Nationwide Building Certifiers Limited v Hey HC Auckland Civ-2006-404-1037

[2007] NZHC 1901

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2006-404-001037

BETWEEN  NATIONWIDE BUILDING CERTIFIERS LIMITED

Appellant

ANDHAMISH HEY AND LEISA HEY- SMALL

First Respondents

ANDREDWOOD GROUP LIMITED Second Respondents

ANDEDEN VILLAGE LIMITED Third Respondents

CIV-2006-404-1052

AND BETWEEN             EDEN VILLAGE LIMITED AS TRUSTEE OF EDEN VILLAGE TRUST First Appellant

ANDREDWOOD GROUP LIMITED Second Appellant

ANDHAMISH HEY AND LEISA HEY- SMALL & OTHERS

Respondents

Hearing:         On the papers

Appearances: H P Holland for Appellants in CIV-2006-404-1052

T W Clark for Appellants in CIV-2006-404-001037
P K McGrath for Respondents

Judgment:      22 June 2007 at 5.00 p.m.

JUDGEMENT OF RODNEY HANSEN J AS TO COSTS

This judgment was delivered by Justice Rodney Hansen on 22 June 2007 at 5:00 pm

pursuant to R 540(4) of the High Court Rules

Registrar / Deputy Registrar

Date……………………….

NATIONWIDE BUILDING CERTIFIERS LTD V HEY & ORS HC AK CIV-2006-404-001037  22 June 2007

[1]      The appellants appealed against interlocutory orders made in proceedings brought in the Auckland District Court by six apartment owners and the body corporate of a leaking apartment building (together the respondents).   At the conclusion of the hearing, I allowed the appeal in relation to two of the three issues argued at the hearing, namely, whether or not there should be separate trials on liability and quantum and whether the appellants should have leave to issue third party notices.

[2]      I gave my decision on those two issues with reasons to be provided later because of the importance of progressing the proceedings in the District Court.   I saw it as important that the orders granting leave to issue third party notices should be implemented immediately and interlocutory steps, unrelated to the outstanding issues before me, should continue pending the delivery of my judgment.

[3]      As events transpired, before delivery of my judgment an order was made in the District Court under s 120 of the Weathertight Homes Resolutions Services Act

2006 transferring the proceedings to the Weathertight Homes Tribunal.   The appellants now seek costs in relation to the appeals.  Their application is opposed by the unsuccessful respondents.

[4] It is submitted on behalf of the respondents that there are special circumstances that would justify the refusal of an award of costs in favour of the appellants. Mr McGrath relies on R 48D(f) of the High Court Rules which provides that, despite RR 47 – 48B, the Court may refuse to make an order for costs or may reduce the costs otherwise payable under those rules if –

(f)        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.

[5]      Mr  McGrath  refers  to  the  difficulties  faced  by the  respondents  who,  on average, face remedial costs of $100,000.   I am informed that there is a risk that repairs will not be economic and that demolition of the entire development may be necessary.

[6]      Mr McGrath submits the decision to issue proceedings in the District Court was fully justified given the ineffective remedy provided by the Weathertight Homes Resolution Service under the previous legislation.  He said this is the first instance of leaky   building   litigation   in   a   multi-unit   situation   being   transferred   to   the Weathertight Homes Tribunal.  As such there is public interest in the implications of transfer and to require the respondents to pay costs would send a signal to other litigants contemplating transfer to the Tribunal which may discourage them from pursuing that option.  The result would be continuing pressures on court and judicial resources while the improved services available under the new legislation will not be used to their full potential.

[7]      I have nothing but sympathy for the plight of the respondents and others in their position but I am not persuaded that the factors relied on provide a sufficient reason to decline an order for costs.  The District Court Judge in ordering transfer, declined to make an order for costs until the respondents’ claim had finally been determined.  He rejected the appellants’ argument that he should treat the transfer as a discontinuance, preferring to see a transfer as an endeavour to continue the proceedings in the most orderly and just manner possible.  In the circumstances, he concluded that costs should not be ordered until a final determination is made and the identity of the successful parties known.

[8]      The costs sought on appeal are in a different category.  The appellants have been successful and are entitled to costs in the absence of disqualifying factors.  The difficulties faced by the respondents are not such a factor.  Nor do I see an order for costs in present circumstances as likely to discourage other litigants from seeking a transfer to the Tribunal.

[9]     The appellants are entitled to costs on a category 2 band B basis and disbursements are to be fixed if necessary by the Registrar.   I do not certify for

second counsel.

Rodney Hansen J

Solicitors:           Knight  Coldicutt  McMahon  Butterworth,  Private  Box  106-214,  Auckland,  for

Appellants (CIV 2006-404-1052) – H Holland

McElroys,  P  O  Box  835,  Auckland,  for  Appellants  (CIV  2006-404-001037) – T Clark

Peter Jones, P O Box 37768, Auckland, for Respondents

Counsel:            P K McGrath, P O Box 4385, Auckland

Fax: [phone]