Briden v Lefkada Limited

[2023] NZHC 1089

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2022-409-279

[2023] NZHC 1089

IN THE MATTER

of a Deed of Lease dated 6 January 2017

BETWEEN

WARREN JOHN BRIDEN, GARY CYRIL BRIDEN and LYNNE

SUSAN BRIDEN, as Partners of the Briden Holdings Partnership

Plaintiffs

AND

LEFKADA LIMITED

Defendant

Hearing:

(On the papers)

Appearances:

J I Taylor for Plaintiffs

T J B Whimp – director of Defendant, by leave

Judgment:

9 May 2023

INTERIM JUDGMENT OF ASSOCIATE JUDGE LESTER

BRIDEN v LEFKADA LIMITED [2023] NZHC 1089 [9 May 2023]

[1]    By a judgment dated 13 December 20221 (the December judgment), orders were made requiring Lefkada Limited (Lefkada) to vacate the property  at  5C  Good Street, Rangiora, North Canterbury (the premises), which it had previously leased from Briden Holdings Partnership (BHP).

[2]    The short point was that Lefkada’s lease had come to an end and it had not exercised its right  of  renewal  nor  sought  relief  under  s 261  of  the  Property  Law Act 2007 (the Act) when BHP refused to grant a renewal.

[3]    As to costs, I recorded in the December judgment  that the lease contained     a solicitor-client  costs  clause.   I entered  judgment  against  Lefkada  for  costs  on a solicitor-client basis. I said the costs were to be established with the usual detail by way of memorandum to be filed within five working days of the date of the December judgment. I recorded that failing BHP filing a memorandum setting out its solicitor- client costs, the costs award would be on a 2B basis plus disbursements as fixed by the Registrar.

[4]    Unfortunately, when the matter next came before me on 23 February 2023,    I was not aware that BHP had filed a memorandum as to costs on 20 December 2022. This led me to conclude that the default order, costs on a 2B basis, had come into effect and I made a costs order on that basis. Mr Taylor, counsel for BHP, upon receiving my Minute, brought to my attention that the costs memorandum had been filed in time. Accordingly, the 2B costs order is set aside.

[5]It is necessary to consider the question of costs afresh.

What was in issue in this proceeding

[6]    In this proceeding, BHP sought a declaration that it was entitled to immediate possession of the premises from the date of expiry of Lefkada’s lease, an order that Lefkada vacate the premises, damages for Lefkada’s failure to vacate, and costs on

1 Briden v Lefkada Ltd [2022] NZHC 3372.

a solicitor-client basis. Under an alternative cause of action for breach of contract, BHP sought damages for the cost of making good the property.

[7]There was no claim for unpaid rent.

[8]The solicitor-client costs clause in the lease provides:

Each party will pay their own costs of the negotiation and preparation of this lease and any deed recording a rent review or renewal. The Tenant shall pay the Landlord’s reasonable costs incurred in considering any request by the Tenant for the Landlord’s consent to any matter contemplated by this lease, and the Landlord’s legal costs (as between lawyer and client) of and incidental to the enforcement of the Landlord’s rights remedies and powers under this lease.

[9]    Counsel for BHP refers to steps taken in response to the breach of covenant by Lefkada to pay rent including the issuing of a Property Law Act Notice and statutory demands, relevant correspondence, issuing liquidation proceedings and discontinuing those proceedings. Invoices were issued for some of those steps, one of which remains outstanding.

[10]   As to steps taken in response to the breach of the obligation to deliver up the premises, there was communication with Lefkada and its solicitors, BHP’s taking of advice, and the commencement of the proceeding.

[11]Costs are sought generally by BHP in relation to Lefkada’s breach of the lease.

[12]   The causes of action for which the relief outlined above at [6] was sought, were recovery of land and breach of contract arising from Lefkada not yielding up the premises as required by the lease on its expiry.

[13]Again, there was no cause of action seeking judgment for unpaid rent.

[14]Rule 14.1 of the High Court Rules 2016 (the Rules) provides:

14.1     Costs at discretion of court

(1)All matters are at the discretion of the court if they relate to costs—

(a)of a proceeding; or

(b)incidental to a proceeding; or

(c)of a step in a proceeding.

…

[15]   The Court, when it awards costs pursuant to the Rules, is fixing costs in respect of the steps related to the proceeding. The request for costs in the prayer for relief relates to that cause of action.

[16]   What BHP can recover in this proceeding, pursuant to its solicitor-client costs clause, is its costs “…of and incidental to the enforcement of the Landlord’s rights remedies and powers under [the] lease”.

[17]A proceeding has to be extant before costs can be incidental to it.2

[18]   Accordingly, the costs that can be awarded to BHP are its costs of enforcement of the rights and remedies asserted in the proceeding and not costs that arose in other contexts. For BHP to obtain costs arising from other alleged breaches of the lease by Lefkada, then there would have to have been a cause of action seeking to enforce BHP’s contractual right to costs in respect of those other steps. If that claim was successful, that would represent BHP recovering under a contractual right quantified by reference to costs rather than it being a costs award made by the Court.

[19]   BHP has asked the Court to award costs in respect of matters beyond the scope of the substantive  proceedings,  including  an  entirely  separate  matter  relating  to a Disputes Tribunal claim for outgoings.

Outcome

[20]   Accordingly, I decline to fix costs in the sum claimed by BHP.  BHP’s counsel is to identify the costs that only relate to and are incidental to the enforcement of its rights and remedies that it sought in this proceeding.

2      Braeburn Dairies Ltd v McGregor &  White  Electrical Ltd  HC Dunedin  CIV-2009-412-668, 16 December 2011 at [14].

[21]I apologise for the delay in addressing the costs memoranda.

Associate Judge Lester

Solicitors:
Wynn Williams, Christchurch (for Plaintiffs)

Copy to:

F Konidaris, Rangiora (for Lefkada Ltd)

Tristram Whimp, Rangiora (for Lefkada Ltd)