Hodge v Hodge HC Hamilton CIV 2010-419-1070

[2011] NZHC 1991

IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY

CIV 2010-419-1070

UNDER  the Land Transfer Act 1952, section 145

IN THE MATTER OF     an application that Caveat 8317246.1 not lapse

BETWEEN  GRAEME HODGE Applicant

ANDDAVID JOHN HODGE, GRANT JAMES FLETT AND JOHN BERWICK NICHOLLS

Respondents

Hearing:         On the papers

Counsel:         PF Gorringe for applicant

KA Lomas for respondents

Judgment:      6 December 2011 at 4:30 PM

JUDGMENT OF ASSOCIATE JUDGE FAIRE [for costs]

Solicitors:           Clyde Law Centre, PO Box 7086, Hamilton

Harkness Henry, Private Bag 3077, Hamilton 3240

HODGE V HODGE HC HAM CIV 2010-419-1070 6 December 2011

[1]      In a judgment delivered on 17 May 2011 Associate Judge Matthews dealt with an application filed by the applicant seeking an order sustaining the applicant’s caveat.  The judgment sets out the background facts which need not be set out again in detail in this judgment.  He ordered that the caveat be sustained until further order of the court.  The order was so framed so that the agreement which the applicant and respondents had entered into on 17 July 2009 could be implemented.

[2]      The agreement of 17 July 2009 provided for the transfer of a strip of land to

be surveyed from the respondents’ title and to be transferred to the applicant’s title.

[3]      The applicant lodged the caveat on 30 October 2010.   The applicant has always maintained that he is not entitled to the caveat indefinitely.   It had been placed on the title simply for the purpose of protecting the applicant’s interests until the 17 July 2009 agreement had been implemented.

[4]      After  a  number  of  further  appearances,  in  a  joint  memorandum  dated

31 October 2011, counsel reported to the court that the boundary adjustment that was required  by  the  17 July  2009  agreement  and  the  issue  of  new  titles  had  been completed.   As  part  of  the final  registration  process  the  applicant’s  caveat  was removed from the respondents’ title.  Counsel reported that the order for the retention of the caveat was no longer required and could be lapsed.   I made an order implementing that advice and directed that the caveat lapse.

[5]      Because counsel could not agree on the question of costs I set a timetable for the exchange of memoranda.  It should be recorded at this stage that the applicant’s position has been that each party should pay their own costs.  It is the respondents’ who have sought an order for costs.

[6]      The respondents’ complaint throughout has been that the applicant has not taken the steps that he should have taken to implement the agreement so that the necessary transfer could be perfected.  This caused a difficulty for the respondents who were unable to deal with their property.

[7]      The application had initially been given a fixture for 18 November 2010.  It did not proceed as a defended hearing because the parties agreed on a process to complete the boundary adjustment and retain the caveat in the interim.   The respondents complain that the applicant failed to meet the deadlines that were set out in that interim settlement reached on or about 18 November 2010.  The respondents were frustrated by events and asked that the matter be relisted before the court as soon as possible. That led to the application being listed in March 2011 and a fixture being made.  Initially the fixture had been allocated for 15 July 2011 but was able to be brought forward to 11 May 2011.   That hearing resulted in the judgment of Associate Judge Matthews, to which I have made reference.

[8]      What must be acknowledged is that the respondents are seeking an order for costs.  I am not asked, for example, to deal with the case as if it were an application for damages pursuant to s 146 of the Land Transfer Act 1952, or entering a caveat without due cause.  The caveat has only been removed because the transfer that was required to be made under the settlement agreement was, in fact, perfected.  It was that very interest that the caveat claimed in the first instance.

[9]      The respondents have claimed that they have been the successful parties because they have succeeded in having the caveat removed.  That position, however, belies the fact that the caveat was sustained to enable its purpose, that is, the implementation of the settlement agreement to be effected.   Although one might criticise the  delay in  this  process  that  the  applicant  appears  to  have caused  on occasions that is properly met in this case by making no order in the applicant’s favour.

[10]     Rule 14.1 gives the Court a discretion to order costs in relation to a step taken in a proceeding.  That discretion is generally to be exercised in accordance with the specific Rules contained in rr 14.2-14.10:  Glaister v Amalgamated Dairies Ltd.[1]   In Mansfield Drycleaners  Ltd v Quinny’s Drycleaning (Dentice Drycleaning Upper

[1] Glaister v Amalgamated Dairies Ltd [2004] 2 NZLR 606 at [19].

Hutt) Ltd it was said of the costs regime contained in what is now rr 14.2-14.10 that:[2]

[2] Mansfield Drycleaners Ltd v Quinny’s Drycleaning (Dentice Drycleaning Upper Hutt) Ltd (2002) 16 PRNZ 662 (CA) at 668.

there is a strong implication that a Court is to apply the regime in the absence of some reason to the contrary

The test to be applied is entirely an objective and not a subjective one.   The only reference which  it is necessary to make towards actual costs is to be found in r 14.2(f), namely that an award of costs should not exceed the costs incurred by the party claiming the costs: Glaister v Amalgamated Dairies Ltd.[3]

[3] Glaister v Amalgamated Dairies Ltd, above n 1 at 610[14].

[11]     Rule 14.2 lists the principles applying to determination of costs. Subrule (a) affirms the principle that the losing party should pay the costs to the successful party. Subrule (b) requires that the costs reflect the complexity and significance of the proceedings and refers specifically, therefore, to the categorisation of a proceeding which is provided for in r 14.3.  Subrule (c) requires a consideration of each step for which costs are sought and an application of the daily rate having regard to the appropriate band which is to be applied after a consideration of r 14.5(2) and the Third Schedule to the High Court Rules.

[12]     Rule 14.6 sets out the circumstances where increased or indemnity costs can be awarded.

[13]     There  is  no  justification  here  for  making  any  order  for  indemnity,  or increased costs for that matter, against the applicant having regard to the outcome of this proceeding.   The outcome of the proceeding is that the very purpose of the caveat has been achieved, that is the protection of the applicant’s interest pending the implementation of the settlement.

[14]     I cannot see any basis upon which it could be said that the respondents are the successful parties when I consider the overall facts of this case.   There has never been an attempt by the applicant to sustain the caveat beyond the implementation of the settlement agreement.  If, in fact, the respondents allege that there has been some damage sustained by breaches of the settlement agreement by the applicant then that is a matter for a separate proceeding and a claim for breach of contract.  It is not a

matter that can properly be determined by an order for costs in this proceeding.  At

the very most, the breach disqualifies the applicant from an entitlement for costs on his application to sustain the caveat.  Quite properly he does not seek costs.

Conclusions

[15]     I conclude that an order for costs is not justified in this case.  I do not accept that the respondents were the successful parties.   The matter is best concluded by each party paying their own costs in relation to the caveat proceedings.  This ruling in no way binds the parties in the event that a party claims that damages have been sustained as a result of a breach of the settlement contract.  That is a matter entirely separate from the determination I am making in this costs judgment.

[16]     I rule accordingly.

JA Faire

Associate Judge