Thorn v United Steel Limited

[2017] NZHC 3152

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2016-409-001212 [2017] NZHC 3152

BETWEEN

ANDREW JOHN THORN

Applicant

AND

UNITED STEEL LIMITED Respondent

Hearing:	On the papers
Counsel:	A Riches for the Applicant C R Vinnell for the Respondent
Judgment:	15 December 2017

JUDGMENT OF NATION J

[1]      In a judgment of 8 August 2017, I held Mr Thorn was entitled to a declaration that the respondent’s registration of a mortgage over a property he had a half share in was not properly authorised and valid.1   I reserved the issue of costs.  Memoranda for both parties were filed in September 2017 and I now deal with that issue.

[2]      Mr Thorn originally applied for such a declaration on three specified grounds, with particular reliance on a judgment of Blanchard J in Pacific Homes Ltd (in Receivership) v Consolidated Joineries Ltd.2    Extensive affidavits, memoranda and

submissions were filed by counsel for both parties dealing with those grounds.  For

1      Thorn v United Steel Ltd [2017] NZHC 1865.

2      Pacific Homes Ltd (in Receivership) v Consolidated Joineries Ltd [1996] 2 NZLR 652.

THORN v UNITED STEEL LTD [2017] NZHC 3152 [15 December 2017]

reasons discussed in my judgment, I held Mr Thorn’s application would fail on all the grounds on which it was first made.

[3]      At the hearing, counsel for Mr Thorn presented further submissions to me, effectively raising a new ground to support the application. He argued that registration of a mortgage was not valid because the power of attorney which United Steel relied on as giving it the authority to register the mortgage had not been granted by deed.  It was on that ground that Mr Thorn was ultimately successful.

[4]      For Mr Thorn, Mr Riches stresses the importance of the principle that the party who fails with respect to a proceeding should pay costs to the party who succeeds.3   I have regard to that, but all matters as to costs are at the discretion of the Court.4   Rule

14.7(d) expressly recognises the Court may refuse to make an order for costs or may reduce the costs otherwise payable under the rules if “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”, and if the party claiming costs has contributed unnecessarily to the time or expense of the proceeding by “taking or pursuing an unnecessary step or an argument that lacks merit”.5

[5]      Mr Thorn’s application was advanced on a number of grounds in respect of which he failed.   In particular, his reliance on the judgment of Blanchard J in the Pacific Homes case had little merit for reasons which had been explained by United Steel Limited’s counsel before the proceedings were filed.

[6]      I have considered the submissions made in both counsels’ memoranda and have revisited my tentative opinion as expressed at the end of my substantive judgment.  I remain of the view that, although Mr Thorn succeeded in the sense of obtaining the declaration he was seeking, given the way the case was initially advanced and the number of grounds on which he failed, this is a case where each

party should bear its own costs.  I make an order accordingly.

3      High Court Rules, r 14.2(1)(a).

4      Rule 14.1.

5      Rule 14.7(f)(ii).

[7]      This will of course mean that United Steel Limited cannot recover the costs from Mr Thorn that it incurred in relation to the proceedings pursuant to the credit agreement which it had entered into with him or the mortgage which it purported to rely on pursuant to that agreement.

Solicitors:

Saunders & Co., Christchurch

Anthony Harper, Christchurch.