Moeke v South Waikato District Council

[2019] NZHC 3457

IN THE HIGH COURT OF NEW ZEALAND ROTORUA REGISTRY

I TE KŌTI MATUA O AOTEAROA

TE ROTORUA-NUI-A-KAHUMATAMOMOE ROHE

CIV-2019-463-000050

[2019] NZHC 3457

BETWEEN

FORD BENJAMIN MOEKE

Plaintiff

AND

SOUTH WAIKATO DISTRICT COUNCIL

Defendant

On the papers:	14 October 2019
Appearances:	K J Patterson for the Plaintiff K Cornegé for the Respondent
Judgment:	20 December 2019

COSTS JUDGMENT OF ASSOCIATE JUDGE SARGISSON

This judgment was delivered by me on 20 December 2019 at 10.30 am pursuant to Rule 11.5 of the High Court Rules.

…………………………………

Deputy Registrar

Solicitors:

Mark Copeland Lawyers, Rotorua K J Patterson, Tauranga

MOEKE v SOUTH WAIKATO DISTRICT COUNCIL [2019] NZHC 3457 [20 December 2019]

[1]        This brief judgment deals with costs issues reserved in a judgment I issued on 12 September 2019 concerning Mr Moeke’s failed application for an order that his caveat not lapse.1   I delayed briefly the coming into effect of my decision to give   Mr Moeke the opportunity to file an appeal and seek a stay if he did not agree with the outcome; and I gave the parties the opportunity to resolve costs issues between themselves.

[2]        Mr Moeke decided not to appeal that judgment. The parties have attempted but been unable to agree on costs, and they have filed costs memoranda.

Approach

[3]        The Court has discretion as to costs, but that discretion is to be exercised in accordance with the rules. The general rule is that costs will follow the event, save for an exceptional circumstance.2 So far as possible, the determination of costs should be predictable and expeditious.3

[4]        There is some scope for a reduction in an award of costs to a successful party. Rule 14.7 outlines a set of reasons for which the Court may reduce or refuse the costs otherwise payable under the rules. Relevant in this case are:

14.7     Refusal of, or reduction in, costs

Despite rules 14.2 to 14.5, the court may refuse to make an order for costs or may reduce the costs otherwise payable under those rules if—

…

(d) although the party claiming costs has succeeded overall, that party has failed in relation to a cause of action or issue which significantly increased the costs of the party opposing costs; or

…

1      Moeke v South Waikato District Council [2019] NZHC 2282, (2019) 20 NZCPR 385.

2      See High Court Rules 2016, r 14.2(1); and Shirley v Wairarapa District Health Board [2006] NZSC 63, [2006] 3 NZLR 523 at [19].

3      Rule 14.2(1)(g).

(g) some other reason exists which justifies the court refusing costs or reducing costs despite the principle that the determination of costs should be predictable and expeditious.

Discussion

[5]        The Council succeeded in the proceeding. The application to sustain the caveat failed. It is, on the face of it, entitled to costs.

[6]When I reserved costs I made some brief observations on costs:4

[48] In terms of the statutory costs regime, the presumption is that the successful party is entitled to costs. For a normal case of this level of complexity, costs would be allowed on a 2B basis. However under r 14.7(g) of the High Court Rules 2016 there is a broad discretion to reduce or refuse costs where some factor exists which justifies the court refusing costs or reducing costs despite the principle that the determination of costs should be “predictable and expeditious”. Without deciding the matter, my initial impression is that this is a case where the just course would be to let costs lie where they fall. If the Council does not agree with that approach, it may file and serve a brief memorandum within 10 working days. Mr Moeke may file and serve a brief memorandum in response within a further 10 working days.

[7]        This was on the basis of the particular facts. The facts are traversed in detail in the substantive judgment. For present purposes, what is relevant is that the Council admitted it had notice of Mr Moeke’s equitable interest in the property as a purchaser (which was the argued grounds for the caveat) and that it knowingly defeated that interest by purchasing the property itself before Mr Moeke could settle. It also acknowledged that it was at least  reasonably  arguable  that  it  had  committed  Land Transfer fraud.

[8]        It was my view that there might be scope under r 14.7(g) to consider the Council’s conduct, as a public body which conceded to having deliberately intervened in an unconditional purchase to defeat the property rights and interests of a private citizen, grounds justifying refusing or reducing costs despite the usual principles. It claimed to be acting on a public interest but had not put serious evidence before me to demonstrate that it did so. I considered this might be one of the “exceptional” cases contemplated by the Supreme Court in Shirley v Wairarapa District Health Board as

4      Moeke v South Waikato District Council, above n 1.

justifying a departure from the predictability of costs.5 I note that historically dishonest or fraudulent conduct by a successful party has been able to, at least, weigh amongst other considerations against an award of costs in their favour.6

[9]        While Council acknowledges those views, it nonetheless submits, and I accept, that they are somewhat out of step with the trend of the recent authorities, including at the appellate level, which have treated the discretion provided by r 14.7(g) as essentially restricted to considering the parties’ conduct as it pertains to the conduct of the litigation itself.7 The applicable  principles  were  recently  summarised  in  Taylor v Roper by Edwards J, to the effect that r 14.7(g) should not provide a means of penalising conduct that was the subject of the substantive claim, simply because that claim has failed.8 Such an approach would cut against the policy objectives of the current regime, by impacting on the decision-making of prospective litigants considering bringing cases likely to face significant hurdles and undermining the predictability and expediency of the costs system.9

[10]      I accept that under the current regime, the costs process is not an appropriate point to penalise the behaviour of the Council. It would not create efficient outcomes to let plaintiffs bring cases facing significant obstacles to trial simply to financially penalise the other party, regardless of their conduct.

[11]      I also acknowledge that Ms Cornegé for the Council has put in evidence correspondence in which she, on behalf of Council, informed counsel for Mr Moeke as to the legal reasons why the Council considered his claim could not succeed. That correspondence is wide-ranging in setting out arguments (some of which appear to be in response to letters on behalf of Mr Moeke) explaining why it is that his caveat could not be sustained. Significantly, in the correspondence she raises the issue on which the caveat proceeding turned – that Mr Moeke had cancelled the contract which grounded his equitable interest in the property – as a fatal obstacle to his case.

5      Shirley v Wairarapa District Health Board [2006] NZSC 63, [2006] 3 NZLR 523 at [19].

6      Scales Trading Ltd v Far Eastern Shipping Co [1999] 3 NZLR 26 (CA).

7      See Roberts v Professional Conduct Committee of Nursing Council of New Zealand [2014] NZCA 141; Johnson v Barry Park Investments Ltd [2019] NZHC 1213; and Taylor v Roper [2019] NZHC 16.

8 At [19].

9      At [20]–[22].

[12]      I also note there is disagreement as to the appropriate time allocations. Counsel for Mr Moeke disputes the Council’s schedule, which is set out on the basis of an preparing for an affidavit hearing, rather than a simple interlocutory application. The application is plainly not interlocutory in kind.

Order

[13]      Costs are ordered as per the Council’s schedule of costs. Counsel seeks costs of $10,775 calculated in accordance with the High Court scale on a 2B basis, plus disbursements of $210. It is entitled to those costs and disbursements, and I make an award in the total amount of $10,865 accordingly.

[14]      In her memorandum Ms Cornegé advises that the Council is prepared not to enforce any award of costs until after Mr Moeke’s application for summary judgment has been determined. That is an entirely appropriate concession.

[15]      Consistent with that advice, I will stay the award until after the determination of quantum of damages following my granting of summary judgment on liability.10

Associate Judge Sargisson

10     See Moeke v Raukawa Iwi Development Ltd [2019] NZHC 3166.