Mann v Far North District Council

[2022] NZHC 1843

IN THE HIGH COURT OF NEW ZEALAND WHANGAREI REGISTRY

I TE KŌTI MATUA O AOTEAROA WHANGĀREI-TERENGA-PARĀOA ROHE

CIV-2021-488-65

[2022] NZHC 1843

UNDER

the District Courts Act 1947

IN THE MATTER

of an appeal against the decision of the District Court

BETWEEN

LAIHA MANN, DESMOND MAHONEY, TANIA MORUNGA, DESLEY AUSTEN, CASINO HADFIELD, PARAIRE

FLETCHER and ALEXANDRA BAKER as

trustees of the NGAKAHU/NGAKOHU WHĀNAU AHU WHENUA TRUST

Appellants

AND

FAR NORTH DISTRICT COUNCIL

Respondent

Hearing:	On the papers
Appearances:	R C Mark for the Appellants JGA Day for the Respondent
Judgment:	29 July 2022

JUDGMENT OF GAULT J

(Costs)

This judgment was delivered by me on 29 July 2022 at 2:30 pm pursuant to r 11.5 of the High Court Rules 2016.

Registrar/Deputy Registrar

……………………………………

Solicitors:

Mr R C Mark, Solicitor, Kerikeri

Mr JGA Day, Law North Ltd, Kerikeri

MANN v FAR NORTH DISTRICT COUNCIL [2022] NZHC 1843 [29 July 2022]

[1]    Following my judgment  dated  31  March  2022  dismissing  this  appeal,1  the parties have been unable to reach agreement on costs. The appellants accept that the respondent is entitled  to  scale  costs  on  a  2B  basis,  totalling  $10,157.50.  The respondent submits that 2B costs total $12,548 and, in addition, seeks indemnity costs for the period after a settlement offer dated 8 October 2021 or alternatively increased costs with a 25 per cent uplift from scale.

Scale costs

[2]    The difference between the parties in scale costs merely reflects three additional items sought by the respondent: preparing for and filing a memorandum for a case management conference and sealing a costs award. Given that counsel for the appellant drafted the joint memorandum for the case management conference and directions were made on the papers and the conference vacated three days in advance, I allow 0.4 days for both items.

[3]Accordingly, 2B costs should be calculated on 4.85 days, totalling $11,591.50.

Indemnity / increased costs

[4]    Where there has been a written without prejudice save as to costs offer,      the Court may in its discretion order indemnity costs on the steps taken in the proceeding after the offer is made, if the offeror offers a sum of money that exceeds or is close to the amount of the judgment obtained by the other party or makes an offer that would have been more beneficial or close to the benefit to that party than the judgment obtained.2

[5]    The Court may order increased costs if the party opposing costs has contributed unnecessarily to the time or expense of the proceeding or a step in it by failing, without reasonable justification, to accept an offer of settlement whether in the form of an offer under r 14.10 or some other offer to settle or dispose of the proceeding.3 The question is whether the appellants acted unreasonably in not accepting the offer. In assessing

1      Mann v Far North District Council [2022] NZHC 632.

2      Rules 14.10 and 14.11.

3      High Court Rules 2016, r 14.6(3)(b)(v).

whether a failure to accept a settlement offer is reasonable, the Court’s assessment is a broad one taking into account, amongst other matters, the offer, its timing, its size, the reasonable expectations of the party who refuses the offer, and whether the parties were  in  a  position  to   assess   the   merits   when   the   offer   was   received.4   The reasonableness of a party’s rejection of a settlement offer must be assessed at the time of the rejection, not against the subsequent result. The onus is on the respondent to persuade the Court that an award of increased costs is justified.

[6]The respondent’s offer of 8 October 2021 (which was not its first) offered:

(i) costs to lie where they fall in this Court; (ii) less than scale costs in the District Court; (iii) management of the asbestos pipe; and (iv) removing the metalled roadway the respondent had constructed, apply topsoil and re-grass.

[7]    The appellants did not accept the offer. Instead, they made a counteroffer dated 22 October 2021 which Mr Mark submitted largely accepted the respondent’s offer (apart from the question of costs in the District Court which has now been resolved) but sought a commitment to remove the asbestos pipe once the easement came to an end. The appellants also asked to see the Council resolution authorising the settlement. The respondent did not acknowledge or respond to the counteroffer.

[8]    I accept that the respondent’s without prejudice save as to costs letter made an offer that would have been more beneficial to the appellants than the judgment obtained. However, I do not award indemnity costs for the subsequent period given the nature of the issues involved in the dispute. I consider the exchange of settlement offers are more appropriately considered in terms of reasonableness under r 14.6(3)(b).

[9]    In terms of r 14.6(3)(b)(v), I am not satisfied that the appellants failed, without reasonable justification, to accept the settlement offer such that increased costs are appropriate. Overall, viewed at the time, the counteroffer involving removal (rather than safe management) of the asbestos pipe once the consent comes to an end was not entirely unreasonable.

4      Samson v Mourant [2016] NZHC 1119 at [44], citing Weaver v HML Nominees Ltd [2016] NZHC 473 at [30]. See also JDA Co Ltd v AIG Insurance New Zealand Ltd [2022] NZHC 301 at [8].

[10]   The respondent also relies on r 14.6(3)(b)(iii), which applies where the party opposing costs has contributed unnecessarily to the time or expense of the proceeding or step in it by failing, without reasonable justification, to admit facts, evidence, documents, or accept a legal argument. I did not accept the appellants’ position that the pipeline was dangerous such that it needed to be removed and I found the Judge’s conclusion was consistent with the expert evidence. However, I do not go so far as to conclude that the appellants contributed unnecessarily to the time or expense of the appeal by failing, without reasonable justification, to accept the pipeline was not dangerous.

[11]   I am not persuaded that indemnity or increased costs are appropriate. The fact that the respondent is a public entity does not of itself weigh in favour of increased or indemnity costs.

Result

[12]The respondent is entitled to 2B costs of $11,591.50.

Gault J