Woodgate Limited v Palmerston North City Council
[2025] NZHC 1098
•12 May 2025
IN THE HIGH COURT OF NEW ZEALAND PALMERSTON NORTH REGISTRY
I TE KŌTI MATUA O AOTEAROA TE PAPAIOEA ROHE
CIV-2024-454-018
[2025] NZHC 1098
BETWEEN WOODGATE LIMITED
Plaintiff
AND
PALMERSTON NORTH CITY COUNCIL
Defendant
Hearing: On the papers Appearances:
G J Woollaston for Plaintiff
N Jessen and O E Sinnema for Defendant
Judgment:
12 May 2025
JUDGMENT OF ASSOCIATE JUDGE PAULSEN
(Costs)
This judgment was delivered by me on 12 May 2025 at 4.15 pm pursuant to r 11.5 of the High Court Rules.
Registrar/Deputy Registrar Date:
WOODGATE LIMITED v PALMERSTON NORTH CITY COUNCIL [2025] NZHC 1098 [12 May 2025]
[1] In a judgment dated 27 August 2024, I dismissed the plaintiff’s (Woodgate) application for summary judgment against the defendant (the Council).1 I reserved costs but directed that if either party considered costs should be awarded memoranda were to be filed.2 Memoranda have been received.
[2] The Council seeks costs in the amount of $26,768, representing 2B scale costs of $15,296 with a 75 per cent uplift.3 It says the usual approach whereby costs on unsuccessful summary judgment applications are reserved should not apply as Woodgate’s case was always unsuitable for summary judgment. The Council says this is because of the existence of clearly disputed facts as to the cause of erosion and scour on Woodgate’s land.
[3] Furthermore, the Council says Woodgate failed to comply with r 9.43 of the High Court Rules 2016 and proceeded on the basis of expert witness evidence that did not comply with the code of conduct for expert witnesses and was substantially unhelpful for the reasons explained at length in my judgment.4 It says, apart from the inadmissible expert evidence, Woodgate provided no more than lay observations from its director which were inadequate for establishing the claim in nuisance.
[4] The Council considers Woodgate’s approach had significant cost implications. It had to challenge the inadmissible expert evidence and also prepare extensive affidavit evidence concerning a complex stormwater context and problematic development history of the Woodgate land, and in circumstances where Woodgate had sought an urgent hearing.
[5] Woodgate says costs should be reserved pending determination of the substantive proceeding. It argues the case was made unnecessarily complex by the Council, which advanced several affirmative defences that did not have merit. It says there was also an attempt by the Council to hold Woodgate responsible for the actions of other entities which was legally and factually untenable and served to expand the scope of the summary judgment hearing unnecessarily.
1 Woodgate Ltd v Palmerston North City Council [2024] NZHC 2423.
2 At [107].
3 High Court Rules 2016, r 14.6(3)(b)(i) and (ii).
4 Woodgate Ltd v Palmerston North City Council, above n 1, at [66]–[86].
[6] Woodgate also submits that an uplift of 75 per cent is unjustified in circumstances where the Council’s conduct significantly contributed to the complexity and length of the hearing. It says it would be expected that any deficiencies in its evidence would reduce rather than increase the time and resources required to reply, and the Council has failed to demonstrate how deficiencies in its evidence imposed any substantive burden upon the Council.
Analysis
[7] Under r 14.8(1), costs on opposed interlocutory applications are to be fixed when the application is determined unless there are special reasons to the contrary.
The rule does not apply, however, to applications for summary judgment.5
[8] Where a plaintiff unsuccessfully seeks summary judgment the most common approach is for the Court to reserve costs until the final result of the case is known.6 This is to encourage the use of the summary judgment procedure to effectively resolve a proceeding, and recognises that it may be difficult to determine who should pay costs until litigation has been completed and that even an unsuccessful application may ultimately prove beneficial to the parties in efficiently resolving the dispute.
[9] However, the Court also recognises that these considerations may not justify reserving costs where a plaintiff’s application was commenced erroneously, unreasonably, or in circumstances where the plaintiff knew or ought to have known that summary judgment would not be granted or was an experiment.7
[10]In NZI Bank Ltd v Philpott, the Court of Appeal said:8
There will be other cases where the plaintiff has embarked on summary judgment proceedings erroneously in the sense that the rules do not allow the summary judgment procedure, or in the certain knowledge that there is a bona fide question of fact or law which can be determined only after a trial. In those circumstances the Court should be able in its discretion to deprive the plaintiff of costs in those unsuccessful and abortive proceedings and award costs to the defendant.
5 High Court Rules, r 14.8(3).
6 NZI Bank Ltd v Philpott [1990] 2 NZLR 403 (CA).
7 Emmons Developments New Zealand Ltd v Mitsui Sumitomo Insurance Ltd [2016] NZHC 1244;
Vision Aluminium Ltd v McLaughlan HC Christchurch CP 123/90, 8 June 1990.
8 NZI Bank Ltd v Philpott, above n 6, at 405.
[11] In Mason v Dodd, the plaintiff sought summary judgment against his former accountant alleging negligent advice had been given about setting up a family trust and transferring assets to it.9 Katz J dismissed the application as unsuitable for summary judgment by a wide margin and awarded costs against the plaintiff. In the costs judgment, Katz J said:10
[11] As noted above, I found Mr Mason’s causes of action to be unsuitable for summary determination, by a wide margin. Amongst other things, Mr Mason provided no expert evidence as to the usual or accepted professional standards applying to accountants involved in the establishment of trusts at the relevant times. Further, there are causation issues that will need to be addressed at trial. It is currently not clear whether Mr Mason has suffered any loss. This will also need to be the subject of evidence and submission at trial. Finally, it appears to be strongly arguable that at least three of the four causes of action are statute barred.
[12] It is rare for claims in negligence to be suitable for summary judgment and this case was no exception. It should have been apparent from the outset that this proceeding was not suitable for summary determination. It is therefore appropriate to fix costs now, rather than after trial.
[12] In my view, this is a case where costs should be fixed in favour of the Council. While Woodgate attempted to present this case as straightforward, it was not. There is a substantial history between the Council and Woodgate’s director in relation to the Woodgate land. Woodgate was well aware of the Council’s position that it was not responsible for the damage to Woodgate’s land. It must also have always been apparent there were disputed questions of fact which were not going to be resolved on a summary judgment application, particularly in relation to the causes of the scour and erosion.
[13] Other relevant factors in my view are that Woodgate insisted on proceeding with urgency in circumstances where its case was founded upon expert evidence that was plainly not admissible.
[14] The next issue is whether, and to what extent, an uplift on scale costs is justified. Rule 14.6(3)(b)(ii) is in issue and provides:
9 Mason v Dodd [2020] NZHC 1508.
10 Mason v Dodd [2020] NZHC 2005.
14.6 Increased costs and indemnity costs
...
(3) The court may order a party to pay increased costs if—
...
(b)the party opposing costs has contributed unnecessarily to the time or expense of the proceeding or step in it by—
...
(ii)taking or pursuing an unnecessary step or an argument that lacks merit; ...
[15] Rule 14.6(3)(b) is concerned with improper or unreasonable conduct on the part of the party against whom increased costs are sought. An uplift on scale costs is justified only to the extent that a party’s failure to act reasonably contributed to the time and expense of the proceeding or some step in it. The party applying for an uplift on scale costs usually should identify the particular steps in respect to which the other party’s unreasonable conduct contributed to increased costs.11 However, where increased costs are sought because the losing party’s overall position lacked merit, it may be appropriate for increased costs to apply to all steps.12
[16] To my mind the uplift of 75 per cent sought by the Council is not justified. While Woodgate’s application for summary judgment should not have been made, there is some limited force in its counterargument that the Council overly complicated the matter in its reliance upon unmeritorious legal defences. Standing back and looking at the matter as a whole, I consider an appropriate uplift on scale costs is 25 per cent.
Quantum of costs
[17] The Council has provided a schedule of costs calculated on a scale 2 band B basis. Woodgate has not taken issue with the Council’s schedule save for the claim for a 75 per cent uplift. The schedule appears to be in order, except I do not think that step 30 in sch 3 applies. On the other hand, I consider that in respect to step 26 band
11 Holdfast NZ Ltd v Selleys Pty Ltd (2005) 17 PRNZ 897 (CA) at [44]–[47].
12 NR v MR [2014] NZCA 623, (2014) 22 PRNZ 636 at [51]–[52]; and Broadspectrum (New Zealand) Ltd v Nathan [2017] NZCA 434, [2017] ERNZ 733 at [57].
C (not band B) should apply. I also consider a 25 per cent uplift on scale costs is appropriate. I have made those adjustments.
Result
[18] The Council is awarded costs of $13,862 with a 25 per cent uplift of $3,465.50, making a total of $17,327.50, along with reasonable disbursements to be fixed by the Registrar.
O G Paulsen Associate Judge
Solicitors:
Dewhirst Law, Palmerston North
Cooper Rapley Lawyers, Palmerston North
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