Hitchcock v Murphy [2025] NZHC 985 (29 April 2025)

Hitchcock v Murphy [2025] NZHC 985 (29 April 2025) Home | Databases | WorldLII | Search | Feedback High Court of New Zealand Decisions You are here: NZLII >> Databases >> High Court of New Zealand Decisions >> 2025 >> [2025] NZHC 985 Database Search | Name Search | Recent Decisions | Noteup | LawCite | Download | Help Hitchcock v Murphy [2025] NZHC 985 (29 April 2025) Last Updated: 8 May 2025 IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE CIV-2020-404-2227[2025] NZHC 985 BETWEEN STEPHEN LESTER HITCHCOCK Plaintiff AND SUSAN KERRIE MURPHY Defendant Hearing: on the papers Appearances: G J Thwaite for plaintiff K E Hogan and B J Lupton for defendant Judgment: 29 April 2025 COSTS JUDGMENT OF JOHNSTONE J This judgment was delivered by me on 29 April 2025 at 3pm pursuant to r 11.5 of the High Court Rules. Registrar/Deputy Registrar Solicitors: G J Thwaite, Sunnynook Insight Legal, Warkworth HITCHCOCK v MURPHY [2025] NZHC 985 [29 April 2025] [1] By judgment dated 29 November 2024, I found that the defendant (Ms Murphy):1 (a) held $500,000 of the sale proceeds of the subdivided back half of her semi-rural Auckland property on constructive trust for her brother, the plaintiff (Mr Hitchcock); (b) owed Mr Hitchcock a further sum of $75,000 by way of debt due; and (c) should pay him those sums, together with interest from 23 June 2022 until the date of payment. [2] Mr Hitchcock now seeks scale costs of $64,052, plus a 50 per cent uplift, and disbursements of $17,385. Ms Murphy opposes, and further applies for her own award of either scale costs of $62,498.50 or an uplifted amount. Principles [3] The Court’s discretion in costs matters, vested by r 14.1 of the High Court Rules 2016, requires generally to be exercised in accordance with the principles set out in r 14.2.2 As observed by the Court of Appeal in Water Guard NZ Ltd v Midgen Enterprises Ltd, “the first of those general principles is that the party which fails should pay the costs of the successful party”.3 This “formalis[es] the paramount rule that costs should follow the event.”4 [4] Thus, in Water Guard, a plaintiff was found not to lose its status as the successful party because it failed on most, but not all, of its claims. The Court noted that such failure “can be properly recognised in other ways, such as [by] reducing costs otherwise payable or ordering costs to lie where they fall.”5 1 Hitchcock v Murphy [2024] NZHC 3607. 2 Water Guard NZ Ltd v Midgen Enterprises Ltd [2017] NZCA 36 at [12]. 3 At [13]. 4 At [13]. 5 At [13]. [5] Similarly, in Weaver v Auckland Council, the Court of Appeal described appellants who had succeeded to roughly half the extent of their claim as “the only party to have succeeded by any ‘realistic appraisal’”.6 As the Court put it:7... success on more limited terms is still success. [6] The prospect of reduced costs being payable to a partially successful party is confirmed by r 14.7, which provides: Despite rules 14.2 to 14.5, the court may refuse to make an order for costs or may reduce the costs otherwise payable under those rules if— ... (d) although the party claiming costs has succeeded overall, that party has failed in relation to a cause of action or issue which significantly increased the costs of the party opposing costs; or ... [7] Similarly, the Court may order that a successful party be paid increased, or indemnity, costs, in circumstances outlined in r 14.6. [8] Another of the general principles set out in r 14.2 is the principle at r 14.2(f), that “an award of costs should not exceed the costs incurred by the party claiming costs (not being a party acting in person)”. Issues [9] In light of these principles, I must determine which of Mr Hitchcock and Ms Murphy was the successful party. And having done so, I must determine whether the costs to which they are entitled should be uplifted or reduced. Finally, I must consider whether the award I arrive at exceeds the costs incurred by the successful party. 6 Weaver v Auckland Council [2017] NZCA 330. 7 At [20]–[29]. Who was the successful party? [10] Despite the findings summarised above, Ms Murphy contends that “by any ‘realistic appraisal’”, she was the successful party. She says that the primary purpose of Mr Hitchcock’s claim was to establish his entitlement to an interest in the front half of Ms Murphy’s property (which remained registered in her name), or damages representing the value of his improperly divested, proprietary interest in the back half. And that this purpose failed. Indeed, Ms Murphy points out that: (a) Mr Hitchcock’s claims by way of express trust, partnership and contract all failed; (b) his partially successful claims by way of constructive trust and in debt rendered his remaining claims redundant; and (c) her first statement of defence contained her concession that she owed Mr Hitchcock $411,179. [11] I do not accept Ms Murphy’s contentions. Certainly, most of Mr Hitchcock’s causes of action failed. But they did not all fail. Instead, and while Ms Murphy had signalled her acceptance of liability (excluding interest) to the tune of $411,179, I found she was liable to Mr Hitchcock in the sum of $575,000 (plus interest). Mr Hitchcock was plainly required to pursue his litigation if he wished to receive the sum to which I found he was entitled. Upon him doing so, I doubt he could properly be described as having been unsuccessful. [12] In my view, realistic appraisal demonstrates that Mr Hitchcock succeeded. He is entitled to be paid costs, subject to adjustment in accordance with rr 14.6 or 14.7. Should Mr Hitchcock’s award of costs be uplifted or reduced? Uplift? [13] Mr Hitchcock contends that his award of costs should be uplifted because: (a) Ms Murphy’s conduct of the litigation featured “elements of oppression”; (b) she delayed the trial in various ways, and he was unable to purchase a home, and might have died, during the litigation; and (c) he was cross-examined excessively on his criminal convictions. [14] I do not accept Mr Hitchcock’s contentions. [15] Given my findings that Mr Hitchcock had no entitlement to an interest in the land, but instead to a maximum of $500,000 of the proceeds of its sale, there was nothing oppressive in Ms Murphy requiring him not to live there. And I am not satisfied by evidence that Mr Hitchcock was required — due to Ms Murphy’s failure to pay him what she owed — to live outside Auckland, or (in any event) that him doing so necessarily gave rise to significant difficulty in the pursuit of his case. [16] On the issue of delay, I do not consider the conduct of the litigation by either party to have resulted in delay significant enough to resound in costs: (a) Ms Murphy’s unsuccessful security for costs application has given rise to a costs order against her, for which she will account separately. (b) Ms Murphy’s eventual discovery of documents held by third parties had no substantive significance: the parties’ 2016/2017 correspondence upon which my finding of constructive trust was based was not the subject of delayed discovery, and the $75,000 debt was acknowledged in pleadings, rather than the subject of documentation. (c) In any event, Mr Hitchcock took advantage of any delay in setting down the trial fixture, by filing multiple amended statements of claim. (d) Similarly, while the Court was required to address Mr Hitchcock’s ongoing inability to file a compliant bundle of documents when required, his delay did not ultimately compromise the trial fixture. [17] And delay in Ms Murphy paying Mr Hitchcock the amount she owes him is addressed by the award of interest, not costs. [18] On the nature of Mr Hitchcock’s cross-examination, the issue of his criminal conduct while at the property may have been relevant to both the amount of property-related expenses he incurred and could properly claim for, and (to a limited extent) his credibility. That I was content, as the trial Judge, to allow counsel to pursue the issue without intervening reflected my assessment of its potential relevance at the time. [19] It follows that Mr Hitchcock’s award of costs should not be uplifted. Reduction? [20] Indeed, I consider Mr Hitchcock’s award of costs should be reduced. [21] Here, I return to Ms Murphy’s contentions to the effect that she was the successful party. While I have found them not to go so far as to establish that point, they nevertheless have merit. [22] As she says, the primary purpose of Mr Hitchcock’s claim was to establish his entitlement to an interest in the front half of Ms Murphy’s property (which remained registered in her name), or damages representing the value of his improperly-divested, proprietary interest in the back half. The claims in debt and pursuant to an alleged promissory note were secondary. It was to this end that Mr Hitchcock made claims by way of express trust, partnership, contract and constructive trust. [23] In respect of these primary claims, it was only the claim of a constructive trust which succeeded, and even then, to a more limited extent than had been pleaded (a constructive trust in the back half, rather than the proceeds of its sale). The successful portion of the claim to a constructive trust was based simply upon Ms Murphy’s written promise in the 2016/2017 correspondence to allow Mr Hitchcock $500,000 from the proceeds of sale of the back half, upon which he relied. It could, and in my view should, have been pleaded and established at trial much more economically than it was. [24] In contrast, I found the former, unsuccessful claims to be unfounded upon (indeed, to contradict) the wording of the parties’ correspondence upon which they were based. Each of these eight causes of action (two each in written contract, oral contract, partnership and express trust) required a response from Ms Murphy by way of pleading, while under cross-examination and in submission. It follows that, in terms of r 14.7(d), Mr Hitchcock “failed in relation to ... cause[s] of action ... which significantly increased the costs of the party opposing costs”. [25] Similarly, the additional claim in debt which succeeded was established on Ms Murphy’s own pleading. [26] Overall, I consider it appropriate to reduce Mr Hitchcock’s award of costs by discounting the otherwise applicable scale costs and disbursements by a factor of 50 per cent. Does the award arrived at exceed Mr Hitchcock’s actual costs? [27] Subject to the application of r 14.2(f), I arrive at an award of costs in favour of Mr Hitchcock of $32,026, with disbursements of $8,692.50. Given the reduction I have applied, it is unlikely that an award of these amounts would exceed Mr Hitchcock’s actual costs. [28] That said, I have not received any information on that issue. Result [29] I direct Mr Hitchcock to arrange for his counsel to file a memorandum within 10 working days, confirming: (a) that his actual costs in this proceeding (other than in respect of Ms Murphy’s security for costs application) exceed $32,026; or (b) if not, the amount of such costs. [30] Upon that memorandum being filed, judgment is to issue: (a) if the memorandum is in terms of [29](a), awarding Mr Hitchcock costs in the sum of $32,026; or (b) if the memorandum is in terms of [29](b), awarding Mr Hitchcock costs in the amount of his actual costs; and (c) in any event, awarding Mr Hitchcock disbursements of $8,692.50. Johnstone J NZLII: Copyright Policy | Disclaimers | Privacy Policy | Feedback URL: http://www.nzlii.org/nz/cases/NZHC/2025/985.html