Fowler v Selwyn District Council

[2021] NZHC 2762

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2020-409-140

[2021] NZHC 2762

BETWEEN

IRENE MARGARET FOWLER

Plaintiff

AND

SELWYN DISTRICT COUNCIL

Defendant

AND

MIKE WILTON CONSULTING LIMITED

First Third Party

AND

MERVYN JAMES CRONIN

Second Third Party

AND

DAVID FOWLER

Third Third Party

AND

MAINLAND RESIDENTIAL LIMITED

Fourth Third Party

Hearing:

(Determined on the papers)

Counsel:

K B Dillon and D W Baxter for Defendant

S D Campbell and M L Rhodes for Third Third Party and Fourth Third Party

Judgment:

15 October 2021

JUDGMENT OF ASSOCIATE JUDGE LESTER

(costs)

FOWLER v SELWYN DISTRICT COUNCIL [2021] NZHC 2762

[1]    On 27 August 2021, I released a judgment1 granting the fourth third party, Mainland Residential Limited (Mainland), leave to apply for summary judgment against the defendant, the Selwyn District Council (the Council). However, I declined the like application of the third third party, Mr Fowler, as the nature of the claim against him changed when late on the day before the hearing the Council filed an amended statement of claim against the third parties.

[2]Both Mr Fowler and Mainland have applied for costs, which are opposed.

[3]    Not only does the Council oppose the application but it says it should be entitled to costs in defending the applications and seeks an uplift, notwithstanding the fact it was unsuccessful in opposing Mainland’s application and only succeeded in respect of Mr Fowler’s application because of the filing of the late statement of claim.

[4]    There is no basis upon which the Council can apply for costs against Mr Fowler and Mainland. The Council’s application is advanced on the ground Mr Fowler and Mainland failed to file a statement of defence for some 16 months after they were served with claims for contributions. The Council’s submission is that Mr Fowler and Mainland refused to file a statement of defence but the fact is, as recorded in my earlier judgment, the delay was minimal and the Council acquiesced in at least some of the delay by those parties in filing their defences.

[5]    The Council submits the proceeding involves an unusual family arrangement where Mr Fowler in reality controls the proceedings by the plaintiff who is his mother. The Council is critical of the content of the original statement of claim as it did not identify who was responsible for the construction of the property or the project manager. It is submitted that Mr Fowler’s failure to do so resulted in wasted time and expense by the Council.

[6]    No formal application for wasted costs has been made, nor do I consider one could be advanced at this time. As the Council notes, the statement of claim in fact names Mainland as the party that constructed the property in issue in the proceeding

1      Fowler v Selwyn District Council [2021] NZHC 2218.

but it is Mr Fowler and Mainland’s position that Mainland had nothing to do with the build.

[7]    The  Council  also  submits  that  Mainland’s  statement  of  defence  dated  25 June 2021 is “null and void” by virtue of r 4.17(1)(b) of the High Court Rules 2016 which provides:

4.17     Default in filing statement of defence

(1)A third party defaulting in filing a statement of defence—

(a)admits the validity of, and is bound by,—

(i)any judgment (whether by consent, default, or otherwise) given in the proceeding; and

(ii)any decision on a question specified in the defendant’s statement of claim; and

(b)admits liability if a contribution, indemnity, relief, or remedy is claimed against the third party in the defendant’s statement of claim.

…

[8]    A third party stands as defendant to the party joining it. It is possible a third party may suffer default judgment if no response is filed to the third party notice.2 That mirrors the approach that applies to a defendant not filing a statement of defence

- that is, until they do so they are at risk of either a default judgment or judgment by formal proof.3 However, until a party seeking judgment applies for judgment there is no prohibition on a statement of defence being filed. The fact Mr Fowler and Mainland did not file their defence of itself had no consequence in the absence of the Council seeking judgment against them by formal proof.

[9]    Ultimately, the matters complained of by the Council and which are said to warrant an award of costs now, might be relevant to the assessment of costs at the end of the day under one of the criteria in r 14.6, but does not warrant the defendant being awarded costs on the leave application.

2      See commentary on the same rule in Stephen Harrop (ed) District Courts Practice (Civil) (online ed, LexisNexis) at [14.4.17.1].

3      High Court Rules 2016, rr 15.7 and 15.9.

[10]   The real issue for present purposes is where costs should fall in relation to the application for leave, that was the subject of the 27 August 2021 judgment.

Costs follow the event

[11]   The starting point is that costs follow the event. Mainland was successful in obtaining leave and as such was the successful party.

[12]   None of the matters relied on by the Council make an award of costs on a 2B basis plus disbursements inappropriate. The Council chose to oppose leave and was unsuccessful in that regard in relation to Mainland.

[13]   I award costs in favour of  Mainland Residential Ltd against the  Council on a 2B basis as per sch 1 to the Wynn Williams’ memorandum of 21 September 2021, save that item nine for the amended pleading is disallowed.

[14]   Counsel for Mr Fowler and Mainland seeks a separate award of costs in favour of each of them. I decline that application. The application for leave was included in one application, one set of submissions was filed and the two applications were run as one. Two awards are not warranted.

A costs award against the third third party?

[15]   As recorded in my earlier judgment, leave was declined for Mr Fowler to bring an application for summary judgment because of the amendment to the statement of claim made by the Council late on the day before the hearing.4

[16]   Counsel for the Council refers to this amended pleading which relies on     Mr Fowler being project manager for the build and says that the pleading was amended should have been anticipated by Mr Fowler given he accepted he was project manager. However, it was not the pleading that Mr Fowler  was project manager that led to  the application for leave to bring summary judgment being declined, it was the amendment referred to at [29] of that judgment in particular, Mr Fowler’s reaction to the “sawdust” issue.

4      Fowler v Selwyn District Council, above n 1 at [25]-[31].

[17]   Even if the significance of the amendment had been that Mr Fowler was project manager, it is not enough for the Council to say that Mr Fowler “ought to have been aware that the pleading would be amended” in that regard. Mr Fowler was entitled to pursue an application based on the pleading as it stood.

[18]   Accordingly, I do not accept para [16] of the Council’s submission in respect of costs, which presupposes that Mr Fowler’s application for leave was declined because of his role as project manager. That is not what my earlier judgment says. As said in the judgment, but for the amendment, Mr Fowler would have been granted the leave sought.

[19]   I make no order as to costs in respect of Mr Fowler’s application. Costs in that regard are to lie where they fall.

Associate Judge Lester

Solicitors:

Adderley Head, Christchurch Cavell Leitch, Christchurch Darroch Forrest, Wellington