Body Corporate 81340 v Knight - [2019] NZHC 211

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE

CIV-2016-485-220

[2019] NZHC 211

UNDER the Unit Titles Act 2010

IN THE MATTER

of an application by Body Corporate 81340, a duly registered Body Corporate under the Unit Titles Act 2010, for an order to settle a scheme under section 74

BETWEEN

BODY CORPORATE 81340

Applicant

AND

ZENA KNIGHT

Respondent

On the papers

Counsel:

A J Knowsley for Applicant N B Dunning for Respondent

Judgment:

20 February 2019

JUDGMENT OF THOMAS J (COSTS)

[1] By my judgment dated 14 November 2018, I granted (with minor variations) the Body Corporate’s application for approval of a repair scheme under s 74 of the Unit Titles Act 2010.1 This was in the face of Mrs Knight’s opposition which, as discussed in my judgment, boiled down to whether a scheme was required and whether the scheme should be paid for on a utility interest basis.

1 Body Corporate 81340 v Knight [2018] NZHC 2953.

BODY CORPORATE 81340 v KNIGHT [2019] NZHC 211 [20 February 2019]

[2] The Body Corporate now seeks costs on a 2B basis and disbursements. Although the Body Corporate’s application was by way of an originating application,2 the Body Corporate also seeks costs for items under sch 3 of the High Court Rules 2016 (the Rules) in relation to some matters, as opposed to seeking costs for those items under originating applications. Mrs Knight submits that costs should lie where they fall.

The law

[3] Costs are at the discretion of the Court, qualified by the principles in the Rules.3 The intent of the Rules is to provide reliable and expeditious costs decisions and to do justice to both parties.4 The general principle is that costs follow the event unless particular considerations indicate otherwise.5

Discussion

[4] Notwithstanding the usual rule, Mr Dunning, for Mrs Knight, makes some valid observations in support of his submission that costs should lie where they fall.

[5] First, he points out that the Body Corporate was obliged to make the application to the Court using the originating application procedure. To that extent I agree with him that costs for filing the application and supporting affidavits should not be recovered from Mrs Knight.

[6] Mr Dunning then observes that Mrs Knight’s opposition resulted in amendments to the application and orders in respect of recladding of the building. This will require the Body Corporate to levy owners for the estimated recladding cost on a utility interest basis once the remedial works are completed. Furthermore, a separate bank sub-account is to be set up in respect of remedial costs. Mr Dunning submits that these amendments were clearly to the collective benefit of the owners as

2      As required under High Court Rules 2016, r 19.2(za).
3      Rule 14.1(1)–(2); Manukau Golf Club Inc v Shoye Venture Ltd [2012] NZSC 109, [2013] 1 NZLR 305 at [7]–[8].
4      High Court Rules 2016, r 14.2(g).
5      Rule 14.2(1)(a); Shirley v Wairarapa District…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2019] NZHC 211
Decision Date: 20 February 2019

CaseChat Overview and Summary

In this case, Body Corporate 81340 sought an order to settle a repair scheme under the Unit Titles Act 2010, facing opposition from Zena Knight. The High Court of New Zealand was tasked with determining the costs associated with the proceedings. The legal issues revolved around the principles governing costs in High Court proceedings, specifically under the High Court Rules 2016. The court needed to determine whether the costs should follow the event or if exceptional circumstances warranted a different approach.

The court held that while the general principle is that costs follow the event, specific circumstances can justify an exception. The Body Corporate’s application was mandatory under the Unit Titles Act, and thus, certain costs, such as filing the application and supporting affidavits, were to be borne by the Body Corporate itself. However, the extensive and vigorous opposition by Mrs Knight necessitated additional work and resources, leading to increased costs. The court concluded that these additional costs, incurred due to Mrs Knight's extensive opposition, should be borne by her.

The court carefully adjusted the costs sought by the Body Corporate, applying a one-quarter reduction to most items to account for Mrs Knight’s contribution to the unnecessary escalation of costs. The adjustments were made to reflect the costs that would have been incurred regardless of the opposition, with specific exclusions for filing the application and supporting affidavits. Consequently, the court awarded costs and disbursements, totalling $33,166.75, with some specific items excluded as per the adjustments.

The final orders included a detailed breakdown of the awarded costs and disbursements, ensuring transparency and fairness in the allocation of costs between the parties involved in the proceedings.

Orders