Bain v Thorne

[2021] NZHC 3051

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2020-404-001265

[2021] NZHC 3051

UNDER

The Property Law Act 2007, ss 316–318

BETWEEN

HAMISH WALKER BAIN

Applicant

AND

PETER ROWLAND THORNE and ROSEMARY MAY THORNE

First Respondents

CYRIL BRIAN WRIGHT
Second Respondent

MINISTER OF CONSERVATION

Third Respondent

Hearing:	(On the papers)
Judgment:	11 November 2021

COSTS JUDGMENT OF VENNING J

This judgment was delivered by me on 11 November 2021 at 2.15 pm, pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date……………

Solicitors/Counsel:

TM Bates & Co, Auckland Duthie Whyte, Auckland A Gilchrist, Auckland

BAIN v THORNE [2021] NZHC 3051 [11 November 2021]

Introduction

[1]                 On 15 October 2020 the Court made orders by consent on Mr Bain’s application to vary/modify existing easements affecting the property owned by the applicant and the respondents.

[2]                 All that remains to be resolved is the issue of costs. The file was referred to me as duty Judge to deal with costs. Counsel have exchanged memoranda on that issue.

[3]                 The applicant seeks costs against the first respondents only. He claims 50 per cent of indemnity costs calculated at $32,190.34 or, in the alternative, an uplift of 75 per cent on scale costs, again calculated on an initial 50 per cent basis. In total on that basis he seeks $12,067.34.

[4]                 The first respondents submit that costs should lie where they fall. Alternatively, if an order for costs is to be made, then they submit it should be no more than one-third of scale costs.

Background

[5]                 The parties own property at Waiheke Island. The applicant wanted to vary or modify existing easements relating to the use of a right-of-way that runs over his two properties and an adjoining property owned by the first respondents. The modification sought was essentially to allow the automation of gates so they responded to a pin entry. There were two relevant easement instruments:

(a)the Wright easement provided right-of-way to the applicant, together with the first and second respondents. The applicant sought to extinguish the right of the second respondent, Mr Wright, insofar as he enjoyed a right-of-way over the applicant’s land;

(b)the second easement granted right-of-way to the Minister of Conservation over the first and second respondents’ properties. The applicant sought to modernise this in the same way as the Wright

easement as effectively there was only one common access road covered by the two easements.

[6]                 The applicant was able to agree the position insofar as the Department of Conservation easement was concerned with the Minister of Conservation prior to proceedings being issued but did not reach agreement with the first and second respondents prior to the issue of proceedings.

[7]                 The applicant does not pursue costs against the second respondent, Mr Wright, having resolved matters with him. The applicant does however seek costs against the first respondents. Mr Bates submits that the first respondents’ response to the “reasonable request” by the applicant to modify the existing easements was best described as dilatory and at worse, evasive and unreasonably difficult.

[8]                 The applicant has incurred considerable costs in pursuing the change in the easements. Mr Bates submits that there had been a change in the character of the neighbourhood engaging s 317(1)(a), Property Law Act 2007 and it was inevitable the Court would grant the variation or modification sought. Although the first respondents never filed any papers in opposition to the application Mr Bates submitted that the matters they had raised in correspondence were not incorporated into the form of the variation finally agreed, save for a minor exception.

[9]                 Mr Bates noted that the first respondents had initially declined to agree to the modification which had necessitated the issue of the proceedings. Further, the delay caused by the first respondents had the corollary effect that by the time the form of the easement modification was agreed as regards the Wright easement in February 2021, it was no longer possible for that modification to be simply made by way of Court order. Mr Wright had made changes to the title whereby additional properties enjoyed the benefit of the easement. As there were other owners affected who were not a party to the proceedings it was necessary to involve both the Auckland Council and other parties in order for the easement to be modified. Further costs were incurred.

[10]For all those reasons the applicant sought costs against the first respondents.

[11]             Generally all matters of costs are at the discretion of the Court.1 In the present case the following features are relevant:

(a)the nature of the proceedings – this is particularly important in the present case. This was an application to vary existing easements to meet the needs or wishes of the applicant;

(b)although proceedings were issued, the first respondents did not file any opposition;

(c)the application was ultimately resolved by consent order.

[12]             Of particular relevance in the present case are the decisions of North Holdings Development Ltd v WGB Investments Ltd and Synlait Milk Ltd v New Zealand Industrial Park Ltd.2

[13]             In North Holdings Katz J considered the issue of costs on an application to vary an easement. In that case the respondent had unsuccessfully opposed an application under s 317 of the Property Law Act 2007. Despite that, Katz J held that the respondent should not be required to pay the costs of the applicant:

[11] The nature of the proceedings must be kept in mind when considering costs issues. Unlike in ordinary civil litigation, a party who opposes extinguishment or modification of a covenant starts from the position of being “in the right”. In opposing the application they are seeking to protect their existing legal rights. For that reason the normal rule that costs follow the event does not apply. A respondent who unsuccessfully opposes an application to extinguish or modify a covenant should generally not have to pay the applicant’s costs, unless he or she has acted unreasonably.

[14]             In support of the proposition Katz J referred to two earlier cases: C Hunton Ltd v Swire3 and a Victorian case Re Withers.4

[15]             In the Synlait decision the Supreme Court cited Katz J’s decision in North Holdings with approval and noted that there were other New Zealand cases in which

1      High Court Rules 2016, r 14.1.

2      North Holdings Development Ltd v WGB Investments Ltd [2014] NZHC 1175; and Synlait Milk Ltd v New Zealand Industrial Park Ltd [2020] NZSC 157.

3      C Hunton Ltd v Swire [1969] NZLR 2332 (SC).

4      Re Withers [1970] VR 319 (SC).

no award of costs had been made against an unsuccessful objector to an application under s 317.5

[16]             The Supreme Court also noted that the position in England and Wales (as reflected in a practice direction of the Upper Tribunal) was the same.

[17]             Further, the Supreme Court noted that in Australia, the practice is that the costs of an unsuccessful objector who has acted reasonably should be met by the successful applicant. Ultimately the Supreme Court accepted the position at first instance to be that an objector would be protected from an adverse costs award assuming it acts reasonably.6

[18]             In the present case, bearing in mind that the matter has not required a determination, that no notice of opposition was filed and that the matter was resolved ultimately by consent orders, I am not in a position at this stage to find that the first respondents acted so unreasonably in raising the issues they did during the course of the applicant’s request to alter the easements and the subsequent proceedings that costs should be awarded against them.

[19]             There is no reason to depart from the principle espoused in North Holdings by Katz J and confirmed by the Supreme Court in Synlait.

Result

[20]             For those reasons I decline the applicant’s application for costs. Costs are to lie where they fall.

Venning J

5      Cambray North Island Ltd v The Minister of Lands HC Auckland CIV-2011-a404-513, 14 December 2011; Martins Bay Investments Ltd v Askham [2017] NZHC 1963, (2017) 18 NZCPR 854; Re Barfilon Investment Ltd [2019] NZHC 780; and Pollard v Williams [2019] NZHC 2029; (2019) 20 NZCPR.

6      Synlait Milk Ltd v New Zealand Industrial Park Ltd, above n 2, at [204].