Body Corporate 203710 v Tubman HC Auckland CIV 2006-404-007416

[2008] NZHC 2553

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV 2006-404-007416

BODY CORPORATE 203710

First Plaintiff

ANDALBERTINE CONSTANCE TUBMAN, RICHARD ERLE DOUGLAS RATHBONE, NICOLA ORMOND RATHBONE, ANTHONY PAUL KORTEGAST, ANNE KORTEGAST

(Cont’d next page)

Appearances: S L Stead for First and Second named third defendants and fourth defendants

R A Smith for Second Defendant
T J Rainey for Plaintiffs

Judgment:      On the Papers1 September 2008

JUDGMENT OF ASSOCIATE JUDGE ROBINSON

Solicitors:           Grimshaw & Co, PO Box 6646, Auckland Heaney & Co, PO Box 105391, Auckland Knight Coldicutt, Private Bag, 92101, Auckland Kensington Swan, Private Bag 92101, Auckland P Withnall, PO box 10201, Wellington

BODY CORPORATE 203710 AND ANOR HC AK CIV 2006-404-007416  1 September 2008

Patricia Mary Carter, Timothy James Mahoney, Jeanette Marie McAuslin, Patrick Murphy, Pamela Murphy, Maurice Mowson Mar, Warwick Francis Wright, White Horse Finance Limited, Sarah Elizabeth Caldwell, Brian John Shaw, Patrice Allison Shaw, William Duncan MacDonald, Elizabeth Equities Limited, Jonathan Hugh Warren, Susan Mary Warren, Judith Elisabeth MacRae Herbert, Roy William Meares, Janet Elaine Meares, Jeremy Michael Taine, Barry Reid, Paul Ewen Callaghan, Sandra Margarette Reid, Maria Fabiana Gordo, Gordon Churchill Davies, Elizabeth Helen Davies

Second Plaintiffs Auckland City Council First Defendant

Brent Francis Hulena

Second Defendant

Promanco Kenman (Auckland) Limited, Nigel Anthony McKenna, Brian David Wrench, William Mark Pennington

Third Defendants

Domain Construction Limited

Fourth Defendant

[1]     Three of the twenty-two named second plaintiffs have filed notice of discontinuance  pursuant  to  r  475  High  Court  Rules.  Consequently,  pursuant  to r 476A  High  Court  Rules,  the  proceedings  by  those  plaintiffs  end  against  all defendants.

[2]      Rule 476C provides:

476C Costs

Unless the defendant otherwise agrees or the Court otherwise orders, a plaintiff who discontinues a proceeding against a defendant must pay costs to the defendant of and incidental to the proceeding up to and including the discontinuance

[3]      This rule creates a presumption that a discontinuing plaintiff must pay the costs to the defendant.

[4]      At a case management conference held on 11 June 2008, notice was given that three of the plaintiffs would be filing a notice of discontinuance. Consequently, I directed that on the filing of such a notice, the defendants were to have fourteen days to file any memorandum in support of an application for costs, the plaintiff discontinuing was to have fourteen days thereafter to file any memorandum in reply and the defendants were to have a further fourteen days to file any memorandum in answer.

[5]      Pursuant to that direction, the first and second named third defendants, the fourth defendant and the second defendant have filed memoranda in support of application for costs on behalf of those defendants.

[6]      Counsel  for  the  second  defendant  seeks  costs  against  the  three  plaintiffs assessed on a 2B basis totalling $15,040. Those costs must be apportioned amongst all the plaintiffs. On the basis that the three plaintiffs who discontinued the proceedings pay 1/22nd  of those costs, counsel for the second defendant seeks a direction that each of the three plaintiffs who are discontinuing the proceedings contribute $683.63 to the defendants costs.

[7]      Counsel for the plaintiffs who are discontinuing the proceedings, submits that the only costs claimed by the second defendant against the withdrawing plaintiffs that  can  be  directly  attributable  to  those  plaintiffs  is  the  inspection  of  the withdrawing plaintiffs  individual  documents.  The  amount  sought  by  the  second defendant for inspection is $2,400. Based on the second defendant’s allocation of costs per plaintiff, the figure of $2,400 divided by the number of plaintiffs namely twenty-two equates to an individual cost of $109.09 per plaintiff.

[8]      Counsel for the withdrawing plaintiffs also points out that included in the schedule of costs claimed by the second defendant, is an amount of $3,200 in respect of the preparation of an affidavit in support of the second defendant’s opposition to an interlocutory application by the second named third defendant for summary judgment seeking to strike out the claim against him. It is pointed out that the second defendant chose to file his opposition to this application and was under no obligation to do so. It is therefore submitted that it is inappropriate to require the withdrawing plaintiffs to contribute towards the costs of the second defendant for preparing the affidavit which, strictly speaking was not caused by any action taken by the withdrawing plaintiffs.

[9]      The position of multiple plaintiffs with only a limited number seeking to discontinue is summarised by Associate Judge Faire in Body Corporate 209549 & ors v Akita Construction Ltd & ors 25 October 2006, AK HC CIV 2005-404-3080. Amongst the factors taken into account in that case were:

a)       It is not possible at this stage to conclude whether the plaintiffs who are withdrawing acted reasonably in bringing the proceedings and further whether the defendants have acted reasonably in defending the proceedings. Those issues will be resolved  either at  a trial of the proceedings or by a settlement.

b)There  is  a  strong  likelihood  that  the  defendants  may  well  have incurred all the costs which they are claiming to date even if the withdrawing plaintiffs had never participated in the litigation. However, as pointed out by counsel for the withdrawing plaintiffs in

the circumstances of this case, extra costs have been incurred by the defendants in dealing with discovery and inspection resulting from the documents held by the plaintiffs who are withdrawing.

c)       Pursuant to r 50 unless the court otherwise directs the liability of each of two or more parties ordered to pay costs is joint and several. Thus even if the remaining plaintiffs fail, having regard to their number, there is unlikely to be any real risk of  an overall order for costs against the plaintiffs not being satisfied.

[10]     In Body Corporate 209549 & ors v Akita Construction Ltd & ors, Associate

Judge Faire came to the following conclusion:

When I consider these circumstances, it seems to me that now is not the appropriate time to fix costs against the plaintiff, Nicola Littlejohn, on the application of the second defendant. The proper time to consider those costs is when there is any change to the current position. That might be when the judgment is given or a notice of discontinuance by a substantial number of the plaintiffs is filed and served. In that way, it would be possible to analyse what is the responsibility for costs of Nicola Littlejohn, if any, and to make appropriate orders.

[11]     I consider the approach by Associate Judge Faire to be entirely appropriate in the circumstances of this case. If the remaining plaintiffs succeed in their claims against the defendants, it is most unlikely that the defendants would be entitled to any order for costs against the plaintiffs who are withdrawing.

[12]     On the other hand, if the defendants succeed in defending the claims brought by the plaintiffs then the defendants would be entitled to costs and the plaintiffs who are withdrawing at this stage would be required to contribute a proportion of the costs incurred up to the date of their withdrawal of their claims.

Decision

[13]     The application for costs by the second, third and fourth defendants against the three plaintiffs who have filed notices of discontinuance is adjourned and may be brought on on seven days notice in the event that there is a significant development

which  either  results  in  a  number  of  plaintiffs  discontinuing  or  settling  the

proceedings or if the proceedings are resolved by a judgment.

Associate Judge Robinson