IN THE HIGH COURT OF NEW ZEALAND NAPIER REGISTRY

I TE KŌTI MATUA O AOTEAROA AHURIRI ROHE	
CIV-2020-441-000023
[2020] NZHC 2230	

BETWEEN	VILLAGE RESIDENTIAL LTD
Applicant	
AND	DAVID IAN CORNES
First Respondent

REI KAHUI JONES
Second Respondent	

On the Papers		
Counsel:	D Kerr for the Applicant
D O’Connor and J Heaphy for the Respondents	
Judgment:	28 August 2020	

JUDGMENT OF DOOGUE J
(Costs)

This judgment was delivered by Justice Doogue on 28 August 2020 at 2.30 pm
pursuant to Rule 11.5 of the High Court Rules.

Registrar/ Deputy Registrar Date:

Solicitors:
S J Scannell & Co, Hastings
Heaphy & Co, Hastings

VILLAGE RESIDENTIAL LTD v CORNES & ANOR [2020] NZHC 2230 [28 August 2020]

Introduction

[1]	On 14 August 2020 I gave judgment for the applicant as follows:1

(a)	Pursuant to the covenants implied in the right of way easement appurtenant to the applicant’s property, and to which the respondents’ property is subject, the applicant is entitled to carry out within the area the subject of the right of way easement, such works as are required to implement the plans, drawings and specifications approved by the Hastings District Council on 11 November 2019 pursuant the Council’s subdivision consent RMA20190177.

(b)	The applicant and its employees, contractors and agents may enter onto the area the subject of the right of way easement, for the purposes of carrying out the said works, together with such vehicles and machinery reasonably required to carry out those works.

(c)	The applicant solely shall bear the cost of the said works.

(d)	The respondents and/or their agents are restrained from directly or indirectly obstructing, delaying or hindering the applicant and its employees, contractors and agents from the performance of the said works.

[2]	The applicant now applies for an award of costs on a 2B basis, in the sum of
$12,308.50. Disbursements of $1,380.00 are also sought (comprising filing fees of
$740.00 and the scheduling fee of $640.00).

[3]	The respondents oppose the making of an award of costs against them. They argue the Court is functus officio, but if the Court does consider it has jurisdiction then costs should lie where they fall.

Discussion

[4]	The applicant’s memorandum on costs very unusually attaches a selection of emails between counsel (without any commentary or submissions thereon). These emails do not constitute evidence or submissions. In the circumstances, I consider they are inappropriately tendered to the Court and I do not intend to consider them.

[5]	The respondents’ argument that the Court is functus officio is based on semantics rather than substance, and I reject it.

1	Village Residential Ltd v Cornes [2020] NZHC 2064 at [46].

[6]	The starting point for the consideration of  costs  is  r  14.2(1)(a)  of  the  High Court Rules 2016:

14.2 Principles applying to determination of costs
(1)	The following general principles apply to the determination of costs:
(a)	the party who fails with respect to a proceeding or an interlocutory application should pay costs to the party who succeeds:
…

[7]	Rule 14.13 states:

14.13	Proceedings within jurisdiction of District Court

Costs ordered to be paid to a successful plaintiff must not exceed the costs and disbursements that the plaintiff would have recovered in the District Court if the proceeding could have been brought there, unless the court otherwise directs.

[8]	Thus, the costs sought in this proceeding are undue because the matter could have been heard in the District Court, and a schedule of lower costs would be applicable.

[9]	The starting point is that the unsuccessful party should be liable for costs to the successful party. In Lawrence v Glynbrook 2001 Ltd, Brown J held that an assessment of which party was successful requires both a consideration of which party won the principal contests of law and of fact, and a realistic appraisal of the end result, rather than focusing on who initiated what step and the extent to which that step succeeded or failed.2

[10]	In fact – in this case – both parties were successful. The applicant was permitted to undertake the driveway upgrade. The respondents were successful because, although liable at law to pay one half of the costs of upgrade, the applicant undertook to the Court that they would pay the full extent of those costs.

[11]	The Court can  refuse to order costs or reduce costs under r 14.7 of the     High Court Rules:

2	Lawrence v Glynbrook 2001 Ltd [2015] NZHC 1005 at [8].

14.7	Refusal of, or reduction in, costs
Despite rules 14.2 to 14.5, the court may refuse to make an order for costs or may reduce the costs otherwise payable under those rules if—
(a)	the nature of the proceeding or the step in a proceeding is such that the time required by the party claiming costs would be substantially less than the time allocated under band A; or
(b)	the property or interests at stake in the proceeding were of exceptionally low value; or
(c)	the issues at stake were of little significance; or
(d)	although the party claiming costs has succeeded overall, that party has failed in relation to a cause of action or issue which significantly increased the costs of the party opposing costs; or
(e)	the proceeding concerned a matter of public interest, and the party opposing costs acted reasonably in the conduct of the proceeding; or
(f)	the party claiming costs has contributed unnecessarily to the time or expense of the proceeding or step in it by—
(i)	failing to comply with these rules or a direction of the court; or
(ii)	taking or pursuing an unnecessary step or an argument that lacks merit; or
(iii)	failing, without reasonable justification, to admit facts, evidence, or documents, or accept a legal argument; or
(iv)	failing, without reasonable justification, to comply with an order for discovery, a notice for further particulars, a notice for interrogatories, or other similar requirement under these rules; or
(v)	failing, without reasonable justification, to accept an offer of settlement whether in the form of an offer under rule 14.10 or some other offer to settle or dispose of the proceeding; or
(g)	some other reason exists which justifies the court refusing costs or reducing costs despite the principle that the determination of costs should be predictable and expeditious.

[12]	In the present case, I refuse to make an order for costs due to:

(a)	the applicant failing in relation to a cause of action (r 14.7(d));

(b)	the applicant failing to comply with Court directions (r 14.7(f)(i));

(c)	the applicant taking arguments that lack merit (r 14.7(f)(ii));

(d)	the applicant failing, without reasonable justification, to accept a legal argument (r 14.7 (f)(iii)); and

(e)	the remedial nature of s 313 of the Property Law Act 2007 (r 14.7(g)).

[13]	It is accepted that applications can change, and arguments can be abandoned. However, when this happens, and to the extent it happened in this case, both during and after the hearing, it is very difficult for the applicant to justify a claim for costs.  I note the following factors in the present case:

(a)	As I recorded in the judgment, the applicant formulated their case on a variety of bases before finally settling on the implied covenants in the Property Law Act.3

(b)	After the hearing, it was necessary for me to issue a minute directing the applicant to file the precise terms of the orders sought, because of the nature of how the proceeding had progressed, with various changes to the orders sought.

(c)	The originating application under s 313 of the Property Law Act was based on both a drainage easement and a right of way easement. During the hearing, the applicant abandoned the drainage easement argument.

(d)	During the hearing, the applicant accepted that the Court had no jurisdiction under s 317 of the Property Law Act, and this part of the originating application was also abandoned.

(e)	The originating application relied on the Land Transfer Regulations, which I held were not retrospective and did not apply.

(f)	Counsel for the applicant said, in his right of reply, that the applicant would pay all the costs of the upgrade, even though the respondents

3	Village Residential Ltd v Cornes, above n [1], at [22].

were liable to pay half of the costs under the memorandum of transfer recording the right of way easement.

(g)	The applicant did not file an amended originating application before the hearing. The respondents were taken by surprise, and had trouble following all the changes made to the application during the hearing and the applicant’s case.

[14]	As recorded in the judgment, I also note that the powers under s 313 of the Property Law Act are remedial; relief may be granted when the Court considers it just and equitable, orders may be made on such terms and conditions as the Court thinks fit, and the Court is empowered to make pragmatic decisions where neighbours are unable to resolve disputes.4 The memorandum of transfer did not provide a right to upgrade the driveway and the parties needed clarification from the Court. The respondents should not be punished by a costs award, as this would be contrary to the remedial provisions under s 313 of the Property Law Act.

[15]	For all the reasons enumerated in paragraphs [13]-[14], I consider costs should lie where they fall.

Result

[16]	The applicant’s application for costs is declined.

Doogue J

4	At [15]; Guo v Bourke [2017] NZCA 609 at [12].