Flath v Minister for Land Information
[2024] NZHC 544
•14 March 2024
IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY
I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE
CIV-2022-485-797
[2024] NZHC 544
IN THE MATTER of a claim for compensation under Part 5 of the Public Works Act 1981 IN THE MATTER
of an appeal under s 26 of the Land Valuation Proceedings Act 1948
BETWEEN
TORBIS KATHARINGA FLATH,
STEPHEN BRENT MACKAY AND SAS CORPORATE TRUSTEES LIMITED
Appellants
AND
THE MINISTER FOR LAND INFORMATION
Respondent
Hearing: On the Papers Appearances:
C M Stevens and C M McCracken for Appellants D J Watson and G Allan for Respondent
Judgment:
14 March 2024
JUDGMENT OF GRICE J
(Costs)
[1]The appellants and the respondent each seek costs on this matter.
[2] The appeal relates to a decision of this Court constituted under s 3 of the Land Valuation Proceedings Act 1948, on an appeal from the Land Valuation Tribunal.1 The hearing time for the appeal was set for two days but took two and a half days. We also took an additional half day to inspect the property.
1 Flath v The Minister for Land Information [2024] NZHC 36 (the Decision).
FLATH v THE MINISTER FOR LAND INFORMATION [2024] NZHC 544 [14 March 2024]
[3] The appellant points to the fact that the appeal was allowed and says the successful party is entitled to costs. The respondent says the appeal was allowed but the figure assessed for compensation by the Tribunal was substantially confirmed as correct and adjusted only for minor arithmetical errors.
Background
[4] This case was an appeal against the decision of the Land Valuation Tribunal concerning assessment of value of land taken and injurious affection compensation for a public work, the Kāpiti Coast Mackays to Peka Peka Expressway. The property involved was 1.084 ha (before the land take) with a residential home at the front and vacant land at the rear lower part of the property. From that, 1,917 m² of land was taken.2 The Tribunal assessed the value of the land taken and compensation payable at $38,000, being the value of the land taken together with compensation for injurious affection of $32,700.3 The Crown had agreed in 2016 to pay compensation of approximately $79,000 to the appellants in advance. The date for assessing compensation was 18 July 2013.4 In reliance on the evidence of their valuer, the appellants had claimed in the Tribunal a sum for compensation of $350,000, being
$210,000 for the land take (reduced by the appellants in the course of the Tribunal hearing to $195,000) and $140,000 for injurious affection. With the adjustments, the appellant’s total claim was $350,000.
[5] The two Crown valuers had valued the land using a before/after valuation methodology, assessing the compensation at $36,000 and $40,000 respectively.
[6] We found that the Tribunal’s approach to the valuation of the land, using a “willing buyer/willing seller” methodology, was correct in the circumstances.5
[7] The appellant raised numerous grounds on appeal. Most of these were dismissed apart from the allegation that the Tribunal failed to give proper reasons in
2 The Decision, above n 1, at [3].
3 The Decision, above n 1, at [8].
4 The Decision, above n 1, at [4].
5 The Decision, above n 1, at [145].
relation to how it carried out its valuation of the land, upon which both the land take and the injurious affection were based.6
[8] We also noted that the Tribunal had made an arithmetical error in its calculations on the injurious assessment. Nevertheless, we agreed with the final figure determined by the Tribunal, the only adjustment in our determination being a correction of an arithmetical error. We concluded that the value of the land taken was
$38,000, and the injurious affection to the balance of the land was assessed at $32,920, rounded up to $33,000. This resulted in an increase in the compensation by $1,000 from the Tribunal’s determination.7
[9] We dismissed the appeal insofar as it related to fencing costs and a relocation interest claim, which we were considered were matters best dealt with in terms of the agreement between the parties for costs and related matters, and were outside the ambit of the appeal.8
The costs’ claims
[10] The appellants say the appeal was allowed, therefore they were the successful party and costs should follow the event. They also submit that the Crown had insisted on bringing the appeal for a “precedent purpose”, which was demonstrated by it withdrawing from a timetabled court assisted mediation because the Crown’ s position was pursued “as a matter of principle”.
[11] The respondent says it is entitled to costs because the primary reason the appeal was allowed was as a result of the inadequacy of the reasons given by the Tribunal. This Court said the reasons given were insufficient to explain why the matter was decided the way it was.9 The respondent says the Court largely upheld the assessment of the Tribunal, correcting a minor arithmetical error, resulting in an increase in the compensation awarded of $1,000. The respondent says that a “realistic appraisal” of success is required. It says that this Court’s judgment confirms that the amount the
6 The Decision, above n 1, at [135].
7 The Decision, above n 1, at [181].
8 The Decision, above n 1, at [177]–[180].
9 The Decision, above n 1, at [133]–136] and [140]–[141].
Crown paid under the Advance Compensation Agreement was appropriate, being
$8,000 more than the amount the Court concluded was appropriate by way of compensation.
[12] The Crown also note that the requirement under ss 90(2) of the Public Works Act 1981 that the claimant pay the costs of the Crown if the compensation offered exceeds the sum awarded in the Tribunal does not expressly apply to appeals from the Tribunal to this Court. It submits that the principle behind this provision must be relevant to the High Court’s exercise of the discretion conferred under r 14.1 of the High Court Rules 2016, as part of a realistic appraisal of success in the context of compensation claims under the Public Works Act.
[13]Each party claims costs on a 2B basis. The appellants claim costs of
$13,742.50, together with disbursements of $14,385.20 which largely relate to the filing fees and preparation of the bundle. The respondent claims a total of $13,145.00 in costs.
Analysis
[14] The aim of the costs regime under the High Court Rules is to achieve predictability, consistency and expediency in determining costs. Costs are at the discretion of the Court.10 However, that discretion must be exercised in a principled way.
[15] Generally, the party who fails with respect to an appeal should pay costs to the successful party.
[16] The appellants submit that despite the fact that they failed to establish many of the grounds put forward on appeal, “success on more limited terms is still success”.11 They refer to Water Guard NZ Ltd v Midgen Enterprises Ltd, in which the Court of Appeal allowed an appeal from an award of costs against the successful party
10 High Court Rules 2016, r 14.1.
11 Weaver v Auckland Council [2017] NZCA 330 at [26].
on the basis that High Court had failed to give sufficient weight to the appellant’s ultimate success, saying:12
[13] The first of those general principles is that the party which fails should pay the costs of the successful party, formalising the paramount rule that costs should follow the event. WGL’s success on its defects claims was affirmed by Midgen’s later consent to judgment being entered against it for $67,527.97. We agree that Midgen qualified as the unsuccessful party — that is, the party which was adjudged liable to pay money to the other — and that accordingly WGL was the successful party. We disagree with the Judge that WGL lost that status because it failed on most of its claims which in turn occupied most of the trial. That factor can be properly recognised in other ways, such as reducing costs otherwise payable or ordering costs to lie where they fall. However, the final result must ordinarily be given primary weight when exercising the r 14.1 discretion.
[17] The Crown relies on the comments of the Court of Appeal in Weaver v Auckland Council as follows:13
[26] In the present case however, the only party to have succeeded by any “realistic appraisal” were the appellants. It is true that they did not succeed to the full extent of their claim but only to roughly half that extent, yet success on more limited terms is still success. We do not therefore see a proper basis upon which the usual rule that the party who fails with respect to a proceeding should pay costs to the party who succeeds should not apply. That said, it is appropriate that the costs ultimately awarded to the appellants should be reduced in accordance with r 14.7(d) because, although the appellants succeeded, the time and resources necessary for the respondent to meet ultimately unsuccessful arguments significantly increased its costs. Like Katz J, we assess that increase at around 100 per cent or roughly a doubling of effort and time. A reduction in entitlement by half is therefore appropriate.
[18] It is appropriate that the appellant receive an award of costs on a 2B basis, as it was the successful party in the appeal. While it did not succeed on a number of grounds argued, nevertheless the appeal was successful. In our view the Tribunal did not provide adequate reasons for the decision and the appellant was entitled to receive those reasons, particularly in a situation where their land was being acquired for a public work. Nevertheless, only a small amount of the hearing time was taken up arguing that ground, and even allowing for the fact that the background information and the details of the decision needed to be put before the Court in order to argue the reasons ground, it still would have taken less than half a day for that to be argued. The balance day and a half of hearing was taken up with the respondent’s argument over
12 Water Guard NZ Ltd v Midgen Enterprises Ltd [2017] NZCA 36 (footnotes omitted).
13 Weaver v Auckland Council, above n 11, at [26].
other issues which needed to be responded to by the Crown. The arithmetical error was not raised by either party. The respondent correctly summarised the areas in which the appellant failed on appeal as follows:
14.1contrary to the appellant’s submission, the Tribunal did not apply a “before and after method”;
14.2the Tribunal had ample valuation evidence before it upon which to base the adjustments it made to the value of the land and in particular:
14.2.1there was evidence available to the Tribunal from which it was justified in concluding a hypothetical buyer might discount the value of the land due to likely building costs relating to foundations, owing to the low lying nature of the land;
14.2.2the Tribunal was right to treat evidence of transactions for other land acquisitions and compensation settlements for the Expressway project with virtually no weight at all, either as individual transactions or as a whole;
14.3the Tribunal was correct to make an allowance for subdivision costs and intangibles and the figure adopted here as an adjustment was, in this Court’s view, generous to the appellants; and relatedly:
14.3.1the interpretation of Bishell argued for by the appellants, and relied upon by their valuer, was incorrect; nothing in that case supports the argument the costs of subdivision must be ignored in valuing a partial land take;
14.3.2the Tribunal made no error in its citation of other cases in support of its conclusion the costs of subdivision should be taken into account in this case;
14.4many other errors raised were minor typographical or transcription errors;
14.5the fencing costs and relocation interest claim are not properly the subject of an appeal to this Court;
14.6it was not an error to fail to refer to certain provisions of the PWA, nor to refer to every single comparator property;
14.7it was not an error to conclude a hypothetical buyer/seller would discount the possibility costs relating to the right of way would be split between four landowners; and
14.8the Tribunal’s approach to assessing injurious affection was correct and supported by the evidence.
[19] In view of the small amount of time taken up by the ground that succeeded in the appeal, we consider that the appeal hearing was unnecessarily prolonged by the
myriad of points raised that had no or little merit as set out above. This increased the time of hearing by over one day, which in the circumstances significantly increased the costs of the respondent. We consider that the appropriate way to reflect that is by a reduction of 20 per cent to the costs award, but with no adjustment to the disbursements claimed.
[20] We have also considered the submission by the Crown that the compensation offered to the appellants exceeded the amount found by this Court to be appropriate by way of compensation and that would justify costs to the respondent. The Advance Compensation Agreement does not qualify as a Calderbank offer of the type contemplated under r 14.10. It is a matter to be taken into account in relation to Tribunal costs, but we do not consider it is a factor properly taken into account in exercising our discretion as to costs on appeal to this Court in this case.
[21] Therefore costs are awarded in favour of the appellants on a 2B basis reduced by 20 per cent. The disbursements are unaffected.
Grice J
W J M Reid
Solicitors:
Hazelton Law, Wellington for Appellants Crown Law Office, Wellington for Respondent
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