Prestige Motors Limited v My Trustee Company (Nikolas and Petra) Limited

[2021] NZHC 1540

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2021-404-000601

[2021] NZHC 1540

UNDER

The Arbitration Act 1996 and The Property Law Act 2007

BETWEEN

PRESTIGE MOTORS LIMITED, a duly

incorporated company having its registered office at 14 Dryden Place, Mt Wellington, Auckland

Applicant

AND

MY TRUSTEE COMPANY (NIKOLAS AND PETRA) LIMITED, a duly

incorporated company having its registered office at 210A Marua Road, Mt Wellington, Auckland, as Trustee of the Nikolas and Petra Trust.

Respondent

Hearing:	On the papers
Appearances:	G Morrison for the Applicant D Purusram for the Respondent
Judgment:	30 June 2021

JUDGMENT OF WALKER J

[As to costs]

This judgment was delivered by me on 30 June 2021 at 12.30 pm Pursuant to Rule 11.5 High Court Rules

Registrar/Deputy Registrar

PRESTIGE MOTORS LIMITED v MY TRUSTEE COMPANY (NIKOLAS AND PETRA) LIMITED [2021] NZHC 1540 [30 June 2021]

[1]                  In this proceeding, Prestige Motors Limited (“Prestige”) sought urgent interim relief to restrain cancellation of a lease between the parties in respect of premises in Mt Wellington and to prevent re-entry in reliance on a notice under the Property Law Act 2007 (“PLA”) issued by the respondent, My Trustee Company (Nikolas and Petra) Limited.

[2]                  Prestige asserted that, at the time the PLA notice was issued, the respondent had unlawfully evicted Prestige from its premises, Prestige was not in possession and the respondent was already subject to sealed orders in related proceedings which required Prestige’s peaceable re-entry to its premises.

[3]                  Prestige repeatedly asked the respondent to withdraw its PLA notice on various grounds and proposed submission to arbitration in respect of the underlying dispute.

[4]                  As the respondent did not withdraw the PLA notice, Prestige prepared and filed an urgent application for relief.

[5]                  Following service, the respondent withdrew its PLA notice with immediate effect and submitted the disputed matters to arbitration.

[6]                  The withdrawal of the PLA notice was precisely the relief that Prestige sought in its application and what it had proposed for over a month to settle the matters.

[7]                  In those circumstances, Prestige seeks costs on discontinuance. It originally sought 2B scale costs and disbursements totalling $6,627.85. It provided a schedule setting out each of the steps taken, the time allocation and recovery on a 2B basis with its memorandum as to costs.

[8]                  The respondent submitted that costs should lie where they fall because the underlying substantive dispute had yet to be aired. It contests Prestige’s account of events, in particular as to the validity of the PLA and effect of s 267 of the Property Law Act 2007. It maintains that Prestige committed breaches outlined in the PLA notice and the Court has not had the opportunity to consider the grounds of opposition substantively.

[9]                  Prestige is entitled to costs. It has been put to the time and trouble of preparing and filing its application to prohibit the respondent from enforcing the PLA notice. After filing and service, the respondent withdrew the PLA notice, in essence giving Prestige the relief it had sought from the Court. The underlying allegations in the withdrawn PLA notice are not relevant to the cost inquiry.

[10]              In a reply memorandum, Prestige added to its costs claim to assert an entitlement to ‘costs on costs’ to reflect the needlessness of a costs determination. It now seeks a further $956 for preparation of the costs memorandum.

[11]              An award of costs on costs is not standard but the Court clearly has a discretion to make such award.1 In circumstances where Prestige only sought “scale” costs and obtained the very relief it sought in the proceeding, there are principled grounds for recovery of the cost of preparation of memoranda which ought to have been unnecessary. Parties ought to be disincentivised from forcing their opponent to incur further costs and the Court to determine what ought to be obvious entitlements to costs. However, an issue arises here. The original costs memorandum did not seek to recover for preparation for the memorandum and this only became a live issue in a reply memorandum to which the respondent is not strictly speaking entitled to respond.

[12]              While I agree that Prestige has been put to needless time and cost, in those circumstances, I make a costs order of $6,627.85 in favour of Prestige, being the amount originally claimed.

............................................................

Walker J

1      Hojsgaard v Chief Executive of Land Information New Zealand [2019] 2 NZLR 864, [2019] NZCA 84 at [130].