Hill v Body Corporate 372185 - [2024] NZHC 2326

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2023-470-111

[2024] NZHC 2326

BETWEEN
JENNIFER MARLENE HILL

Plaintiff

AND

BODY CORPORATE 372185

Defendant

Hearing: On the papers

Counsel:

J W McDougall for the Plaintiff

S C Price / J J K Spring for the Defendant 19 August 2024

Judgment:

19 August 2024

JUDGMENT OF ASSOCIATE JUDGE BRITTAIN

[costs]

This judgment was delivered by me on 19 August 2024 at 4 pm Pursuant to r 11.5 of the High Court Rules.

…………………..
Registrar/Deputy Registrar

Solicitors:
Holland Beckett Law, Tauranga MinterEllisonRuddWatts, Auckland

HILL v BODY CORPORATE 372185 [2024] NZHC 2326 [19 August 2024]

Introduction

[1] On 19 March 2024, I gave judgment declining the defendant’s application for an order under r 5.49 of the High Court Rules 2016 (HCR) dismissing this proceeding on the ground that the Court has no jurisdiction to hear it.1

[2] The plaintiff’s statement of claim pleaded three causes of action. The third cause of action claimed minority relief under s 210 of the Unit Titles Act 2010 (UTA). I struck out the third cause of action on the ground that the plaintiff did not have standing to bring it.

[3] I expressed my preliminary view in the judgment that I considered the plaintiff to be the successful party, and that 2B costs would be appropriate subject to a reduction to reflect mixed success. The plaintiff now applies for costs on that basis.

[4] The plaintiff seeks ancillary orders to deal with what it submits is inherent unfairness arising from the defendant’s contractual right to pass on a share of the defendant’s costs to the plaintiff.

[5] The Trinity Wharf unit title development is atypical. The principal units are stratum estates in leasehold land. The registered owner of the stratum in leasehold interests is Trinity Wharf Limited (TWL). Therefore, TWL is the sole member of the Body Corporate, who is the defendant. TWL has granted registered leases of the principal units. The plaintiff, Ms Hill, is one of the lessees. She brings the proceeding on her own behalf and on behalf of other lessees of units, challenging certain resolutions of the Body Corporate.

[6] Ms Hill and the other lessees that she represents are concerned that TWL is responsible for meeting the Body Corporate’s costs in defending the proceeding, including any costs award that the Body Corporate is ordered to pay to Ms Hill, and that TWL is seeking to pass those costs on to the lessees pursuant to the terms of the registered leases.

1 Hill v Body Corporate 37215 [2024] NZHC 600.

[7] The defendant argues that it is the successful party and entitled to costs on a 2B basis with a 50 per cent reduction to reflect partial success.

[8]The applications for costs raise the following issues:

(a)Who is the successful party?

(b)Should costs be reduced to reflect mixed success?

(c)Is Ms Hill entitled to any further orders to remedy any unfairness that might arise…

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: [2024] NZHC 2326
Decision Date: 19 August 2024

CaseChat Overview and Summary

In the High Court of New Zealand, the case of Hill v Body Corporate 372185 involved a dispute between Jennifer Marlene Hill, a lessee of a unit in the Trinity Wharf development, and Body Corporate 372185, the governing body for the leasehold units. The plaintiff sought to challenge certain resolutions made by the Body Corporate, but the court found that it lacked jurisdiction to hear the plaintiff's third cause of action under the Unit Titles Act 2010. The court struck out this cause of action, leading to a discussion on the appropriate costs to be awarded to the plaintiff.

The legal issues before the court were whether the plaintiff was the successful party, if costs should be reduced to reflect mixed success, and if there should be further orders to address potential unfairness arising from the defendant's contractual right to pass on costs to the plaintiff. The Body Corporate argued that it was the successful party due to its successful challenge against the court's jurisdiction and the dismissal of the plaintiff's remaining claims. However, the court found that the plaintiff was the successful party as the Body Corporate's application to dismiss the proceeding was unsuccessful.

The court acknowledged that the plaintiff was successful in her claims but that the third cause of action was struck out. Therefore, the costs awarded should reflect this mixed success. The plaintiff's costs were calculated to be $6,692, and the court found that a 25 per cent reduction for the preparation of written submissions and appearance at the defended hearing was appropriate. Consequently, the plaintiff was awarded $5,497 in costs and $160 in disbursements.

Regarding the potential unfairness of the defendant passing on its costs to the plaintiff, the court noted that while it could not directly address the issue of costs passed on by non-parties, it was prepared to intervene if the Body Corporate passed the burden of the costs order on to Trinity Wharf Limited, which in turn sought to pass the burden to the plaintiff and other lessees. The court reserved leave for the plaintiff to seek further orders if required.

The final orders of the court required the defendant to pay the plaintiff's costs of $5,497 and disbursements of $160. The court also reserved leave for the plaintiff to seek further orders if the plaintiff and the lessees were required to contribute to meeting the costs award.

Orders