Body Corporate 348047 v Auckland Council
[2015] NZHC 128
•11 February 2015
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
CIV-2013-404-4646 [2015] NZHC 128
IN THE MATTER of Imperial Gardens Apartments BETWEEN
BODY CORPORATE 348047
First Plaintiff………………../Second plaintiffs listed over
AND
AUCKLAND COUNCIL First Defendant
WATTS & HUGHES LIMITED Second Defendant
DOWNER NEW ZEALAND LIMITED Third Defendant
..................../Third Parties listed over
On the papers Counsel:
PR Grimshaw and RF Harvey for plaintiffs
SC Price and JK Wilson for first defendantJudgment:
11 February 2015
JUDGMENT OF FAIRE J
This judgment was delivered by me on 11 February 2015 at 4 pm, pursuant to Rule 11.5 of the High Court Rules.
Registrar/Deputy Registrar
Date……………
Solicitors: Grimshaw & Co, Auckland
MinterEllisonRuddWatts, Auckland
Body Corporate 348047 v Auckland Council [2015] NZHC 128 [11 February 2015]
Second plaintiffs
ANDCHRISTIAN WAN, ZHENG WANG, LINE LINE FAILLOUX (1/2 share) and THIERRY SILLOUX (1/2 share); LI-WEI SUN; JAMES ERNEST STEWART and ELIZABETH MARY BAYNE; HORTENSE FAILLOUX; MEI MEI
LUO; FLORA WANG; LEON FAILLOUX and SOLANGE CHENGUE FAILLOUX; AGATHE FAILLOUX; RALPH MATAPO and BLANCHE NIVA MATAPO; EMMANUEL RAUNUI ROLAND PAIN (1/3 share), MYRIAM HAIMANU DANNIELLE PAIN (1/3 share) and ANGELIQUE HITIATUA MARIE PAIN (1/3 share); YUAN- CHUNG WANG and SHENG-PAO CHANG WANG; SHANE LAVELLE MCDUFFIE; HOUSING NEW ZEALAND LIMITED; PL AND SONS INVESTMENTS LIMITED; FANG XIA; ROSE JOANNA LIM; HENRI MOU and THERESE TERIRIATUA MOU; DEALEX LIMITED; PHYLLIS LAI; CHANG MEI-YU CHIU and ABNER
YU-RAY CHIU; TSAI-YU LO and TONY YU CHUAN WANG; ALAN MICHAEL BIRD and DIANE MAREE BIRD; XUFENG LI; ROTA ANDREE; FINMEI FAN; ALAN ROLAND; LIQIAN TONG; YUEHUA HE; JUNLING QI and QI
SUN; MIAOSHAN LIU; XIANGHONG CAO; MIKI GIORDANI; IRENE MARDIONO; MINGZHU YANG and PINGQI WEI; HUIJIE XIN; ZHENG HE; HLY LIMITED; MASANOBU ESUMI; HENG LI; DEQIANG SHI and JIA ZHOU; XUELAN PANG; PEIYAN MA, QIANG WANG and WILLIAM WANG MA; DONALD HARTLEY KAYES; CHOONG HUAT LAI and LUAN JOO TAN; KANG XU; MING LI; LIANG ZHU and XIAOSHU CHEN; TREVOR DENIS ALLISON; GEN BAO IN; SYLVIAN LIAO; LI MA; JUNYU QIANG; XUI XU PRODUCTIONS PARADISE NZ LIMITED; KIM HA TRAN; GANG XU; FEN GU; JIANHAO XU; NIEVES RUBIO CAMBERO; SCATS INVESTMENTS LIMITED; EN-
CHIN TENG and MAN-JUNG HSIEH; AZANO PROPERTIES LIMITED; ROGER DESPOIR and GHISLANE WONG KIN HING; JOHN WILLIAM BLUNDEN and FOOTES TRUSTEES LIMITED, BETTERKIWI LIMITED; PAUL ERNEST WHITE; JOHN PATTERSON; PAUL JOHN FOLWELL and PAULINE ANN FOLWELL; JIANHUI HUANG; TAG JEONG HAM and EUN JEONG JANG; HUI GU and QI YANG; GORDON LEONARD WIGG
and HEATHER ANNE WIGG; YUET WO FUNG and BOSTON TRUSTEES 6303
LIMITED; GRIGG-CRAIG INVESTMENTS LIMITED; ACADACA INVESTMENTS LIMITED; XIANJUN SUN; QIJUN XIE; MANAKO NAKAKIMA; LITTLE ENTERPRISES (2003) LIMITED; COLIN MCKENZIE DOUGLAS and LYNN HEATHER DOUGLAS (1/2 share) and KIRSTY LORNA TSOI (1/2 share); GUIYEN REN and MINGXIANG GU; OSCAR LOO and PHUI YEE WONG; OSCAR LOO, PHUI YEE WONG and EDDY LOO; NIKHITA
& NIKHL INVESTMENTS LIMITED; JIAJUA LU; ROHIT KUMAR; FREDERICK MCSKIMMING HACKETT; HOCK SENG HARRY LOH and SIEW GEOK ANNETTE CHONG; ; ANTHONY JOHN PATTERSON; SEON JANG; DANEIL LECOMTE and ALICE LECOMTE; PETER TIMOTHY MOORE and ANDREW MARIE MOORE; HUI XUE; PUSHPALI JAYANTHI DE ZOYSA YAYATILLAKA and AGAMPODI JALIYA DE ZOYSA JAYATILLAKA; PHILIP HAROLD TYLER; VILAS KANITKAR; JACK ARIEL and ADRIANNA GLORIA MARCHETTO DE ARIEL; RENXIANG WANG, LIYA REN and ZHIFANG WANG; BIN-FA CHING and LING LO CHING; MASSIS OVANESSOFF; KEITH ALEXANDER MILNE (1/2
share) and JAN MARGARET MILNE (1/2 share); LOUIS KWUN HO YEUNG and WING MAN SANDY LAU; TSENG SAO LEON (1/2 share) and YONG VVE
LOPIN SIOU HANE EDWIGE (1/2 share); SIU YIN CHOU and LAU KIU CHOU; STEPHEN CHANG HUNGLIU and WINNIE SHUK KUEN SIU; JIANMIN ZHAO; SORAYA SABETIAN and PETER CARL NEUMEGEN; JIAN SUN and YAN ZHAO; DEEPIKA HIMMAT LODHIA and CHRISHANT LODHIA; COUTTS INVESTMENTS LIMITED; OLGA BUCAN and PERICA BUCAN; MICHALE WALKER and ELIZABETH WALKER; QIN ZHANG; HOCK SENG HARRY LOH and SIEW GEOK ANNETTE CHONG; TSENG LI LAN TSAI; MIKI GIORDANI; BOKSOON BAE and MICHELLE EUNJOO SEOK; JULIE ANNE PEPPER and HELEN MAREE STANAWAY; YITIAN LUO; MICHAEL DUPIEUX and MARTHE MO WONG; TAHOMIN LAUZUN and TIIHIVA TURERE;REALTYCORP LIMITED DONNY HENRI TCHONG-WONG and DELHIA ASAMI LI CHIN FOC TCHONG-WONG;FENG GAO (1/2
share) and XIAOQI TONG (1/2 share); RICARDO IVAN DORAN; NORTHERN PROPERTY TRUST LIMITED; YAN LU (1/2 share) and YINI YE (1/2 share); GUANCUI WANG and GUIYAN ZOU; LINDA CATHERINE HILL and JONATHAN AUBREY HILL; ALBERT CHONON and CHRISTINE CHONON; HUIZHEN CHEN; LIQIANG GUAN; LIXIAN LIANG; PO-MIN YANG; LI- WEI SUN; TERII WONG, AMELIE CHANSAY WONG and JOEL WONG; QUANG KIEM TRAN and INH HA TRAN; SUZANNE JISSANG; LI-LING CHOU; PRADIP BAISYET and JINA BAISYET; MIAOSHAN LIU; MING PO HUANG and CHEN AH-MEI HUANG; YING CHEN; YING YING HUNG; WEI LUN WU; MARK LOUISE WALSDORF; WEI YUAN; WEIJIA ZHANG,
HUIFANG FU and ZHONGMIN ZHANG; LUCIEN FRANCIS CHING and MARTINE CHING; ERNEST MOUX, HOWEVER, WAH CHAN EP. MOUX and YANNICK TEVA MOUX;
WEI LIU; MENGYI SUN and YONGWEI ZUO; LITTLE BOXES LIMITED, WEI WEI; HUAJUN WANG; SAROACH JONGJITT; CHOONG HUAT LAI and LUAN JOO TAN; SUCHART TANYATANABOON; WAI-HING CHEN; HOOI CHIN CHAN; HUNG DUNG
NGO BONNIE FONG PAN; SESH PROPERTY LIMITED; RUI LING ZHOU; CHIH-SHAN LAI; YUEN KWONG CHUNG and YUEN PAT FONG; KERRIN BIANCA MELINDA LEONI; TERRY CHRISTOPHER PARKIN, MAUREEN PARKIN and G.D.A. TRUSTEES LIMITED; MASAHIKO OSHINO; MONIQUE LAUSIN; ROGER STANLEY HICKSON (1/2 share) and ANNA BRIGID HICKSON (1/2 share); TARA ANNE HICKSON (1/2 share) and GERARD ANTHONY O’SULLIVAN (1/2 share); EUGENIE WONG; SIU WING CHAN (1/2 share) and SIU FONG CHAN also known as SIU FONG PANG (1/2 share); SOHAIL SABETIAN; DARREN MAN CUONG PANG and YING CHEN; DIANA DIEM QUYEN PHU; HORTENSE LAUX and ROSELINE LAURENT; WARAPORN ONGTHANASUK; JING WANG; PHAN TUYET VAN; GOLD HARBOUR LIMITED; RAYMOND KHAU; DEMIN GE; HONG ZHANG YAN; JOANNA FRANCES PARKIN and G.D.A.
TRUSTEES LIMITED; ANGELA JAYNE HACKETT and KM BUCHANAN TRUSTEE COMPANY (2008) LIMITED; KATHLEEN MARY BUCHANAN and ROBERT LOUIS BUCHANAN;; LOUIS CHALONS, PUI HAN CHAN EP. CHALONS and LAURENT VETEA CHALONS; LOUIS CHALONS, PUI HAN CHAN EP. CHALONS and KEVIN TEVA CHALONS; GEOFFREY JOHNSTON PEARSON, SHAMIMUN NISHA PEARSON and MAQ TRUSTEE
2011 LIMITED; JIANHUI HUANG; YUAN GUO; HONGMEI MATUSCHKA; YUXIA WANG and WEIMIAO ZHENG; SHERRY WANG
FITCHETT; BELINDA PHU; KEVIN
CHARLES EWANS and LYNNETTE ALISON EWANS; KEVIN BARRY JUDD, LEANNE RUTH JUDD and COOMBE SMITH TRUSTEE COMPANY LIMITED; JING JING TONG; MICHAEL TERRENCE BUTLER; CHI MIA; JOHN DEARSLEY ROBINSON, PAMELA JOAN ROBINSON and NORMAN JOHN COMERFORD; MEW RESIDENTIAL LIMITED; ARTHUR CHUNG and SOU LAN CHUNG; JAEKEUN LIM and HEEJA KIM; YAN TIAN; ZHONMIN ZHANG; AND LING KAN
Second Plaintiffs
Third parties
AND
ALUMINIUM TECHNOLOGY LIMITED
First Third Party
ARCHITECTURAL WINDOW SOLUTIONS LIMITED
Second Third Party
ABBAS LIMITED Third Third Party
STEPHEN MITCHELL ENGINEERS LIMITED
Fourth Third Party
METROPOLITAN GLASS & GLAZING LIMITED
Fifth Third Party
RICHARD ORMAN BUILDERS LIMITED
Sixth Third Party
RICHARD LEONARD ORMAN Seventh Third Party
TAL LIMITED Eighth Third Party
[1] The first defendant and the plaintiffs both seek costs arising from my determination of the first defendant’s application for an order that the plaintiffs’ proceedings be dismissed and/or struck out in its entirety. I delivered judgment on
26 November 2014.
[2] Each party had a measure of success.
[3] The first defendant was successful in obtaining an order as sought in counsel’s synopsis that the statement of claim dated 23 October 2013 be dismissed or struck out. The factual importance of that ruling is not yet apparent. It may well have some significance when limitation issues are finally determined.
[4] The plaintiffs, however, were successful in resisting the application that the proceeding be struck out in its entirety. That was because an amended statement of claim had been filed on 20 August 2014 and had been the subject of a pleading by the first defendant on 30 September 2014. In my judgment I found that there was sufficient in that document to identify a potential cause of action and therefore it should not be struck out but that time should be allowed for an amendment which complies with the High Court Rules. I noted that that was a position which the plaintiffs have accepted that they have an obligation to carry out and, indeed, have
undertaken to file such a document.1
[5] The first defendant’s case seeking costs is based upon the fact that I found:
(a) That the original claim was hopelessly inadequate and hopelessly deficient in terms of compliance with the High Court Rules;2
(b)It amounted to an abuse of process. It was highly prejudicial and was issued for an improper motive, namely to bring a case inside a limitation period when it was known to the plaintiffs that no notified
particularised foundation for the allegations made in it were pleaded;3
1 Body Corporate 348047 v Auckland Council [2014] NZHC 2971 at [52].
2 At [48] and [56].
3 At [50].
(c) The plaintiffs were also in breach of r 5.72 by not serving the original statement of claim promptly.
The Court’s approach to applications for costs
[6] Rule 14.1 gives the Court a discretion to order costs in relation to a step taken in a proceeding. That discretion is generally to be exercised in accordance with the specific Rules contained in rr 14.2-14.10.4 In Mansfield Drycleaners Ltd v Quinny’s Drycleaning (Dentice Drycleaning Upper Hutt) Ltd it was said of the costs regime contained in what is now rr 14.2-14.10 that:5
there is a strong implication that a Court is to apply the regime in the absence of some reason to the contrary[.]
The test to be applied is entirely an objective and not a subjective one. The only reference which it is necessary to make towards actual costs is to be found in r 14.2(f), namely that an award of costs should not exceed the costs incurred by the party claiming the costs.6
[7] It is unnecessary that I review the matters that are set out in r 14.2 in light of the positions adopted by the parties. This is a Category 2 case and, to the extent that it is appropriate to deal with each step that was taken, Band B is the appropriate band.
[8] Rule 14.6 sets out the circumstances where increased or indemnity costs can be awarded.
[9] Rule 14.6 in relation to indemnity costs provides:
14.6 Increased costs and indemnity costs
(1) Despite rules 14.2 to 14.5, the court may make an order—
(a) increasing costs otherwise payable under those rules
(increased costs); or
4 Glaister v Amalgamated Dairies Ltd [2004] 2 NZLR 606 (CA) at [19].
5 Mansfield Drycleaners Ltd v Quinny’s Drycleaning (Dentice Drycleaning Upper Hutt) Ltd
(2002) 16 PRNZ 662 (CA) at 668.
6 Glaister v Amalgamated Dairies Ltd, above n 5, at [14].
(b) that the costs payable are the actual costs, disbursements, and witness expenses reasonably incurred by a party (indemnity costs).
….
(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
(b) the party has ignored or disobeyed an order or direction of the court or breached an undertaking given to the court or another party; or
(c) costs are payable from a fund, the party claiming costs is a necessary party to the proceeding affecting the fund, and the party claiming costs has acted reasonably in the proceeding; or
(d) the person in whose favour the order of costs is made was not a party to the proceeding and has acted reasonably in relation to it; or
(e) the party claiming costs is entitled to indemnity costs under a contract or deed; 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: rr 14.2-14.10.
[10] In Paper Reclaim Ltd v Aotearoa International Ltd the Court of Appeal considered an application for indemnity costs pursuant to the now r 14.6(4)(a).7 The Court emphasised the need to examine the specific grounds set out in the Rule for ordering indemnity costs.
[11] In Hedley & Ors v Kiwi Co-operative Dairies Ltd it was said:8
[8] Such authorities as there are indicate that indemnity costs are awarded where truly exceptional circumstances exist.
The court’s approach was approved in Bradbury v Westpac Banking Corporation.9
[12] The Court of Appeal said:10
While recognising that the categories in respect of which the discretion may be exercised are not closed (see r 14.6(4)(f)), it listed the following circumstances in which indemnity costs have been ordered:
(a) the making of allegations of fraud knowing them to be false and the making of irrelevant allegations of fraud;
(b) particular misconduct that causes loss of time to the court and to other parties;
(c) commencing or continuing proceedings for some ulterior motive;
(d) doing so in wilful disregard of known facts or clearly established law;
(e) making allegations which ought never to have been made or unduly prolonging a case by groundless contentions, summarised in French J’s “hopeless case” test.
Each of these concerns conduct which would fall within r 14.6(4).
[13] Had I been left to determine this case solely on the basis of the statement of claim dated 23 October 2013, I would have concluded that this was an appropriate case for indemnity costs to be awarded in favour of the first defendant. That is because the claim was clearly issued for some ulterior motive and was hopelessly deficient. That, however, is not what happened. A subsequent statement of claim was filed which, as I have said, I found to have sufficient information to identify a potential cause of action and therefore should not be struck out. Indeed, I recorded in the judgment that the plaintiffs had agreed to amend. The effect of that finding was a refusal to order in terms of the application itself.
[14] It will be readily apparent from the short summary I have referred to in this judgment that one cannot determine this case simply as the applicant being successful, and therefore entitled to costs in terms of r 14.2(a). On the other hand, as I have mentioned, the plaintiffs’ position in issuing a statement of claim for clearly an improper motive which was defective and, as I have found, a nullity in terms of
the High Court Rules, would have justified, if that was the only matter being considered, an order for indemnity costs.
[15] So far as the plaintiffs’ application for costs is concerned, the plaintiffs have, in fact, been granted an indulgence because it had presented to the Court defective documents even at the time of the hearing of the application to strike out. They were given time to cure that position.
[16] The unusual nature of this case means that I am forced to revert to the general discretion which is preserved by r 14.1 of the High Court Rules. In doing so I have reached the conclusion that the defendant’s application was justified because of the completely unacceptable position adopted that arose from the filing of the statement of claim and notice of proceeding dated 23 October 2013 and by virtue of the fact that the document was not served, thus preventing any notice of its existence being given to the defendant. Admittedly, any prejudice flowing from that I have ruled out by the order I have made declaring that document a nullity.
[17] On the other hand, the plaintiffs have successfully resisted an order striking out the proceeding in its entirety, albeit on the basis of an undertaking to provide a fully particularised statement of claim. Although they have resisted the order sought they have succeeded in that opposition simply because the Court was prepared to give them an indulgence.
[18] Weighing all these matters up, I reach the conclusion that the proper result for costs here is an order for costs based on Category 2 Band B in relation to the interlocutory application in favour of the first defendant. A schedule to that affect has been appended to counsel for the first defendant’s submissions. I have considered each step and have noted that the allowance for each Band seems appropriate. That indicates a total figure for costs of $8,059.50, plus a filing fee of
$500.
[19] Accordingly, I order that the plaintiffs pay the first defendant’s costs on this
application in the sum of $8,059.50 together with disbursements of $500.
[20] I make no allowance in the cost order made in respect of the memoranda that
have been filed.
JA Faire J
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