Black v Body Corporate 125491

[2025] NZHC 3076

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2025-404-39

[2025] NZHC 3076

UNDER

Parts 18 and 30 of the High Court Rules 2016 and the Judicial Review Procedure Act 2016

IN THE MATTER OF

a judicial review of a body corporate under the Unit Titles Act 2010

BETWEEN

MICHAEL CARSON BLACK

Applicant

AND

BODY CORPORATE 125491

Respondent

Hearing:

On the papers

Counsel:

Applicant in person

J P Wood for Respondent

Judgment:

16 October 2025

JUDGMENT OF O’GORMAN J

[as to costs]

This judgment was delivered by me on 16 October 2025 at 11 am pursuant to r 11.5 of the High Court Rules 2016.

Registrar/Deputy Registrar

…………………………………

Solicitors:
Court One, Auckland

BLACK v BODY CORPORATE 125491 [2025] NZHC 3076 [16 October 2025]

Introduction

[1]                 This judgment determines the issue of costs, following my decision to grant the respondent’s application to strike out the proceeding.1 The parties have failed to agree on the issue of costs.

[2]The issues for determination are:

(a)whether costs should be awarded on the standard High Court scale (category 2B), or whether there are grounds for increased or indemnity costs; and

(b)if indemnity or increased costs are appropriate, what quantum should be awarded.

Legal principles

[3]                 The Court has a general discretion to award  costs  under  r  14.1  of  the  High Court Rules 2016. Subject to that discretion, r 14.2 provides the principles to be applied in most cases:

(a)Under r 14.2(1)(a), the party who fails with respect to a proceeding or an interlocutory application should pay costs to the party who succeeds.

(b)Under r 14.2(1)(b), an award of costs should reflect the complexity and significance of the proceeding. For those purposes, r 14.3 provides for three categories of proceeding (1, 2 or 3).

(c)Rule 14.2(1)(c) provides that costs should generally be assessed by applying the appropriate daily recovery rate to the time considered reasonable for each step reasonably required in relation to the proceeding or interlocutory application. The reasonable determination of time is set out in r 14.5 by band (A, B or C).

1      Black v Body Corporate 125491 [2025] NZHC 2401.

(d)Rule 14.2(1)(f) provides that an award of costs should not exceed the actual costs incurred by the party.

[4]                 The above position of limiting a losing party’s liability for costs to scale in most cases is supported by access to justice considerations.2 Other objectives are that the determination of costs should be predictable and expeditious.3

[5]                 Rule 14.6 provides for increased and indemnity costs. Relevantly, rr 14.6(3) and (4) provide:

(3)   The court may order a party to pay increased costs if—

…

(b)the party opposing costs has contributed unnecessarily to the time or expense of the proceeding or step in it by—

…

(iii) failing, without reasonable justification, to admit facts, evidence, documents, or accept a legal argument; or

…

(4)   The court may order a party to pay indemnity costs if—

(a)the party has acted vexatiously, frivolously, improperly, or unnecessarily in commencing, continuing, or defending a proceeding or a step in a proceeding; or

…

(f) some other reason exists which justifies the court making an order for indemnity costs despite the principle that the determination of costs should be predictable and expeditious.

[6]                 The circumstances in r 14.6(3) justifying increased costs include where there is a failure by the paying party to act reasonably,4 or where the party opposing costs has contributed unnecessarily to the time or expense of the proceeding by pursuing an argument that lacks merit, failing to accept a legal argument or for some other reason

2      Bradbury v Westpac Banking Corp [2009] NZCA 234, [2009] 3 NZLR 400 at [10]; and Ben Nevis Forestry Ventures Ltd v Commissioner of Inland Revenue [2014] NZCA 348, (2014) 22 PRNZ 322 at [13].

3      Lawrence v Glynbrook 2001 Ltd [2015] NZHC 1005 at [18]–[20], citing North Shore City Council v Body Corporate 188529 [2010] NZCA 234, (2010) 20 PRNZ 740 at [12].

4      Bradbury v Westpac Banking Corp, above n 2, at [27].

justifying the Court making an order for increased costs. In such a case, the Court must consider the extent to which the failure to act reasonably contributed to the time or expense of the proceeding and it is only to that extent that any percentage uplift from scale can be justified.5

[7]                 Indemnity costs are exceptional. Indemnity costs under r 14.6(4)(a) can be awarded if a party has acted vexatiously, frivolously, improperly, or unnecessarily. This requires that the unsuccessful party has pursued a “hopeless case”,6 being a position “totally without merit” 7 and “bound to fail”,8 or one commenced or continued for an ulterior motive or where there has been wilful disregard of the known facts or the clearly established law.9 A party’s misconduct can lead to indemnity costs if it is “flagrant”,10 or constitutes “exceptionally bad behaviour”.11

Respondent’s submissions

[8]                 If costs are to be awarded on the standard scale, the parties have agreed the amount: $17,577.50 plus disbursements of $1,066.09 (GST exclusive).

[9]                 The respondent seeks indemnity costs, arguing that Mr Black acted unnecessarily in commencing and continuing the proceeding until it was struck out. The respondent contends that the criteria in Bradbury v Westpac Banking Corp are satisfied, namely that Mr Black has commenced or continued a proceeding for an ulterior motive. The respondent submits that Mr Black’s purpose was to obtain a cost-shifting benefit from reviewing historic spending by the body corporate, which is not a proper purpose for judicial review.

5      Commissioner of Inland Revenue v Chesterfields Preschools Ltd [2010] NZCA 400, (2010) 24 NZTC 24,500 at [165].

6      Ben Nevis Forestry Ventures Ltd v Commissioner of Inland Revenue, above n 2, at [17].

7      TheCircle.co.nz Ltd v Trends Publishing International Ltd (in liq and in rec) [2021] NZCA 235, (2021) 25 PRNZ 766 at [34].

8      Big Basin Ltd v Stockco Ltd [2023] NZHC 2130 at [45].

9      Ben Nevis Forestry Ventures Ltd v Commissioner of Inland Revenue, above n 2, at [17]; and Big Basin Ltd v Stockco Ltd, above n 8, at [53].

10     Batley v MacDonald [2025] NZHC 2122 at [17], citing Bradbury v Westpac Banking Corp, above n 2; and Prebble v Awatere Huata (No 2) [2005] NZSC 18, [2005] 2 NZLR 467 at [6].

11     Phillips v Heremaia [2025] NZCA 394 at [14], citing Bradbury v Westpac Banking Corp, above n 2, at [28].

[10]             The respondent relies on the findings in my judgment that Mr Black’s claim was prolix, vague, and sought compensatory relief inappropriate for judicial review. Despite being given opportunities to re-plead, the claim remained inadequate and was ultimately struck out.

[11]             The respondent has provided invoices with supporting time records showing total legal costs of $66,720.19 (GST inclusive). It submits that all invoiced time was reasonably necessary in the defence of the claim. As the body corporate is GST-registered, GST has not been claimed.

Mr Black’s submissions

[12]             Mr Black argues that costs should be limited to the 2B quantum of $17,577.50 for costs and $1,066.09 for disbursements. Indemnity or increased costs are exceptional and require “truly exceptional” circumstances, usually involving very bad or unreasonable behaviour, with the onus on the respondent to show “clear cause”.

[13]             He argues that the respondent has not sufficiently particularised the grounds for indemnity costs, nor  substantiated the reasonableness of the amount claimed.   Mr Black argues that the indemnity costs claimed are disproportionate to the amount at issue.

[14]             He denies that his claim was brought for any ulterior motive. He says he sought remedies (such as accounting directions) that would have benefited all owners, not just himself. He further submits that the proceeding was reasonable given the lack of financial records, the need for transparency, and the interests of all owners.

Analysis

[15]             In this case, I do not accept that the high threshold for indemnity costs is met. A mere finding that a proceeding should be struck out does not, without more, automatically attract indemnity costs.12 I made no findings of misconduct or improper behaviour of that “truly exceptional” type.

12     Minister of Education v James Hardie New Zealand [2018] NZHC 2960 at [21].

[16]             However, I am satisfied that an uplift is appropriate, to reflect that the arguments lacked merit, and Mr Black contributed unnecessarily to the time and expense of the proceeding by continuing to pursue wide-ranging and unfocused pleadings and arguments  without  taking  on  board  the  concerns  identified  by  van Bohemen J and then by Jagose J at the case management conferences.

[17]             Although there is discretion to award higher, an uplift of 50 per cent is at the upper end in the typical increased costs case.13 I consider that an uplift of 50 per cent is appropriate on the facts.

[18]             A 50 per cent uplift on 2B costs equates to a further $8,788.75, resulting in a costs award of $26,366.25, plus disbursements of $1,066.09 (GST exclusive).

Result

[19]             I award the respondent, Body Corporate 125491, costs of $26,366.25 plus disbursements of $1,066.09.

[20]             Interest is awarded on the above amounts under s 10 of the Interest on Money Claims Act 2016 from the date of this judgment until payment in full.

O’Gorman J

13     Deliu v Attorney-General [2023] NZHC 2375 at [25]; and Holdfast NZ Ltd v Selleys Pty Ltd (2005) 17 PRNZ 897 (CA) at [46]–[48].