Stake Property Limited as trustee of Stake Property Trust v Coate HC Auckland CIV-2010-404-8465

[2011] NZHC 1715

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2010-404-8465

BETWEEN  STAKE PROPERTY LIMITED AS TRUSTEE OF STAKE PROPERTY TRUST

Plaintiff

ANDJOCELYN SHIRLEY COATE KATHRYN ANNE BENIONI MARGARET ILIA MCCAULEY Defendants

ANDBARFOOT & THOMPSON First Third Party

ANDALFRED BOK Second Third Party

Hearing:         On the papers

Counsel:         CT Patterson for Plaintiff

PJP Grace for defendants

Judgment:      22 November 2011 at 11:00 AM

COSTS JUDGMENT OF ABBOTT AJ

This judgment was delivered by me on 22 November 2011 at 11.00 a.m., pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date: ………………………….

Solicitors:           Conveyancing Shop Lawyers, P O Box 1205, Pukekohe

Insight Legal, P O Box 333, Warkworth

Copies to:           Mr CT Patterson,  [email protected]

Mr PJP Grace,  [email protected]

STAKE PROPERTY LIMITED V COATE HC AK CIV-2010-404-8465 22 November 2011

[1]      The defendants have applied for an award of costs to them on a scale 2B

basis, following dismissal of the plaintiff’s application for summary judgment.

[2]      The essential issue is whether this is an appropriate case to depart from the standard  approach  (principle stated  by the Court  of Appeal  in  NZI Bank Ltd  v Philpott[1], confirmed in cases such as Henkgaa v Holdfast Manufacturing Ltd[2] following introduction of the current cost regime) to reserve costs following an unsuccessful application, until final determination of the proceeding.

[1] NZI Bank Ltd v Philpott [1992] NZLR 403.

[2] Henkgaa v Holdfast Manufacturing Ltd (2004) 17 PRNZ 54.

[3]      The defendants contend that the plaintiff proceeded with its application in the certain knowledge that there were bonafide questions of fact and law which could only be determined after trial (picking up on the language of the Court of Appeal in NZI Bank Ltd v Philpott[3], describing the circumstances in which the Court might exercise its discretion to depart from the general principle).

[3] Ibid n 1, at [405].

[4]      In support of their claim, the defendants refer to correspondence sent by the defendants’ solicitor to the plaintiff’s solicitor following receipt of the application for summary judgment, setting out the defendants’ view that the application was incapable of success.  That letter referred to arguments available to the defendants over the proper construction of the agreement, and uncertainty of the subject matter of the agreement, coupled with the plaintiff’s later consent to joinder of third parties (indicating an awareness of issues that needed to be heard together).

[5]      I am not persuaded that it is appropriate to depart from the usual principle of awaiting a final determination of the proceeding.   Although I found that the defendants  had  arguable  defences  in  respect  of  all  matters  advanced  by  the defendants, I came to that view because I considered that the critical legal issue of construction of the agreement required further investigation into the context, and the findings on those matters would also inform the Court on considerations for the other

grounds, including whether or not to grant specific performance.

[6]      There is no question that the defendants’ view of the application has been borne out by the result, but that is not the test.  The Court needs to be satisfied that the plaintiff pursued the application “in the certain knowledge” of a question of fact or law which could only be determined after a trial.  Using further language of the Court of Appeal[4]  I do not consider that it can be said that the plaintiff brought the application unreasonably, or with knowledge of its certain failure, or by way of an experiment.  If the context, determined at trial, does not support the arguments being advanced for the defendants, their entitlement to costs on this application may fall

away (although I hasten to add that I am not determining that point here).

[4] Ibid n 1, at [406].

[7]      Costs of the application for summary judgment are reserved pending final determination of the proceeding.

Associate Judge Abbott