded the following principles are applicable:^[4]

• (a) The Court has a broad discretion when deciding the level of costs;
• (b) The Court should have regard to the nature of the court proceedings; whether the proceedings were formal or informal; the importance of the issues; and the conduct of the parties;
• (c) If a party has acted unreasonably, for example by pursuing a wholly unmeritorious and hopeless claim or defence, it is within the Court’s discretion to award a higher level of costs against them;
• (d) Where the unsuccessful party has acted reasonably, it should not be penalised by having to bear the full costs of their adversary as well as their own solicitor/client costs;

[21] Costs are objectively assessed with regard to the above principles and a reasonable contribution will usually fall within the range of 10 per cent to 80 per cent of a reasonable fee.

Discussion

Should costs be awarded?

[22] As the Appellants withdrew the appeal there is no successful party. There is no specific provision in the legislation for costs following a discontinuance. Mr Tongatule referred the Court to r 15.23 of the High Court Rules (NZ) which provides:

15.23 Costs

Unless the defendant otherwise agrees or the court otherwise orders, a plaintiff who discontinues a proceeding against a defendant must pay costs to the defendant of and incidental to the proceeding up to and including the discontinuance.

5. In Kroma Colour Prints Ltd v Tridonicatco NZ Ltd the Court of Appeal (NZ) set out the general approach to considering applications for costs where a notice of discontinuance has been filed. ^[5]

[12] The Judge correctly stated the law on r 476C. She referred to North Shore City Council v Local Government Commission (1995) 9 PRNZ 182, noting that the presumption in favour of awarding costs to a defendant against whom a proceeding had been discontinued may be displaced if there were just and equitable circumstances not to apply it. A court would not speculate on respective strengths and weaknesses of the parties’ cases. The reasonableness of the stance of both parties, however, had to be considered. She also referred to Oggi Advertising Limited v McKenzie (1998) 12 PRNZ 535 which recognised that the discretion reposing in r 46 could override the general principles relating to discontinuance.

6. In FM Custodians Ltd v Pati, the High Court set out the principles governing the exercise of the discretion under r 15.23 as follows:^[6]

[11] The Court is not limited in the factors that can be taken into account when considering whether the presumption is displaced, but the following are matters which are taken into consideration:

(a) As the general rule the Court will not consider the merits of the respective cases (unless they are so obvious that they should influence the costs issue).

(b) The Court will consider the reasonableness of the stance of both parties in the proceeding (whether it was reasonable for the plaintiff to bring and continue the proceeding, and for the defendant to oppose and continue to oppose it, up to the point of discontinuance).

(c) Conduct prior to the commencement of the proceeding may be relevant (for example, if any conduct by a defendant has precipitated the litigation), as may be the reason for discontinuing (for example, where a change of circumstances has made the proceedings unnecessary).

[12] The Courts general discretion in relation to costs can also override the general principles in relation to discontinuance.

[25] Having regard to the relevant principles set out above, we consider that the parties each enjoyed a measure of success in the lower court. The Appellants were successful in their initial application for determination and appointment. The Respondents were in turn successful in obtaining a rehearing and subsequent orders in their favour regarding determination and appointment.
[26] While we have the jurisdiction to award costs for the lower court proceedings, given the tempestuous and fraught nature of the matter, we consider that the issue of costs for the lower court proceedings should be referred back to the lower Court for determination.
[27] In relation to the appeal, the parties were each represented by counsel, the appeal was contested and followed a formal legal framework. The Respondents were put to the expense in preparing for this appeal and have been required to respond to the application to file further evidence, which we ultimately declined. On this basis, we consider that there are no meritorious reasons why an award of costs should not be made.

What level of costs should be awarded?

[28] This Court has a wide discretion as to costs. These proceedings have been hampered by delays due in part to unavailability of counsel for Appellants.
[29] The proceedings were conducted on a formal basis and the issue before the Court was serious. The determination of the common ancestor of the land is an important issue for Niuean residents and in the present case the Appellants have homes situated on the land. While we were, in the end, not called up to determine the merits of the appeal we consider that some measure of research and preparation was required by both parties.
[30] The application to adduce further evidence required the Respondents to provide legal submission on the evidence produced by the Appellant before we could make a decision on whether to allow the evidence.
[31] We are satisfied that the appeal was bought in good faith and we do not consider the Appellants to have acted unreasonably in bringing the appeal. It is unfortunate that the matter has been outstanding for some time. Given that our decision not to allow further evidence was issued in 5 February 2016, and the application was withdrawn on 2 March 2016, we do not consider the actions of the Appellants wholly unreasonable or to have unduly delayed matters, especially in light of the fact that the Respondents had been seriously ill.
[32] The total costs for the appeal sought by the respondents is $24,673.00 we are prepared to make an award of 50 per cent of the costs incurred being $12,336.50.

Decision

[33] The Appellants must pay the Respondents’ costs on appeal of $12,336.50.

Dated this 19^th day of June 2018.

P J Savage CJ

C T Coxhead J

S F Reeves J

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^[1] Waitakere City Council v Brunel HC Auckland CIV-2006-404-4504, 5 September 2008.

^[2] Hekau v Tongahai [2012] NUCA 5. See also Sioneholo v Talagi [2012] NUCA 4.

^[3] At [13].

^[4] At [14].

5. ^[5] Kroma Colour Prints Ltd v Tridonicatco NZ Ltd [2008] NZCA 150 at [12].
6. ^[6] FM Custodians Ltd v Pati [2012] NZHC 1902 at [11] to [12]. See also Opus International Consultants Ltd v Colac Bay Vision Ltd [2015] NZHC 1782.