Ruby & Rata Limited v Reed Trustee 2018 Limited

[2022] NZHC 2928

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2022-404-724

[2022] NZHC 2928

UNDER

section 313 Property Law Act 2007

BETWEEN

RUBY & RATA LIMITED

Plaintiff

AND

REED TRUSTEE 2018 LIMITED and ANTHONY PRIVETT REED

Defendants

Hearing:	On the papers
Appearances:	RO Parmenter for the Plaintiff JW Maassen for the Defendants
Judgment:	8 November 2022

JUDGMENT OF FITZGERALD J

[As to costs]

This judgment was delivered by me on 8 November 2022 at 4.00pm, pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date……………

Solicitors:           Graham & Co, Auckland (G Bilkey)

Langford Law, Wellington (J Langford)

To:R Parmenter, Auckland J Maassen, Wellington

RUBY & RATA LTD v REED [2022] NZHC 2928 [8 November 2022]

Introduction and background

[1]                 The plaintiff (Ruby) and defendants (to which  I will  refer collectively  as  Mr Reed) own adjoining rural properties. There is a right of way easement which passes over Mr Reed’s land to give Ruby access to its property. Ruby wants to carry out works on the right of way, including forming an additional access point from the right of way to its property. Mr Reed objects to the proposed works, saying that they go beyond what is reasonably necessary for Ruby to enjoy its rights under the right of way.

[2]                 Discussions and correspondence between the parties did not resolve matters. In the event, Mr Reed issued trespass notices against Ruby’s two directors. The trespass notices were framed in broad terms, warning each of Ruby’s directors to “stay off the place known as 87 Ruby Road”.

[3]                 In response, Ruby sought an interim injunction against Mr Reed, preventing Mr Reed from:

(a)enforcing the trespass notices; and

(b)interfering with any of the works on the right of way proposed by Ruby.

[4]                 The hearing of the injunction application came before me. I found that there was plainly a serious question to be tried, but on the balance of convenience, declined the application.1

[5]                 I concluded that both parties had taken initial positions that were probably not sustainable as a matter of law, but that there was a serious question to be tried that Ruby could establish more than one access point from the right of way to its property. I held, however, that the effect of granting the relief sought at [3(b)] above would have been to effectively determine the substantive dispute as to the reasonableness of the proposed works. That was not appropriate on an interim injunction application. In addition, following the injunction application being filed and served, Mr Reed’s

1      Ruby & Rata Ltd v Reed [2022] NZHC 2025.

counsel had confirmed that the trespass notices were not intended to prevent everyday use of the right of way. In response, counsel for Ruby noted in his memorandum filed on the first call of the matter that given the confirmation provided by counsel for   Mr Reed, he did “not press for an injunction”. It remains unclear to me from the file why the matter nevertheless proceeded to a hearing. Finally, following the hearing of the injunction application, and at the Court’s invitation, Mr Reed filed notice of certain “exceptions” to the trespass notices, the relevant exception for present purposes being:

The plaintiff (including its agent, contractors and invitees) may use the right of way and access point X in the statement of claim – without modifying the land in any way without restriction – in a manner that does not offend the right of the defendant that the right of way is not obstructed under the Property Law Act, sch 5.

[6]                 In these circumstances, I concluded my judgment determining the interim injunction application with the (preliminary and non-binding) observation that an appropriate outcome on costs may be for costs to lie where they fell. I observed that it was not unreasonable for Ruby to have brought the application for an interim injunction, given the original form of the trespass notices and that confirmation that the trespass notices did not prevent passage over the right of way was only provided following the commencement of the proceedings. Despite this, however, I noted that Ruby had not obtained the substantive relief which it sought (namely that at [3(b)] above).

[7]                 The parties have not been able to agree costs. Ruby is content for costs to lie where they fall. Mr Reed, on the other hand, seeks approximately $24,000 for costs of the injunction application.2 If the Court does make a costs award in Mr Reed’s favour, Ruby says the costs sought by Mr Reed are inflated and any costs awards should be no more than $6,572.50.

Discussion

[8]                 Despite the formal outcome on the injunction application, I am of the view that Ruby was the successful party overall for costs purposes. It was reasonable for Ruby to file the application for an injunction given the trespass notices issued by Mr Reed.

2      This is on a scale 2B basis.

The injunction application had the effect of bringing about that relief sought by Ruby at [3(a)] above, namely confirmation that Mr Reed would not enforce the trespass notices in the form issued.

[9]                 Nevertheless, Ruby elected to pursue the application for the relief set out at [3(b)] above and was unsuccessful in that respect. Pursuit of that part of the application plainly led to Mr Reed incurring significantly increased costs than would have otherwise been the case. In these circumstances, and pursuant to r 14.7(d) of the High Court Rules 2016, the appropriate outcome in my view is for costs to lie where they fall. I make an order accordingly.

[10]             For completeness, had I awarded costs to Mr Reed, they would have been nowhere near the amount claimed. The claim of approximately $24,000 in scale costs for a defended interlocutory application is unsustainable. The claim reflects either a misunderstanding as to the proper application of the costs rules, or overreach. In terms of the items claimed:

(a)Item 10 ought not to have been included: preparation for the first case management conference addresses matters broader than the injunction application and is properly included in any claim for costs at the conclusion of the substantive proceedings.

(b)While item 26 is properly claimed (appearance at hearing of defended application for sole or principal counsel), the claim of two days is unsustainable. The matter concluded well before the lunch adjournment,3 so at most a half or quarter day ought to have been claimed. It is not clear on what basis two days has been included for this step.

3      Court records show the hearing lasted 1.5 hours.

(c)Items 30 and 32 relate to preparation for substantive (affidavit) hearings and not defended interlocutory applications. They too ought to have been excluded.

Fitzgerald J