Webb v Canavan

[2025] NZHC 8

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2023-404-1993

[2025] NZHC 8

UNDER

the Land Transfer Act 2017

IN THE MATTER

of Land covenant D004628.1

BETWEEN

HELENE MARIE WEBB, LAWRENCE SCOTT WEBB and LEAINE ELSIE

PILGRAIM as trustees of the WEBB FAMILY TRUST
Plaintiffs

AND

PAUL DESMOND CANAVAN and ROZANNE TAYLOR

First Defendants

AUCKLAND COUNCIL

Second Defendant

Judgment

(on the papers):

13 January 2025

COSTS JUDGMENT OF ROBINSON J

This judgment was delivered by me on 13 January 2025 at 3:30 pm pursuant to Rule 11.5 of the High Court Rules

…………………………………………………………………… Registrar/Deputy Registrar

Solicitors/Counsel: DLA Piper, Auckland K Gould, Auckland

WEBB v CANAVAN [2025] NZHC 8 [13 January 2025]

Introduction

[1]    Auckland Council (the Council) seeks costs from the Trustees of the Webb Family Trust. The latter were plaintiffs who applied for an interim injunction. The Council was the second-named defendant. The application was subsequently discontinued, but the plaintiffs and the Council have been unable to agree costs and have since filed memoranda on the matter.

[2]The Council seeks costs on a 2B basis and disbursements in a total amount of

$12,021.80.

Background

[3]    The plaintiffs applied for an interim injunction against the first defendants, Paul Canavan and Rozanne Taylor, and the Council. The first defendants had applied to the Council for subdivision and restricted discretionary activity land use consents, which they subsequently received. The plaintiffs alleged that the actions of the first defendants breached a restrictive land covenant between themselves and the first defendants. The plaintiffs sought an injunction from both the first defendants and the Council to a) prevent the first defendants continuing their subdivision and b) prevent all defendants from “acting upon” the consents.

[4]    On 28 September 2023, the Council sent the plaintiffs a Calderbank letter. The letter advised that the plaintiffs’ action against the Council was “highly unlikely to succeed” and requested that the plaintiffs discontinue the application against the Council. It further advised that if the matter proceeded to a hearing and the application for an interim injunction against the Council was unsuccessful, then the Council would rely on the letter in support of a costs application.

[5]    The plaintiffs did  not  discontinue  the  application,  which  was  heard  on  26 October 2023. In their submissions, the plaintiffs acknowledged that they joined the Council to put it on notice that they opposed the first defendants’ proposed subdivision, and to ensure that the Council did not grant the first defendants any more consents. They accepted that the Council had no role to play in enforcing a covenant

between two private parties, that there was no need for an order against the Council, and that it was ultimately unnecessary for the Council to be a party to proceedings.

[6]    The plaintiffs subsequently settled with the first defendant and discontinued proceedings against all defendants. However, as mentioned above, the plaintiffs and the Council have been unable to agree on costs.

Applicable legal principles

[7]    Rule 15.23 of the High Court Rules 2016 provides that, unless the Court orders otherwise, a plaintiff that discontinues proceedings against a defendant should pay the costs of the defendant up to and including the discontinuance. The Court of Appeal has characterised r 15.23 as a “presumption” that may be displaced when it is just and equitable to do so.1

[8]    In deciding what is just and equitable, a court may consider the parties' conduct in the matter and the reasonableness of the parties' respective stances. This includes the reasons why the plaintiff brought and continued the proceeding, and why the defendant opposed it.2 Past courts have declined to award defendants costs in instances of discontinuance where the defendant’s acts or omissions have both caused the litigation and rendered it unnecessary,3 or the decision and/or actions of a third party rendered the proceeding redundant. As a general rule, courts will not consider the merits of each party’s case, unless they are so obvious that they should influence the issue of costs.4 Conduct prior to the commencement of the proceeding may be relevant (for example, if any conduct by a defendant has precipitated the litigation), as may be the reason for discontinuing (for example, where a change of circumstances has made the proceeding unnecessary).5

1      Earthquake Commission v Whiting [2015] NZCA 144, (2015) 23 PRNZ 411 at [66], citing Kroma Colour Prints Ltd v Tridonicato NZ Ltd [2008] NZCA 150, (2008) 18 PRNZ 973 at [12] and [29].

2      Earthquake Commission v Whiting, above n 1, at [68].

3      Kroma Colour Prints Ltd v Tridonicato NZ Ltd, above n 1, at [12] and [29]; and Powell v Hally Labels Ltd [2014] NZCA 572 at [21].

4      Bailey v Auckland Council [2023] NZHC 3146 at [9], citing FM Custodians Ltd v Pati [2012] NZHC 1902 at [11].

5      FM Custodians Ltd v Pati, above n 4, at [11].

Submissions

The plaintiffs’ submissions

[9]    Mr Gould for the plaintiffs says that no substantive remedy was sought against the Council. He also says that he assured the Council’s solicitors that they did not need to appear at the hearing but received a reply that they had been instructed to do so.

[10]   Mr Gould further says that the fees incurred by the Council were unnecessary because all the plaintiffs had sought was for the Council to abide by the Court’s decision.

The Council’s submissions

[11]   Ms Hartley for the Council submits that the Council neither caused the litigation nor rendered it unnecessary, and there were no interventions made by third parties that rendered the proceeding redundant.

[12]   In response to Mr Gould’s submission that no relief was sought against the Council, Ms Hartley points out that interim relief was sought against the Council in the plaintiff’s statement of claim: namely that the Council be restrained from acting upon the consents it granted the first defendants.

[13]   Ms Harley also observes that it was unreasonable for the plaintiffs to continue proceedings against the Council after the Calderbank letter of 28 September 2023, and that it was entirely reasonable for the Council to take steps to continue to defend the proceedings.

Analysis

[14]   In my view, there is no reason to displace the presumption under r 15.23 that a plaintiff should pay costs up until discontinuance. The Council did not cause the litigation. Nor did they do anything to prolong proceedings. On the contrary, it reasonably invited the plaintiffs to discontinue proceedings. Moreover, in their written submissions and at the hearing, the plaintiffs accepted that there was no need for the

Council to be party to the proceedings. But as Ms Hartley observes, the plaintiffs only discontinued when they settled their covenant dispute with the first-named defendants. While the plaintiffs might have expected the Council to abide the decision of the Court, it was not unreasonable for the Council, as a party to the High Court proceeding, to instruct counsel to take the steps it did.

[15]   Nevertheless, costs on a 2B scale seem somewhat generous. The scope of the relevant facts were extremely limited and the only relevant legal principles were those related to applications for interim injunctions. The arguments made in written submissions and at the hearing of the application were also limited in scope and complexity; there was no real question to be tried and the plaintiffs had accepted that it was not necessary for the Council to be party to the proceedings.

Result

[16]   I award the Council costs in accordance with their memoranda but calculated on a 2A basis, together with the disbursements sought.

Robinson J