Taylor v Small

[2020] NZHC 2947

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2018-404-864

[2020] NZHC 2947

UNDER

the Declaratory Judgments Act 1908

IN THE MATTER

of an application for a Declaratory Judgment

BETWEEN

WILLIAM PETER TAYLOR AND SUSAN MARY TAYLOR

First Plaintiffs (Discontinued)

SCOTT KERRY JACKSON AND SARAH ANNE JACKSON

Second Plaintiffs

RICHARD DONALD JOHNSTON AND RACHEL ELIZABETH JOHNSTON

Third Plaintiffs (Discontinued)

TREVOR FRANK SAVORY AND SALLIE ANN RENWICK

Fourth Plaintiffs

AND

GEOFFREY CLEMMENT SMALL AND ARIA SMALL

First Defendants

BOMBAY INVESTMENTS LIMITED

Second Defendant

Hearing:	On the papers
Appearances:	TJG Allan for the Second and Fourth Plaintiffs C B Wilkinson-Smith for First Defendants
Judgment:	11 November 2020

JUDGMENT OF GORDON J

[As to costs]

This judgment was delivered by me on 11 November 2020 at 3 pm, pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar  Date:

TAYLOR v SMALL [2020] NZHC 2947 [11 November 2020]

Introduction

[1]    This is an application by the second plaintiffs, Scott and Sarah Jackson, and the fourth plaintiffs, Trevor Savory and Sallie Renwick (together the plaintiffs), for costs. The application follows my judgment, given on 11 August 2020, in which I declared the equestrian facilities building constructed by the first defendants, Geoffrey and Aria Small (the Smalls), on their property in breach of certain restrictive covenants.1

[2]    The Smalls submit any award of costs should be reduced on account of the plaintiffs’ partial success. They point, in particular, to the terms of the injunction sought by the plaintiffs which, they say, were materially different from the relief granted.

Background

[3]    This proceeding was originally brought by four plaintiffs against the Smalls. All are owners of rural lifestyle blocks located south of Auckland between Ramarama and Bombay. The Smalls purchased land from the first plaintiffs, William and Susan Taylor. The title to that land was encumbered by certain restrictive covenants which controlled the type and extent of development on that land. The Smalls erected an equestrian facilities building.

[4]    The first to fourth plaintiffs commenced proceedings in May 2018 alleging, among other things, that the equestrian facilities building was in breach of the restrictive covenants. They sought an injunction requiring removal of the building. I concluded that the building did not comply with the covenants. I made the declaration but refused to grant an injunction. I did not consider it equitable to require the removal of the equestrian facilities building in the circumstances as I had found them to be.

[5]    All four plaintiffs appealed that decision and the Smalls cross-appealed. The second ground of appeal, dealing with the construction of the restrictive covenants, was the only successful one. The Court of Appeal held:2

1      Taylor v Small [2020] NZHC 2023.

2      Taylor v Small [2019] NZCA 152 at [59]-[60].

… that any dwelling house and outbuilding must:

(a)be usual and reasonable for the type of rural use of the land in the subdivision; and

(b)be of a nature, design or style in keeping with each other.

…

The first requirement is aimed at ensuring the buildings are not unusual for a rural property. The second requirement is aimed at maintaining consistency between the buildings within the subdivision.

[6]    The Court of Appeal concluded I was in error by failing to consider the evidence addressing the size and design of the buildings within the subdivision. The proceeding was remitted back to the High Court, with the observation that the matter required “an appraisal of competing evidence, which is likely to require cross- examination”.3

[7]    Before the proceeding resumed in this Court before me, the first and third plaintiffs filed a notice of discontinuance (the third plaintiffs having sold their property).

[8]    The Smalls’ new counterclaim seeking an order modifying the restrictive covenants, added after the hearing in the Court of Appeal, was abandoned at the commencement of the hearing.

[9]    The only new evidence filed for the hearing was expert evidence given by  Mr Hume, an architect called by the plaintiffs. Mr Hume and Mr Small were cross- examined.

[10]   I concluded that the equestrian facilities building did not comply with the restrictive covenants. The terms of the covenants required two distinct assessments. The first was the type of land use within the subdivision. The second was whether the equestrian facilities building, viewed objectively, was usual and reasonable in that context. Neither the location of the building on the Smalls’ property nor the use of the building for a particular purpose was relevant.

3 At [63].

[11]   In comparing the rural uses within the subdivision, I considered the main type of rural use was rural residential. This addressed the first assessment. The equestrian facilities building was not usual or reasonable within this landscape. Its form, scale and materiality did not reflect the character of the existing built form. In undertaking the second assessment, I concluded the equestrian facilities building was not objectively reasonable.

[12]   In fashioning appropriate relief given this conclusion, the parties were permitted to address me further due to concerns I raised regarding the form of the relief sought. The final form of the order reflected my view that an order which allowed input from the plaintiffs on the proposed alterations to the equestrian facilities building, but which did not give the plaintiffs a right of veto, was appropriate.

[13]   The order included a timetable for the Smalls to produce a plan prepared by an appropriately qualified architect or designer in light of the terms of restrictive covenants and my judgment, for the parties to convey their agreement to the Court and for the Smalls to implement the agreed plan. If agreement could not be reached, leave was given for the parties to apply to the Court for directions or orders. A further order was made restraining the Smalls or their agents from erecting any building which did not comply with the restrictive covenants.

Costs claimed and submissions

[14]   The plaintiffs seek 2B scale costs against the Smalls in the sum of $52,341.00 and disbursements of $10,034.14 (excluding GST).

[15]   Mr Wilkinson-Smith, for the Smalls, submits reduced costs of 40 per cent of the 2B scale should be awarded. He says the plaintiffs pursued a cause of action which was barred by the Court of Appeal judgment. That was as to the number of dwellings that could be built on the Smalls’ land. The Court of Appeal had upheld my decision in favour of the Smalls on this issue. No relief was given on this cause of action.

[16]   He further says that the terms of the injunction were materially different from the terms sought by the plaintiffs. In particular, it was more favourable to the Smalls because they were given a longer timeframe to comply with the covenants, the

plaintiffs could not insist on demolition and it did not require the removal of the hardstand area. Mr Wilkinson-Smith submits the hardstand area is several times larger in area than the equestrian building. The plaintiffs’ success, he says, was partial.

[17]   In his memorandum Mr Wilkinson-Smith also refers to his letter of 27 August 2020 to Mr Allan, solicitor for the plaintiffs, and says that the Smalls’ position on costs is largely unchanged from that letter (which was annexed to Mr Allan’s memorandum). While he did not make a separate submission in his memorandum, in his letter Mr Wilkinson-Smith suggests that some of the short interlocutory matters and procedural issues are more appropriately band A; particularly during the period when the Smalls were self-represented. In addition, he says the filing of the amended statement of claim should be band A as it was substantially based on the previous statement of claim and because it included the cause of action already considered by the Court of Appeal which upheld my decision in favour of the Smalls.

[18]   Mr Allan responds that there is no proper basis on which the discretion conferred in r 14.7 to award reduced costs can be exercised. There is also no basis to categorise any of the steps as band A.

Reduced costs

[19]   Rule 14.7 provides that the Court may reduce the costs otherwise payable in certain circumstances. It appears Mr Wilkinson-Smith’s submission on success is based on r 14.7(d):

14.7     Refusal of, or reduction in, costs

Despite rules 14.2 to 14.5, the court may refuse to make an order for costs or may reduce the costs otherwise payable under those rules if—

…

(d) although the party claiming costs has succeeded overall, that party has failed in relation to a cause of action or issue which significantly increased the costs of the party opposing costs …

[20]   There are two main points to make on Mr Wilkinson-Smith’s submissions. First, Mr Wilkinson-Smith submits the plaintiffs’ first cause of action was not pursued at this hearing and relief on that cause of action was not granted. However, r 14.7(d)

requires not just failure on a cause of action or issue pursued by the plaintiffs but also that the cause of action or issue has significantly increased the Smalls’ costs. He does not, however, establish that this action caused any significant cost to the Smalls. It is also difficult to see how it could. Even if it remained a cause of action in the second amended statement of claim, it was not one for determination in the second hearing before me. The issue remitted by the Court of Appeal for consideration at the hearing was a narrow one and concerned only compliance with the restrictive covenants. On this point, Mr Wilkinson-Smith’s submission appears focused on form over substance. There is no basis to award reduced costs on this point.

[21]   Second, Mr Wilkinson-Smith says that although the plaintiffs were successful on the question of compliance, the relief they obtained was different from that sought. However, as the Court of Appeal held in Weaver v Auckland Council, “success on more limited terms is still success”.4 My orders established a process for ensuring the equestrian facilities building complies with the restrictive covenants. Failure to comply will lead to removal of the building; it does not alter the outcome, on which the plaintiffs have succeeded, it is simply a question of timing. Reduced costs are not justified on this point either.

[22]   Finally, on Mr Wilkinson-Smith’s submissions on band A, the calibre of the defendant is not a relevant factor in determining categorisation for costs. As to the time claimed for the second amended statement of claim, although it was based on the previous statement of claim, nevertheless I consider a normal amount of time is reasonable (i.e. band B).

[23]The plaintiffs are therefore entitled to 2B scale costs for all steps.

Disbursements

[24]   Mr Wilkinson-Smith questions the disbursement for “Auckland Council – property files”. He says no explanation is provided. Mr Allan notes the proceeding

4      Weaver v Auckland Council [2017] NZCA 330, (2017) 24 PRNZ 379 at [26]. See also Water Guard NZ Ltd v Midgen Enterprises Ltd [2017] NZCA 36 at [13].

concerned a property dispute. Relevant information was contained in the property file. The cost of obtaining the file is an appropriate disbursement.

[25]   I accept the disbursement is justified in a proceeding of this kind. The property file contains relevant information about the subdivision and development of the land which was the subject of the proceeding.

Quantum of costs and disbursements

[26]I have reviewed the schedule of costs claimed and have made one adjustment.

[27]   The Smalls’ interlocutory application for the appointment of counsel to assist the Court was the subject of a short hearing before Davison J  on 17 June 2020.     Mr Allan’s schedule provides for an appearance of half a day at that hearing. However, the hearing time was approximately 20 minutes. The time allocation for appearance by counsel at a defended interlocutory application is the time occupied by the hearing measured in quarter days. The correct allocation for that appearance is therefore one quarter day.

[28]   Adjusting for this amount, the award of costs will be $51,743.50 and disbursements of $10,034.14 (excluding GST).

Result

[29]I award costs in the sum of $51,743.50 and disbursements in the sum of

$10,034.14 in favour of the plaintiffs against the Smalls. The total award is

$61,777.64.

Gordon J