Ng v Pauatahanui GS Ltd - [2014] NZHC 3396

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

CIV-2014-485-1731 [2014] NZHC 3396

UNDER Section 244 of the Property Law Act 2007

IN THE MATTER

of a cancellation of lease for breach of covenant or condition

BETWEEN

ALBERT NG and TINA YUK HUNG NG Applicants

AND

PAUATAHANUI GS LIMITED Respondent

Hearing: On the papers

Counsel:

A N Isac for Applicants
J C Corry for Respondent

Judgment

22 December 2014

JUDGMENT OF MACKENZIE J

I direct that the delivery time of this judgment is
3 pm on the 22nd day of December 2014.

Solicitors: O’Sullivan & Associates, Wellington for Applicants
Kapimana Legal Services Ltd, Porirua for Respondent

NG v PAUATAHANUI GS LTD [2014] NZHC 3396 [22 December 2014]

[1] This proceeding was an application by the applicants, the owners of premises in Pauatahanui, seeking orders under ss 244 and 251 of the Property Law Act 2007 (the Act) for possession of the premises occupied by the respondent as lessee, for the purpose of cancelling the lease for alleged breaches, and for compensation for the breaches. The respondent opposed the making of those orders, and applied for relief against cancellation of the breach under ss 252, 253, 255 and 256 of the Act.

[2] The proceedings were set down for hearing in October 2014. Shortly before the hearing, counsel filed a joint memorandum advising that the parties had been able to agree on terms which would avoid the need for that hearing, and proposed consent orders to dispose of the proceedings. In the memorandum counsel said:

7. As the parties have been unable to agree on the overall question of costs on the application they respectfully request that costs be reserved for determination by the Court and (subject to any direction by the court) be conducted on the papers.

[3] On 6 October 2014, I noted that memorandum “Orders by consent accordingly”.

[4] The parties have now filed memoranda. The respondent seeks costs on the basis that the claim has been dismissed. The applicants oppose costs.

[5] Counsel for the respondent submits that the respondent should be treated as a successful party. He relies upon r 15.23 of the High Court Rules, which provides that a plaintiff who discontinues a proceeding will normally be liable for costs.

[6] Rule 15.23 is not applicable. That rule applies to a unilateral discontinuance by the plaintiff. That is not the case here. The applicants’ proceedings were dismissed by a consent order. It is often the case, when litigation is settled, that the formal mechanism used to dispose of the proceedings is a discontinuance, or a consent order dismissing the proceedings. When those mechanisms are used, it is not generally appropriate to treat the party whose proceeding is discontinued or dismissed as an unsuccessful party, for costs purposes. The parties should, if costs are in issue, resolve those as part of the settlement.

[7] I must apply the principles in pt 14 of the High Court Rules for fixing costs. Those apply generally where there has…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2014] NZHC 3396
Decision Date: 22 December 2014

CaseChat Overview and Summary

In Ng v Pauatahanui GS Ltd, the applicants, Albert Ng and Tina Yuk Hung Ng, sought to cancel their lease with the respondent, Pauatahanui GS Limited, due to alleged breaches of covenant or condition, and sought compensation for those breaches. The respondent opposed the cancellation and applied for relief against the breach under the Property Law Act 2007. The case was resolved through consent orders dismissing the applicants’ claim, with the parties unable to agree on the issue of costs. The respondent argued that they should be treated as a successful party for costs purposes, relying on High Court Rule 15.23. However, the judge found that the rule was not applicable as the proceedings were dismissed by a consent order, rather than a unilateral discontinuance by the plaintiff. The judge noted that in cases where litigation is settled, it is not generally appropriate to treat the party whose proceeding is dismissed as an unsuccessful party for costs purposes. Instead, the parties should resolve the issue of costs as part of the settlement.

The judge applied the principles in Part 14 of the High Court Rules for fixing costs, which generally apply where there has been a judicial determination of the proceeding on the merits. However, in this case, there had been no such determination due to the settlement. The judge considered the approach to costs in cases where there has not been a judicial determination of the proceedings, as discussed in a trio of decisions of the English Court of Appeal. The judge found that it was not possible to determine the likely outcome of the matter from the papers alone, and there was no compelling reason to award costs one way or the other. The judge therefore decided that there should be no order as to costs.

In conclusion, the court dismissed the applicants’ claim by consent order and made no order as to costs. The judge found that it was not appropriate to treat either party as a successful or unsuccessful party for costs purposes, as the proceedings were settled and there had been no judicial determination of the merits. The parties were encouraged to resolve the issue of costs as part of the settlement, and the judge declined to make an order for costs in the absence of a clear winner or loser. This case highlights the importance of parties resolving the issue of costs as part of any settlement agreement, and the potential difficulties in determining costs where there has been no judicial determination of the merits.

Orders