Sybeem Holdings Limited v Body Corporate No. 187087 HC Auckland CIV-2009-404-7806

[2011] NZHC 447

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2009-404-7806

UNDER  THE UNIT TITLES ACT 1972

AND UNDER                 THE DECLARATORY JUDGMENTS ACT 1908

BETWEEN  SYBEEM HOLDINGS LIMITED Plaintiff

AND  BODY CORPORATE NO. 187087

Defendant

Hearing:         By memoranda

Appearances: Mr S J Corlett for plaintiff

Mr C Baker for defendant

Judgment:      3 May 2011 at 3:00 PM

JUDGMENT OF ASSOCIATE JUDGE MATTHEWS [on costs]

This judgment was delivered by me on 3 May 2011 at 3 pm, pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date……………

SYBEEM HOLDINGS LTD V BODY CORPORATE NO. 187087 HC AK CIV-2009-404-7806 3 May 2011

[1]      The plaintiff and the defendant both seek costs on the discontinuance of this proceeding.

Background

[2]      The plaintiff is the owner of a unit within an apartment complex, of which the defendant is the body corporate under the provisions of the Unit Titles Act 1972. The complex of which the unit forms part suffered from water ingress problems, and the defendant took proceedings to recover from various parties the cost of remedial work which the body corporate had incurred, and for which the owners of the unit titles within the complex had been levied.  That proceeding was settled in or about May 2008.   In August 2009 the then solicitors for the owners of Unit 3, Sven Guttenbeil, Michelle Guttenbeil and the Birdwood Trust wrote to Auckland Property Management Limited, the manager of the defendant body corporate, seeking access for  inspection  purposes  of  the  books  of  account  and  all  minutes  of  the  body corporate, pursuant to Schedule 2 Rule 12 of the Unit Titles Act 1972 (“the Act”). Some inspection of documents was permitted on 9 September 2009,  but on 25

September 2009  this  group  of owners brought  an  originating application  in  the District Court against the defendant seeking orders that the books of account for the body corporate (and in particular certain listed documents), minutes relating to the affairs of the body corporate, and all other relevant documents including documents evidencing the settlement  of the High  Court  proceedings  for damages  be made available for inspection.   Evidently the District Court Rules require that before an originating application can be filed, leave must be given.  No such leave was sought, resulting in the District Court striking out the application and awarding costs to the defendant.

[3]      This proceeding was then filed in the High Court on 23 November 2009.  In a statement of defence filed on 22 January 2010 the defendant indicated it would provide certain documents, and it duly did so.  Further information was sought on 16

July 2010, and provided on 10 August 2010.

[4]      Although  in  the  memoranda  of  counsel  reference  is  made  to  various memoranda filed in this proceeding, it is not necessary for present purposes to refer to them.

The applications

[5]      The plaintiff discontinued this proceeding on 2 March 2011 having formed the view that it had received most of the documentation it sought in its claim.  It now seeks costs against the defendant.   It has incurred legal costs of $13,494.57 and disbursements of $2,223.31 including costs of a chartered accountant for analysis of the material provided, amounting to $1,033.31.  Scale costs and disbursements on a Category 2B basis total $10,871.31.  The plaintiff seeks an increased award of costs of  $12,000.00,  inclusive  of  disbursements,  or  alternatively  scale  2B  costs  of

$8,648.00 plus disbursements of $2,233.31.

[6]      The   defendant   seeks   costs   against   the   plaintiff   on   the   plaintiff’s

discontinuance, on a scale 2B basis.

[7]      The plaintiff maintains that the documents provided by the body corporate were substantially those which were first sought on 3 August 2009, to which it maintains it was entitled under the provisions of the Act.  Its position is that it would not have obtained those documents without recourse to the Court in this proceeding. The information required was not made available until after January 2010, most of it on 28 April 2010 and some further information on 10 August 2010.

[8]      The defendant maintains that it was always ready, willing and able to supply ledgers sought by the plaintiff, that there are no bank statements to be provided, that the plaintiff’s request for examination of accounts went beyond the provisions of r 12  in the schedule to the Act, that the plaintiff did not seek the minutes of the body corporate in any way other than by this proceeding (and the former District Court proceeding) and that certain documents relating to the settlement of the body corporate  damages  claim  were  confidential  and  not  able  to  be  provided  to  the plaintiff.

[9]      Rule 15.23 provides that unless the defendant otherwise agrees or the Court otherwise orders, a plaintiff who discontinues a proceeding against the defendant must pay costs to the defendant, up to and including the discontinuance.  It is clear, however, that a different costs outcome may be ordered if it is just and equitable to do so.  The Court is not to speculate on the merits of a case which it has not heard though in exceptional cases, where the merits are clear, they may influence the Court’s costs decision on a discontinuance.  On the other hand, the reasonableness of the stance of both parties has to be considered.  See, generally, Kroma Colour Prints v Tridonicatco NZ Ltd (2008) 18 PRNZ 973 and McGechan at paragraph 15.23.01.

[10]     I am satisfied that it was reasonable for this proceeding to be brought in order to achieve access to the material to which the plaintiff is entitled under the Act.  The material was first sought in August 2009 and the proceeding filed later in November

2009.  Limited inspection had been given in September, and the material sought in this proceeding is identical to the material sought in the District Court proceeding which was filed in September.  By the time this proceeding was brought, therefore, the defendant had had two to three months to make the material available, and it had not done so.

[11]     Secondly, it took a period in excess of a further eight months for all the information sought to be provided.   There may have been valid reasons for there being some delay in the provision of information, but I am satisfied that given the statutory duty on the defendant a more prompt outcome could reasonably have been anticipated by the plaintiff.

[12]    Thirdly, the plaintiff has largely achieved the outcome it sought in the proceeding.   Whilst paragraph 2 of the prayer for relief in the statement of claim seeks a taking of account of levies payable and paid in relation to the plaintiff’s unit, in the terms set out in that paragraph, and the plaintiff has not sought to continue to seek that remedy, it is the eventual provision of the information the plaintiff sought which has led to that position.

[13]     Weighing up all matters, it is my view that the plaintiff is entitled to costs against the defendant in this case, for reasons discussed.  However, I am not satisfied that it is appropriate for the plaintiff to be awarded any greater sum than scale.  The plaintiff has stopped short of achieving all it sought to achieve in its prayer for relief, and attendances have been required on the part of the defendant in the period of some eight months since the last of the relevant information was provided.  I award to the plaintiff costs on a Scale 2B basis together with disbursements, a total sum of

$10,871.31.

J G Matthews

Associate Judge

Solicitors:

Brookfields, Auckland
Price Baker Berridge, Auckland