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 Health Board [2006] NZSC 63, [2006] 3 NZLR 523 at [19].

a whole and Mrs Knight’s opposition drew attention to deficiencies in the scheme to the benefit of all owners.

[7]    Mr Dunning then objects to the specific items claimed on behalf of the Body Corporate for which there is no provision in respect of costs on originating applications.

[8]    Notwithstanding those submissions, there were, prior to the hearing, a myriad of objections identified by Mrs Knight with which the Body Corporate had to deal for the purposes of the hearing. For example, as recorded in my judgment:6

Mrs Knight also appears to dispute the various EGM resolutions, maintaining that the information provided to owners was misleading or incomplete and that they did not vote for a utility interest allocation as the Body Corporate contends. She says the vote was only to the effect that owners should be levied on that basis but there should be a subsequent reallocation of costs apportioning them to those owners whose units had work carried out on them. That contention is not supported by the various EGM resolutions, nor by any other owner (save for Ms Yee).

[9]    Therefore, while I accept that the Body Corporate was required to make an application under s 74 of the Unit Titles Act and that, as a result of Mrs Knight’s opposition,  some  amendments  were  made  to  that  application,  the  extent  of  Mrs Knight’s opposition was extensive and required considerable additional, unnecessary expenditure by the Body Corporate. For this reason, it is appropriate that Mrs Knight bear the associated costs.

[10]   While sch 3 of the Rules, in respect of originating applications, does not make specific provision for a number of the items claimed on behalf of the Body Corporate, that does not preclude their award in a costs decision. This is particularly so in this case where Mrs Knight vigorously opposed the application, requiring extensive oral evidence not usually associated with an originating application. In fairness to the Body Corporate, it is appropriate that its costs for preparation of briefs should be recovered. The same principle applies to the other sch 3 items sought by the Body Corporate, being the plaintiff’s preparation of authorities and common bundle, and

6      Body Corporate 81340 v Knight, above n 1, at [73], n 21.

preparation for hearing (with some modification given that there would still have been a hearing in respect of the s 74 Unit Titles Act application).

[11]   The Body Corporate seeks a high level of costs in relation to case management ($7,136.00). It claims this was required due to the respondent’s raising numerous issues not ultimately relevant to the application. Mr Dunning’s response is that much of the time was required because of the Body Corporate’s incomplete discovery. In addition, the Body Corporate claimed legal professional privilege in respect of its legal opinions, a position from which it ultimately resiled. This contributed to the delay. In the usual course, a single case management conference would have been required and the costs award would reflect that.

[12]   I have therefore made the following adjustments to the schedule of costs and disbursements sought by the Body Corporate, applying in general a one-quarter allowance in favour of Mrs Knight in respect of cost items, a portion of which the Body Corporate would have had to incur in any event, except for filing the application and supporting affidavits, where the Body Corporate must bear the whole cost:

Costs

Step	Description	Time	Amount claimed	Amount awarded
37	Filing application and supporting affidavits	2	$4,460.00	Nil
10	Preparation for first case management conference	0.4	$892.00	Nil
11	Filing memoranda for case management conferences on 25 August 2016, 22 March 2017, 11 November 2017 and 12 September 2018	0.4 x 4	$3,568.00	$2,676.00
13	Appearances at case management conferences on 25 August 2016, 22 March 2017, 11 November 2017 and 12 September 2018	0.3 x 4	$2,676.00	$2,007.00
20	List of documents on discovery	2.5	$5,575.00	$5,575.00
30	Plaintiff’s preparation of briefs	2.5	$5,575.00	$5,575.00

31	Plaintiff’s preparations of authorities and common bundle	2.5	$5,575.00	$5,575.00
33	Preparation for hearing	3	$6,690.00	$5,017.50
42	Appearance at hearing for principal counsel	2.5	$5,575.00	$4,181.25
Subtotal	$40,586.00	$30,606.75

Disbursements

Item	Description	Amount claimed	Amount awarded
Filing fee – originating application	$540.00	Nil
Filing fee – amended originating application	$110.00	Nil
17(c)	Scheduling fee	$640.00	Nil
19	Hearing fee ($640.00 per half day after first half day for 2.5 hearing days total)	$2,560.00	$2,560.00
Subtotal	$3,850.00	$2,560.00
TOTAL AWARD	$33,166.75

Thomas J

Solicitors:

Rainey Collins, Wellington for Applicant

Nat Dunning Law, Wellington for Respondents