Lyons v Breslin

[2012] NZHC 3106

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2009-404-7165 [2012] NZHC 3106

BETWEEN  PETER JOHN LYONS AND SUSAN MARIE LYONS

Plaintiffs

ANDMARTIN PAUL BRESLIN AND SHAYLE CHAMBERS

First Defendants

ANDVICTOR RUTHERFORD Second Defendant

Hearing:         On the papers

Appearances: K A Muir for the Plaintiffs

P J Dale for the First Defendants

Judgment:      21 November 2012

COSTS JUDGMENT OF PRIESTLEY J

Counsel:

K A Muir, Morgan Coakle, Auckland. Email: [email protected]

P J Dale, Barrister, Auckland. Email: [email protected]

LYONS V BRESLIN  HC AK CIV-2009-404-7165 [21 November 2012]

[1]      I released a reserved judgment to the parties on 7 March 2012.  My decision was that the first defendants’ land at 31 Kitchener Road, Milford was not landlocked for the purposes of s 327 of the Property Law Act 2007.

[2]      The hearing canvassed a number of issues which included various types of vehicular access which might be ordered in respect of 31 Kitchener Road; the value of any strips of land which might be taken from the plaintiffs’ neighbouring property at 33 Kitchener Road; site and traffic engineering issues; and whether, as a matter of law, the owners of 31 Kitchener Road and occupiers of that property were entitled to park on the shared driveway, a right-of-way, as of right.

[3]      None of these issues, other than the last, needed to be decided by me since I was satisfied the first defendants were not entitled to the discretionary relief they sought under s 327.  There is reasonable access to 31 Kitchener Road.  The property was not landlocked.

[4]      At the conclusion of my judgment, the first defendants being unsuccessful, I observed that the plaintiffs were entitled to costs.   On that aspect I reserved my decision in the hope that costs would be agreed.  Unfortunately there has been no agreement so a decision is required.  Memoranda have been filed and it is common ground that I should decide costs on the papers.

[5]      For a variety of systemic reasons, this judgment has been long delayed.  It is pointless for me to list the systemic failures there have been.   Suffice to say that, although these were not attributable to me, I am prepared to accept overall responsibility for them.   I apologise to the parties for the delay and undoubted anxiety this might have caused.

[6]      The dispute between the parties is clear.   Mr Muir, for the plaintiffs, seeks increased costs by a 50% uplift on 2B scale costs.[1]   He also seeks disbursements of

$74,292.14.  Mr Dale, for the first defendants, accepts the plaintiffs are entitled to 2B costs  but  not more.    In  respect  of the professional  fees  charged  by one of the plaintiffs’ expert  witnesses,  Mr  Baikie,  Mr  Dale  submits  the  claimed  figure  of

$31,050 is unreasonable.

[1] Scale 2B costs would amount to $90,828. A 50% uplift, as claimed by Mr Muir, would reach

$136,242.

[7]      So the issues quite simply are:

(a)      Does r 14.6(3) of the High Court Rules apply?  Does that rule entitle, in  the circumstances  of  this  case,  the plaintiffs to  increased  costs beyond the 2B scale?

(b)Feeding  into  my  discretion  (costs  ultimately  being  discretionary), what weight, if any, should be given to three factors raised by Mr Dale, being:

(i)Various  settlement  proposals  made  and  rejected  before  and during the hearing.

(ii)The fact that the first defendants were effectively seeking a statutory indulgence.

(iii)That, with the advantage of hindsight, a split hearing whereby there would have been a preliminary hearing as to whether 31

Kitchener Road was indeed landlocked, would have consumed less time and fewer costs.

(c)       Whether the $31,050 disbursement should be allowed.

[8]      Rule 14.6(3) of the High Court Rules relevantly provides:

(3)      The court may order a party to pay increased costs if —

…

(b)       the party opposing costs has contributed unnecessarily to the time or expense of the proceedings or step in it by —

…

(ii)      taking  or  pursuing  an  unnecessary  step  or  an argument that lacks merit; or

…

(v)      failing, without reasonable justification, to accept an offer of settlement whether in the form of an offer under rule

14.10  or  some  other  offer  to  settle  or  dispose  of  the proceeding; or

…

(d)       some other reason exists which justifies the court making an order for increased costs despite the principle that the determination  of  costs  should  be  predictable  and expeditious.

[9]      I do not consider that for the purposes of subr (3)(b)(ii) it can be said that the first defendants’ claim lacked merit.  I consider Mr Muir is on stronger ground when he submits that the central issue (whether 31 Kitchener Road was landlocked) could fairly be described as weak from the first defendants’ perspective.   But it was not hopeless.  The various authorities discussed in my judgment make it clear that the issue of vehicular access to urban properties is contentious.  Ultimately the issue of whether or not access to a property is reasonable is fact-specific.   The first defendants’ central concern was to achieve drive-on access to the property.   The litigation dynamic was not assisted by unilateral actions taken by the second defendant, but I discard that as a factor in exercising my discretion.

[10]     As  the  case  proceeded,  however,  the  first  defendants’  litigation  stance softened.  Mr Dale conceded at the end of the hearing that, if, as a matter of law, the

first defendants and occupiers were entitled to park on the right-of-way as of right, then perhaps 31 Kitchener Road might not cross the threshold of being landlocked.

[11]     Mr Muir’s submissions helpfully set out a number of settlement offers and counter-offers which were made and rejected by the parties both before and after the proceeding.  I do not consider that offers and counter-offers made in terms of which one party might have purchased the other parties’ land in its entirety are of much assistance.     Of  greater  relevance,  however,  were  two  proposals  made  on  22

September 2011 and 23 November 2011 respectively. The first was that the plaintiffs transfer to the first defendants a roadside garage comprised in their title at the end of the shared driveway which would have provided the first defendants with a garage car space on Kitchener Road.  The second was to transfer the same roadside garage and to amend the easement so that two off-street car parking spaces at the start of the shared driveway were available.   From the first defendants’ perspective neither of these offers was ideal since they fell well short of the litigation objective of drive-on vehicular access.  Furthermore compensation would have been payable.  However, both offers, made in the last stages of the proceeding, and at a time when it was clear to the first defendants’ counsel that the ultimate litigation objective was problematic, would  have  constituted  a  better  result  for  the  first  defendants  than  what  was achieved.

[12]     Essentially the first defendants were seeking an indulgence.  Section 127 and related provisions confer on this Court broad powers to ameliorate the situation of owners of landlocked land.   Those broad powers, however, usually involve interference with the property rights of neighbouring owners.   Were the first defendants to have been totally successful, it is unlikely the plaintiffs would have been  ordered  to  pay  significant  costs  unless  their  litigation  stance  had  been

unhelpful.[2]   It thus follows that, in the exercise of my discretion, I should weigh the

fact that the plaintiffs were doing no more than resisting an attempt to strip them of part of their property which they did not want to lose.

[2] See Holdgate v Holdgate HC Auckland CP 303/96, 24 September 1996; Sayes v Wentworth HC Auckland M1817/90, 12 November 1993; Brankin v MacLean HC Christchurch M191/01, 11

September 2003.

[13]     So the miscellany of factors which inform my discretion here are:

(a)       The first defendants were seeking an indulgence.

(b)From   a   very  early  stage   (and   certainly  before   litigation   was commenced) the first defendants took the stance that there was no good reason why they should not be able to acquire drive-on access, and negotiated accordingly.[3]

[3] This theme comes through not only in the evidence but in the correspondence between solicitors

which was exhibited during the trial.

(c)      Attempts by the plaintiffs to provide off-street parking to the first defendants (not ideal from their standpoint) were rejected during the hearing.

(d)      As  the  hearing  progressed  the  first  defendants’  litigation  stance

softened markedly.

(e)       The plaintiffs’ litigation stance was reasonable throughout.

(f)       On  the  authorities  and  the  state  of  the  law,  the  first  defendants’

objective was a possibility but never a certainty.

(g)      Rule 14.6(3)(b)(ii) does not apply.  But the broad terms of r 14.6(d)

are applicable.

[14]     Balancing all these matters as best I can, in the exercise of my discretion I

consider a fair and appropriate costs award to the plaintiffs would be an uplift on the

2B scale of just under one third.  I thus fix the plaintiffs’ costs at $121,000.

[15]     As  I  observed  in  my  judgment  at  [98],  a  split  trial  (determining  the landlocked issue first) would have been fraught with risk.  There is a clear judicial reluctance to grant applications under r 10.14.   This was considered by the first defendants, but not pursued. Although, with the advantage of hindsight, there would have been substantial savings to both parties, I am not prepared to give this factor any additional weight.  I consider costs awards should largely be based on the reality

of the procedural and litigation steps the parties adopted, not on some ex post facto

basis.

Disbursements

[16]     Mr Baikie was an expert engaged and called by the plaintiffs.  His essential expertise was as a planner.  Mr Dale submits that the $31,050 disbursement figure claimed is unreasonable when compared with the invoices of the first defendants’ planner, Mr Rikard, which amounted to just over $7,000.

[17]     On the authorities, it is clear that expert witness fees can be claimed as disbursements but Court approval is required.   In the exercise of its discretion the Court must consider whether the fees were necessarily incurred and are reasonable.[4]

[4] Progressive Enterprises Ltd v North Shore City Council (2005) 17 PRNZ 919 HC at [22]-[26];

High Court Rules, r 14.12(2)(a)(i); and High Court Rules, r 14.12(2) and (3).

[18]     The invoices relating to Mr Baikie’s fees have been submitted.   There is nothing which Mr Dale has said which points to the disbursement of $31,050 being unreasonable.  I am not minded to involve the parties in further delay and expense so that the quantum of Mr Baikie’s fees can be assessed by a qualified third party.

[19]     Mr Muir’s memorandum in reply states that when Mr Baikie was originally engaged it was envisaged his role would be as the plaintiffs’ “lead expert” with a task of tying together the various strands of competing expert evidence.   As the trial progressed Mr Baikie’s role diminished somewhat.  As a result, an agreement was reached between the plaintiffs and Mr Baikie that he would not charge for any fees for his attendances after 7 November 2011 (which included time spent giving evidence at the hearing).

[20]     This latter factor incorporates a swings and roundabouts element into the reasonableness of Mr Baikie’s fees.  Nonetheless, a proportion of his work before 7

November 2011 was involved in strategising and, as Mr Muir fairly observes, assessing the much greater volume of expert evidence being filed by the first defendants.   In my view, a modest reduction is appropriate to reflect  that extra

involvement which lies somewhat outside the traditional role of an expert witness. In making that comment there is absolutely no criticism of either Mr Baikie or the use to which the plaintiffs put him.  I consider an appropriate disbursement award in respect of Mr Blaikie’s fee is $26,000 and order accordingly.

Additional comment

[21]     Counsel are thanked for updating me on the Pohutakawa tree.  Its death is to be mourned.

Result

[22]     The first defendants are ordered to pay the plaintiffs costs in the sum of

$121,000 and disbursements of $69,242.14.

.......................................…

Priestley J