Body Corporate 355492 v Queenstown Lakes District Council

[2021] NZHC 2429

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2015-425-000036

[2021] NZHC 2429

BETWEEN

BODY CORPORATE 355492

First Plaintiff

AND

JOHN ROBERT CHESTNEY & ORS

Second Plaintiffs

AND

QUEENSTOWN LAKES DISTRICT COUNCIL

First Defendant

AND

ELLIOTT ARCHITECT LIMITED (IN LIQUIDATION)

Second Defendant

AND

EDWIN GERARD ELLIOTT

Third Defendant

AND

HOLMES CONSULTING GROUP LIMITED

Fourth Defendant

AND

ARCH UNDERWRITING AT LLOYD’S LIMITED

Fifth Defendant/Fifth Third Party

AND

ASTA MANAGING AGENCY LIMITED

Sixth Defendant/Sixth Third Party

AND

HARDY (UNDERWRITING AGENCY) LIMITED

Seventh Defendant/Seventh Third Party

AND

LIBERTY MANAGING AGENCY LIMITED

Eighth Defendant/Eighth Third Party

AND

STEPHEN BRUCE MCLEAN

First Third Party

BODY CORPORATE 355492 v QUEENSTOWN LAKES DISTRICT COUNCIL [2021] NZHC 2429

[16 September 2021]

AND

JULIE RAEWYN WENSLEY JACK

Second Third Party

AND

PETER LAWSON

Third Third Party

AND

DANIEL STEWART

Fourth Third Party

Hearing:

On the papers

Counsel:

D J Powell for First Plaintiff

C M Meechan QC and J R Halligan for First Defendant

Judgment:

16 September 2021

COSTS JUDGMENT OF ASSOCIATE JUDGE PAULSEN

This judgment was delivered by me on 16 September 2021 at 11.00 am pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar Date:

[1]    In a judgment of 20 October 2020, I ordered the plaintiffs to provide further and better particulars of their amended statement of claim upon the application of the Queenstown Lakes District Council (the Council).¹ I reserved costs but granted leave to the parties to file memoranda if they could not reach agreement on the issue. They did not agree. However, I did not determine costs at that time because the Council applied to review one aspect of my judgment.  I delayed my determination until after

the outcome of the review was known. Subsequently, the Council was successful on the review. On 27 April 2021, Mander J ordered that additional particulars were to be provided by the plaintiffs.²  In a subsequent judgment, Mander J awarded costs of the

review to the Council.³ The parties now seek a ruling on costs consequent upon my judgment of 20 October 2020.

The parties’ positions

The plaintiffs

[2]    The plaintiffs submit that costs should lie where they fall because the Council was substantively unsuccessful in relation to the great majority of the particulars sought, that it pursued arguments that lacked merit and it was unreasonable in its approach.

The Council

[3]    The Council argues it was the successful party and is entitled to costs calculated on a 2B basis. It contends that an analysis of the particulars sought by it shows the majority were in fact either provided by the plaintiffs prior to the hearing or were subsequently ordered by the Court. It says it obtained further particulars in respect of 18 out of 22 categories and where it did not obtain particulars they were of little

significance and do not justify any reduction in its costs entitlement.⁴

Principles

1      Body Corporate 355492 v Queenstown Lakes District Council [2020] NZHC 2590.

2      Body Corporate 355492 v Queenstown Lakes District Council [2021] NZHC 894.

3      Body Corporate 355492 v Queenstown Lakes District Council [2021] NZHC 1851.

4      High Court Rules 2016, r 14.7(d).

[4]    Matters relating to costs are discretionary. So far as is possible, the determination of costs should be predictable and expeditious.5 Unless there are exceptional reasons to the contrary,6 the party who fails on an opposed interlocutory application should pay the costs of the party who succeeds.7 However, “success on more limited terms is still success”.8 The analysis requires “a realistic appraisal of the end result”, rather than a focus on who succeeded at each step.9 The Court may reduce the costs award of the successful party if that party failed in relation to a cause of action or issue which significantly increased the costs of the opposing party.10

Discussion

[5]There are two principal issues that I must decide. They are:

(a)Was the Council the successful party overall for the purposes of the application?

(b)If so, to what extent should any costs award in the Council’s favour be reduced because it pursued unmeritorious arguments or acted unreasonably?

Was the Council the successful party?

[6]    A realistic appraisal of the end result shows the Council was the successful party. Although it did not achieve total success, success on more limited terms is still success.11 The Council’s success is reflected in all the following.

[7]    First, as I noted in my judgment, the plaintiffs failed to respond to a notice requiring further particulars. The Council then filed its application. Only then did the plaintiffs provide a memorandum containing responses to the Council’s request for

5      Rule 14.2(1)(g).

6      Shirley v Wairarapa District Health Board [2006] NZSC 63, [2006] 3 NZLR 523 at [19].

7      High Court Rules, r 14.2(1)(a).

8      Weaver v Auckland Council [2017] NZCA 330, (2017) 24 PRNZ 379 at [26].

9      Packing In Ltd (in liq) formerly known as Bond Cargo Ltd v Chilcott (2003) 16 PRNZ 869 (CA) at [6].

10     Rule 14.7(d).

11     Weaver v Auckland Council, above n 8, at [26].

particulars. It satisfied only some of the Council’s requirements. The filing of the application was justified.

[8]    Second, the plaintiffs’ counsel acknowledges in their submissions the several matters upon which the Council successfully obtained particulars. These matters are not insignificant or peripheral.

[9]    Third, at the hearing, the Council sought particulars in relation to five paragraphs of the plaintiffs’ amended statement of claim and in relation to the schedule 4 attached to it. Upon my analysis the Council was successful in obtaining orders relating to three paragraphs,12 albeit some of the orders were in more limited or less particularised terms. Particulars were not ordered in relation to one paragraph as substantial responses were provided before the hearing.13 No particulars were ordered in relation to only the one remaining paragraph.

[10]    Fourth, the Council was then successful on the review. In the review hearing, Mander J was concerned with only one aspect of my judgment, namely, my decision to decline to order that the plaintiffs particularise the estimated repair cost to fix each alleged defect.14 In his costs judgment, Mander J noted that the Council had “changed its approach in response to the amended statement of claim that was filed after the Council lodged its application for review”.15 However, his Honour found the Council should not be penalised for responding to the amended statement of claim by adapting its argument in a realistic way that corresponded with the updated pleading.

[11]    Fifth, and looking at the matter more broadly, prior to the application being filed the plaintiffs’ pleading was clearly deficient. The application resulted in amended pleadings to deal with deficiencies. For example, as a result of the application the plaintiffs were required to particularise their position in relation to the allegations of non-compliance with the building consent, and with the Building Code; what damage was said to have occurred as a result of the alleged defects; the location of the damage; the proposed remedial solution; and the overall cost of the proposed

12     Namely, paras 53, 54 and 58.

13     Paragraph 52.

14     Body Corporate 355492 v Queenstown Lakes District Council, above n 2.

15     Body Corporate 355492 v Queenstown Lakes District Council, above n 3, at [20].

remedial work. It follows, overall, the Council was successful and is prima facie entitled to costs.

To what extent (if any) should any costs award in favour of the Council be reduced?

[12]    Under r 14.7(d) High Court Rules 2016 the Court may refuse to make an order for costs or may reduce the costs otherwise payable if:

although the party claiming costs has succeeded overall, that party has failed in relation to a cause of action or issue which significantly increased the costs of the party opposing costs.

[13]    The plaintiffs highlight instances where the Court did not require particulars to the extent sought by the Council. They point to other matters which they consider demonstrate the Council was unreasonable. They contend the Council failed to respond to a reasonable proposal that particulars concerning parts of the application would be provided in the plaintiffs’ briefs of evidence and an amended pleading to be filed at that time. Another matter was the Council’s insistence that they file an amended statement of claim with the particulars contained in their memorandum when I determined no criticism could be made of the plaintiffs for use of a memorandum. They also rely on the Council’s insistence that an amended statement of claim be filed within 10 working days when  I  ultimately  held  the  plaintiffs  should have until  30 November 2020 to do so.

[14]    I do not see merit in the argument that the Council was unreasonable or that its attitude increased the plaintiffs’ costs. The points raised by the plaintiffs can be dealt with quickly. The Council was not required to wait for the briefs of evidence to obtain a properly particularised pleading from the plaintiffs. While I accepted no criticism could be levelled at the plaintiffs for the use of a memorandum, it was always the case an amended pleading would have to be filed. The issue of when the plaintiffs were to file their amended statement of claim was simply a practical matter that did not occupy any hearing time.

[15]    That said, I do not accept the Council’s assessment that to the extent it was unsuccessful in its pursuit of particulars, that did not increase the plaintiffs’ costs. Much of the hearing was dominated by argument about matters where the Council was

successful only in part. As has been pointed out in other cases, making an assessment of the extent to which a party has contributed unnecessarily to the time or expense of a proceeding is not an exact science.¹⁶ My best assessment is that the Council’s costs should be reduced for this factor by 20 per cent.

Quantum

[16]    The Council has submitted a calculation of costs and disbursements sought. That seems in order, except in respect to the attendance by second counsel. I do not consider that there should be an allowance for second counsel on a matter that was of only average complexity.

Result

[17]    For these reasons, the Council is granted costs on a 2B basis reduced by 20 per cent in the amount of $6,500.80 along with disbursements of $565.17.

O G Paulsen Associate Judge

Solicitors:

Grimshaw & Co, Auckland (for Plaintiffs) Counsel: P R Grimshaw and D J Powell, Auckland Wynn Williams, Christchurch (for First Defendant)

Counsel: R M Saunders and S D Campbell, Christchurch

Greig Gallagher & Co, Wellington (for Second and Third Defendants)
Counsel: J M Morrison, Barrister, Wellington

DLA Piper, Auckland (for Fourth to Eighth Defendants and for Fifth to Eighth Parties)

Counsel: M Henaghan and R Tosh, Auckland

RVG Law (Stephen Brent), Christchurch (for First Third Party)

Counsel: Kelly Quinn, Bankside Chambers, Auckland Parlane Law, Auckland (for Second Third Party) Counsel: A Parlane, Auckland

Cogswell Law, Auckland (for Third Third Party)

Counsel: Graham Kohler QC, Shortland Chambers, Auckland Preston Russell Law, Invercargill (for Fourth Third Party) Counsel: S McKenzie, Invercargill

16     See for instance Taylor v Roper [2019] NZHC 16 at [17].