Property Sales Direct Ltd v Hawken Lane Development LP

[2022] NZHC 596

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2019-404-1435

[2022] NZHC 596

UNDER

Companies Act 1993 and the Limited Partnerships Act 2008

BETWEEN

PROPERTY SALES DIRECT LTD

Plaintiff/First Counterclaim Defendant

AND

HAWKEN LANE DEVELOPMENT LP

Defendant/Counterclaimant

STEPHEN JOHN DAVIES

Second Counterclaim Defendant

Judgment:

(On the papers)

29 March 2022

JUDGMENT OF BREWER J

[Costs]

This judgment was delivered by me on 29 March 2022 at 12 noon pursuant to Rule 11.5 High Court Rules.

Registrar/Deputy Registrar

Solicitors:

Keegan Alexander (Auckland) for Plaintiff Heritage Law (Auckland) for Defendant

PROPERTY SALES DIRECT LTD v HAWKEN LANE DEVELOPMENT LP [2022] NZHC 596 [29 March 2022]

Introduction

[1]                 On 18 November 2021, I declined the plaintiff’s application to strike out an amended counterclaim filed by the defendant.1 I also granted a number of applications brought by the plaintiff which were not opposed by the defendant.2

[2]                 The plaintiff, although it was the unsuccessful party, seeks costs of $7,050.50 on two grounds. First, it argues that the defendant has in essence been granted an indulgence. A grant of indulgence is conventionally made at the expense of a costs award against the party obtaining the indulgence.3 The plaintiff submits that the defendant was out of time to file its second counterclaim, it failed to address the difficulties this would cause to the timetable and that the plaintiff’s strike-out application was responsibly brought. Secondly, the plaintiff submits that it was unnecessarily required to bring several other interlocutory applications before the defendant ultimately consented to them in its notice of opposition. This caused significant wastage of time and money.

[3]                 The defendant seeks costs of $6,095 and disbursements of $150 on the basis that it was the successful party. It consented to a number of the orders sought which left only the plaintiff’s strike-out application for determination at the hearing on     11 November 2021. That application was declined. In response to the plaintiff’s claim for costs, the defendant submits that it did not receive an indulgence. The defendant was forced to respond to the plaintiff’s application to strike out the counterclaim. While leave may technically have been required to bring the second counterclaim under r 5.57(1), the defendant submits that leave should have been obtained as a matter of consent (as with the other orders sought by the plaintiff). The counterclaim is clearly connected with the subject matter of the main proceeding and it could not have been brought earlier, as it was based on a judgment issued on 15 June 2021. The plaintiff’s opposition to the counterclaim was purely tactical.

1      Property Sales Direct Ltd v Hawken Lane Development LP [2021] NZHC 3119.

2 At [19].

3      See Holdgate v Holdgate HC Auckland CP303/96, 24 September 1996; and Cunningham v Butterfield [2014] NZCA 213, (2014) 22 PRNZ 521.

[4]                 I do not consider that granting leave for the defendant to file the second counterclaim should be characterised as an indulgence such that the plaintiff is entitled to an award of costs. The counterclaim is plainly related to or connected with the subject matter of the proceeding. The catalyst for it was a reasons judgment of Katz J delivered on 15 June 2021. This is not a case where, despite the plaintiff having been unsuccessful in applying to strike out the counterclaim, it should nevertheless be awarded costs. The defendant successfully opposed the strike-out application and is entitled to costs on that basis.4

[5]                 With respect to the other applications within the omnibus application, the impetus for the plaintiff deciding to file the applications came from Muir J:

The Court is not prepared to entertain multiple informal interlocutory applications in the manner proposed. The plaintiff will need to apply in the usual way with the applications properly supported by evidence as required.

[6]                 The defendant did not contest the other applications. It consented to them in its notice of opposition.

[7]                 In these circumstances the general practice of costs following the outcome of the contested application should be followed.

Decision

[8]                 I award costs to the defendant on a 2B scale basis together with disbursements, totalling $6,245.

Brewer J

4      High Court Rules 2016, r 14.2(1)(a).