Briscoes (New Zealand) Ltd v StorageOne Petone Ltd

[2016] NZHC 370

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

CIV-2015-485-477 [2016] NZHC 370

BETWEEN

BRISCOES (NEW ZEALAND) LTD

Plaintiff

AND

STORAGEONE PETONE LTD Defendant

On the papers
Counsel:	A C Sorrell for Plaintiff S M O'Sullivan for Defendant
Judgment:	7 March 2016

JUDGMENT OF CLIFFORD J (COSTS)

[1]      These   proceedings   were   discontinued   by   the   plaintiff,   Briscoes,   on

2 December 2015.    Questions  of costs  were reserved.   A timetable  was  set  for submissions. Those submissions have now been received.

[2]      The  defendant,  StorageOne,  claims  indemnity  costs,  on  the  basis  that Briscoes commenced these proceedings for some ulterior motive and that Briscoes’ claim was “hopeless” from the outset.  Briscoes opposes, saying 2B costs against it are in order.

[3]      The general principle is that a plaintiff who discontinues a proceeding against a defendant must pay costs to the defendant of and incidental to the proceeding, up to and including the discontinuance.  Increased or indemnity costs can be awarded to a defendant upon a discontinuance. The usual rules apply.

[4]      Briscoes owns, and StorageOne leases, land and buildings in Nevis Street, Petone.   StorageOne carries on business there as the provider of storage.   In its

statement of claim, Briscoes alleged that StorageOne had carried out unauthorised

BRISCOES (NEW ZEALAND) LTD v STORAGEONE PETONE LTD [2016] NZHC 370 [7 March 2016]

alterations to the leased building without a building consent and had not obtained code compliance certification.   Briscoes said it had required StorageOne to make good the works or allow access to do so.   Briscoes said Storageone had filed to comply with that notice.   It sought orders prohibiting public access pending completion of those remedial works, orders for access and for costs.

[5]      StorageOne denied that it was in breach of any obligation under the lease.  It said it had no liability to make good the works, and had been willing to give Briscoes access to carry out any necessary remedial works.  By way of affirmative defence it said that if there were any “defective” works, then they had been carried out by the previous owner, Petone Commercial Park Limited (Struck Off), from whose liquidators Briscoes had purchased the property.  Any responsibility for defects was, therefore, Briscoes’ liability.   As I understand it, Petone Commercial Park was a related company of StorageOne: the full details of that relationship are not before me.

[6]      At the time of filing its substantive claim, Briscoes also applied on notice for an interim injunction to require StorageOne to stop public use and access to the leased premises.  That application was initially set down for a hearing on 7 August

2015.  By agreement, that fixture was vacated and the matter set down for hearing on

5 October 2015.   That fixture was, again by agreement, vacated by Williams J on

24 September 2015, with the matter to be called again in the Judge’s Chambers List “two months hence to gauge process in settlement discussions”.   The next communication with the Court was the Briscoes’ 2 December 2015 discontinuance.

[7]     In effect, StorageOne says Briscoes’ ulterior motive was to terminate StorageOne’s  occupation  of  the  premises  to  allow  their  redevelopment  by  the plaintiff.    In  support  of that  proposition, Mr O’Sullivan  has  provided extensive references to affidavit materials filed in anticipation of the hearing for the interim injunction.  It goes without saying, of course, that the affidavit material relied on by StorageOne at that time is contradicted by the like material relied on by Briscoes. The factual position is, therefore, far from clear.   I am not in a position to resolve those factual disputes on the basis of untested affidavit evidence.

[8]      The fact  that  a  collateral  benefit  may have  accrued  to  Briscoes,  were  it lawfully in a position to terminate StorageOne’s lease, does not in my view mean it was improper for it to commence these proceedings.

[9]      As far as Briscoes’ case being hopeless, in submissions prepared for the August interim injunction hearing Mr O’Sullivan, on behalf of StorageOne, submitted:

25.1Counsel for the defendant acknowledges that there is a serious issue to be tried in the substantive proceedings – that being the question as to which party is responsible for the ensuring the alterations to the Premises have:

25.1.1  Building consents; and

25.1.2  Code compliance certificates.

[10]     In  these  circumstances,  I am  far  from  satisfied  that  indemnity costs  are appropriate.

[11]     There will be 2B costs payable by Briscoes to StorageOne as recorded in the memorandum of support of StorageOne of 29 January 2016.

[12]     Briscoes sought an order that payment of costs be stayed, pending a dispute as to the ownership of StorageOne.  As best as I understand it, Briscoes says it is the owner of StorageOne; StorageOne denies that.  If Briscoes wishes a stay, it should apply in the normal manner.

“Clifford J”

Solicitors:

Cockcroft d’Young Moorehouse Limited, Auckland for Plaintiff

DLA Piper, Wellington for Defendant