IN THE HIGH COURT OF NEW ZEALAND NELSON REGISTRY

CIV 2009-442-347

UNDER	the Property Law Act 2007

IN THE MATTER OF	an application under section 200 of the Act for an order or sale of land by way of private auction by the plaintiff

BETWEEN	FM CUSTODIANS LIMITED Plaintiff

AND	KENNETH RAYMOND VALENTINE AND SHORE CRANE LIMITED (AS TRUSTEES OF THE VALENTINE FAMILY TRUST)
First Defendant

AND	KENNETH RAYMOND VALENTINE Second Defendant

Hearing:	On Papers

Counsel:	D M Smith for Plaintiff
P Bellamy for LDC Finance Ltd (in receivership), a party seeking costs

Judgment:	8 July 2010

JUDGMENT OF SIMON FRANCE J (Costs)

[1]	The  plaintiff  was  the  first  mortgagee  of  property  owned  by  the  first defendants as trustees.  The plaintiff commenced proceedings to enable it to sell the
land at auction, to set the reserve, and to buy the land if it chose.

[2]       LDC Finance Limited (in receivership) was the second mortgagee.  It filed a notice of opposition to the capacity of the plaintiff to set the reserve and buy the land.  It considered that it would be left with nothing, and said there was a dispute as to the quantum of priority the plaintiff had under the mortgage.

[3]       A half day fixture was allocated.   It was adjourned the day before at the plaintiff’s request.  Subsequently the plaintiff discontinued its application.  LDC (in receivership) seeks costs which are opposed.

[4]       LDC calculates costs using the 2B scale and as if it were a defendant.  The costs relate to the notice of opposition, evidence in support, preparation for hearing, attendances at call over and telephone conference.  It also seeks to recover the cost of a valuation it obtained.

[5]       The plaintiff opposes on the basis that the opposition was unfounded.  The plaintiff made the application because the law required it to.  The proper course was to dispute priority in separate proceedings, which LDC has now done.

[6]       If costs are thought appropriate it is submitted that 1A is the proper scale, which would give $1,375 rather than the claimed $2,400.  The costs of the valuation is disputed as it was not appended to the only brief affidavit filed by the defendant, nor otherwise filed with the Court.

Decision

[7]       I agree with the plaintiff on the valuation.   A  day before the scheduled hearing it had not been filed in Court by way of evidence.   Whatever its value to LDC, it was not an item that would feature in the litigation.

[8]       I consider costs are payable.  It may be that the plaintiff was obliged in law to file, but LDC was entitled to seek to protect its position.   The plaintiff thereafter discontinued and LDC was effectively successful in its opposition, whatever the plaintiff’s motives for discontinuing.

[9]       I allow 2B costs for the filing of the notice of opposition and for preparation for the hearing.   Scale 1B is appropriate for the procedural steps of call over and telephone conference.   I would also allow 1B for sealing the order if indeed that
occurred.  The parties can resolve that dispute.

Solicitors:

Simon France J

D M Smith, Stephens Lawyers Limited, PO Box 10966, Wellington, email: dave.smith@slaw.co.nz
P Bellamy, Duncan Cotterill, PO Box 827, Nelson, email: p.bellamy@duncancotterill.com