Exclusive Estates Limited v Hoffman

[2023] NZHC 2221

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2023-404-000326

[2023] NZHC 2221

IN THE MATTER

Of the Residential Tenancies Act 1986

AND

IN THE MATTER OF

an appeal against a decision of the District Court pursuant to s 119 of the Residential Tenancies Act 1986

BETWEEN

EXCLUSIVE ESTATES LIMITED

Appellant

AND

SONIA MCKELLER HOFFMAN

Respondent

Hearing:	On the papers
Counsel:	J Mackie for Appellant Respondent in person
Judgment:	17 August 2023

JUDGMENT OF LANG J

[Costs]

This judgment was delivered by Justice Lang On 17 August 2023 at 2.00 pm

Pursuant to r 11.5 of the High Court Rules Registrar/Deputy Registrar

Date:…………………………

Solicitors/counsel:

Urlich Milne Lawyers/J Mackie, Barrister, Auckland

Copy to:
The Respondent, S M Hoffman

EXCLUSIVE ESTATES LTD v HOFFMAN [2023] NZHC 2221 [17 August 2023]

[1]    On 19 July 2023, I delivered a judgment allowing an appeal by Exclusive Estates Ltd (EEL) against a judgment of the District Court on a question of law.1 The question of law was whether the District Court had been correct to hold that EEL had permitted the respondent, Ms Hoffman, to live in rented premises owned by EEL when it was unlawful for her to reside in those premises.

[2]    EEL now seeks costs on the appeal. Its counsel, Mr Mackie, has endeavoured to correspond with Ms Hoffman regarding that issue but she has declined to respond.

[3]    On 22 March 2023, Robinson J directed that the appeal was a category 2 proceeding for costs categorisation purposes. On EEL’s behalf, Mr Mackie calculates costs on a category 2B basis as amounting to $16,730. EEL also seeks disbursements totalling $1,504.35. In total, therefore EEL seeks an award of costs and disbursements amounting to $18,234.35.

Relevant principles

[4]    All questions as to costs are at the discretion of the Court.2 However, in exercising its discretion the Court is guided by the principles set out in r 14.2 of the High Court Rules 2016. To the forefront of these is the principle that the unsuccessful party should contribute to the costs of the successful party.3 Another important principle is that, so far as possible, the determination of costs should be both predictable and expeditious.4

[5]    These principles are not inflexible. The Court has the power to increase, reduce and refuse to award costs in appropriate cases. Rule 14.7 provides the Court with a discretion to refuse to make an order for costs, or to reduce the costs otherwise payable, in certain circumstances. It relevantly provides:

14.7     Refusal of, or reduction in, costs

Despite rules 14.2 to 14.5, the court may refuse to make an order for costs or may reduce the costs otherwise payable under those rules if—

1      Exclusive Estates Ltd v Hoffman [2022] NZDC 25495.

2      High Court Rules 2016, r 14.1.

3      Rule 14.2(1)(a).

4      Rule 14.2(1)(g).

(a)the nature of the proceeding or the step in a proceeding is such that the time required by the party claiming costs would be substantially less than the time allocated under band A; or

(b)the property or interests at stake in the proceeding were of exceptionally low value; or

…

(g) some other reason exists which justifies the court refusing costs or reducing costs despite the principle that the determination of costs should be predictable and expeditious.

Decision

[6]    EEL was the successful party on the appeal and would ordinarily be entitled to an award of costs in its favour. However, there are several features about this case that I consider render that outcome inappropriate and unjust.

[7]    First, in monetary terms the appeal involved just $1,500. It would ordinarily be wholly uneconomic for an appellant to advance an appeal to this Court when such a small sum was at stake. That is particularly so when the hearing in this Court was effectively the fourth occasion on which the issue in question was argued.5 When I raised this with Mr Mackie during argument, he advised me that the appeal involved an important point of principle. He said his client was concerned that there may be many landlords in the Auckland area whose interests would be adversely affected by the reasoning adopted in the District Court. He said his client therefore advanced the appeal not for monetary reasons but to correct the error of principle that it contended had been made in the District Court.

[8]    EEL was obviously entitled to advance the appeal notwithstanding the very small monetary sum at stake. Further, I have accepted that its argument was correct. However, I am satisfied that Ms Hoffman should not be required to meet EEL’s costs in advocating for a principle that is said to be of importance beyond the case in which she was involved. She had no option but to oppose the appeal although the amount involved meant it was completely uneconomic for her to engage counsel. The issue I was required to determine was also legally complex and, without meaning any

5      The issue had previously been argued at the original hearing before the Tenancy Tribunal, at the application for rehearing before the Tenancy Tribunal and at the appeal to the District Court.

disrespect to Ms Hoffman, it was well beyond the ability of most lay persons to argue. Ms Hoffman’s role in the appeal was effectively reduced to that of a bystander.

[9]    In those  circumstances,  I  am  satisfied  that  jurisdiction  exists  under  both r 14.7(b) and (g) to refuse to make an order of costs.

[10]I therefore direct that costs are to lie where they fall.

Lang J