Alpine Prime Properties Limited v Haskell Construction Limited

[2020] NZHC 55

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE

CIV-2019-485-465

[2020] NZHC 55

BETWEEN

ALPINE PRIME PROPERTIES LIMITED

Applicant

AND

HASKELL CONSTRUCTION LIMITED

Respondent

Counsel:	F B Collins for applicant M Freeman for respondent
Judgment:	4 February 2020

COSTS JUDGMENT OF ASSOCIATE JUDGE JOHNSTON

[On the papers]

[1]    Following adjudication proceedings under the Construction Contracts Act 2002, the adjudicator ordered Alpine Prime Properties Ltd to pay Haskell Construction Ltd the sum of $133,619.06. Haskell elected to serve a statutory demand pursuant to pt 16 of the Companies Act 1993 demanding payment of that amount. Alpine commenced proceedings seeking an order setting aside Haskell’s statutory demand. The essential basis for this application was that the adjudicator had, in a later determination, concluded that Haskell had breached the contract, with the result, Alpine submitted, that it had a claim for damages against Haskell that would exceed Haskell’s claim.

[2]    Alpine’s originating application was heard on 25 October 2019. In a judgment dated 9 December 2019, and reissued on 13 December 2019, I dismissed Alpine’s application.

ALPINE PRIME PROPERTIES LIMITED v HASKELL CONSTRUCTION LIMITED [2020] NZHC 55

[4 February 2020]

[3]    As I had not heard from counsel as to costs, I reserved these, in the expectation that counsel would be able to resolve them. That has not occurred. Counsel have now filed memoranda for which I thank them.

[4]    On behalf of Haskell, Mr Freeman’s submission is straightforward. He says that this was a stand alone proceeding, that the respondent was successful, and that there is no reason why it should not be entitled to its costs.

[5]    On behalf of Alpine, Mr Collins submits that costs should be reserved. His submission proceeds on the basis that Alpine’s application was, or was closely akin to, an interlocutory application and that r 14.8(2) of the High Court Rules “… implicitly recognises that a costs order made at the time of the outcome of [an] interlocutory application, which would generally be in favour of the then successful party, may no longer be appropriate once the substantive outcome [is] known”. On that basis, Mr Collins submits that as a declaration has been made in Alpine’s favour in the second adjudication proceeding to the effect that it was entitled to terminate the contract for breach, this means that Haskell’s purported termination of the contract was a repudiation and that Alpine will in all likelihood secure a damages award exceeding the amount of Haskell’s claim.

[6]    He goes on to draw an analogy between summary judgment proceedings and this proceeding, pointing out that in unsuccessful summary judgment applications it is generally not the practice to award costs in favour of the respondent.

[7]Mr Collins concludes:

Standing back, the issue of costs should be reserved until it has been decided who was the ultimate winner. That will need to be decided by the Court in the fullness of time because Haskell has now issued liquidation proceedings on which it is inevitable that the issue of costs will need to be resolved.

[8]    I do not accept the submission advanced on Alpine’s behalf. This was not an interlocutory application, or an application for summary judgment. It was an originating application under pt 19 of the High Court Rules made in the context of liquidation proceedings. It was effectively a stand-alone substantive component of those proceedings. The Rules are clear that whilst costs are always a matter of

discretion for the Court the starting point is that costs follow the event and are calculated in accordance with the schedules provided for in the Rules. In my view, there is no reason in this case why the successful party, Haskell, should be deprived of its costs. My preliminary view expressed in my judgment was that costs should be calculated on a 2B basis, and neither party contends otherwise.

[9]    I order that the applicant, Alpine Prime Properties, pay costs to the defendant, Haskell Construction Ltd, on a 2B basis, together with such disbursements as may be allowed by the Registrar.

Associate Judge Johnston

Solicitors:

Gibson Sheat, Wellington for applicant

Thomas Dewar Sziranyi Letts, Lower Hutt for respondent