Tauranga Bridge Marina Ltd v De Fall - [2016] NZHC 2704

IN THE HIGH COURT OF NEW ZEALAND TAURANGA REGISTRY

CIV-2015-470-188 [2016] NZHC 2704

UNDER the Declaratory Judgments Act 1908

BETWEEN

TAURANGA BRIDGE MARINA LTD Plaintiff

AND

NEVILLE JOHN DU FALL, JANET LOUISE DU FALL AND RUSSELL FREDERICK DU FALL as trustees of N.J Du Fall Family Trust

First Defendants

AND

CHRISTOPHER DENNIS DONALD COLLIER AND CA TRUSTEES (2012) LTD as trustees of Chris Collier Family Trust

Second Defendants

CONTINUED OVERLEAF

Hearing: On the papers

Judgment:

11 November 2016

JUDGMENT AS TO COSTS OF THOMAS J

This judgment was delivered by me on 11 November 2016 at 3pm pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date:………………………….

TAURANGA BRIDGE MARINA LTD v DU FALL, DU FALL AND DU FALL as trustees of N.J Du Fall
Family Trust [2016] NZHC 2704 [11 November 2016]

AND
RUSSELL JOHN LEVY

Third Defendant

AND

STUART JAMES NEAVE Fourth Defendant

AND

STUART JAMES NEAVE AND SUE CELS

Fifth Defendants

AND

ALLARD ROBERT HENRY MITCHELL AND CLAYTON ROBERT HENRY MITCHELL as trustees of Bob Mitchell Sixth Defendants

AND

COLIN GRAHAM Seventh Defendant

Introduction

[1] On 27 July 2016, I delivered judgment against the plaintiff in this case.1 The defendants now seek costs. On a 2B basis, their costs and disbursements total
$62,726.78. The plaintiffs say that costs should lie where they fall.

[2] The decision related to the proposed construction of a breakwater at a marina in Tauranga, which the manager and owner of the marina, the plaintiff, sought partially to fund from contributions from the berth licence holders. The contributions were sought through an extraordinary resolution of the licence holders, overseen by the plaintiff and the Public Trust according to the terms of a Management Deed (Deed), which the plaintiff asserted governed the relationships between it and the licence holders. The defendants said that they were not bound by the resolution, and that they should not be required to pay the levies sought to fund the breakwater.

[3] I held that the licensees were not bound by the Deed, and there was no estoppel despite their use of some of the benefits granted by the Deed. Further, the Deed and scheme as a whole arguably did not contemplate use of the scheme for re- developments of the marina, such as this. The levies could not be raised as an operating expense under the licences. As a consequence, the application for a declaration that the defendants were required to pay the levies was declined.

Submissions

Defendants’ submissions

[4] The defendants say that they should receive costs on a 2B basis with a 50 per cent uplift to reflect the plaintiff’s conduct, and the plaintiff should be required to meet the costs award itself rather than compelling licence holders to do so. The defendants rely on r 14.6(3)(c) and (d) of the High Court Rules, and say that the proceeding is of general importance to a wider group, as it affected all the licence holders. Furthermore, they say that the plaintiff’s conduct in the proceeding…

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: [2016] NZHC 2704
Decision Date: 11 November 2016

CaseChat Overview and Summary

In Tauranga Bridge Marina Ltd v Du Fall, the plaintiff, Tauranga Bridge Marina Ltd, sought to enforce contributions from berth licence holders to fund the construction of a breakwater. The defendants, various licence holders, contested the levy. The court ruled in favour of the defendants, finding that the licence holders were not bound by the terms of the Management Deed and that the proposed levies could not be raised as an operating expense under the licences. The defendants subsequently sought costs on a 2B basis, along with an uplift for the plaintiff's unreasonable conduct. The plaintiff argued that costs should lie where they fell, as the proceeding was in the interests of the marina and the licence holders, not to further its own interests.

The court considered whether the proceeding was of general importance to persons other than the parties and whether there were other reasons justifying increased costs. It concluded that the proceeding was essentially a private dispute, albeit with many parties. While the plaintiff's conduct was not entirely reasonable, it was not unreasonable enough to warrant increased costs. The court noted that the plaintiff had a genuine interpretive dispute and that there was no other way to finally determine the interpretation of the Deed and licences aside from bringing the action. The court also found that the plaintiff's decision to seek reimbursement of legal costs from the licence holders was permissible under the terms of the licences.

The court awarded costs on a 2B basis to the defendants, plus disbursements, but declined to award increased costs. It held that the defendants were the successful party and that there was no clear basis under the rules to reduce or refuse costs. The court emphasised that the plaintiff could not escape a costs award simply because it could recover the costs from the licence holders, as they were liable for the legal costs under the contractual arrangement. The court also noted that the defendants, despite being successful, would bear all their own costs if costs were not awarded. The final orders included costs awarded to the defendants on a 2B basis, plus disbursements.

Orders