Filleul Apartments JV Limited v Salis

[2019] NZHC 2806

IN THE HIGH COURT OF NEW ZEALAND DUNEDIN REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTEPOTI ROHE

CIV-2019-412-000008

[2019] NZHC 2806

BETWEEN

FILLEUL APARTMENTS JV LIMITED

Appellants

AND

SERGIO SALIS AND

CHRISTOPHER ROBERTSON

Respondents

Hearing:

29 October 2019

Appearances:

T Shiels QC for Applicant

L A Andersen for Respondent

Judgment:

31 October 2019

JUDGMENT OF GENDALL J

This judgment was delivered by me on 31 October 2019 at 3:00 p.m. pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar Date: 31 October 2019

FILLEUL APARTMENTS JV LIMITED v SALIS [2019] NZHC 2806 [31 October 2019]

Introduction

[1]    The applicant, Filleul Apartments JV Limited, (Filleul) seeks leave of this Court to appeal to the Court of Appeal solely on issues relating to costs the subject of my decision in this proceeding.

[2]    The  application  for  leave  is  opposed  by  the  respondents,  S  Salis  and   C Robertson (the respondents).

[3]    Filleul brings this application for leave pursuant to s 60(2) of the Senior Courts Act 2016 (the Act). Section 60(1) of the Act provides that a decision of the High Court on appeal from the District Court is final unless a party obtains leave to bring an appeal to the Court of Appeal. McGechan on Procedure at para SC60.021 addresses the test for leave for an appeal to the Court of Appeal and states:

SC60.02 Test for leave for a second appeal

The appeal must raise some question of law or fact capable of bona fide and serious argument in a case involving some interest, public or private, of sufficient importance to outweigh the cost and delay of the further appeal. Not every alleged error of law is sufficiently important, either generally or to the parties, to justify further pursuit of litigation already twice considered and ruled upon by a court, so the test is a restrictive one. The scarce time and resources of the Court of Appeal are not to be wasted, nor additional expense for parties incurred, “without realistic hope of benefit”: Snee v Snee (1999) 13 PRNZ 609 (CA) at [15]; Waller v Hider [1998] 1 NZLR 412 (CA) at 413.

Further, the Court of Appeal has noted the trend, both in New Zealand and in the United Kingdom, “to reverse the steady increase in the number of (second appeals) reaching the Court of Appeal, and so to free up valuable and expensive judicial resources to give more and more effective attention to hearing first appeals”: Downer Construction (New Zealand) Ltd v Silverfield Developments Ltd [2007] NZCA 355…In Chief Executive of Land Information New Zealand v Luke [2008] NZCA 43 at [18], the Court of Appeal explained that the trend reflected the Court’s fundamental role and the need for proportionality in civil litigation.

[4]    McGechan on Procedure also goes on at para SC 60.04 to address the Court of Appeal’s function on a second appeal in this way:

1      McGechan on Procedure (looseleaf ed Thomson Reuters)

SC60.04 Court of Appeal’s function on second appeal

(1)Not general error correction

On a second appeal, the Court of Appeal’s function is not general correction of error. Rather, it is to clarify the law and determine whether it has been properly interpreted and applied by the Court below: …

[5]    And at para SC 60.05 McGechan on Procedure2 indicates that an entirely or largely factual issue will rarely be one considered of public importance. It notes that the Court of Appeal has recognised such an issue may have qualifying private importance, however, where the amount at stake is very substantial, the decision reflects seriously on the conduct or character of the would be appellant, or the judgment has special consequences (for example bankruptcy) for the losing party.

[6]    Here, Filleul seeks leave to appeal in order to raise a number of questions which it contends are questions of law set out in a schedule which was provided to the Court by counsel, Mr Shiels QC. This schedule sets out these questions as follows:

Did the High Court err in:

(a)Deciding that costs on the appeal should lie where they fell, and thus departing from the general principles of costs;

-     Without hearing orally from Counsel on costs of the appeal;

-     Not having previously suggested such an outcome;

-     Without giving reasons.

(b)Deciding that there would be no order for costs on the Appellant’s procedural interlocutory application (decision [2018] NZDC 2310) and thus departing from the general principles of costs;

-     Without identifying any error in the substantive disposition of the interlocutory application or its approach to costs;

-     Without hearing orally from counsel;

-     Without giving reasons.

(c)In quashing the order for costs in [2019] NZDC 2310 (Stay Application):

-     When neither the substantive nor the costs outcome of that interlocutory application were raised in the appeal before the Court;

2      McGechan on Procedure, above n 1.

-     When there was no appeal against that decision (or Stay Application to the High Court);

-     Without identifying any error in the substantive disposition of that Application or its direction for costs on a 2B basis;

-     Without hearing orally from counsel;

-     Without giving reasons.

(d)In quashing the order for costs in decision [2019] NZDC 2310, and thus departing from the general principles of costs;

-     Without identifying any error in the substantive decision;

-     Without hearing orally from counsel;

-     Without giving reasons.

[7]    In opposition to the present leave application, Mr Andersen for the respondents notes the leave application is opposed for two reasons which he outlines as follows:

(a)No proper questions of law are identified by Filleul; and

(b)The appeal does not satisfy the criteria required for leave to appeal to the Court of Appeal.

[8]    At the outset, I note a comment I made recently in Smith v Claims Resolution Service Ltd3 on a somewhat similar application for leave to appeal to the Court of Appeal where at para [29] I stated:

[29] There is always an inherent tension in being the Judge who delivered the judgments at issue and then being required to consider whether those judgments raise arguable errors of law or fact. …

Judgment for which leave to appeal is sought

[9]    It is useful at this point to set out in full those parts of my 10 April 2019 judgment relating to the costs issue and explanations relating to this which are the subject of the present leave application:

[43]      The consequences of the present appeal, in light of recent events and the construction progress that has been made, must mean in my view that the major item of relief sought by the appellants [Salis and Robertson] here has

3      Smith v Claims Resolution Service Ltd [2019] NZHC 2738.

been overtaken by these events and serves no practical purpose. Any question of referring this matter back to the District Court to reconsider its decision would be entirely futile.

[44]      The appellants, nevertheless, have chosen to proceed with this appeal to hearing. This is on the basis that they say they require “vindication” of their position and a reconsideration of the costs question.

[45]      On this first matter, there is major disagreement between the parties, it seems to me, on the evidence which was before Judge Christiansen in the District Court. It is my view that little would be gained by endeavouring to trawl through these matters now long after the events in question have been completed.

[46]      Suffice to say I accept here that the decision of the District Court in granting the respondent’s ss 319 and 320 application was a significant indulgence. I say this particularly bearing in mind the earlier Environment Court consent conditions, … which initially prohibited any intrusion by the respondent into 34 London in carrying out the development.

[47]      That said, there might well be something, as I see it, in the argument advanced by Mr Andersen that, Judge Christiansen in his decision may have paid insufficient attention to that Environment Court condition and the appellants’ property rights in 34 London. I say no more than that at this point however. Also, I make no definitive decision on the 11 individual grounds of appeal advanced by the appellants before me. I note that they were all strongly opposed by the respondent.

[48]      The pragmatic outcome that in my view is needed on this appeal simply requires that I should set aside the orders for costs made by Judge Christiansen in his decisions under appeal. I now do so and I direct that costs with respect to all those matters are simply to lie where they fall. This takes into account the fact too that, in my view, although the respondent succeeded in its s 320 application it effectively obtained an indulgence in being permitted to have access to 97 Filleul, no doubt with some beneficial cost-savings to it. The work for which access was required, as I have noted, is now effectively completed.

[49]      That leaves one question outstanding. This relates to costs on this present appeal to the High Court. Again I note, as I have recorded at para [2] above, that this whole matter involving  the  respondent’s development  at  97 Filleul has a long and tortuous history. It is hoped that the many differences that have arisen between these neighbours, the appellants and the respondent, are now virtually at an end.

[50]      With this in mind and adopting what I see as a pragmatic approach here, I find that costs with respect to the current appeal to this Court should also simply lie where they fall.

Result

[51]      This appeal, in my view, having some merit is nevertheless largely otiose, given that from a pragmatic perspective it serves no useful purpose. Subject to [52] below, the appeal is effectively dismissed.

[52]      The order for costs in the District Court decisions under appeal is quashed. Costs on those matters and costs in this Court on the present appeal are to lie where they fall.

Analysis

[10]   As to costs generally, r 14.1 of the High Court Rules provides that all matters relating to costs are at the discretion of the Court.

[11]   It is clear, however, that this general discretion is not an unfettered one. It is qualified by the specific costs rules set out in rr 14.2 – 14.10 of the High Court Rules. Any departure from those rules must be a considered and particularised exercise of the general discretion. Cases such as the Supreme Court decision in Manukau Golf Club Inc v Shoye Venture Ltd,4 referred to me by Mr Shiels, make this clear.

[12]   What is also clear, however, as Mr Andersen urged upon me, is that an award of costs still has a discretionary element, given that it is an order made by the Judge who has heard the case and the parties in question, and the Court of Appeal is “very slow to upset costs awards in the High Court”.5

[13]   Turning now to consider the threshold required for a successful costs appeal, the Supreme Court has reiterated the basis on which an appellate court might interfere with an exercise of a costs discretion in its decision in Shirley v Wairarapa District Health Board.6 In that case the Supreme Court confirmed that, in allowing a costs appeal, the Court must be satisfied that in making the orders it has the High Court:

(a)acted on a wrong principle;

(b)failed to take into account some relevant matter;

(c)took account of some irrelevant matter; or

(d)was plainly wrong.

4      Manukau Golf Club Inc v Shoye Venture Ltd [2012] NZSC 109.

5      Lewis v Cotton [2001] 2 NZLR 21 at [65].

6      Shirley v Wairarapa District Health Board [2006] NZSC 63, [2006] 3 NZLR 523.

[14]   It needs to be noted that, in the Shirley v Wairarapa District Health Board case, the matter of costs had already been determined twice before. In the present case, Filleul contends that the present matter is effectively a first appeal on costs issues and an appeal to the Court of Appeal is the only avenue now available for Filleul. It is suggested, too, that the threshold for a grant of leave here should be lower than it would otherwise be if Filleul was seeking leave to enable a second or third reconsideration of costs issues.

[15]   Notwithstanding this, I am satisfied overall that this is a case where the leave to appeal sought by Filleul should be refused.

[16]I reach this finding for a number of reasons:

(a)My costs decision was made for pragmatic reasons given the longstanding and bitter fight between the parties. Those parties were and continue to remain neighbours and in reality they have each achieved some success in the various matters which have been before the Courts. Effectively no finding was made on the substantive appeal, as I have noted above, because “…the major item of relief sought by the appellant here has been overtaken by these events and serves no practical purpose.” And further, I noted that the granting of the application by the District Court was … a significant indulgence…particularly bearing in mind the Environment Court consent conditions … Those conditions, as I have outlined, prohibited

…any significant effect on, intrusion into or reliance on the neighbouring property at 36 London Street… and, on their face, it might be thought that as a starting point they could preclude the application the District Court had itself granted. And, in any event, my pragmatic determination on the costs question was based upon my finding at [51] of my decision which I repeat noted that:

This appeal, in my view, having some merit is nevertheless largely otiose, given that from a pragmatic perspective it serves no useful purpose.

(b)In any event, Filleul, in my view, would be hard pressed here to claim any miscarriage of justice has occurred. It is true that overall, as it did obtain access over the respondent’s land to enable it to complete its substantial commercial development. This was notwithstanding the strict Environment Court consent conditions that had been imposed. Given too that it had obtained this access, rather than needing to employ more costly construction methods, perhaps it could be the case that it has achieved some significant reduction in its overall costs which it would otherwise have incurred for the development. But, I appreciate that this is speculation here. And, in any event, this is also notwithstanding the finding in my decision that the respondents’ overall complaints about the process here might be seen as having some merit.

(c)Before me, counsel for the parties were unable to identify precisely the amount by way of District Court costs which could be at issue here, but overall it seems they were not unduly significant. I have noted above that each party, in my view, has achieved some success in the various court proceedings they have undertaken. The likely costs awards that might flow, particularly bearing in mind the increased monetary awards that would be likely in this Court over those in the District Court, would probably go some way towards cancelling each other out.

(d)Even if some arguable error may have arisen in that part of my decision relating to costs, in terms of s 60 of the Act, for leave to be granted, some interest either public or private of sufficient importance to outweigh the cost and delay of the further appeal must be established. In the present case, as I understand it, Filleul’s commercial development is now complete. The parties’ simmering disputes and bitter ongoing complaints, which have surfaced against each other for some time now, need to be brought to an end. In my judgment, whether or not this matter may be considered to involve a first or second appeal, the cost and delay of a further appeal to the Court of Appeal here outweighs the importance of the private interest to the parties of these relatively minor costs issues in this case. As the authorities and legal

commentators have expressed on many occasions, the time and resources of the Court of Appeal are scarce and need to be applied with proportionality relating to the increasing demands of civil litigation.

[17]   For all these reasons Filleul’s application for leave to appeal to the Court of Appeal is refused.

...................................................

Gendall J

Solicitors:

Webb Farry Lawyers, Dunedin

A D Patterson, Solicitors, Dunedin

Copy to:

Trevor Shiels QC, Barrister, Dunedin L A Andersen, Barrister, Dunedin