Bream Tail Residents Association Incorporated v Wong

[2016] NZHC 1125

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2015-404-002339 [2016] NZHC 1125

UNDER	The Declaratory Judgments Act 1908
IN THE MATTER OF	An application for declaratory and other relief in respect of the Rules of the Bream Tail Residents Association Incorporated dated 8 July 2005
BETWEEN	BREAM TAIL RESIDENTS ASSOCIATION INCORPORATED Plaintiff
AND	TIMOTHY CHUN HAI WONG Defendant

Hearing:	On the papers
Counsel:	L J Turner for Plaintiff A G Stuart for Defendant
Judgment:	27 May 2016

JUDGMENT OF GILBERT J [Costs]

This judgment is delivered by me on 27 May 2016 at 10.30 am pursuant to r 11.5 of the High Court Rules.

..................................................... Registrar / Deputy Registrar

BREAM TAIL RESIDENTS ASSOC INC v WONG (Costs) [2016] NZHC 1125 [27 May 2016]

[1]      In  a  judgment  delivered  on  30  March  2016,  I  granted  the  plaintiff’s application  for  a  declaration  as  to  the  meaning  of  a  particular  bylaw  in  the Bream Tail Residents Association Rules.1   I agreed with the plaintiff’s interpretation of the relevant rule and granted its application for a permanent injunction restraining Mr Wong from subdividing his lot.

[2]      The plaintiff now seeks costs for the proceeding on an indemnity basis.   It founds this claim on rule 8.2(c) which provides:

All money paid and expenses incurred by the Association (including any legal costs of the Association) in remedying, or attempting to remedy, any breach by an Offending Owner of the Rules, or incurred in the exercise, or attempted exercise, or enforcement or attempted enforcement of any power, right or remedy of the Association in respect of such breach, shall be a debt due from the Offending Owner to the Association.

[3]      This rule entitles the plaintiff to recover its costs in two situations.  The first is where costs are incurred in remedying, or attempting to remedy, any breach of the Rules by an Owner.  The second is where the costs are incurred in the exercise or attempted exercise or enforcement or attempted enforcement of any power, right or remedy  of  the Association  in  respect  of  such  breach.    In  either  situation,  the plaintiff’s entitlement to indemnity costs is contingent on there being a breach of the Rules. An Owner is not vulnerable to an order for indemnity costs unless that Owner breaches the Rules.

[4]      The threshold question is therefore whether Mr Wong breached the Rules.  I do not consider that he did.  He did not subdivide his lot in breach of the Rules.  Nor did he, in breach of the Rules, erect any structure outside the designated house site without the prior written approval of the plaintiff.

[5]     The purpose of the proceeding, in seeking a declaration, was to obtain clarification from the Court of the meaning of the Rules.  This enabled Mr Wong to know where he stood before he took any steps that would be in breach of them. Although I rejected Mr Wong’s contention regarding the proper interpretation of the

relevant rules, his argument was not hopeless or devoid of merit.

1      Bream Tail Residents Assoc Inc v Wong [2016] NZHC 537.

[6]      For  these  reasons,  I  do  not  consider  that  the  plaintiff  has  established  a contractual entitlement to indemnity costs for the proceeding.  Costs should therefore be fixed in accordance with the High Court Rules.  I consider that costs assessed on a

2B basis would be appropriate.

Result

[7]      The defendant is to pay the plaintiff’s costs in relation to this proceeding assessed on a category 2, band B basis.

M A Gilbert J