Butcher v Body Corporate 324525 - [2017] NZHC 1061

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2015-488-086 [2017] NZHC 1061

UNDER
the Declaratory Judgments Act 1908 and

Sections 173 and 210 of the Unit Titles
Act 2010

BETWEEN

ANTHONY JOHN BUTCHER AND RUTH BARBARA BUTCHER, LARRY LAWRENCE SMALL AND KM TRUSTEE SERVICES LTD, IVOR ANTHONY MILLINGTON, NEVILLE EADE, ROBYN KATHLEEN STENT, GRAEME PHIP DICKESON AND JULIE MAY DICKESON (BOTH DICKESONS STRUCK OUT AS AT 29 AUGUST 2016) Plaintiffs

AND

BODY CORPORATE 324525

Defendant

Hearing: On the papers

Counsel:

B E Brill for the Plaintiffs
TJG Allan and S Powrie for the Defendant

Judgment:

19 May 2017

COSTS JUDGMENT OF MUIR J

This judgment was delivered by me on Friday 19 May 2017 at 4.30 pm
Pursuant to Rule 11.5 of the High court Rules.

Registrar/Deputy Registrar

Date:…………………………

Counsel/Solicitors:
B E Brill, B E Brill Ltd, Paihia
TJG Allan, Grove Darlow & Partners, Auckland
S Powrie, Grove Darlow & Partners, Auckland

BUTCHER v BODY CORPORATE 324525 [2017] NZHC 1061 [19 May 2017]

Introduction

[1] This judgment corrects all previous judgments where the Body Corporate has been incorrectly recorded as Body Corporate 342525. The correct title is Body Corporate 324525.

[2] The defendant applies for costs following its successful defence of the

plaintiffs’ claims.1

[3] It does so on three alternative bases, namely: (1) Indemnity costs of $170,113.80;2
(2) Increased costs of $137,215.80;3

(3) Scale 2B costs of $108,448.80.

[4] The claim for indemnity costs in turn proceeds on two alternative bases, namely that:

(i)the proceedings were in substance a “pre-emptive strike” against the defendant’s claim for recovery of levies associated with remediation of the Bridgewater development. As such costs should be dealt with as if a claim for recovery of such levies had been brought and the issues resolved in that context. In that respect the defendant relies on s 124 of the Unit Titles Act 2010 (UTA) and the decision of the Court of Appeal in
Black v ASB Bank Ltd.4

1      Butcher v Body Corporate 342525 [2016] NZHC 3128. At [113] of that judgment I expressed the provisional view that costs be fixed on a 2B basis with allowance for second counsel and invited submissions in the absence of agreement. Extensive submissions have now been received.
2      High Court Rules 2016, r 14.6(4).
3      High Court Rules 2016, r 14.6(3).
4      Black v ASB Bank Ltd [2012] NZCA 384.

(ii)The plaintiffs’ conduct in commencing and continuing the proceeding was unnecessary and improper for the purposes of r 14.6(4)(a) of the High Court Rules 2016 and the plaintiffs failed to adhere to an undertaking to conduct a stock-take of issues with senior counsel before pursuing the claim to trial.

The claim for indemnity costs

[5] Section 124(2) of the UTA provides:

(2) The amount of any unpaid levy, together with any reasonable costs incurred in collecting the levy, is recoverable as a debt due to the body corporate by the person who was the unit owner at the time the levy became payable or…

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: [2017] NZHC 1061
Decision Date: 19 May 2017

CaseChat Overview and Summary

The case of Butcher v Body Corporate 324525 involved a claim by the plaintiffs, Anthony John Butcher and others, against the defendant, Body Corporate 324525, for various reliefs and declarations. The plaintiffs sought to challenge the defendant's decisions and actions related to a remediation project for the Bridgewater development. The defendant applied for costs following its successful defence of the plaintiffs' claims, arguing for indemnity costs, increased costs, and scale 2B costs. The court considered whether the plaintiffs' proceedings were a "pre-emptive strike" against the defendant's claim for recovery of levies and whether the plaintiffs' conduct was unnecessary and improper.

The court found that while the plaintiffs' proceedings could, in principle, attract indemnity costs as a pre-emptive strike, the claims were not limited to the recovery of levies. The court also held that the plaintiffs' conduct in pursuing the claims was improper and unnecessary, resulting in significantly increased costs for the defendant. The court granted indemnity costs for the defendant, finding that the plaintiffs' claims were largely hopeless and conducted in a manner that greatly exacerbated the defendant's costs. The court also considered the reasonableness of the defendant's costs, making certain deductions for excessive expert witness fees and disallowing certain disbursements. The court ultimately awarded the defendant costs and disbursements in the amount of $144,698.21.

Orders