Simunac v Lu

[2023] NZHC 335

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2022-404-1867

[2023] NZHC 335

BETWEEN

MARKO SIMUNAC and MAJA VISNIC SIMUNAC
Plaintiffs

AND

JIEYU LU

First Defendant

HERENGA A NUKU AOTEAROA, THE OUTDOOR ACCESS COMMISSION

Second Defendant

AUCKLAND COUNCIL, TE
KAUNIHERA O TAMAKI MAKAURAU

Third Defendant

Hearing:

On the papers

Appearances:

A C Eager for Plaintiffs

M D Pascariu for First Defendant
No appearance for Second and Third Defendants

Minute:

28 February 2023

JUDGMENT OF LANG J

[on costs]

This judgment was delivered by me on 28 February 2023 at 3 pm, pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar Date……………

Solicitors:

Hesketh Henry, Auckland Hamilton Locke, Hamilton

SIMUNAC v LU [2023] NZHC 335 [28 February 2023]

[1]                In this proceeding Mr and Mrs Simunac challenge a proposal by the defendants to establish a walking, cycling and equestrian trail that will travel in part along a right of way granted in their favour by an easement. Mr and Mr Simunac contend the proposal will derogate from their enjoyment of the rights afforded them by the easement. They therefore filed a statement of claim containing three causes of action. These were based on allegations that the proposal will create both a public and private nuisance and that it will derogate from the grant of the easement.

[2]                The first defendant, Ms Lu, applied for a stay of the proceeding on the basis that the easement contained an implied term requiring any dispute to be referred to arbitration.1 I was scheduled to hear the application for stay as Duty Judge on 15 February 2023.

[3]                On 13 February 2023 Mr and Mrs Simunac filed an amended statement of claim that omitted the claim based on derogation of the grant of the easement. This prompted Mr Piscariu, counsel for Ms Yu, to withdraw the application for a stay of the proceeding at the commencement of the hearing. I now formally dismiss the application. The only remaining issue is that of costs.

[4]                All issues as to costs are at the discretion of the Court.2 In exercising its discretion, however, the Court is required to take into account the principles set out in r 14.2 of the High Court Rules 2016. To the forefront of these is the principle that the party who fails with respect to an interlocutory proceeding should pay costs to the party who succeeds.3

The arguments

[5]                Mr and Mrs Simunac claim they were the successful parties because Ms Lu ultimately withdrew the application. They therefore seek an order for costs in their favour.

1      Land Transfer Regulations 2002, Article 14 in Sch 4.

2      High Court Rules 2016, r 14.1.

3      Rule 14.2(1)(a)

[6]                Mr Piscariu contends Ms Lu was the successful party because her application forced Mr and Mrs Simunac to amend their claim. She therefore seeks an award of costs in her favour.

[7]                Mr Pascariu also relies on 7.77 of the High Court Rules 2016, which provides as follows:

7.77     Filing of amended pleading

(1)       A party may before trial file an amended pleading and serve a copy of it on the other party or parties.

(2)An amended pleading may introduce, as an alternative or otherwise,—

(a)relief in respect of a fresh cause of action, which is not statute barred; or

(b)a fresh ground of defence.

(3)An amended pleading may introduce a fresh cause of action whether or not that cause of action has arisen since the filing of the statement of claim.

(4)If a cause of action has arisen since the filing of the statement of claim, it may be added only by leave of the court. If leave is granted, the amended pleading must be treated, for the purposes of the law of  limitation  defences,  as  having  been filed on the date of the filing of the application for leave to introduce that cause of action.

(5)Subclause (4) overrides subclause (1).

(6)If an amended pleading introduces a fresh cause of action, the other party must file and serve that party’s defence to it within 10 working days after the day on which the amended pleading is actually served on the other party.

(7)When an amended pleading does not introduce a fresh cause of action, the other party may, within 5 working days after the day on which the amended pleading is served on that other party, file and serve an amended defence to it.

(8)If an amended pleading has been filed under this rule, the party filing the amended pleading must bear all the costs of and occasioned by the original pleading and any application for amendment, unless the court otherwise orders.

(9)       This rule does not limit the powers conferred on the court  by rule 1.9.

(10)This rule is subject to rule 7.7 (which prohibits steps after the close of pleadings date without leave).

(Emphasis added)

[8]                Mr Pascariu submits that r 7.77(8) applies in the present case to render Mr and Mrs Simunac liable for Ms Lu’s costs in relation to the application.

Decision

[9]                I accept that r 7.77(8) arguably applies in the present context because of the words “occasioned by”. It can be argued that Mr and Mrs Simunac should bear the costs Ms Lu has incurred in pursuing the stay application because they were occasioned by the inclusion in the original statement of claim of the cause of action based on derogation from the grant of the easement.

[10]            However, the application for stay always faced a significant obstacle because the original statement of claim contained two other causes of action, neither of which could have been determined by arbitration.

[11]            The fact that Ms Lu was ultimately forced to withdraw the application for stay does not mean Mr and Mrs Simunac were the successful parties. They elected to amend their statement of claim at a very late stage to guard against the risk that the first cause of action would be referred to arbitration.

[12]            In those circumstances I consider the interests of justice will be served by leaving costs to lie where they fall. There will be no order as to costs.

Next event

[13]            There remains on file an application on notice for an interim injunction. Ms Eager was unable to advise me whether Mr and Mrs Simunac propose to pursue the application. I would be grateful if she could file and serve a memorandum within seven days to advise the Court whether fixture time will be required.

[14]            If the application for an interim injunction is not to be pursued the Registrar is to allocate the proceeding a first case management conference before an Associate Judge on the first available date after 1 April 2023.

Lang J