BETWEEN BODY CORPORATE 201036 Appellant AND WHAI RAWA RAILWAY LANDS LP Respondent

[2024] NZCA 458

IN THE COURT OF APPEAL OF NEW ZEALAND

I TE KŌTI PĪRA O AOTEAROA

 CA660/2021
 [2024] NZCA 458

BETWEEN	BODY CORPORATE 201036 Appellant
AND	WHAI RAWA RAILWAY LANDS LP Respondent

Court:	Courtney, Katz and Mallon JJ
Counsel:	J Heatlie and J P Wood for Appellant D M Salmon KC and S G T Ma-Ching for Respondent
Judgment: (On the papers)	19 September 2024 at 11 am

JUDGMENT OF THE COURT
(Costs)

The appellant must pay costs and disbursements to the respondent in the sum of $29,477.44. 

____________________________________________________________________

REASONS OF THE COURT

(Given by Courtney J)

1. In Whai Rawa Railway Lands LP v Body Corporate 201036, Gordon J found in favour of Whai Rawa Railway Lands LP in relation to a dispute over ground rent and appointed an administrator to Body Corporate 201036.[1]  She awarded indemnity costs to Whai Rawa on the basis of a provision in the lease.[2]  The Body Corporate appealed unsuccessfully against the substantive judgment.[3]  Costs were reserved so that the parties could file memoranda.[4]

   [1]Whai Rawa Railway Lands LP v Body Corporate 201036 [2021] NZHC 2893, (2021) 22 NZCPR 776.

   [2]Whai Rawa Railway Lands LP v Body Corporate 201036 [2021] NZHC 1285.

   [3]Body Corporate 201036 v Whai Rawa Railway Lands LP [2024] NZCA 151.

   [4]At [101].

2. Whai Rawa seeks costs and disbursements on the appeal on an indemnity basis totalling $29,477.44 and provided invoices to support that figure.  The Body Corporate neither consents to, nor opposes the award.  Its position is that if indemnity costs are awarded, it takes no issue with the quantum claimed.

3. While the quantum of costs is generally set in accordance with the provisions of rr 53A–53D of the Court of Appeal (Civil) Rules 2005 (the Rules), r 53E(3)(e) expressly permits an order that the costs payable be the actual costs and disbursements reasonably incurred by a party where the party claiming costs is entitled to indemnity costs under a contract or deed.[5] 

   [5]Court of Appeal (Civil) Rules 2005, r 53E(1)(b) and (3)(e).

4. Clause 10.1 of the lease provided that Whai Rawa would be entitled to indemnity costs in respect of failure by the Body Corporate to comply with any obligation imposed under the lease or at law:

   10.1The Lessee shall indemnify and keep indemnified the Lessor from and against any action, claim, demand, loss, damage, cost, expense and liability which the Lessor may suffer or incur, or for which the Lessor may become liable in respect of or arising from:

   …

   (c)Any failure by the Lessee to comply with any obligation imposed on the Lessee under this Lease or by law.

5. This Court upheld the High Court’s findings that the Body Corporate had failed to comply with its statutory obligation in relation to the payment of ground rent and that the breach was “a deliberate and considered one” for the purposes of pressuring Whai Rawa into reducing the ground rental.[6] 

   [6]Body Corporate 201036 v Whai Rawa Railway Lands LP, above n 3, at [93]–[96]; and Whai Rawa Railway Lands LP v Body Corporate 201036, above n 1, at [113].

6. In these circumstances, we are satisfied that an award of indemnity costs is properly made in the amount sought.  We note that $7,463.16 has already been disbursed, in accordance with r 52B(2)(b) of the Rules, from the security of costs held by this Court, in partial satisfaction of the costs award.   

Result

1. The appellant must pay costs and disbursements to the respondent in the sum of $29,477.44. 

Solicitors:
Court One, Auckland for Appellant
Lee Salmon Long, Auckland for Respondent