York Trustees Limited v Body Corporate 166208
[2017] NZHC 2877
•23 November 2017
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2017-404-001815 [2017] NZHC 2877
BETWEEN YORK TRUSTEES LIMITED
Applicant
AND
BODY CORPORATE 166208
Respondent
Hearing: (On the papers) Appearances:
Not applicable
Judgment:
23 November 2017
JUDGMENT OF HINTON J
This judgment was delivered by me on 23 November 2017 at 4.45 pm pursuant to Rule 11.5 of the High Court Rules
…………………………………………………………………… Registrar/Deputy Registrar
Counsel/Solicitors:
Katerina Wendt, Barrister, AucklandSimpson Grierson, Auckland
YORK TRUSTEES LIMITED v BODY CORPORATE 166208 [2017] NZHC 2877 [23 November 2017]
[1] On 4 August 2017, York Trustees Limited (York Trustees) applied to set aside a statutory demand issued by Body Corporate 166208 (Body Corporate), being the Body Corporate for the York Street apartments in Parnell.
[2] The statutory demand was itself for unpaid costs orders issued by the Tenancy Tribunal and the District Court. Those costs orders in turn relate to proceedings to recover unpaid levies.
[3] On 27 June 2017, York Trustees appealed the Tenancy Tribunal decision. The Tribunal granted a stay on 24 July 2017.
[4] On 2 August 2017, York Trustees applied to appeal the District Court decision
(including costs) out of time.
[5] On some date thereafter, the stay granted by the Tenancy Tribunal was reversed.
[6] In early November 2017, van Bohemen J, after hearing the application for leave to appeal out of time, indicated it was unlikely to be successful.
[7] In terms of the present application, the Body Corporate filed a notice of opposition and supporting affidavits. York Trustees was directed to file submissions, a bundle and authorities by 9 November 2017. York Trustees failed to comply with those timetable directions and the matter was listed before me in the Duty Judge List on 15 November 2017, to deal with their non-compliance. No explanation for the failure to comply with the timetable was given prior to 15 November 2017.
[8] At the hearing on 15 November 2017, the application was withdrawn. Counsel for York Trustees pointed to changed circumstances as being the reason for the withdrawal. The changed circumstances were the negative indication by van Bohemen J in terms of the application for leave to appeal out of time and the reversal of the stay of the Tenancy Tribunal decision.
[9] The parties could not agree costs, and have since filed lengthy submissions.
[10] York Trustees accepts that costs should follow the event and submits that
2B costs are appropriate.
[11] In the Duty Judge List on 15 November 2017, the Body Corporate indicated that it would seek indemnity costs, but it now seeks a 75 per cent increase on scale costs. It says that a previous indemnity costs award against York Trustees proved to be more trouble than it was worth.
[12] I agree that increased costs are appropriate on the basis that the time and expense of the proceeding was wasted, in that it was an application that lacked merit. It necessarily follows, therefore, that each step in it lacked merit or was unnecessary. York Trustees acted unreasonably in bringing the application and pursuing it.1
Increased costs are payable under r 14.6(3)(b)(ii) of the High Court Rules 2016.
[13] The fact that the application lacked merit is illustrated primarily by its being summarily withdrawn on top of non-compliance with the timetable order. The reasons for the withdrawal only reinforce the lack of merit, obviously then perceived by the applicant itself.
[14] I also take notice of the nature of the application and the history of the matter. The statutory demand York Trustees was applying to set aside was itself for unpaid costs orders issued by the Tenancy Tribunal and the District Court. The costs orders in turn relate to proceedings to recover unpaid levies. While I consider conduct in previous proceedings is irrelevant, the history of the matter also indicates a lack of merit in the present application.
[15] As an alternative, I would have been prepared to order increased costs under r 14.6(3)(d), relying by analogy on s 124 of the Unit Titles Act 2010 which provides that reasonable costs incurred in collecting unpaid levies are recoverable as a debt due to the Body Corporate by the person who was the unit owner at the time the levy became payable. The matter at issue in this proceeding is indirectly related to the collection of unpaid levies. As the Court of Appeal said in Holdfast NZ Ltd v
Selleys Pty Ltd, the rate prescribed in the scale for category 2 proceedings is two-thirds
1 Bradbury v Westpac Banking Corporation [2009] NZCA 234.
of the daily rate considered reasonable for the particular proceeding.2 On that basis, an increase of 50 per cent would lead to “reasonable costs”, as referenced in s 124.
[16] The Body Corporate seeks costs of $11,427.25, being 2B costs with an uplift of 75 per cent. The Body Corporate does not say what its actual costs are for each step, but it confirms that its actual costs exceed the sum of $11,427.25.
[17] York Trustees points out that the costs apparently incurred seem high for a matter of this nature where the Body Corporate had only to file a notice of opposition and supporting affidavits; appear at two case management conferences and file a memorandum for one of them. The Body Corporate fairly responds that in light of the history of the matter, it had to give the application more exhaustive consideration than would otherwise apply.
[18] Taking account of the Court of Appeal’s comments in Holdfast NZ Ltd that any increase above 50 per cent on category 2 scale costs is unlikely given the daily recovery rate is two-thirds of what is considered a reasonable daily rate,3 I have decided to limit the amount of the increase on scale costs to 50 per cent.
[19] I therefore order costs in favour of the respondent in the sum of $9,810.50.
–––––––––––––––––––––––––––– Hinton J
2 Holdfast NZ Ltd v Selleys Pty Ltd (2005) 17 PRNZ 897 (CA) at [46].
3 At [46]-[48].
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