JEB Management Limited v Grubz United Whanau Trust

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2014-404-2587 [2015] NZHC 2070

BETWEEN
JEB MANAGEMENT LIMITED

Applicant

AND

GRUBZ UNITED WHANAU TRUST Respondents

Hearing: On the Papers

Appearances:

D Mitchell for Applicant
P Webb for Respondents

Judgment:

28 August 2015

JUDGMENT OF TOOGOOD J [COSTS]

This judgment was delivered by me on 28 August 2015 at 3:00 pm
Pursuant to Rule 11.5 High Court Rules

Registrar/Deputy Registrar

JEB MANAGEMENT LIMITED v GRUBZ UNITED WHANAU TRUST [2015] NZHC 2070 [28 August 2015]

[1] On 12 February 2015 I delivered a judgment ordering that a caveat registered against the property at 56 Wymondley Road, Otara, Manukau, shall be removed from the title.1 I directed that the applicant was entitled to costs.2

[2] The parties could not agree on costs and on 2 March 2015 Mr Mitchell filed on behalf of the applicant a draft costs order calculated on a 2B basis in the sum of
$8,756, plus disbursements inclusive of GST of $624.75.

[3] Mr Webb filed a memorandum on behalf of the respondents on 19 March

2015, indicating that the respondents had applied for legal aid and were at that time awaiting a final decision on the application. The applicant’s costs application has been deferred until now while the legal aid decision was awaited. Mr Webb has now informed the Court that legal aid was refused and that legal assistance to the respondents was provided on a pro bono basis.

[4] I commend Mr Webb for following the highest traditions of the legal profession by undertaking this work without fee for a client with obvious financial problems. Nevertheless, the respondents elected to resist what I have held to be a justified application by the applicant to remove the caveat, and failed to satisfy the Court that the order should not be made.

[5] It is an essential principle of the costs regime that an unsuccessful party should pay the costs of a successful party and the respondents must be taken to have known at the time they were served with the application that they would be susceptible to an order for costs if they did not succeed. I adopt, with respect, the pertinent observations of Lord Neuberger, President of the UK Supreme Court that, “by becoming a party to legal proceedings … a person is brought within a system governed by rules of court, which carry with them the potential for being rendered
legally liable for costs, subject of course to the discretion of the court.”3

[6] I am informed that sufficient funds are currently held in trust in accordance with the agreement of sale and purchase on the property and that will enable costs to

1 JEB Management Ltd v Grubz United Whanau Trust [2015] NZHC 157.
2 At [48].
3 Re Nortel GmbH [2013] UKSC 52, [2014] AC 209 at [89].

be paid. I see no reason in this case to depart from the principle that costs should follow the event.

[7] Mr Webb does not suggest that the costs sought are unreasonable and in the circumstances I make an order for costs in terms of the draft order filed with Mr Mitchell’s memorandum of 2 March 1015.

……………………………

Toogood J

CaseChat Overview and Summary

In the case of JEB Management Limited v Grubz United Whanau Trust, the applicant sought an order for the removal of a caveat registered against a property located at 56 Wymondley Road, Otara, Manukau. The High Court of New Zealand was tasked with deciding whether the caveat should be removed and, if so, whether the applicant should be awarded costs. The court had already determined that the caveat should be removed, and the matter before it was the quantum of costs to be awarded to the applicant. The respondent, represented pro bono, argued that they should not be liable for costs as they were unable to afford legal representation and had applied for legal aid, which was ultimately refused.

The legal issues before the court were whether the respondent, despite being unable to afford legal representation, should still be liable for the applicant's costs under the principle that costs should follow the event, and if so, whether the costs sought were reasonable. The court considered the principle that an unsuccessful party should pay the costs of a successful party, and that the respondents knew they would be susceptible to a costs order if they did not succeed. The court also considered the professional conduct of the respondent's representative, who had undertaken the work without fee.

The court held that the principle that costs should follow the event should apply in this case, and that there was no reason to depart from this principle. The court also noted that the costs sought were not suggested to be unreasonable and that the respondent had elected to resist the applicant's justified application to remove the caveat. The court therefore made an order for costs in the sum of $8,756, plus disbursements of $624.75, to be paid by the respondent. The court commended the respondent's representative for their professional conduct in providing pro bono legal assistance.

The final orders of the court were that the respondent, Grubz United Whanau Trust, was to pay the applicant, JEB Management Limited, the sum of $8,756 in costs, plus disbursements of $624.75, to be paid within 28 days of the judgment.

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established

Hearing:	On the Papers
Appearances:	D Mitchell for Applicant P Webb for Respondents
Judgment:	28 August 2015