Gulf Harbour Investments Limited v Rodney District Council HC Ak CIV 2006-404-005005

[2009] NZHC 2419

IN THE HIGH COURT OF NEW ZEALAND

AUCKLAND REGISTRY

CIV 2006-404-005005

BETWEEN  GULF HARBOUR INVESTMENTS

LIMITED First Plaintiff

ANDGULF HARBOUR MARINA HOLDINGS LIMITED

Second Plaintiff

ANDRODNEY DISTRICT COUNCIL Defendant

Counsel:         K W Fulton & K L Bannister for Plaintiffs

J G Miles QC & R M Gapes & J R C Lees for Defendant

Judgment:      22 December 2009

COSTS JUDGMENT OF KEANE J

This judgment was delivered by Justice Keane on 22 December 2009 at 3.30 pm

pursuant to Rule 11.5 of the High Court Rules.

Registrar/ Deputy Registrar

Date:

Solicitors:

Simpson Grierson, Auckland

GULF HARBOUR INVESTMENTS AND ANOR V RODNEY DISTRICT COUNCIL HC AK CIV 2006-404-

005005  22 December 2009

[1]      In my decision, dated 5 February 2009, I held that Gulf Harbour Investments Limited,  which  as  assignee  holds  a  development  licence,  issued  by  the  Rodney County  Council  on  1  November  1985,  entitling  it  to  three  leases  over  the  last remaining part of the Gulf Harbour Marina yet to be developed, Hammerhead Point, remains constrained by the licence.

[2]      The leasehold interests to which GH Investments is entitled, I held, did not independently of the licence give any wider right of development constrained only

by the District Scheme of the Rodney District Council, the successor to the County. The leasehold interests remained subject to the licence.

[3]      The licence, I held also, and the leases and the planning instrument governing the marina were all expressions of, and subject to, the Rodney Council Council (Gulf Harbour) Vesting and Empowering Act 1977.

[4]      The  Rodney  Council  Council, I  held,  was  not  estopped  by  conduct  from contending that the development licence,  and the  development scheme of which it was an expression, remained governing. The   Council’s   duty to subdivide Hammerhead  Point  and  issue  the  leases,  I  held  also,  was  subject  to  the  Resource Management Act 1991 and the Local Government Act 2002.

[5]      GH Investments was not entitled, I held, therefore, to develop Hammerhead Point as intensively as it wished; an illustrative proposal was a 300 unit residential complex,  offering  timeshare  accommodation,  four  storeys  high,  extending  across most  of  the  Point.  The  development  licence,  I  held,  as  the  Council  contended, permitted only modest accommodation serving the marina.

[6]      The result was not, however, an outright win to the Council. GH Investments issued in the first place because the Council at first denied any duty to subdivide and lease,  arguing  the  licence  was  spent.  GH  Investments  then  contended  the  Council was  estopped.  The  Council  had  accepted  previously  that  the  licence,  and  those duties, remained on foot. That was conceded at the outset of the hearing and I gave GH Investments that measure of declaratory relief.

[7]      It is against that background that each side seeks costs, and the first issue is

as to the cost category and band applying.

Principles applying

[8]      Costs lie within the discretion of  the  Court:  HCR  46.  The  one  who  fails ordinarily pays the costs of the one who succeeds: HCR 47(a). Costs may be reduced

or denied, however, when the one apparently entitled is not deserving or not fully so: HCR 48D.

[9]      That can be so, for instance, where parties succeed only partly or enjoy equal success  or  failure:  Packing  In  Ltd  (in  liq),  formerly  known  as  Bond  Cargo  Ltd  v Chilcott [2003] 16 PRNZ 869, CA. There the Court held that justice must be done to each side, taking into account the time taken in each phase of the case, without fixing unduly on success or failure in any phase. Costs  have to be set finally against the result.

[10]     Thus a defendant was awarded costs on a plaintiff’s claim, and the balance of

a counterclaim, when it succeeded as to both: Harnak v Green [1958] 2 QB 9, CA. A defendant was allowed costs on its counterclaim, when it admitted the plaintiff’s claim but succeeded on its counterclaim; the plaintiff received costs up to the admission: N V Amsterdamsche  v H  & H  Trading Agencies [1940] 1 All ER 587. Where both plaintiff and defendant failed in their cross-claims, each was allowed costs: Medway Oil & Storage Co Ltd v Continental Contractors Ltd [1929] AC 88, HL.

[11]     A contrasting instance on which GH Investments relies is where a defendant largely abandoned its defence to a claim but that did not save it from costs incurred

by the plaintiff; costs, in effect,  forced  by  its  stance  until  then:  Carmel  College

Auckland  Ltd  v  North  Shore  City  Council  (AK  HC,  CIV  2007-404-005894,  20 January 2009), Venning J.

Costs category

[12]     The  Council  claims  that  this  case  lies  within  category  3B.  The  evidence spanned  30  years.  The  issues  spanned  contractual  interpretation,  rectification  and estoppel  as  well  as  issues  concerning  planning,  validity  and  frustration  due  to supervening legislation. The public interest was high. The case called for counsel of special skill and experience and second counsel.

[13]     GH Investments contends that the case lies within category two. The issues of law were not novel. The evidence was neither lengthy nor complex. The length of trial was not great. It was typical litigation in this Court. The Council was entitled to elect to be represented by senior counsel and second counsel. That did not alter the character of the case.

[14]     There is something in each of these submissions. The case more naturally lies

in category 2 than category 3. It turned on a connected series of instruments giving effect to a statute. There was no acute issue of interpretation. Statutory issues were equally confined. The evidence was within a small compass. The public interest was, however,  I  accept,  high.  The  Council  was  entitled  to  engage  senior  and  second counsel.

Relative success and failure

[15]     On  the  face  of  it  a  watershed  event  distinguishing  between  success  and failure may seem to be when the Council conceded in June 2008 that it was under a duty to subdivide and lease. That, however, does not stand analysis.

[16]     Before  then  the  case  divided  into  three  phases.  In  the  first  phase  between August – November 2006 GH Investments applied for summary judgment, seeking specific performance relying on estoppel. That application was settled on the basis that the Council was entitled to some award of costs: see minute of Abbott AJ dated 23 November 2007.

[17]     In  the  second  phase,  December  2006  –  September  2007,  GH  Investments continued  to  seek  specific  performance  on  a  wider  basis,  enlarged  to  include contract.  The  Council  pleaded  that  it  was  subject  to  statutory  impediments,  those imposed by the Resource Management Act and the Local Government Act.

[18]     In the third phase, between October 2007 – 25 June 2008, GH Investments amended  again,  still  relying  on  contract  and  estoppel  but  in  place  of  specific performance  seeking damages  and  declaratory relief  as  to  the  scope  of  its  right  of development of Hammerhead Point. The Council pleaded to that much as it had and counterclaimed for declaratory relief.

[19]     In  the  fourth  phase,  after  25  June  2008,  the  date  of  the  concession,  there remained pre-trial proceedings. There was an amended defence filed and conference regarding rectification and general preparation for trial. This culminated in the fifth phase, the trial itself between 25 – 29 August 2008.

[20]     By 25 June 2008, therefore, when the Council did belatedly concede a duty to subdivide and lease, the case had transformed. That issue had ceased to be the only one and it was relatively confined. The issues became those on which I gave, with that one exception, declaratory relief to the Council.

Conclusions

[21]     On this analysis the Council plainly succeeded on the case as it became and, given that GH Investments did not persist in its application for summary judgment, the  Council  cannot  be  said  to  have  been  altogether  devoid  of  success  before  it conceded the duty to subdivide and lease.

[22]     On that basis, I consider, the Council is entitled to costs and disbursements as claimed but in category 2B, not category 3B, and I certify for second counsel, but subject to this. GH Investments is, I consider, entitled to a measure of recognition. That need not be by a distinct award of costs. Rather, I consider, the Council’s costs should be reduced as to one quarter.

[23]     Any issue as to whether the Council’s fresh calculation of costs accords with category 2B is to be referred in the first instance to the Registrar, who is also to fix

the disbursements.

P.J. Keane  J