Een v Body Corporate 384911
[2023] NZHC 1640
•30 June 2023
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2020-404-1899
[2023] NZHC 1640
UNDER the Unit Titles Act 2020, section 10 IN THE MATTER OF
an originating application by a minority for relief against resolutions of the majority
BETWEEN
WONG SUN EEN and Others Plaintiffs
AND
BODY CORPORATE 384911
First Defendant
PANDEY VIADUCT QUAYS LIMITED
Second Defendant(Continued …… )
Hearing: On the papers Counsel:
P L Rice/S East/L McNeely/D Friar for the Plaintiffs S Carey for the First Defendant
R J Hollyman KC, N G Lawrence/W J Revell/V Hansen for the Second to Sixth defendants
S A Armstrong for the Seventh Defendant
Judgment:
30 June 2023
COSTS JUDGMENT OF ASSOCIATE JUDGE C B TAYLOR
This judgment was delivered by me on 30 June 2023 at 3:00pm
pursuant to Rule 11.5 of the High Court Rules
………………………….
Registrar/Deputy Registrar
WONG SUN EEN and Others v BODY CORPORATE 384911 [2023] NZHC 1640 [30 June 2023]
PANDEY VIADUCT SUITES LIMITED
Third Defendant
PANDEY VIADUCT SUITES TWO LIMITED
Fourth Defendant
PANDEY VIADUCT SUITES THREE LIMITED
Fifth Defendant
CUSTOMS STREET HOTEL LIMITED
Sixth Defendant
AAPC PROPERTIES PTY LIMITED
Seventh Defendant
Table Of Contents
Paragraph
Introduction [1]
Costs on October 2020 application for an interim injunction [3]
Costs in respect of the discovery application [5]
Costs in relation to Accor [6]
Increased costs sought by Accor [11]
Conclusion on costs in relation to Accor [12] Costs on the discovery application in respect of the 2nd to 6th defendants [15] Conclusion in respect of costs in relation to the 2nd to 6th defendants [17]
Costs in respect of the leave application [20]
Orders [23]
Introduction
[1] On 7 March 2023, the Court delivered a judgment in respect of the plaintiffs’ application for particular discovery against the second to seventh defendants. The judgment held:
(a)The plaintiffs’ application was granted, except to the following extent:
(i)discovery of the documents in category C was limited to two employment contracts;
(ii)discovery of the documents in category E was limited to independent contractors that have access to the common property of the hotel;
(iii)there were some minor modifications to the documents to be discovered under category F;
(iv)discovery of the documents in category H was declined.
(b)no orders for discovery were made against the seventh defendant.
[2] At [149] of the judgment, the Court invited the plaintiffs to file a memorandum as to costs if counsel could not agree costs in respect of the plaintiffs’ application. Counsel have not been able to agree costs and accordingly the following memoranda have been filed:
(a)the plaintiffs’ memorandum dated 13 April 2023;
(b)the seventh defendant’s memorandum dated 20 April 2023;
(c)the plaintiffs’ memorandum in reply dated 21 April 2023;
(d)the second to sixth defendants’ memorandum dated 26 April 2023;
(e)the plaintiffs’ memorandum in reply dated 28 April 2023.
Costs on October 2020 application for an interim injunction
[3] At [17] to [25] of his memorandum dated 26 April 2023, counsel for the second to sixth defendants asked the Court to fix costs in relation to two applications heard by Hinton J on 27 October 2020 which were:
(a)the second to fifth defendants’ application to dismiss the plaintiffs’ originating application under r 5.49 of the High Court Rules 2016;
(b)the plaintiffs’ application for an injunction.
Both applications were unsuccessful. Re-opening the issue of costs in respect of these two applications is opposed by the plaintiffs, based on the memorandum filed by the parties dated 22 January 2021 in which it was agreed that costs should be reserved pending the outcome of the substantive hearing.
[4] I accept the plaintiffs’ position that the issue of costs on these two applications should not be reopened as part of the costs determination in relation to the discovery applications, and the agreement recorded in the memorandum of 22 January 2021 should be abided by. Accordingly, I will not deal with this issue any further.
Costs in respect of the discovery application
[5]The plaintiffs, in the memorandum of 13 April 2023, submit:
(a)that the plaintiffs substantially succeeded in their application against the second to sixth defendants and they seek 2B costs in the sum of
$11,421.00 as set out in the schedule attached to the memorandum;
(b)in relation to the seventh defendant (Accor) that costs should lie where they fall because, although no order was made against Accor, the plaintiffs substantially succeeded in their application.
Costs in relation to Accor
[6] Expanding on submissions at [5](b) above, the plaintiffs contend that counsel for Accor argued that the documents sought were not relevant, that discovery was disproportionate to their probative value and they were protected by confidentiality. The plaintiffs submit they were successful in satisfying the Court that the documents existed, were relevant to the central issue, that discovery was proportionate and they were not sufficiently confidential (apart from pricing information) as to be protected from disclosure, and it is therefore fair to describe the plaintiffs as “victors” on the principal contests of law and fact.
[7] The plaintiffs submit that although no order was made against Accor because it would be a duplicate of discovery orders made against the second to sixth defendants in the same category, this does not mean the plaintiffs’ application against Accor was unjustified, or in substance unsuccessful. The plaintiffs submit that on the contrary, except for discovery orders made against the second to sixth defendants, the likelihood is that Accor would have been ordered to discover most of the documents itself. The plaintiffs submit that in the circumstances, even though no orders were made against Accor, it would be unjust to order costs against the plaintiffs.
[8] The plaintiffs then set out further background to the application for discovery against Accor at [13] to [24] of the memorandum of 13 April 2023.
[9] Counsel for Accor, in her memorandum dated 20 April 2023, submits that the Court declined to order discovery against Accor in respect of all nine categories sought by the plaintiffs, and accordingly seeks cost against the plaintiffs on a 2B basis, amounting to $7,887.00 plus $110.00 disbursements. Accor also seeks an order for increased costs above the scale, to bring the total costs award to $10,000 submitting this represents a modest uplift of just over $2,000 (or 25 per cent on the 2B scale) and is less than the costs the plaintiffs seek from the second to sixth defendants for the same discovery application. Accor seeks increased costs because the plaintiffs have contributed unnecessarily to the time and expense of this step in the proceeding by persevering with the unnecessary discovery application against Accor, which was without merit.
[10] In relation to the plaintiffs’ arguments that costs should not be awarded in favour of Accor, Accor submits:
(a)The plaintiffs did not substantially succeed and are not “victors” in respect of Accor as no orders were made against Accor, and its opposition was entirely successful. Accor opposed the application on different grounds to the other defendants and adduced specific evidence concerning its position. The measure of success of the application against the second to sixth respondents is not a valid basis for the plaintiffs to avoid paying costs to Accor.
(b)The finding that discovery would be duplicative as to categories B, D, E, F, G and H obviated the need for the Court to assess whether these documents could be sought from Accor at all. It is therefore unsafe to assume that, had the Court been required to make this assessment, it would have found for the plaintiffs and the plaintiffs’ submissions on this issue are based on hypothetical reasoning.
(c)The affidavit evidence of the general manger of Sofitel (Mr Gould) in support of the Accor’s opposition was unchallenged, no issue was taken with Accor when its duplication arguments were squarely raised in the notice of opposition until the hearing. The plaintiffs improperly conflated the second to sixth defendants’ identities and interests with Accor’s without proper consideration for issues of duplication or relevance to the pleadings.
(d)Accor would not have been ordered to provide discovery sought “but for” the orders against the second to sixth defendants. Accor submits this is a hypothetical proposition which does not exist on costs. Unlike the second to sixth defendants, there are no material pleaded facts in dispute in relation to Accor and the pleading of the allegations against Accor are narrow and reflect Accor’s accepted status as an agent of the sixth defendant in relation to the key issues in dispute. There are no pleadings or particulars in the plaintiffs’ claim referring to Accor’s
conduct in respect of the common property. In addition, there were at least two categories of documents where it was accepted that Accor did not have in its possession and control the documents sought (based on the unchallenged evidence of Mr Gould).
(e)It is not unjust to order costs against the plaintiffs. The Court’s finding that the orders would be duplicative highlights the plaintiffs’ error in treating Accor as one and the same with the other defendants. The plaintiffs’ partial success against the second to sixth defendants is not tantamount to success against Accor.
Increased costs sought by Accor
[11] Accor argues that it should be entitled to increased costs against the plaintiffs for the following reasons:
(a)The application was an unnecessary step against Accor and lacked merit. All categories of documents sought have been obtained from the other defendants and Accor was not a necessary party to the application.
(b)The pursuit of documents that the plaintiffs should have known were in the other defendants’ possession or control (or would result in duplicative discovery if ordered) was unreasonable and disproportionate.
(c)The plaintiffs should have considered the appropriate party against whom the application should have been made for the documents sought, rather than casting the net widely and hoping that one or other defendant would be ordered to discover the documents. The plaintiffs took no real steps towards agreeing a practical solution in this regard to resolve issues with Accor.
(d)The documents sought fell outside the scope of the case pleaded against Accor. The plaintiffs had also been invited to agree facts with Accor but did not do so.
Conclusion on costs in relation to Accor
[12] In my view, costs in respect of the application should be awarded to Accor on a 2B basis, but not increased costs. In relation to 2B costs, I accept the submissions by Accor are correct and that the key reasons they are entitled to 2B costs against the plaintiffs are:
(a)no orders were made against Accor for discovery;
(b)the plaintiffs are in error in conflating the success of the application against the second to sixth defendants with success of the application against Accor;
(c)the assertion by the plaintiffs that if discovery of the documents in categories B, D, E, F, G and H would have been granted against Accor if it was not duplication, was correctly rejected by Accor (as set out at [10](b)), and the hypothetical situation proposed by the plaintiffs was correctly rejected by Accor as set out at [10](d).
[13] As to increased costs, balancing the grounds of the application set out in the plaintiffs’ memorandum dated 13 April 2023 at [13] to [24] and the reasons advanced by Accor for increased costs set out at [11], I am of the view that no increased costs should be awarded.
[14] Accordingly, I make an order below for the costs calculated on a 2B basis, set out at [8] of Accor’s memorandum of 20 April 2023.
Costs on the discovery application in respect of the second to sixth defendants
[15] The second to sixth defendants submit that costs should lie where they fall on the discovery application for the following reasons:
(a)the plaintiffs sought broad and extensive discovery in their application amounting close to the former Peruvian Guano standard of discovery;
(b)the plaintiffs refused to acknowledge that the were in competition with the second to sixth defendants, or that any information they sought should be considered commercially sensitive and be properly redacted;
(c)the plaintiffs sought discovery of every employment agreement with the second to sixth defendants;
(d)the outcome for a discovery order includes:
(i)that all categories are limited by appropriate electronic discovery methods;
(ii)that in all categories, any commercially sensitive information may be redacted;
(iii)that the only employment agreements that are to be provided are for the building engineer and the executive housekeeper.
[16] The second to sixth defendants submit that this represents a significant compromise between the positions of the parties and the Court can properly take the view the parties were equally successful and accordingly each party should bear their own costs.
Conclusion in respect of costs in relation to the second to sixth defendants
[17] In my view, the plaintiffs are entitled to costs against the second to sixth defendants on a 2B basis subject to an adjustment in respect of the areas where the plaintiffs were not successful, as set out in [1](a)(i) to (iv). In my view, this adjustment should be 20 per cent of the 2B scale costs on the basis that the application failed in respect of two of the nine categories sought, plus there were some modifications to the orders sought as set out at [1](a)(i) to (iv).
[18] I do not accept the submissions for the second to sixth defendants that essentially the parties had an equal result and accordingly costs should lie where they fall. The plaintiffs were substantially successful and the areas where they were not successful did not, as submitted by the second to sixth defendants, represent a significant compromise between the parties’ positions.
[19] The disbursements should be adjusted by being reduced by $1600.00, as conceded at [9] of the plaintiffs’ memorandum of 28 April 2023. However, I accept the plaintiff’s position as set out at [10] of their memorandum of 28 April 2023 that while there was only one callover it dealt with two applications and item 11 should be calculated to reflect that it applied to both preparations for the callover.
Costs in respect of the leave application
[20] The plaintiffs seek costs against the second to sixth defendants in respect of the leave application made by the second to sixth defendants, which was dismissed on 16 March 2023. The plaintiffs seek scale 2B costs as set out in the plaintiffs’ memorandum of 21 April 2023, totalling $7,997.00 including a disbursement of
$110.00.
[21] The second to sixth defendants do not oppose these costs set out at [9] of the second to sixth defendants’ memorandum dated 26 April 2023.
[22]Accordingly, an order is made as set out below.
Orders
[23]I make the following orders:
(a)The plaintiffs are to pay costs in respect of the discovery application to Accor calculated on a 2B basis, being costs of $7,887.00 and a disbursement of $110.00, totalling $7,997.00.
(b)The second to sixth defendants are to pay costs in respect of the discovery application to the plaintiffs, calculated on a 2B basis, reduced
by 20 per cent, being costs of $7,459.80 and a disbursement of $500.00, totalling $7,959.00.
(c)The second to sixth defendants are to pay costs in respect of the application for leave to appeal on a 2B basis, being costs of $7,887 plus a disbursement of $110.00, totalling $7,997.00.
…………………………….. Associate Judge Taylor
Solicitors:
Bell Gully (Sophie East/Liam McNeely/David Friar), Auckland, for the Plaintiffs Edmonds Judd (Chris Grenfell), Te Awamutu, for the First Defendant
Farry Law Limited (Wallace Revell/Vita Hansen), Auckland, for the Second to Sixth Defendants Webb Henderson (Sarah Keene/Reay McGuinness), Auckland, for the Seventh Defendant
Counsel:
Phillip Rice, Barrister, Auckland, for the Plaintiffs
Samuel Carey, Barrister, Auckland, for the First Defendant
Sarah Armstrong / PKJ Roycroft, Barristers, Auckland, for the Seventh Defendant
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