Austin v Rentrezi 2 Limited

[2021] NZHC 1590

IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY

I TE KŌTI MATUA O AOTEAROA

KIRIKIRIROA ROHE

CIV-2019-419-000070

[2021] NZHC 1590

BETWEEN

NORMAN CLIVE AUSTIN and MARGARET IRENE AUSTIN
Plaintiffs

AND

RENTREZI 2 LIMITED

First Defendant

PRAGMA DESIGNER HOMES LIMITED
Second Defendant

AHL RENTALS LIMITED

Third Defendant

Hearing:	On the papers
Judgment:	30 June 2021

JUDGMENT OF WYLIE J

[Costs]

This judgment was delivered by Justice Wylie On 30 June 2021 at 3.00 pm

Pursuant to r 11.5 of the High Court Rules Registrar/Deputy Registrar

Date:…………………………

Solicitors/counsel:

O’Sheas Barristers & Solicitors, Hamilton/V Whitfield, Cambridge Braun Bond & Lomas Ltd, Hamilton

AUSTIN v RENTREZI 2 LTD [2021] NZHC 1590 [30 June 2021]

Introduction

[1]                 I refer to my judgment of 10 May 2021.1 I dismissed the first, second and third causes of action, upheld the fourth and fifth causes of action and awarded $20,000 by way of general damages to the plaintiffs, Mr and Mrs Austin.

[2]                 I indicated my view that all parties had had a measure of success in the proceedings, and expressed the preliminary opinion that costs and disbursements should lie where they fall.

[3]Neither party has accepted that indication.

[4]                 The defendants, Rentrezi 2 Ltd (“Rentrezi”) and Pragma Designer Homes Ltd (“Pragma”), have sought costs either on a 2B basis in the sum of $67,274.50 and disbursements in the sum of $33,183.37, or increased costs. They argue that a Calderbank offer was made on 6 May 2020 in the sum of $15,000, which they assert was close to the value of the judgment obtained by Mr and Mrs Austin. They also say that the Austins advanced arguments that lacked merit and they seek an order for increased costs after the date of the Calderbank offer.

[5]                 The Austins have replied, denying any liability to Rentrezi and Pragma. They seek that their costs should be met in the sum of $40,217.40 together with disbursements of $5,368.98.

Analysis

[6]                 Costs are of course in the discretion of the Court under r 14.1 of the High Court Rules 2016. The principles governing the exercise of that discretion are however well established. The costs regime is of a regulatory character and it is important that its integrity is maintained. There is accordingly a strong implication that the Court should apply the costs regime set out in the High Court Rules in the absence of some reason to the contrary; any departure must be a considered and particularised exercise of the discretion.2

1      Austin v Rentrezi 2 Ltd [2021] NZHC 1027.

2      Glaister v Amalgamated Dairies Ltd [2004] 2 NZLR 606 (CA) at [21]-[24].

[7]                 A party who fails with respect to a proceeding is generally required to pay costs to the party who succeeds.3

[8]Here, there were five causes of action pleaded.

[9]                 In their first cause of action, Mr and Mrs Austin sought a declaration that the benefit of the right of way did not pass to the subdivided lots on which the new residential units built by Rentrezi and Pragma had been erected. They asserted that the right of way did not contemplate subdivision of the original lot which had the benefit of the right of way. This cause of action failed.

[10]              The second cause of action was against the third defendant AHL Rentals Ltd only. The Austins asserted that the use being made of the right of way by AHL and its tenants constituted a trespass. They said that the use being made of the right of way by the tenants was either unauthorised or that the terms of the right of way did not permit unlimited use by the tenants, so as to interfere unreasonably with the use of the right of way by others entitled to use it. This cause of action also failed.

[11]              As I noted in my substantive judgment, the first two causes of action ran together.

[12]              As a third of cause of action, the Austins asserted an ongoing nuisance by all three defendants. Again, this cause of action failed.

[13]              The fourth and fifth causes of action alleged respectively trespass and nuisance during the construction period by Rentrezi and Pragma. The Austins initially claimed damages of $19,500 for costs and expenses they said they had incurred, together with general damages of $50,000, or in the alternative, general damages as well as aggravating and exemplary damages in the sum of $20,000.

[14]              These causes of action succeeded. I made an award of $20,000 by way of general damages to the Austins.

3      High Court Rules 2016, r 14.2(1)(a).

[15]              While Rentrezi and Pragma admitted large parts of the statement of claim, they did put the Austins to proof of the alleged trespass and nuisance during the construction period, as well as to proof of the damages claimed. They also raised a number of affirmative defences, all of which failed.

[16]              In terms of the time taken during the trial, the first and second causes of action took roughly the same amount of time as the fourth and fifth causes of action. The third cause of action occupied relatively little time. Accordingly, I reached the preliminary view that both sides had had a measure of success in the proceedings. I remain of that view.

[17]              Rentrezi and Pragma were adjudged liable to pay money to the Austins. As a result, Rentrezi and Pragma were the unsuccessful parties in the proceedings and prima facie the Austins are the successful party entitled to an award of costs.

[18]              The Austins claim costs calculated by reference to the High Court Rules. The proceedings could and should have been brought in the District Court, and any costs which the Austins are entitled to claim as the successful party by virtue of the monetary award fall to be determined in accordance with the District Court scale of costs.

[19]There are other factors which have to be considered:

(a)the Austins’ failure in relation to the first, second and third causes of action should be taken into account under r 14.7. The first and second causes of action significantly increased the costs to Rentrezi and Pragma. Those causes of action were always ambitious and their pursuit contributed unnecessarily the time and expense taken by the proceedings;

(b)while the Austins succeeded in the fourth and fifth causes of action, they put forward no proper evidence to support the claims for damages made in their statement of claim. They there sought by way of damages the reimbursement of legal costs they said they had incurred, notwithstanding that damages do not normally extend to legal costs

which a party has been required to meet, and there was no evidence presented of the costs which the Austins said they had incurred;

(c)Rentrezi and Pragma made an offer in writing to the Austins of $15,000 in full and final settlement of their claim. That offer was without prejudice save as to costs. The offer was close to the value or benefit of the judgment obtained by the Austins, and it can be taken into account pursuant to r 14.11(4) even though, on the face of it, the offer would not have been more beneficial to the Austins than the judgment obtained by them.

[20]              In the circumstances, I do not consider that an award of costs against Rentrezi and Pragma is appropriate. In my view, the factors which I have set out above justify an order refusing costs, despite the principle that determination of costs should be predictable and expeditious and follow the result of the hearing.4

[21]Accordingly, I make no order for the payment of costs and disbursements.

Wylie J

4      Rule 14.2(1)(g).