Body Corporate 401803 v Vermillion Wagener Limited

[2015] NZHC 693

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2014-404-1343 [2015] NZHC 693

UNDER

the Unit Titles Act 2010 and Part 12 of the

High Court Rules

IN THE MATTER OF

the Tremont Apartments

BETWEEN

BODY CORPORATE 401803
Applicant

AND

VERMILLION WAGENER LIMITED First Respondent

TREMONT HOLDINGS LIMITED Second Respondent

SAGE PROPERTY MANAGEMENT LIMITED

Third Respondent

TMT AMENITIES LIMITED Fourth Respondent

Hearing:	15 and 16 December 2014
Counsel:	S C Price and I Rosic for the Applicant T J Rainey and J P Wood for Respondents
Judgment:	14 April 2015

COSTS JUDGMENT OF MUIR J

This judgment was delivered by me on Tuesday 14 April 2015 at 3.00 pm pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date:………………………….

Solicitors:     Minter Ellison Rudd Watts, Auckland 1140

Rainey Law, Auckland 1140

BODY CORPORATE 401803 v VERMILLION WAGENER LIMITED [2015] NZHC 693 [14 April 2015]

Introduction

[1]      On 26 February 2015 I delivered judgment on an interlocutory application for summary judgment brought by the applicant against the first, third, fourth and sixth respondents.  The applicant was partially successful and is entitled to costs on a 2B basis.  I made orders reducing costs by 25 per cent given that a significant portion of the argument was devoted to a claim which was ultimately unsuccessful.

[2]      The parties have now filed memoranda raising three issues relating to costs:

(a)      Whether  the  applicant  may  claim  costs  for  drafting  and  filing  a statement of claim, given that that proceeding continues in respect of five of the six causes of action;

(b)Whether the applicant may claim costs for the appearance of second counsel; and

(c)      Whether   the   25   per   cent   reduction   in   costs   applies   also   to disbursements.

Statement of claim

[3]      The respondents argue that the applicant should not be allowed to claim costs for a statement of claim when the matter was only partially disposed of on summary judgment and that, instead, costs for the statement of claim should only be awarded if the applicant succeeds at trial.  Accordingly, the respondents say the applicant is only entitled to the steps following and including the filing of the summary judgment application.

[4]      I  do  not  accept  that  proposition. An  application  for  summary  judgment cannot be brought unless a statement of claim outlining the causes of action has already or is contemporaneously filed.  Schedule 3 to the High Court Rules provides as the first item “Commencement of proceeding by plaintiff”.   In the summary judgment context such commencement is by statement of claim.   It is appropriate

therefore that costs be awarded in respect of that initiating document, that is, in a 2B

context, three days at $1990 per day.

[5]      Should the balance of the causes of action (which were not the subject of the applicant’s  summary  judgment  application)  proceed  to  trial  and  the  applicant succeeds  on  them,  then  any  award  of  costs  would  necessarily  recognise  the applicant’s prior recovery on the initiating document.  In the event of failure then no such issue will obviously arise.

Second counsel

[6]      The defendant argues that costs for second counsel should not be allowed given  that  the  matter  was  not  so  complex  as  to  require  their  attendance.    The applicant disagrees with that submission, pointing to the fact that both applicant and respondents engaged junior counsel.

[7]      The  appropriateness  of  certification  of  second  counsel  in  category  2 proceedings was comprehensively discussed by Chambers J in Nomoi Holdings Ltd v Elders Pastoral Holdings1 where he identified a change in approach to that applying before briefs, bundles of documents and prior filing of submissions was the norm and where costs for second counsel were declined.  His Honour emphasised that the approach is always objective in the sense that it is focused on the nature of the

proceeding and  not  the  actual  counsel  involved.    In  my view it  will be a rare occasion in which certification occurs in a summary judgment context and there was certainly nothing about the present case which would indicate it was in the exceptional category.  The fact that junior counsel for the applicant only addressed on the s 140 Unit Titles Act 2010 claim which I dismissed fortifies that conclusion.

Costs and disbursements

[8]      The defendants submit that the 25 per cent reduction of costs ought also to apply to disbursements. The plaintiff points out that in my judgment I referred to a

25 per cent discount on costs and says that the respondents’ point could only be dealt

with on a recall application.

1      Nomoi Holdings Ltd v Elders Pastoral Holdings Ltd (2001) 15 PRNZ 155 at [17].

[9]      Disbursements are addressed in r 14.12 of the High Court Rules.  Although within the terms of r 14.12(2) a disbursement, if claimed and verified, is to be “included in the costs awarded for a proceeding”, costs and disbursements are clearly two separate concepts.  Rule 14.2(3) provides that a disbursement may be disallowed if disproportionate in the circumstances of the proceeding, which is a discretion not linked to any parallel costs award.

[10]     I  add  for  completeness  that  it  was  not  my  intention  that  the  identified discount apply to disbursements but the judgment stands in its own terms.

Result

[11]     The applicant is entitled to costs on a 2B basis in relation to commencement of the proceeding by statement of claim.

[12]     The claim for costs of second counsel is disallowed.

[13]     The 25 per cent discount referred to in my substantive judgment applies (and was intended to apply) to costs only and not disbursements.

[14]     I am not invited to make specific calculations.   If difficulties arise in that respect I reserve leave to any party to apply further.

Muir J