Myoak Holdings Limited v Millstone Grazing Limited

[2017] NZCA 273

IN THE COURT OF APPEAL OF NEW ZEALAND

CA333/2016
[2017] NZCA 273

BETWEEN	MYOAK HOLDINGS LIMITED Appellant
AND	MILLSTONE GRAZING LIMITED Respondent

Court:

Harrison, Venning and Simon France JJ

Counsel:

PWG Ahern for Appellant
J D Haig for Respondent

Judgment:

(On the papers)

28 June 2017 at 3.30 pm

JUDGMENT OF THE COURT

Both applications for costs are dismissed. 

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REASONS OF THE COURT

(Given by Harrison J)

1. Myoak Holdings Ltd abandoned its appeal to this Court on 29 May 2017, the day before the fixture for its hearing.

2. Each party has now applied for an order for costs pursuant r 44(3) of the Court of Appeal (Civil) Rules 2005.  This Court has an overriding discretion under r 53 to make any costs order which we think is just.

3. The brief history of the appeal is as follows.  In 2016 Myoak filed an appeal against a judgment of Mander J in the High Court dismissing its application to remove a caveat lodged against its property by the respondent Millstone Grazing Ltd.[1]  Myoak sought to fast track its appeal.  A Judge of this Court suggested to counsel that the parties would have been better served by applying at the outset for a priority fixture in the High Court on Millstone’s substantive claim based on an option to purchase.  The parties then pursued that course which culminated in a judgment delivered by Mallon J on 24 April 2017 dismissing Millstone’s claim following trial.[2]  Millstone did not appeal and as a result had no arguable grounds for sustaining its caveat. 

   [1]Millstone Grazing Ltd v Myoak Holdings Ltd [2016] NZHC 1320.

   [2]Millstone Grazing Ltd v Myoak Holdings Ltd [2017] NZHC 773.

4. Nevertheless, Myoak’s appeal remained on foot.  The parties prepared for the hearing in this Court on 30 May even though the issue was by then moot.  We did not learn that Millstone had removed its caveat on 15 May 2017 until receipt of its counsel’s synopsis with a brief passing reference to that fact.  It was only following a further conference with a Judge of the Court on 29 May that Myoak withdrew its appeal. 

5. Each side seeks costs.  Millstone applies on the premise that in accordance with ordinary principles the discontinuing party should pay costs incurred to that point.  It seeks a further 50-per-cent uplift to take account of the factors that, first, Myoak contributed unnecessarily to the time or expense of this appeal by proceeding with it following delivery of Mallon J’s judgment; and, second, Myoak failed without reasonable justification to accept an offer to settle and dispose of the appeal.  That offer was made in a letter to Myoak’s solicitors on 28 April 2017: its effect was that Millstone was prepared to bear its own costs subject to Myoak’s discontinuance of its appeal within three working days.  The letter finished with this statement:

   Finally, following Mallon J’s judgment we have been expecting a request from you [the solicitors] for Millstone to remove its caveat over Myoak’s land.  Millstone is ready, willing and able to withdraw the caveat.  Please confirm Myoak’s position. 

6. Myoak acknowledges that costs are normally awarded to the respondent following abandonment.  However, it submits that a different approach is appropriate here.  That is because Myoak abandoned its appeal following Millstone’s removal of the caveat from its title, and by this means obtained the relief it was seeking on the appeal.  Myoak emphasises that Millstone did not remove its caveat until some three weeks after delivery of Mallon J’s judgment, and it first learned of this fact on receipt of Millstone’s submissions on 17 May.  By then, in accordance with the standard timetabling directions, Myoak had been required to file its synopsis.  Myoak seeks an order for costs against Millstone at the standard rate. 

7. In our judgment costs should lie where they fall.  Both parties have contributed equally to the costs which each has incurred through the appeal process.  This whole proceeding would have been rendered unnecessary if the parties had jointly applied for a priority fixture of the substantive claim in the High Court.  Only a day’s hearing was required.  Instead they followed the diversionary and inconclusive process of disputing the arguability of Millstone’s caveat. 

8. More specifically, Millstone should have advised Myoak promptly after Mallon J’s judgment was issued on 24 April 2017 that it did not intend to appeal and that it would withdraw its caveat.  The statement in its 28 April 2017 letter was disingenuous.  It did not require a request from Myoak to remove the caveat.  On the other hand Myoak should have filed a notice of discontinuance of its own volition when it learned Millstone had withdrawn its caveat on 17 May instead of allowing both parties to incur further costs in preparing for and committing to the hearing scheduled for 30 May. 

9. In the result, both applications for costs are dismissed.  There is no order for costs on the applications themselves. 

Solicitors:
Morrison Kent, Wellington for Appellant
Nowland Gordon & Associates, Wellington for Respondent