Master Build Services Limited v Queenstown Lakes District Council

[2023] NZHC 1000

IN THE HIGH COURT OF NEW ZEALAND INVERCARGILL REGISTRY

I TE KŌTI MATUA O AOTEAROA WAIHŌPAI ROHE

CIV-2022-425-29

[2023] NZHC 1000

BETWEEN

MASTER BUILD SERVICES LIMITED

Plaintiff

AND

QUEENSTOWN LAKES DISTRICT COUNCIL

First Defendant

EZED LIMITED
Second Defendant

PAULA FRANCISCA HUGENS
Third Defendant

SEAN ANDERSON
Fourth Defendant

STEPHEN BATES

Fifth Defendant         (continued next page)

Hearing:

(On the papers)

Appearances:

B M Cash and M K Dobie for Plaintiff

R M Saunders and R A Lane for First Defendant Second to Tenth Defendants - Appearances Excused

Judgment:

1 May 2023

JUDGMENT OF ASSOCIATE JUDGE LESTER

(Costs)

MASTER BUILD SERVICES LIMITED v QUEENSTOWN LAKES DISTRICT COUNCIL [2023] NZHC 1000 [1 May 2023]

ANDNEW ZEALAND STRUCTURAL INSULATED PANELS (NZSIP) LIMITED

Sixth Defendant

ANDOPTIMUS PROJECT MANAGEMENT LIMITED

Seventh Defendant

AND  JAMES ROY ARTHUR CLARKE

Eighth Defendant

AND  SARAH ANNE SOMERVILLE

Ninth Defendant

AND  MICHAEL PICKNEY ELLESMERE-SLY

Tenth Defendant

[1]    On 31 March 2023, the Court released its decision declining the Queenstown Lakes District Council’s  (QLDC)  application  to  strike  out  Master  Build  Services Limited’s (MBS) proceeding on the grounds that an assignment of rights relied on by MBS was invalid.1

[2]    Costs were reserved. I indicated my initial impression was that costs should follow the event on a 2B basis. I indicated that if no costs memoranda were received within five working days of the date of the judgment, (which were not to be more than four pages), then that would be the order as to costs.

[3]    Counsel for MBS filed an eight page costs memorandum seeking costs on     a 2C basis together with a 50 per cent uplift.

[4]Counsel for QLDC opposes costs being dealt with on a 2C basis and any uplift.

1      Master Build Services Ltd v Queenstown Lakes District Council [2023] NZHC 698.

Time Band

[5]    Nothing in the submissions for MBS leads me to depart from my initial impression that costs should be on a 2B basis.

[6]    Mr Cash, counsel for MBS, submitted the case was not a straightforward interlocutory application. I do not agree. I consider the matter was reasonably straightforward and note my Judgment was just over 40 paragraphs.

[7]    Mr Cash also relies on the importance of the matters in issue to the construction industry as a whole. That may well be the case but I do not see that of itself converting the application into one involving a comparatively large amount of time for the particular steps involved; that being the test for whether B and C applies.

[8]    Mr Cash refers to the application being more dependent on evidence than most strike out applications. QLDC also sought summary judgment for which affidavit evidence was required.

[9]    Mr Cash also refers to the timetabling of preparation for the application and suggested the granting of an extended timeframe by the Court could be seen to reflect the complexity of the case. The fact is, the timeframe was adjusted by the Court to avoid MBS’ counsel having to take steps early in the New Year to prepare material, when there was no point imposing that inconvenience on counsel given the timing of the hearing.

[10]I am satisfied this case is a Category 2B for costs and I so order.

Uplift

[11]   Mr Cash has attached to his submissions (in addition to the eight pages), a letter sent by email to counsel for QLDC responding to the grounds for the strike out raised by QLDC in correspondence.

[12]   In short, Mr Cash submits that the grounds upon which MBS succeeded in resisting the strike out application, at least in part, are reflected in the matters raised

in that letter. He submits that QLDC in continuing with its application to strike out in the face of MBS setting out its argument in full, represents QLDC either pursuing an unnecessary step (the application to strike out itself), or pursuing the application when it lacked merit.

[13]   I did not have MBS’ letter when I indicated that costs on a 2B basis would be sufficient.

[14]   In general terms, the core argument presented by MBS in the letter referred to above, that is, it did have a genuine commercial interest in taking an assignment of the homeowner’s rights, was upheld.

[15]   Counsel for QLDC nonetheless submits that it acted reasonably, saying that the test for unreasonableness relates to conduct during the litigation and not before it, and submitting that the conduct to be considered here should be confined to the interlocutory application itself.

[16]   I do not agree. During the course of a proceeding, should counsel consider there are grounds for an application, then the Court expects counsel to raise those matters in correspondence to see if matters can be resolved or, at the very least, narrowed. If, in the face of the arguments raised by the responding party, an application is pursued without response, such can be taken into account in fixing costs. In an interlocutory application the assessment of factors relevant to costs does not start with the filing of the application as if everything before had not occurred.

[17]   Counsel for QLDC submits that it cannot have been expected simply to not to bring its application, having received the letter I have referred to. That is correct, but it does not appear that the letter from MBS’ solicitors explaining why the strike out application would fail, was responded to by counsel for QLDC.

[18]   Counsel can, and often will, differ on the merits of an application without either of  their  positions  being  unreasonably  held.   However,  where  a  party  resisting  a threatened strike out sets out in detail why an application would fail, for the application to then be filed without a response to those reasons, and for the application

to be dismissed for at least one of the reasons raised, means it can be said that pursuing the strike out application was unnecessary. The merits of MBS’ position should have been subject to further debate/correspondence between counsel, for the same reason the application lacked merit when, in my view, the submissions presented by QLDC in support of its application did not answer the core proposition  in  MBS’  November 2022 letter, that being that MBS had a general commercial interest in taking the assignment.

[19]   I am satisfied that an uplift is warranted but, as I have said, not against the  2C scale but rather against scale 2B. The uplift is awarded at 50 per cent. The filing fee for the notice of opposition of $110 is approved. I order accordingly.

Associate Judge Lester

Solicitors:

Dentons Kensington Swan, Wellington (for plaintiff) Wynn Williams, Auckland (for First Defendant)