EQC Action Group v Earthquake Commission - [2016] NZHC 1335

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

CIV-2015-409-000754 [2016] NZHC 1335

UNDER
the Declaratory Judgments Act 1908 and

the inherent jurisdiction of the High Court of New Zealand

BETWEEN

EQC ACTION GROUP Plaintiffs

AND

EARTHQUAKE COMMISSION Defendant

Hearing: 20 June 2016 (Determined on the papers)

Counsel:

P Woods for Plaintiffs
J A Knight for Defendant

Judgment:

20 June 2016

COSTS JUDGMENT OF ASSOCIATE JUDGE MATTHEWS

[1] The plaintiffs are owners of residential buildings adversely affected by the Christchurch earthquake sequence, and collectively describe themselves as the EQC Action Group (the Group). The defendant is a Crown entity under the Earthquake Commission Act 1993. The Group brought this application seeking declarations in relation to the obligations of the Earthquake Commission (EQC) under the Act. When the proceeding was filed on 17 November 2015 the Group also filed two affidavits in support.

[2] The proceeding was filed after negotiations between the Group and EQC, and those negotiations continued after service of the application, finally resulting in a joint press statement being released, and the plaintiffs discontinuing this proceeding.

[3] The Group and EQC entered a settlement agreement recording, amongst other matters:

EQC ACTION GROUP v EARTHQUAKE COMMISSION [2016] NZHC 1335 [20 June 2016]

If either party wishes to seek costs in the Proceeding it must apply to the Court within ten working days of the filing of the Notice of Discontinuance. If no application is made within that period then the parties agree that the costs in the Proceeding will lie where they fall.

[4] The Group and EQC both seek costs.

[5] Rule 15.23 of the High Court Rules requires a plaintiff, on discontinuing a proceeding, to pay the defendant’s costs unless the defendant agrees otherwise, or the Court otherwise directs. No agreement has been reached.

[6] The principles to be applied by the Court in this circumstance are discussed in Earthquake Commission v Whiting, van Limburg and Ryde: The Court said:1

... There is no doubt that when considering a plaintiff’s application for an order of this nature, the Court has a discretion to order that costs should lie where they fall or that the defendant should pay the costs of the plaintiff in whole or in part. This discretion reflects the general rule that all matters relating to costs are at the discretion of the Court. The discretion is not unfettered, but is qualified by the specific costs rules.2

[7] After noting that the discretion in the Court may be exercised in the interests of justice where it is just and equitable to displace the r 15.23 presumption,3 the Court went on to say that in deciding whether it is just and equitable to exercise its discretion, the Court may consider the parties’ conduct in the matter and the reasonableness of their respective stances, including the reasons why the plaintiff brought and continued the proceeding and the defendant opposed it. Finally, of
relevance to the present case, the Court of Appeal also said it will not…

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: [2016] NZHC 1335
Decision Date: 20 June 2016

CaseChat Overview and Summary

The EQC Action Group, a collective of residential building owners adversely affected by the Christchurch earthquake, brought a proceeding against the Earthquake Commission (EQC) seeking declarations regarding EQC's obligations under the Earthquake Commission Act 1993. The proceeding was filed on 17 November 2015, but was subsequently discontinued following negotiations between the Group and EQC, culminating in a joint press statement and a settlement agreement. Both parties sought costs, with EQC claiming $4,237 for five attendances relating to management conferences, and the Group contending that the presumption in rule 15.23 of the High Court Rules should not apply.

The court needed to decide whether the Group had demonstrated that it would be just and equitable to displace the presumption in rule 15.23, which requires a plaintiff, upon discontinuing a proceeding, to pay the defendant's costs unless the defendant agrees otherwise, or the Court otherwise directs. The court considered the Group's arguments, including that the settlement agreement allowed for either party to apply to the Court to seek costs, and that the proceeding was "clearly justified" because EQC did not take any action to strike it out, or to file a defence. However, the court rejected these arguments, holding that the settlement agreement did not override the presumption in rule 15.23, and that the presumption is not displaced merely because a defendant does not apply to strike out, or because an acceptable resolution is achieved by agreement. The court further found that the Group had achieved a modest degree of success in relation to interpretation of EQC’s responsibilities, but little if any more than that, and that it was not clear that it was necessary for the proceeding to be brought in order to achieve the agreed outcome.

The court held that the Group had not demonstrated that it would be just and equitable to displace the presumption in rule 15.23. Consequently, the court awarded costs to EQC in the sum of $4,237, noting that it did not claim any sum by way of disbursements. The application by the Group for costs was declined.

Orders