COLIN ANDREW BIRCHLER AND ROBYN KAYLENE BIRCHLER s AND HOMEBUILD HOMES LIMITED

IN THE COURT OF APPEAL OF NEW ZEALAND

I TE KŌTI PĪRA O AOTEAROA

CA250/2024
[2024] NZCA 493

BETWEEN	COLIN ANDREW BIRCHLER AND ROBYN KAYLENE BIRCHLER Applicants
AND	HOMEBUILD HOMES LIMITED Respondent

Court:	Courtney and Thomas JJ
Counsel:	Applicants in Person G P Mason for Respondent
Judgment: (On the papers)	1 October 2024 at 10.30 am

JUDGMENT OF THE COURT

The applicants must pay the respondent costs and disbursements in the sum of $7,667.56.

____________________________________________________________________

REASONS OF THE COURT

(Given by Thomas J)

By our judgment dated 30 August 2024, we declined Colin and Robyn Birchlers’ application for leave to bring a second appeal.[1] Apprehending an issue concerning indemnity costs pursuant to the Construction Contracts Act 2002 (the Act), costs were reserved.[2] Homebuild has now filed a memorandum seeking its actual and reasonable costs in respect of its opposition to the application for leave to appeal.
[1]Birchler v Homebuild Homes Ltd [2024] NZCA 414.
[2]At [38].
The Birchlers have not responded to Homebuild’s memorandum on costs.
Section 23 of the Act sets out the consequences of not paying the claimed amount where no payment schedule is provided. One of the consequences is that the payee (in this case Homebuild) may recover from the payer (the Birchlers), as a debt due, in any court “the actual and reasonable costs of recovery awarded against the payer by that court”.[3]
[3]Construction Contracts Act 2002, s 23(2)(a)(ii).
The word “court” is defined in the Act to include only the High Court and the District Court.[4] There is no statutory entitlement to actual and reasonable costs on appeal in this Court,[5] but, as this Court observed in Salem Ltd v Top End Homes Ltd:[6]
Where, as here, a statutory cause of action is asserted and the statute expressly contemplates actual and reasonable costs in the courts of first instance, it is a short step to the proposition that this Court may do likewise in relation to appeal costs. That is to say that while on its terms s 23(2)(a)(ii) does not apply to this Court, the spirit of the provision may find expression through the breadth of the Court's discretion as to costs.
[4]Section 5 definition of “court”.
[5]Demasol Ltd v South Pacific Industrial Ltd [2022] NZCA 480 at [60], citing Salem Ltd v Top End Homes Ltd CA169/05, 4 April 2006.
[6]Salem Ltd v Top End Homes Ltd, above n 5, at [9] (emphasis added).
Costs on an application for leave to appeal are at the discretion of the Court.[7] This Court can award actual and reasonable costs if there is some reason which justifies such an order.[8]
[7]Court of Appeal (Civil) Rules 2005, r 53(b).
[8]Rule 53E(1)(b) and (3)(f).
We are satisfied that Homebuild is entitled to its actual and reasonable costs. Not only is that within the spirit and policy of the Act but both the District and High Courts had made it clear that the Birchers had no defence to the claim. The payment claim approach and consequences of failure to comply with it are set out in the Act. The High Court refused the Birchlers’ application for leave to appeal to this Court, saying there was no available basis on which leave to appeal could be granted. The Birchlers persisted. Their application for leave to appeal was clearly hopeless.
Furthermore, in this case the approach taken by the Birchlers has resulted in a significantly unnecessary and unreasonable expenditure of time by Homebuild’s lawyers. The submissions and over 150 pages of appended documents filed by the Birchlers did not engage with the requirements for leave to bring a second appeal. Rather, they were primarily directed at the hardship the Birchlers believed had been caused to them. While the submissions were generally irrelevant, we accept that Homebuild’s lawyers had to review all the material which added significantly to the time and cost of responding.
Homebuild seeks actual and reasonable costs of $7,667.56, including GST. They have supplied copies of their invoices from their lawyers. We have reviewed the invoices and are satisfied they are limited to the period covered by the Birchlers’ application for leave, that is from 17 April 2024, when the application for leave was filed, to 31 August 2024, when the judgment was released. We are satisfied the amounts are reasonable.

Result

The applicants must pay the respondent costs and disbursements in the sum of $7,667.56.

Solicitors:
Green Law, Palmerston North for Respondent

Colin and Robyn Birchler appealed against a decision that declined their application for leave to bring a second appeal. They were in dispute with Homebuild Homes Limited, a construction company, under the Construction Contracts Act 2002. The Court of Appeal of New Zealand, consisting of Courtney and Thomas JJ, heard the case. The central legal issue was whether Homebuild Homes Limited was entitled to actual and reasonable costs for opposing the Birchlers' second appeal application.

The court examined the statutory framework under the Construction Contracts Act 2002, particularly section 23, which addresses the consequences of non-payment of a claim for payment. The court noted that while the Act does not explicitly grant the right to recover costs on appeal in the Court of Appeal, the spirit of the Act supports such a recovery. The court referenced Salem Ltd v Top End Homes Ltd to highlight that the discretion to award costs in the Court of Appeal could align with the policy intent of the Act. The Birchlers' repeated failure to engage with the substantive issues and their focus on personal hardship in their submissions led the court to conclude that Homebuild was entitled to its costs. The court also took into account the significant additional time and resources expended by Homebuild's legal team in reviewing the extensive and largely irrelevant material submitted by the Birchlers.

The court found that the costs claimed by Homebuild were reasonable and directly related to the period of the Birchlers' second appeal application. The court ordered that the Birchlers must pay Homebuild the sum of $7,667.56, including GST, as actual and reasonable costs for opposing the second appeal application. This decision underscored the importance of focusing on substantive legal issues rather than personal grievances when pursuing appeals.

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established