SPAK (1996) Limited v Leroy - [2023] NZCA 77

IN THE COURT OF APPEAL OF NEW ZEALAND

I TE KŌTI PĪRA O AOTEAROA

CA614/2021
[2023] NZCA 77

BETWEEN	SPAK (1996) LIMITED Appellant
AND	REECE LEROY First Respondent BODY CORPORATE 407404 Second Respondent

Court:	Courtney, Thomas and Peters JJ
Counsel:	M Eastwick-Field and J B C Trezise for Appellant E J H Morrison and E F R Bello for First Respondent
Judgment: (On the papers)	24 March 2023 at 2.30 pm

JUDGMENT OF THE COURT

Costs awarded in favour of the first respondent for a standard appeal on a band A basis with usual disbursements. Second counsel certified.

____________________________________________________________________

REASONS OF THE COURT

(Given by Thomas J)

In September 2020, SPAK (1996) Limited (SPAK), the operator of an Auckland hotel intended for use as a managed isolation facility in response to the COVID-19 pandemic, commenced proceedings in trespass against Reece LeRoy, the building manager of apartments located within the same building as the hotel. In October 2020, SPAK obtained an interim injunction against Mr LeRoy restricting his entry into the hotel. Almost a year later, by which time Mr LeRoy had ceased working as the building manager, the High Court gave summary judgment dismissing SPAK’s trespass claim, finding SPAK had no arguable case against Mr LeRoy and that it had an improper purpose in bringing the proceeding.[1] Indemnity costs were awarded.
[1]SPAK (1996) Ltd v LeRoy [2021] NZHC 2398.
SPAK appealed the decision. In a judgment delivered on 18 November 2022, this Court dismissed the appeal against summary judgment but allowed the appeal against the award of indemnity costs, remitting costs back to the High Court.[2] We reserved costs in this Court, noting that while we considered it appropriate that costs should lie where they fell, the parties were able to file submissions as to costs if they wished. They have done so.
[2]SPAK (1996) Ltd v LeRoy [2022] NZCA 564 at [195]–[197].
Mr LeRoy seeks an order for costs on a standard appeal band A basis (including second counsel) totalling $5,975. SPAK opposes the granting of such an order on the basis there is no reason to depart from the Court’s preliminary indication that costs should lie where they fall.

Submissions

Mr Morrison, for Mr LeRoy, submits that an award of costs in his favour is justified on the grounds that SPAK’s substantive proceeding was meritless and Mr LeRoy was largely successful on appeal. Not only was Mr LeRoy largely successful in his opposition to the appeal against the substantive High Court judgment but he was also successful in his application to adduce further evidence and in his opposition to SPAK’s application to adduce further evidence. Mr Morrison submits that Mr LeRoy was put to significant expense in taking steps in relation to the appeal. Further, that SPAK’s claim was, from the outset, frivolous and not worthy of the Court’s resources and that this was recognised by the Court.[3]
[3]Citing paragraphs [178], [181] and [187].
Citing Tyrion Holdings Ltd v Infrastructure NZ Ltd, Mr Morrison…

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: [2023] NZCA 77
Decision Date: 24 March 2023 at 2.30 pm

CaseChat Overview and Summary

SPAK (1996) Limited, the operator of an Auckland hotel intended for use as a managed isolation facility during the COVID-19 pandemic, brought a trespass claim against Reece LeRoy, the building manager of apartments within the same building as the hotel. SPAK obtained an interim injunction against LeRoy before the High Court dismissed SPAK’s claim on summary judgment, finding SPAK had no arguable case and had an improper purpose in bringing the proceedings. SPAK appealed the High Court's decision, but this Court dismissed the appeal against summary judgment, allowed the appeal against the award of indemnity costs, and remitted the costs back to the High Court. This Court reserved costs, noting that while it considered it appropriate that costs should lie where they fell, the parties were able to file submissions as to costs if they wished.

The Court was required to decide whether costs should be awarded to LeRoy for the appeal against the High Court’s decision and, if so, the basis on which such costs should be awarded. In particular, the Court was required to consider the extent to which SPAK’s appeal was meritless and whether its conduct during the proceedings warranted an award of costs against it. The Court was also required to consider whether SPAK’s success in its appeal against the award of indemnity costs should affect the outcome of the costs appeal.

The Court observed that LeRoy was largely successful on appeal, having opposed SPAK’s appeal against the substantive judgment and successfully argued against SPAK’s applications to adduce further evidence. The Court also observed that SPAK’s claim was, from the outset, frivolous and an abuse of process. It was noted that SPAK’s conduct during the proceedings was not above reproach. The Court rejected SPAK’s submission that its appeal against the award of indemnity costs was more material overall than in Tyrion Holdings Ltd v Infrastructure NZ Ltd, where the Court had awarded costs to the respondent for the appeal against the substantive decision of the High Court. The Court concluded that SPAK’s success in its appeal against the award of indemnity costs did not disentitle LeRoy from costs for the appeal. The Court also rejected SPAK’s submission that it was not appropriate for this Court to award costs simply to offset LeRoy’s possible separate obligation to repay a portion of the High Court costs to SPAK.

The Court concluded that costs should be awarded to LeRoy for the appeal in this Court for a standard appeal on a band A basis with usual disbursements. The Court certified for second counsel.

Orders