Conqra Asbestos Solutions Ltd v Warehouse World Ltd

[2022] NZHC 321

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2021-404-1619

[2022] NZHC 321

UNDER

Part 19 of the High Court Rules & Part 4, Subpart 6 of the Property Law Act 2007.

IN THE MATTER OF

A notice of intention to cancel lease (s 246 Property Law Act), and notice of cancelation of lease, both dated 3 August 2021

BETWEEN

CONQRA ASBESTOS SOLUTIONS LTD

Applicant

AND

WAREHOUSE WORLD LTD

Respondent

Hearing:	On the papers at Auckland
Appearances:	D G Collecutt for the Applicant I H Miller for the Respondent
Judgment:	1 March 2022

JUDGMENT OF L HARVEY J

This judgment was delivered by me on 1 March 2022 at 10 am pursuant to R 11.5 of the High Court Rules

Registrar/Deputy Registrar Date:

Solicitors/Counsel:Simpson Dowsett Mackie, 2 Enfield Street, Mt Eden Anderson Lloyd, P O Box 399, Shortland Street, Auckland

D G Collecutt, P O Box 106-564, Auckland

CONQRA ASBESTOS SOLUTIONS LTD v WAREHOUSE WORLD LTD [2022] NZHC 321 [1 March 2022]

Introduction

[1]    Conqra Asbestos Solutions Ltd entered into a lease of premises with Warehouse World Ltd, effective from 1 April 2021. A dispute developed over car parks and claims of threatening behaviour. On 3 August, Warehouse World issued a notice of intention to cancel, giving Conqra five days to vacate the premises.   On     9 August, Conqra filed an application for relief against forfeiture, including evidence that it intended to move to new premises before the end of September. A COVID-19 Alert Level 4 lockdown then came into effect. Warehouse World filed a notice of opposition with supporting evidence while negotiating with a replacement tenant.

[2]    On 13 September, Wylie J set the application down for a one-day hearing to be held on 15 November.1 Effective from 20 September, Conqra found new premises. Warehouse World  had  also secured a new tenant with a commencement date of      1 September. Following exchanges between counsel, including efforts to negotiate a resolution, by minute dated 4 November, Wylie J recorded that it was accepted that the proceedings were “now otiose”.2 Timetable orders were then issued for the filing of costs submissions to be dealt with on the papers.3

[3]    Counsel for Conqra seeks an award of costs and disbursements of $10,100.00 against Warehouse World, who in turn have applied for solicitor-client costs of

$40,220.41 and disbursements of $98.74 (as well as any further costs and disbursements up to the point the proceeding is formally discontinued), citing clause

6.1 of the lease in support of its claim.

[4]    The issue for determination is who is entitled to costs? If the defendant is entitled, then should costs be awarded under the lease on an indemnity basis?

1      Conqra Asbestos Solutions Ltd v Warehouse World Limited HC Auckland CIV-2020-404-001619, 13 September 2021.

2      Conqra Asbestos Solutions Ltd v Warehouse World Ltd HC Auckland CIV-2021-404-001619, 4 November 2021.

3 At [4].

Background

[5]    On 17 May 2021, Conqra Asbestos entered into a lease of premises at Unit D22, 930 Great South Road, Penrose, Auckland with Warehouse World, backdated to 1 April 2021. The term was four years at an annual rental of $90,000 plus GST and included six carparks. Warehouse World said it allowed Conqra the use of three additional car parks “at no extra cost”.4 As set out above, a dispute then developed over the carparks and mutual claims of threatening behaviour, which were all denied. Three specific “incidents” were cited, on 13 May, 30 July and 2 August respectively.

[6]    On 3 August 2021, following a meeting with Conqra, Warehouse World issued a notice of intention to cancel the lease with immediate effect, claiming Conqra had failed to conduct its business free from “nuisance, disturbance or annoyance” citing the three alleged instances of Warehouse World affiliates being “threatened” by Conqra staff.5 The notice also asserted that the alleged breaches were “not capable of being remedied.” A covering letter from Andrew Kirkpatrick, a director of Warehouse World dated 3 August accompanying the notice, stated that termination of the lease was effective from that date while also confirming that Conqra could have access to the premises for “five working days” to remove its “fixtures, fittings and chattels”. All of which would be without prejudice to Warehouse World’s rights under the lease.

[7]    Conqra denied the allegations and responded that cancellation was not justified or consistent with the lease. On 9 August 2021, six days after receiving the notice, Conqra filed the present application for relief against forfeiture to prevent cancellation until alternative premises could be secured, stating:

(x)The applicant is seeking alternative premises but needs to remain in the premises until it is able to relocate to new premises.

(y)The applicant hopes to conclude an agreement to lease alternative premises in the near future, is in the process of signing a lease, and hopes to be able to move out of unit 22 and relinquish the car parks on or by 20 September 2021.

4 Affidavit of Andrew Kirkpatrick in support of the respondent’s opposition to originating application for relief against forfeiture, filed 25 August 2021 at [6].

5      Affidavit of Andrew Kirkpatrick in support of the respondent’s opposition to originating application for relief against forfeiture, filed 25 August 2021 at [23] – [24].

[8]    Two affidavits were filed in support of the application, both sworn on 9 August 2021. The first by Wayne Brown, managing director of Conqra and the other by Craig Rutters, accounts manager for the company. In his affidavit Mr Brown claimed that during his meeting with Mr Kirkpatrick, the latter required Conqra to “give up the contentious car parks”, which was denied. Significantly, Mr Brown also confirmed that Conqra was in the process of securing new premises, with a proposed commencement date of 20 September 2021:6

55.We have looked for and found alternative premises. Annexed and marked “I” is a copy of the lease we are in the process of signing.

56.We will provide a copy of the executed lease to the court once it is signed.

57.On the assumption that the lease of the new premises is signed we anticipate that we will be able to move out on or by 20 September 2021.

[9]    Then eight days later on 17 August, an Alert Level 4 COVID-19 lockdown came into effect. A further eight days after that, on 25 August last, Warehouse World filed a notice of opposition, along with undated affidavits of Mr Kirkpatrick and Mark Hellyer, a maintenance supervisor of the company, which were unsworn due to the lockdown. An affidavit from Gordon Craig, a contractor for Warehouse World was sworn on 23 September 2021. According to Mr Kirkpatrick, on 6 August, three days after issuing the notice to Conqra, Warehouse World entered into “an agreement to lease” with a new tenant, commencing 1 September and conditional on the premises being made available by 20 August.

[10]   A first call of the application was set for 6 September 2021. Counsel filed a joint memorandum on 2 September seeking an adjournment to enable discussions to occur between the parties. Powell J granted the request the following day. Following that, on 10 September a memorandum was filed by Warehouse World’s counsel, along with an updating affidavit from Mr Kirkpatrick, confirming that the parties’ discussions had proved unsuccessful. In addition, counsel confirmed, inter alia, that Warehouse World had arranged for a new tenant to lease the premises, relying on Conqra’s representation that it would vacate on or before 20 September. Further,

6      Affidavit of Wayne Brown in support of originating application for order for relief against forfeiture, sworn 9 August 2021.

counsel submitted that, in principle, Warehouse World agreed with the proposed timetabling orders of counsel for Conqra for the efficient disposal of the proceedings.

[11]   On 1 November, counsel filed a joint memorandum seeking a telephone conference as to further procedural directions on the basis that:

(a)Conqra considered that, having “obtained the substantive result that it sought” because Warehouse World took no steps to take possession, costs in its favour were appropriate. The Court, having considered arguments in writing from counsel, might then decide that cross- examination was necessary to assist it in determining the merits of the original application in order to decide costs;

(b)Warehouse World considered that, as Conqra had vacated the premises, the relief sought is redundant and, accordingly, its application should be discontinued, given that such a step would not affect the issue of costs;

(c)Under r 15.23 of the High Court Rules 2016, a discontinuing plaintiff must pay a defendant’s costs unless the latter agrees, or the Court decides, otherwise; and

(d)Warehouse World considered holding a hearing with cross-examination was not appropriate to determine costs. Moreover, Warehouse World confirmed that its decision not to re-enter its premises was without prejudice and that, in any case, the COVID-19 Lockdown impacted its ability to do so.

[12]   As set out above, on 4 November, Wylie J issued timetable orders for the filing of costs submissions to be dealt with on the papers. All submissions, including a reply from the applicant, were filed by 1 December 2021.

Applicant’s submissions

[13]   As foreshadowed, Mr Collecutt seeks an award of costs and disbursements against the respondent of $10,100.00 calculated on a 2B basis. He argued that because the applicant has obtained the substantive result which it sought – that the respondent take no steps to recover possession of the property prior to the applicant vacating – costs should be awarded against the respondent since it had “failed” with respect to the proceeding. Moreover, Mr Collecutt contended that r 15.23 of the High Court Rules does not apply as the applicant has not discontinued the proceeding but, rather, simply withdrawn its application for substantive relief.

[14]   In submissions in reply, dated 1 December 2021, Mr Collecutt emphasised that while the applicant had withdrawn its application for substantive relief it had not filed a notice of discontinuance nor discontinued the proceedings. Accordingly, he argued that the rules and caselaw relevant to discontinuance were inapplicable. Mr Collecutt contended that this is a case where, as a result of the proceedings, the respondent had “provided” the applicant with the substantive relief the applicant originally sought and so costs were the sole remaining issue. Underscoring that the merits of the applicant’s case are “so obvious” they should be the dominant factor in determining costs,      Mr Collecutt submitted that this was a case where costs for his client were appropriate.

Respondent’s submissions

[15]   Mr Miller seeks indemnity costs against the applicant up to the point the proceeding is formally discontinued with indemnity costs of $40,220.41 and disbursements of $98.74 (GST exclusive). Counsel argued that by withdrawing the substantive proceeding the application has been effectively discontinued (albeit that the applicant has refused to elect to formally do so), meaning that there is a presumption that the respondent is entitled to costs.

[16]   In addition, Mr Miller submitted that the applicant cannot rely on the technicality of not filing a notice of discontinuance to avoid  the presumption under  r 15.23. Regarding the applicant’s submissions on the substantive issues, Mr Miller contended that the merits of the substantive claim are irrelevant for two reasons. First, that this is not a case where the merits of the applicant’s claim are so obvious that they

should influence the costs outcome, given the conflicting evidence. Second, that in any event the application was withdrawn because the applicant had relocated to new premises rather than because of any merit in the applicant’s case.

[17]   Further, Mr Miller relied on r 14.6(4)(a) and (e) in support of the proposition that indemnity costs are appropriate. Regarding r 14.6(4)(e), counsel argued that the lease entitled the respondent  as  landlord  to  solicitor-client  costs.  Alternatively, Mr Miller submitted that the applicant acted unreasonably in bringing and continuing the proceeding per r 14.6(4)(a) because it was well advanced with plans to move to new premises at the time of the application. Moreover, given the timeframes, it was unlikely that the substantive claim, which resulted in considerable costs for both parties, would ever be tested in Court.

The Law

[18]   It is well settled that costs are at the discretion of the Court pursuant to r 14.1 of the High Court Rules. Even so, there is a general principle that the unsuccessful party should pay the costs of the party who prevails.7 In addition, Rule 14.6 sets out the circumstances in which the Court may order increased or indemnity costs:

14.6  Increased costs and indemnity costs

(1)Despite rules 14.2 to 14.5, the court may make an order—

(a)    increasing costs otherwise payable under those rules (increased costs); or

(b)    that the costs payable are the actual costs, disbursements, and witness expenses reasonably incurred by a party (indemnity costs).

(2)The court may make the order at any stage of a proceeding and in relation to any step in it.

(3)The court may order a party to pay increased costs if—

(a)    …

(b)    the party opposing costs has contributed unnecessarily to the time or expense of the proceeding or step in it by—

(i)…

(ii)taking or pursuing an unnecessary step or an argument that lacks merit;

(iii)…

(4)The court may order a party to pay indemnity costs if—

(a)    the party has acted vexatiously, frivolously, improperly, or unnecessarily in commencing, continuing, or defending a proceeding or a step in a proceeding;

7      High Court Rules 2016, r 14.2(1)(a).

…

(e) the party claiming costs is entitled to indemnity costs under a contract or deed.

[19]Rule 15.23 of the High Court Rules is also relevant:

Unless the defendant otherwise agrees or the court otherwise orders, 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.

[20]   It is well settled that r 15.23 may be applied to situations where proceedings are effectively at an end and an applicant elects to proceed no further, even though a formal notice of discontinuance has not been filed.8 Kós J considered r 15.23 in Moodie v Strachan, in the context of a permanent stay, summarising that:9

[15]      Displacement of the usual rule (that a discontinuing plaintiff pay costs) will normally depend on a summary merits assessment where the Court is able to say, in the absence of full trial, that:

(a)Some action on the part of the defendant obviates the necessity for proceeding, thus vindicating the plaintiff’s action. An obvious example is where the defendant effectively satisfies the claim by payment, or some other action – although without filing formal confession to judgment. Examples include Carmel College Auckland Ltd v North Shore City Council,10 Whiting v Earthquake Commission11 and Ryde v The Earthquake Commission.12

(b)Some event beyond the direct control of the parties obviates the continued necessity for proceedings, again vindicating the issue of the proceeding.

(c)Some other special reason exists why it is just and equitable that the plaintiff not pay costs to the defendant.

8      Moodie v Strachan [2015] NZHC 327 at [14]; see also Harrison v Harrison HC Wellington CIV- 2005-485-2673, 2 February 2007; and Clark v Police HC Wellington CIV-2005-485-245, 9 March 2006.

9      Moodie v Strachan, above n 8.

10     Carmel College Auckland Ltd v North Shore City Council HC Auckland CIV-2007-404-5894, 20 January 2009.

11     Whiting v Earthquake Commission [2014] NZHC 1736.

12     Ryde & Anor v The Earthquake Commission [2014] NZHC 2763.

Discussion

Who is entitled to costs?

[21]   It is trite law that the Court will not consider the substantive merits of a case in a costs context unless they are so obvious that this should influence a final award.13 In short, a costs proceeding is not intended to provide a platform for ventilation of arguments on the substantive proceedings, had they continued. In this instance, however, some of the background detail is necessary to put the respective costs claims in their proper context – more so where indemnity costs are being claimed based on the specific terms of a lease.

[22]   The central question in determining which party should be awarded costs is why the proceedings were rendered otiose, to adopt Wylie J’s language. Both counsel addressed the substantive merits in some detail, the respondent doing so largely as a matter of reply. Having carefully reviewed the submissions and the rest of the court file, my initial observation is that both parties must accept some responsibility for the situation that they now find themselves in regarding costs, including the amounts that have been incurred.

[23]   In summary, the parties entered into a lease of four years duration that lasted less than six months for a total rental approaching $45,000 for that period. They fell into dispute over three carparks and mutual claims of threatening behaviour. Both parties eventually sought legal advice. The respondent issued a notice of intention to cancel and the applicant filed for relief against forfeiture, with two supporting affidavits. The respondent filed a notice of opposition along with, in total, three affidavits. None of the affidavits of either party were particularly lengthy or complicated. All of this occurred within a period of less than a month. They are now seeking costs of approximately $10,000 and $40,000 respectively.

[24]   Counsel then filed a series of brief memoranda and sought an adjournment to permit discussions between the parties, as well as a notice to cross examine. Equally importantly, within less than two months, following the issue of the notice of intention

13     Kroma Colour Prints Ltd v Tridonicatco NZ Ltd [2008] NZCA 150, (2008) 18 PRNZ 973.

to cancel, and during a COVID-19 lockdown, the applicant moved out, paying a higher rental than before and the respondent secured a new tenant, also at a higher rate of rent. Moreover, it will be remembered that there has been no hearing and both counsel agreed that costs can be determined on the papers.14

[25]   The respondent filed its  reply  evidence  to  the  application  for  relief  on  25 August, 10 September and 23 September 2021, after it had become aware of the applicant’s intention to vacate on or before 20 September. The respondent might have considered that step necessary to not only respond to the applicant’s evidence, but to also ensure that its version of events was on the record, in case the proceedings continued and for any issue of costs that might arise. Alternatively, it could be argued that once the respondent became aware, on 9 August, of the applicant’s intention to vacate on or before 20 September, then the incurring of further costs might be considered unnecessary.15 It was always open to the respondent to simply reserve its position, pending the outcome of the applicant’s proposed move. The updating affidavit of Mr Kirkpatrick while helpful, was probably not essential to the proper disposal of the proceedings, given what had already occurred by the time of its filing. The affidavit essentially advised that because of the COVID-19 lockdown, the lease terms with the new tenant had been extended to allow for that delay.

[26]   It also is evident that the applicant was proceeding when it was aware of the prospects of an imminent end to the dispute, notwithstanding the effects on timeframes as a result of the alert level change. Mr Brown said as much in his evidence. Doubtless, being aware of the risk of delay associated with bringing relief against forfeiture proceedings in this Court, it is not an unreasonable conclusion that the applicant would have been aware of the likelihood of it being able to move premises before the substantive proceeding could be heard. That is what, in the end, occurred.

[27]   In the event, even with the supervening lockdown, which both parties accept caused delay, on 1 November 2021 the applicant confirmed its earlier advice to the

14 For completeness, Mr Collecut suggested cross examination be permitted on the cost’s application, which was opposed.

15 Per Mr Kirkpatrick’s updating affidavit, “The Applicant's lawyer confirmed on 19 August 2021  that the Applicant had entered into a new lease and would be moving out ‘on or by 20 September 2021.’”

Court that new premises had been secured and that the substantive proceedings were, therefore, redundant. That  is,  some  14  days  before  the  hearing  scheduled  for  15 November 2021. It will also be remembered that the applicant’s new lease took effect from 20 September 2021 – less than a month following the filing of the respondent’s notice of opposition. Neither of the parties could be accused of being tardy.

[28]   Moreover, the applicant’s “continuation” of the proceedings in the few weeks between its filing of the application and its vacating of the premises could be described as keeping the door to the Court open while the practical steps of moving under a lockdown situation, and all that entailed, unfolded. Again, I can see nothing on the file to suggest that the applicant was in any way tardy or difficult in firstly, finding new premises and secondly, effecting the actual move when it was able to do so. I accept that it could be argued, because of the situation at that time, until the applicant had moved, there was some uncertainty over whether the proceedings needed to remain extant. Yet once the applicant had taken possession of its new premises and had left the respondent’s building, then at that point it would have been appropriate to discontinue the proceedings or seek costs. The applicant chose the latter.

[29]   As to the issue of discontinuance, notwithstanding that r 15.23 does not strictly apply given that the proceedings have not been formally discontinued, the practical effect is arguably the same by analogy. Commencing and, more relevantly, then continuing with relief against forfeiture proceedings, in circumstances where the applicant knew when it filed the application that a move to alternative premises was likely and imminent, resulted in the parties incurring costs. That said, I accept that the parties were entitled to obtain legal advice before and after the notice had been issued. That they had also attempted to negotiate a solution but without success, which meant that the proceedings remained on foot, is also acknowledged.

[30]   Regarding the applicant’s submissions that the respondent “failed” and should therefore pay costs, the evidence was contested, and a one-day hearing had been scheduled. This was not an obvious case for either party where, based on the evidence, and at first blush, success was certain or probable. The evidence disclosed that, like the respondent, the applicant had an arguable case. In addition, the respondent’s

refraining from taking possession during the period in which proceedings were progressing, including when there was a COVID-19 Alert Level 4 lockdown for a number of weeks, could not be described as the respondent “failing” in any reasonable sense of that phrase.

[31]   In any case, the short point is that both parties secured the outcomes they were seeking – for the applicant, a move to new premises as soon as was possible in the circumstances; for the respondent, the replacement of the applicant with a new tenant at the earliest opportunity. Both parties achieved the result they wanted, taking into account the deterioration in their relationship, and without an actual hearing. As foreshadowed, that they obtained legal advice before taking any steps is entirely understandable.

[32]   Turning to the issue of costs, given the reality of “successful” outcomes for both parties in that they have extricated themselves out of an unfortunate set of circumstances, and evidently to their mutual satisfaction, I am not persuaded that one has therefore prevailed over the other in an orthodox sense. While the respondent is correct to point to r 15.23, ultimately the Court retains a discretion on the question of costs. Taking into account my conclusion on the outcome of the litigation, I do not accept that it would be just, in the circumstances, for the applicant to have to pay costs at all, let alone indemnity costs, notwithstanding the lease.

[33]   As foreshadowed, the applicant would remain entitled to challenge the appropriateness of the respondent’s actions in issuing the notice of intention to cancel the lease, just as the respondent would have had the obvious right to challenge any questioning of its conduct in so proceeding in the first case. Accordingly, and for the reasons set out above, I am also unpersuaded that the applicant is entitled to recover costs from the applicant. My conclusion is that, in the context of costs following the event in the orthodox manner, no party is entitled to costs and that this is an appropriate case for costs to lie where they fall.

Are indemnity costs payable?

[34]   Finally, and for completeness only, given that costs are to lie where they fall, I note that clause 6.1 of the lease provides:

The tenant shall pay … the Landlord’s legal costs (as between solicitor and client) of and incidental to the enforcement or attempted enforcement of the Landlord’s rights remedies and powers under this lease.

(emphasis added)

[35]   The Supreme Court in Synlait Milk Ltd v New Zealand Industrial Park Ltd confirmed that determining whether cl 6.1 entitles the respondent to indemnity costs under r 14.6(4)(e) is a matter of contractual interpretation, and ordinary principles apply.16 In cases where there is a contractual entitlement to indemnity costs, the Court’s discretion is more limited.17 In any event, as the Supreme Court has confirmed, this Court retains a discretion to deny recovery of indemnity costs on public policy grounds or if the costs claimed are not objectively reasonable.18 In addition, in that case the landlord successfully sued the tenant for non-payment of rent, a situation quite different from the present proceedings.

[36]   As this case was precipitated by the respondent’s attempt to cancel the lease, where it considered it was justified to do so, and the applicant then filed proceedings to prevent that cancellation, the respondent argued that the costs incidental to the attempted enforcement of its rights under the lease were properly incurred. Whether it was justified to take that step cannot now be determined because the proceedings are effectively at an end. Accordingly, whether it can rely on cl 6.1 of the lease including the phrases “costs…of and incidental to” and “attempted enforcement” is arguable. Alternatively, Mr Collecutt submitted that the landlord did not have the right to cancel the lease, and so the issue of costs pursuant to cl 6.1 does not arise.

[37]   As foreshadowed, the lease enables the granting of indemnity costs, provided such costs have been reasonably incurred. While in the normal course of events increased costs rather than indemnity costs would be appropriate, costs should, where possible, be predictable and expeditious.19 Where a party has made a valid contractual agreement to pay indemnity costs, that contractual obligation should be upheld, in the

16     Synlait Milk Ltd v New Zealand Industrial Park Ltd [2020] NZSC 157 at [192]; and see also

Watson & Son Ltd v Active Manuka Honey Assoc [2009] NZCA 595 at [21].

17     Kent Sing Trading Company Ltd v JNJ Holdings Ltd [2019] NZCA 388 at [132].

18     Synlait Milk Ltd v New Zealand Industrial Park Ltd, above n 15, at [200].

19     High Court Rules 2016, r 14.1(g).

absence of reasonable grounds for declining such an award.20 Assuming that the grounds were reasonable, the question then becomes, were the costs objectively reasonable? Put another way, was the respondent justified in issuing the notice in the first place and then incurring further costs once the application had been filed and it had become aware that the applicant had secured alternative premises and would move on or before 20 September? At the risk of belabouring the point, it will be remembered that the respondent filed in total three affidavits after 9 August when it became aware of Conqra’s intention to vacate the premises.

[38]   Given the broad framing of cl 6.1, which includes costs “incidental” to “attempted enforcement” of rights, it could be said that the present situation is covered by the indemnity clause. The respondent has incurred legal costs as a result of defending proceedings brought by the applicant after the respondent took steps to attempt to exercise its right to cancel the lease. That said, the applicant was also entitled to obtain legal advice and to resist the cancellation of the lease if it considered that it had good grounds to do so. Again, whether that step was justified on reasonable grounds cannot be resolved given that the proceedings have concluded and there has been no hearing to test the evidence of whether there had been threats of violence to justify cancellation of the lease. There must be some reasonable basis for landlords seeking to invoke cancellation, to then successfully resist relief against forfeiture proceedings and to then rely on an indemnity clause for costs.

[39]   Yet that is not the situation here. There has been no trial and therefore no determination in either party’s favour. They have instead, quite sensibly, agreed to cease the litigation. More importantly, in several of the authorities it is evident that orders have been made for indemnity costs based on existing deeds and contracts following a successful claim by landlords against former tenants. That is not what has happened here. That being the case, as foreshadowed, given that I have found that neither party is entitled to costs, there is no question of indemnity costs being appropriate in these particular circumstances.

20   In Synlait Milk Ltd v New Zealand Industrial Park Ltd, above n 16, at [199] “enforcement” did not include “an unsuccessful attempt at enforcement, particularly where there is no reference in the indemnity costs clause to the costs of any ‘attempted enforcement’”. This clause has been so drafted, with the inclusion of the words ‘attempted enforcement’ so as to avoid that gap.

Decision

[40]The applicant and respondent’s applications for costs are dismissed.

Harvey J