Waharoa Land Holdings Limited v Waharoa Industrial Park Limited

[2023] NZHC 1480

IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY

I TE KŌTI MATUA O AOTEAROA KIRIKIRIROA ROHE

CIV-2021-419-107

[2023] NZHC 1480

IN THE MATTER

of a claim for declaratory relief, an account of profits and a permanent injunction

BETWEEN

WAHAROA LAND HOLDINGS LIMITED

Plaintiff

AND

WAHAROA INDUSTRIAL PARK LIMITED

First Defendant

SPARK NEW ZEALAND TRADING LIMITED

Second Defendant

Counsel:

H Thompson for the Plaintiff

C T Gudsell KC and J Gilby-Todd for First Defendant

Judgment:

14 June 2023

JUDGMENT OF WOOLFORD J

(Costs)

This judgment was delivered by me on Wednesday, 14 June 2023 at 2:30 pm pursuant to r 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Solicitors:McMahon Butterworth Thompson, Auckland Bell & Graham, Matamata

Counsel:            C T Gudsell KC, Hamilton

WAHAROA LAND HOLDINGS LIMITED v WAHAROA INDUSTRIAL PARK LIMITED [2023] NZHC 1480 [14 June 2023]

[1]        On 18 April 2023, I issued a judgment in which I dismissed the claim by the plaintiff against the first defendant for declarations as to alleged breaches of contract and for damages.

[2]        Nonetheless, the plaintiff applies for costs in its favour on the basis that it was the substantially successful party. On the other hand, the first defendant says it was wholly successful at trial and is entitled to costs against the plaintiff.

Proceedings

[3]        The plaintiff sued both the first defendant and the second defendant — Spark New Zealand Trading Limited (Spark).

[4]There were four causes of action:

(a)A claim for breach of contract against the first defendant alleging that the first defendant did not:

(i)replace soil in accordance with accepted engineering practice;

(ii)provide an engineer’s certificate that the soil had been correctly rolled and compacted; and

(iii)remove rubber chip to the reasonable satisfaction of the plaintiff.

(b)A cause of action in trespass against the first and second defendants, arising from encroachment on the plaintiff’s land of a mobile telephone tower, erected by Spark under an arrangement between Spark and the first defendant.

(c)A claim for breach of constructive trust seeking account of profits from the lease payments made by Spark to the first defendant for the land occupied by the tower.

(d)A cause of action in trespass, relating to the discharge of stormwater by the first defendant onto the plaintiff’s land.

[5]        The second defendant settled the claim against it shortly before trial and a notice of discontinuance was filed shortly before trial. The second to fourth causes of action were also resolved as between the plaintiff and the first defendant except as to costs. The trial was therefore limited to the plaintiff’s claim on the first cause of action, which alleged breach of contract. After a two-day hearing in the High Court of Hamilton, I dismissed the plaintiff’s claim against the first defendant for declarations as to breaches of contract. I also found no damages were payable.

Pre-trial offers to settle first cause of action

[6]        Because an engineer’s certificate was not available for the replaced soil, the solicitors for the first defendant arranged for payment of the $30,000 retention monies to the plaintiff on 30 April 2021, almost two years before trial.

[7]        On 4 April 2022, the plaintiff offered to settle the first cause of action in return for payment of $100,000 (plus the $30,000  retention monies)  and 2B  costs.  On   15 August 2022, the first defendant offered $20,000 in addition to the $30,000 retention monies with no contribution as to costs. The counter-offer was rejected by the plaintiff.

[8]        On 22 September 2022, the first defendant proposed mediation. The proposal was declined by the plaintiff who suggested the first defendant should purchase the plaintiff’s property.

[9]        On 8 February 2023, the first defendant obtained a registered valuation for the property of $1.55 million and offered to purchase the plaintiff’s property for

$1.6 million. The plaintiff declined the offer.

[10]      On 14 March 2023, a week before trial, the plaintiff again offered to settle the first cause of action in return for payment of $100,000 (plus the $30,000 retention monies) and $52,000 for 2B costs.  The next  day the  first defendant  rejected the   14 March offer and offered to settle on an alternative basis so that the second to fourth

causes of action could be settled notwithstanding the first cause of action. The first defendant offered $12,000 instead of $52,000 for costs on the basis that the first cause of action was discontinued.

[11]      The plaintiff rejected the offer. The first defendant then undertook to pay the sums claimed on the second to fourth causes of action, leaving the matter of the first cause of action and costs.

Legal principles

[12]      The principles relating to costs are well settled. Costs will be at the discretion of the Court.1 The guiding principle is however that costs will ordinarily follow the event.

[13]      As the plaintiff submits, the question of who has succeeded in litigation is a matter of common sense viewed as a matter of substance, not of form. It involves a realistic assessment of the end result.

Discussion

[14]      In making a realistic assessment of the end result, I note that the second cause of action was settled not long before the trial on unknown terms between the plaintiff and the second defendant. The first defendant was unable to settle that cause of action because it was the second defendant who owned the mobile telephone tower.

[15]      I also note the relatively minor sums claimed in the second to fourth causes of action, which were able to be settled prior to trial once the second cause of action was settled between the plaintiff and the second defendant.

[16]The claimed success of the plaintiff entailed the payment of approximately

$63,000 from the first defendant, incurring costs exceeding that sum. It seems to me the first defendant took an entirely pragmatic approach to keep the trial (and its costs) as minimal as possible after extensive efforts to settle the claims globally. The first

1      High Court Rules 2016, r 14.1.

defendant then successfully defended the balance of the plaintiff’s claims over the course of a two-day hearing.

[17]      In those circumstances, the first defendant is entitled to its costs. There will be an order that the plaintiff pay costs of $29,019.50 to the first defendant in terms of the schedule annexed hereto (being 2B costs with an adjustment to Band A in respect of two items, which reflects the paucity of documentation).

COSTS AND DISBURSEMENTS – FIRST DEFENDANT

COSTS

Category 2, Band B – Daily rate $2,390

Item	Description	Days	Amount
2	Commencement of defence by defendant	2	$4,780.00
11	Joint memorandum – 9 July 2021 (1/2 allocation)	0.2	$478.00
11	Joint memorandum – 21 July 2021 (1/2 allocation)	0.2	$478.00
10	Preparation for first CMC	0.4	$956.00
11	Memorandum for CMC – 22 October 2021	0.4	$956.00
13	Appearance at CMC – 26 October 2021	0.3	$717.00
20	List of documents on discovery [Band A]	0.7	$1,673.00
21	Inspection of documents [Band A]	0.5	$1,195.00
11	Joint memorandum – 31 March 2022 (1/2 allocation)	0.2	$478.00
11	Memorandum – 12 July 2022	0.4	$956.00
9	Statement of Defence to Second Amended Statement of Claim	0.6	$1,434.00
11	Memorandum – 7 March 2023	0.4	$956.00
15	Attendance at pre-trial conference – 8 March 2023	0.5	$1,195.00
33	Preparation of briefs, list of issues, authorities and agreeing common bundle	1.75	$4,182.50
33B	Preparation for hearing	1.75	$4,182.50
34	Appearance at hearing 20 and 21 March 2023 – senior counsel (hearing concluded approximately 3:00 pm)	1.75	$4,182.50
12.05	$28,799.50

Disbursements

Description	Amount
Filing fee – statement of defence	$110.00
Filing fee – statement of defence to amended statement of claim	$110.00
$220.00

[18]Total costs and disbursements payable - $29,019.50

Woolford J