Gilpin v Auckland Council - [2018] NZHC 1052

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2014-404-1778

[2018] NZHC 1052

IN THE MATTER OF WESTVIEW MEDICAL CENTRE

BETWEEN

ANTHONY CRAVEN GILPIN ANTONIA CRAVEN GILPIN HELEN JUDITH HODGSON and CLOSEPATCH LIMITED

Plaintiffs

AND

AUCKLAND COUNCIL

First Defendant

MACHARR DEVELOPMENTS LIMITED
Second Defendant

SCOTT INVERARITY (Discontinued) First Third Party

RODERICK McCRAE HARRE
Second Third Party

FAÇADE DESIGN SERVICES LIMITED
Third Third Party

STEPHEN CHRISTOPHER SLOANE

Fourth Third Party

Hearing: On the papers

Appearances:

T Rea for the Plaintiffs

J Knight/D Barr for the First Defendant

M L Thornton for the Second Defendant/Second Third Party R Anderson for the Third Third Party

Judgment:

15 May 2018

COSTS JUDGMENT OF ASSOCIATE JUDGE R M BELL

GILPIN v AUCKLAND COUNCIL [2018] NZHC 1052 [15 May 2018]

This judgment was delivered by me on 15 May 2018 at 3:00pm
pursuant to Rule 11.5 of the High Court Rules.

…………………………………
Deputy Registrar

[1] The second defendant, Macharr Developments Ltd, seeks costs of $31,768 and disbursements of $6,107.69 on the plaintiffs’ discontinuance of their claim against it. Under r 15.23 of the High Court Rules, unless the defendant otherwise agrees or the Court otherwise orders, a plaintiff who discontinues a proceeding against a defendant must pay costs to the defendant of and incidental to the proceeding up to and including the discontinuance. In Yarrall v Earthquake Commission, the Court of Appeal said:1
Rule 15.23 imposes an obligation on a plaintiff who discontinues a proceeding to pay the defendant’s costs unless the defendant agrees or the Court orders otherwise. This Court has recognised the discretion to order “otherwise” may be exercised where it is “just and equitable”. The onus is on the discontinuing plaintiff to persuade the Court to exercise that discretion. The presumption is not lightly displaced.

[2] McGechan on Procedure at HR15.23.01 cites the following principles derived from Kroma Colour Prints Ltd v Tridonicatco NZ Ltd, FM Custodians Ltd v Pati and Opus International Consultants Ltd v Colac Bay Vision Ltd:2
(a) The rule 15.23 presumption obviates any requirement for the defendant to demonstrate that the plaintiff acted unreasonably in commencing and then discontinuing the proceeding. The defendant has the advantage of the presumption even where there has not been such unreasonableness.

(b) Although the rule 15.23 presumption is designed to give a certain and predictable outcome upon discontinuance, it may be displaced if the Court finds that there are circumstances which make it just and equitable that it should not apply.

1 Yarrall v Earthquake Commission [2016] NZCA 517 at [12].
2 J R Wild and others McGechan on Procedure (online loose-leaf ed, Thompson Reuters New Zealand) at HR15.23.01; Kroma Colour Prints Ltd v Tridonicatco NZ Ltd [2008] NZCA 150, (2008) 18 PRNZ 973; FM Custodians Ltd v Pati [2012] NZHC 1902 at [10]–[12]; Opus International Consultants Ltd v Colac Bay Vision Ltd [2015] NZHC 1782, [2015] NZCCLR 19 at [20]–[24].

(c) Although the Court is not limited in…

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: [2018] NZHC 1052
Decision Date: 15 May 2018

CaseChat Overview and Summary

The case of Gilpin v Auckland Council involves a dispute over building defects at the Westview Medical Centre in Glen Eden. The plaintiffs, who own the medical centre, sought damages from both the Auckland Council and Macharr Developments Limited, the building contractor. The plaintiffs initially sued for $635,000, a figure which increased to $796,000 in an amended claim. The Auckland Council, in turn, filed a cross-claim against Macharr seeking contribution under the Law Reform Act 1936. The plaintiffs later settled with the Auckland Council, discontinuing their claim against Macharr, but the Council continued its contribution claims against Macharr and others. Macharr sought costs from the plaintiffs under Rule 15.23 of the High Court Rules, which generally requires a plaintiff who discontinues a proceeding to pay the defendant's costs.

The central legal issue before the court was whether the presumption under Rule 15.23 that a plaintiff must pay the defendant's costs upon discontinuance should apply in this case. Rule 15.23 typically imposes a cost burden on the plaintiff unless the defendant agrees otherwise or the court orders otherwise. The court noted that this rule presumes the proceeding has ended against the defendant, which was not the case here as Macharr remained in the proceeding despite the plaintiffs' discontinuance. The court examined several factors, including the reasonableness of the parties' positions and the reason for discontinuance, to determine whether the presumption should be displaced. The court found that awarding costs to Macharr would be unjust since it would mean that Macharr had been sued in vain, yet it still faced potential liability if found liable for the defects. Additionally, the settlement with the Council had reduced Macharr's exposure, benefiting them without them bearing any cost responsibility.

In conclusion, the court declined to require the plaintiffs to pay costs to Macharr Developments Limited. The reasoning was that Macharr remained a defendant in the proceeding, and its liability for the damages to the plaintiffs' building was yet to be determined. The court held that awarding costs in this situation would not be just and equitable, given the circumstances and the potential ongoing liability. The court thus ruled in favor of the plaintiffs, declining to impose costs on them.

Orders