Stanhope Workshop Limited v Arthur

[2013] NZHC 2725

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV 2013-404-003234 [2013] NZHC 2725

IN THE MATTER

of the enforcement of a right of way easement

BETWEEN

STANHOPE WORKSHOP LIMITED Plaintiff

AND

BRUCE ARTHUR First Defendant

AUCKLAND COUNCIL Second Defendant

Hearing:	(on the papers)
Appearances:	R S Pidgeon for the Plaintiff J Strauss for the First Defendant J Hilario for the Second Defendant
Judgment:	18 October 2013

[COSTS] JUDGMENT OF WYLIE J

This judgment was delivered by Justice Wylie on 18 October 2013 at 3.00 pm

Pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar

Date:

STANHOPE WORKSHOP LIMITED v ARTHUR & ANOR [2013] NZHC 2725 [18 October 2013 ]

Introduction

[1]      In June 2013, the plaintiff filed a statement of claim against both the first defendant, Mr Arthur, and the second defendant, Auckland Council.

[2]      In brief, the plaintiff and the first defendant owned adjoining properties, which shared a right of way.  The plaintiff purchased its property in April 2013.  In doing so, it relied upon the memorandum of transfer which related to the right of way.  It transpired that in 1989, the first defendant had sought consent from the Council to permit the operation of a business from his property with appurtenant car parking. That application had been approved by the second defendant. The approval purported to allow the first defendant to park on the right of way.   The plaintiff sought a mandatory injunction compelling the first defendant to comply with the terms of the right of way easement.   It also asserted that the second defendant’s actions in granting the car park approval were in breach of duties owed to the registered proprietor of the lot purchased by it, and that its actions in granting the approval were negligent.

[3]      At  the same time as it filed its statement of claim, the plaintiff applied without notice for a mandatory injunction against Mr Arthur.  Keane J declined to deal with the matter on a without notice basis, and directed that the application should be served on Mr Arthur.

[4]      The matter was called before the Court on 27 June 2013.  The Court was then advised that the first defendant would provide an undertaking that he, his family, and his invitees, would not in future use or occupy the car park in contention.   The parties requested an adjournment to enable them to discuss the terms of the undertaking.  There was no great difficulty in this regard and the undertaking was signed by Mr Arthur on the same day — 27 June 2013.

[5]      The matter was due to be called on 1 July 2013.  On 28 June 2013, counsel filed a joint memorandum. The memorandum recorded that the undertaking resolved the matter as between the plaintiff and the first defendant, save as to costs.   This position was confirmed in a subsequent memorandum filed on 5 July 2013.

[6]      In the event, and at counsels’ request, the proceeding was further adjourned to enable an application to be made to vary the planning consent given by the second defendant.  It was then adjourned yet again, but it ultimately came before the Court on 9 September 2013.  The Court recorded the undertakings offered from the outset by Mr Arthur.  It also noted that Mr Arthur had already applied to the Council to vary the planning approval.   After discussions with counsel, the Court recorded that Mr Arthur would use his best endeavours to obtain a consent which would ensure that no car parks were permitted on the right of way.

Costs Application

[7]      The plaintiff now seeks costs against Mr Arthur.  The application for costs does not affect the second defendant. It is neutral in regard to the issue.

[8]      The plaintiff seeks costs on a 2B basis.  The total amount sought, together with disbursements, is $15,023.15.   The memorandum filed by the plaintiff, and Mr Bailey’s affidavit in support, record that the plaintiff’s actual costs are $8,838.83, plus filing fees, making a total of $10,893.03.   However, it is asserted that an additional two affidavits were sworn and filed in relation to costs, which have not yet been  invoiced.   Those  affidavits were  filed to  respond  to  an  affidavit filed  by Mr Arthur in relation to costs.  It is estimated that the plaintiff’s actual costs (which I assume include disbursements) are $13,000 to $13,500.   It is asserted that the anticipated actual costs, taking into account attendances in respect of the plaintiff’s claim for costs, will roughly equate to the scale costs sought.

Analysis

[9]      The starting point is r 15.23.  It provides as follows:

15.23   Costs

Unless the defendant otherwise agrees or the court otherwise orders, a plaintiff who discontinues a proceeding against a defendant must pay costs to the defendant of and incidental to the proceeding up to and including the discontinuance.

[10]     Mr Pidgeon, acting on  behalf of the plaintiff, accepted that it is for the plaintiff to show the Court that the presumption in r 15.23 should not apply.   He

argued that it is necessary to go behind the notice of discontinuance, and to focus on the following:

(a)       The plaintiff has acted reasonably in bringing the proceedings;

(b)The  first  defendant  acted  unreasonably,  and  that  the  proceedings should not have been required to be issued in the first place;

(c)       The proceedings were delayed until Mr Arthur agreed to amend his undertaking; and

(d)      The plaintiff essentially achieved what it set out to achieve.

He pointed to the judgment of Venning J in Carmel College v North Shore City Council,1 where His Honour indicated that the plaintiffs in that case had achieved the result they sought to achieve by issuing proceedings, and that they were prima facie entitled to costs as successful parties, notwithstanding that the matter did not proceed to trial.

[11]    Mr Strauss, for Mr Arthur, referred to the relevant facts disclosed by the affidavits. He noted that, prior to becoming aware of the proceedings, Mr Arthur had stopped  using  the  carpark  in  question,  and  that  at  the  first  call  of  the  matter, Mr Arthur gave an undertaking not to park, or to allow any other party associated with him to park on the right of way.

[12]     In my view, the plaintiff did act reasonably in commencing the proceedings.2

It is common ground that difficulties over Mr Arthur’s use of the right of way first surfaced  in  late April  2013.    While  the  parties  disagree  as  to  what  happened thereafter, it is clear that matters were not quickly resolved.  Even on his own evidence, Mr Arthur did not cease using the carpark until 24 June 2013, or shortly thereafter.  As I have noted above, the proceedings were issued on 21 June 2013.

The plaintiff was entitled to bring matters to a head, and in my view, did not act

1      Carmel College v North Shore City Council HC Auckland CIV 2007-404-5894, 20 January

2009.

2      Oggi Advertising Ltd v McKenzie (1998) 12 PRNZ 535 (HC).

unreasonably in filing the proceedings. The plaintiff was, however, unwise to seek a mandatory injunction on a without notice basis.  This dispute had been simmering since April 2013, the plaintiff was aware of the approvals issued by the Auckland Council, and of the resulting confusion.  Applying for a mandatory injunction on a without notice basis was optimistic.  The plaintiff should not be entitled to visit the costs of this application on Mr Arthur.

[13]     It is noteworthy that Mr Arthur did not seek to defend the proceedings.  An undertaking was offered when the matter was first called before the Court — only six days after the proceedings were filed.  On the same day, Mr Arthur signed an undertaking, which concluded matters as between him and the plaintiff.  That was confirmed in the joint memorandum filed on 28 June 2013.   At this stage, the plaintiff had filed its proceedings, attended before Gendall J, and filed one memorandum.

[14]     Mr Arthur did not thereafter oppose the proceeding.  The final undertaking recorded by the Court was in the terms initially agreed by Mr Arthur.  An additional term was sought by the plaintiff to require Mr Arthur to make application to the Council to vary the planning consent.  However, this aspect of the matter had not been signalled in the original proceedings — at least against the first defendant — and it appears to have been something of an afterthought by the plaintiff.  In any event, the request for the additional undertaking was not resisted by Mr Arthur. As at the date the discontinuance was advised to the Court, and the final undertakings were recorded, Mr Arthur had already applied to the Council for variation to his consent. The only difficulty was in settling the terms of the plaintiff’s additional requirement. In my judgment, Mr Arthur was not unduly difficult in this regard.

[15]    While both Mr Arthur and the plaintiff have since filed lengthy affidavits asserting what did or did not occur, the Court cannot enter into the merits in the context of the present application.   Filing those affidavits was effectively wasted time.  The parties should have been aware that the Court would not be considering the merits of the matter on a costs application of this kind.

[16]     It appears that the plaintiff is seeking to recover all of its costs, or perhaps even  a  sum  in  excess  of  its  actual  costs,  from  the  first  defendant  only, notwithstanding that it brought proceedings against the second defendant. Arguably, it was the second defendant’s action in issuing the planning permit which caused the dispute.  While the plaintiff has not sought costs against the second defendant, it has not disclosed what arrangements (if any) it has made in relation to costs with the second defendant.

[17]     In my view, the plaintiff’s cost entitlement is limited to part only of its costs

from the defendant.

[18]     I agree that it is appropriate to fix costs on a 2B basis. The plaintiff is entitled to part of its costs for commencing the proceedings — three days at $1,990 per day,

0.4 of a day for filing the memorandum for the first conference, and 0.2 of a day for an appearance at that conference.   This equates to $7,164.   This figure should be halved, given that there were two defendants to the proceedings.

[19]     Accordingly, I direct that the first defendant is to pay to the plaintiff by way of costs the sum of $3,582.  The first defendant is also to pay one-half of the filing fee on the notice of proceeding (but not the without notice application), and one-half of the service costs incurred.  The plaintiff is not entitled to recover “research fees”. They are embraced with the costs allowed for preparing the statement of claim.  If there is any difficulty settling disbursements, the same is to be dealt with by the

Registrar.

Wylie J