IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE	
CIV 2020-404-1493
[2021] NZHC 1513	

BETWEEN	MELINDA MARGARET DOYLE, STEPHEN LUKE DOYLE and SDM
TRUSTEE COMPANY (2007) LIMITED
Plaintiffs	
AND	KNAGGS CONSTRUCTION LIMITED
Defendant	

Hearing:	16 June 2021	
Appearances:	L Kemp for the Plaintiffs
L A Mills for the Defendant	
Judgment:	23 June 2021	

JUDGMENT OF CAMPBELL J

This judgment was delivered by me on 23 June 2021 at 4:00 pm pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar

DOYLE, DOYLE and SDM TRUSTEE COMPANY (2007) LIMITED v KNAGGS CONSTRUCTION LIMITED [2021] NZHC 1513 [23 June 2021]

[1]	The plaintiffs (the Doyles) own a rural property at Taupaki, north west of Auckland. The Doyles say they engaged the defendant, Knaggs Construction Ltd (Knaggs), to construct an equestrian arena at their property. The Doyles commenced this proceeding against Knaggs, claiming the arena was constructed defectively.

[2]	A discovery order has been made. Affidavits of documents have been exchanged. In addition, on 16 December 2020, Associate Judge Bell made an order under r 9.34 allowing Knaggs to inspect the Doyles’ property (the inspection order).

[3]	Knaggs says that the Doyles have failed to comply with both the discovery order and the inspection order. Knaggs applies for interlocutory orders in respect of the Doyles’ alleged non-compliance:

(a)	An order under s 16 of the Contempt of Court Act 2019 to enforce court orders;

(b)	Unless orders under r 7.48 or the Court’s inherent jurisdiction requiring compliance with the discovery order and the inspection order.

The Doyles’ substantive claim

[4]	The Doyles allege that, in February 2018, they engaged Knaggs to undertake the design and construction of an equestrian arena platform at their property. They allege they entered into an oral agreement with Knaggs for this work. The express or implied terms of this agreement are said to include:

(a)	Knaggs would deliver clean clay fill to the property;

(b)	Knaggs would spread and level the area where the fill was deposited;

(c)	Knaggs would use the fill to construct the equestrian arena platform according to required industry specifications;

(d)	Knaggs would deposit topsoil to level the grade of the equestrian arena platform with the surrounding land;

(e)	Knaggs would complete the works with reasonable care and skill.

[5]	After the works commenced, the Doyles allege it was further agreed Knaggs would survey the property.

[6]	The works finished in May 2019. The Doyles allege the earthworks have subsided, the equestrian arena has begun to collapse, the arena fence has sunk, fencing has moved and cracks have appeared in the arena platform. The Doyles allege there are various defects in the works. They say that to remedy the defects the topsoil has to be stripped, the fill removed, the natural ground benched, drainage has to be installed, and the fill re-compacted in accordance with an engineered specification.

[7]	The Doyles also allege damage caused to the driveway, fencing and a water trough at the property by Knaggs. They also claim that Knaggs deposited tainted topsoil over surrounding paddocks, which are no longer suitable for grazing horses.

[8]	The Doyles pursue causes of action against Knaggs for breach of contract, breach of the Consumer Guarantees Act 1993, misrepresentation under s 35 of the Contract and Commercial Law Act 2017, and negligence. On all these causes of action, the Doyles seek damages of $750,000 to remedy the alleged defects, address the other alleged damage, and to redo certain other work.

Procedural history

[9]	The Doyles filed this proceeding in September 2020. It is still at an early stage.

Discovery order

[10]	By a minute dated 27 November 2020, Associate Judge Bell directed the parties to file and serve affidavits of documents by 29 January 2021. Copies of open documents were to be provided at the same time.

[11]	The Doyles’ affidavit of documents was filed and served on 22 January 2021. Included in the list was an item numbered MMD.073 which was described as “audio

files of recorded telephone conversations”. As I detail below, the Doyles did not provide the audio files to Knaggs when they served their affidavit of documents.

Inspection order

[12]	On 11 November 2020, counsel for Knaggs filed a memorandum for the first case management review. Counsel said Knaggs wished to inspect the property and undertake tests, observations, photos and the like. Counsel noted that the Doyles’ new contractor was undertaking remedial works on the property. Counsel sought an order under r 9.34, with a proposed protocol (for giving notice of attendance, and so on).

[13]	Associate Judge Bell, in a minute dated 27 November 2020, noted that Knaggs’ experts should be able to enter the site, inspect the works and also inspect any remedial works. The Judge anticipated an acceptable protocol could be negotiated between the parties to ensure adequate notice to Knaggs’ experts and allow for the Doyles to undertake their remedial works.

[14]	In due course the parties agreed to a protocol. The Judge gave effect to the protocol through consent orders under r 9.34 made on 16 December 2020. Knaggs would give at least five working days’ notice of its intention to observe works undertaken to the arena, and/or to carry out an inspection. Knaggs would then give two working days’ notice of the names of the persons who would undertake the inspection. Arrangements for parking vehicles were included in the order. The experts would remain on the property for the minimum time required, and access would only be to a specific site on the property identified in an attached plan (the designated site). Finally, the Doyles were to give five working days’ notice of any works on the property, to permit Knaggs or its experts to decide whether they should attend.

[15]	A face-to-face case management conference was scheduled on 18 February 2021. On 17 February 2021, Knaggs’ counsel filed a memorandum for the conference. Among other things, counsel asserted that the Doyles had breached the inspection order several times. After the conference, in a minute of 19 February 2021, Associate Judge Andrew varied the inspection order by adding a further condition. This precluded the Doyles or their representatives from entering the designated site while

Knaggs’ experts were there, though they could observe from outside the designated site.

Did the Doyles fail to comply with the discovery order?

Background

[16]	As noted, the Doyles’ affidavit of documents was served on Knaggs on 22 January 2021. Included in the open part of the affidavit was MMD.073, described as “audio files of recorded telephone conversations”.

[17]	On 25 January 2021, Knaggs’ solicitor requested electronic copies of the documents listed in the open part of the affidavit. The Doyles’ solicitor did not respond, so Knaggs’ solicitor wrote again on 2 February 2021. The same day Knaggs’ solicitor received from the Doyles’ solicitor a memory stick that purported to contain the documents in the open part of the affidavit.

[18]	Knaggs’ solicitor reviewed the memory stick and noticed that the audio files listed as MMD.073 were not on the memory stick. Accordingly, on 9 February 2021, Knaggs’ solicitor wrote to the Doyles’ solicitor requesting the audio files. No response was received, so Knaggs’ solicitor repeated the request on 12 February 2021. That day the Doyles’ solicitor responded that they had requested the audio files from their client and “will forward them to you as soon as we receive them”.

[19]	On 15 February 2021, Knaggs’ solicitor emailed the Doyles’ solicitor asking when they might expect to receive the audio files. The Doyles’ solicitor did not respond. On 26 February 2021, Knaggs’ solicitor repeated their request for the audio files. They noted that it had been more than a month since the Doyles had served their affidavit of documents. The Doyles’ solicitor did not respond.

[20]	On 1 March 2021, Knaggs’ solicitor sent a letter, by email, to the Doyles’ solicitor. They noted that despite repeated requests the Doyles had not provided the audio files. They noted that r 8.27 required the Doyles to make available for inspection the documents listed in the affidavit “as soon as” the affidavit of documents had been filed and served. They asked that the Doyles immediately provide the audio files, and

cautioned that if they were not provided by 5 March 2021 Knaggs would seek the Court’s assistance.

[21]	That letter did prompt the Doyles’ solicitor to respond. By email later that day, 1 March 2021, the Doyles’ solicitor advised that they were trying to obtain “clear copies of the recordings as the copies which we currently have [are] not clear”. They said they were hoping to consult with their clients to “sort this out”, but that owing to the COVID-19 lockdown they were unlikely to be able to provide the audio files by 5 March 2021.

[22]	Knaggs’ solicitor responded by email within a few minutes, requesting that the Doyles’ solicitor provide the audio files that they had been provided by the Doyles. Knaggs’ solicitor emailed a letter to the Doyles’ solicitor later that day. They noted that the High Court Rules required the Doyles to provide documents within their control, that the Doyles had the audio files within their control, and that nowhere in the High Court Rules were the Doyles required to provide “clear copies” of a document. They expressed their concern that the listed audio files might have been altered. They repeated their caution that Knaggs would seek the Court’s assistance if the audio files were not provided by 5 March 2021. No response was received to that letter, or to a follow up letter sent by Knaggs’ solicitor on 4 March 2021.

[23]	On 5 March 2021 Knaggs brought this application. This prompted a response. On 8 March 2021 (the next working day), the Doyles’ solicitor sent an email to Knaggs’ solicitor attaching audio files. The email said “we attach the audio files which are referred to as MMD.073”. The next day the Doyles’ solicitor sent a further email attaching copies of the audio files “which should be a bit clearer to hear”.

[24]	On 17 March 2021, in response to the above emails, Knaggs’ solicitor asked the Doyles’ solicitor to advise the dates of the audio recordings, to confirm all audio recordings had been provided, and to advise what had been done to the audio files and by whom to make them “a bit clearer to hear”. According to the reply affidavit of Ms Lim dated 10 May 2021, the Doyles’ solicitor had not at the date of that affidavit replied to that letter. At the hearing I asked Mr Kemp, who appeared for the Doyles, whether he had since replied to the letter. He said he had not.

Submissions

[25]	Ms Mills, for Knaggs, submitted the Doyles were clearly in breach of the order. Both the terms of the order and r 8.27 required the Doyles to provide their open documents at the same time as they filed and served their affidavit of documents.

[26]	Mr Kemp submitted there was only a brief period of time in which the Doyles were in breach. He said that Associate Judge Bell had ordered that inspection of the documents was to be completed by 26 February 2021. Mr Kemp said the Doyles had provided the audio files on 8 March 2021, and that some of the delay was attributable to COVID-19 restrictions.

Decision

[27]	I do not accept Mr Kemp’s submission. The discovery order, and r 8.27, are both clear that parties are to provide copies of open documents at the same time as serving their affidavit of documents.

[28]	That the audio files might have been unclear did not justify the Doyles withholding the files. The Doyles were free to try to improve the clarity of the files (so long as they preserved the integrity of the original files). But in the meantime they were obliged to provide the files that were in their control.

[29]	I find that the Doyles failed to comply with the discovery order.

What should be done about the Doyles’ non-compliance with the discovery order?

[30]	Knaggs applied for an order under s 16 of the Contempt of Court Act 2019, either for the issue of a warrant to arrest Mrs Doyle and/or Mr Doyle, or for the imposition of a fine not exceeding $25,000, or that the Doyles do community work not exceeding 200 hours. Knaggs also applied for an unless order.

[31]	Knaggs should not have sought orders under the Contempt of Court Act for this non-compliance. That was a completely disproportionate approach. Orders under that Act would never have been made. Section 16(3)(a) directs the Court not to

proceed with an application unless satisfied that other methods of enforcing the court order “have been considered and are inappropriate or have been tried unsuccessfully”. The appropriate method of enforcing the discovery order was to seek an unless order. Knaggs needed to try that method first.

[32]	As to the unless order, I would have made such an order, were it not for the Doyles having in the meantime provided the audio files to Knaggs. Given that has happened, there is no need to make an unless order.

[33]	Ms Mills said that there had been no response to the questions raised (in the letter of 17 March 2021) about the dates of the audio files, about whether all audio files had been provided, and about what had been done to the audio files and by whom to make them “a bit clearer to hear”. She said Knaggs has serious concerns about these matters. I express the hope and expectation that the Doyles’ solicitor will respond to these questions. But Knaggs’ application did not seek any orders about these matters.

[34]	Although I will not be making an unless order, it was understandable that Knaggs applied for such an order. The Doyles failed to comply with the discovery order for several weeks. During that period Knaggs made repeated requests for the audio files to be provided. Knaggs also gave fair warning that it would seek the Court’s assistance if the files were not provided. It was only after making the application that the Doyles provided the audio files. Knaggs has been successful in this part of its application (to the extent that it was seeking an unless order). That has costs consequences, to which I will return.

Did the Doyles fail to comply with the r 9.34 order?

The scope of the order

[35]	An issue arose as to the scope of the order made under r 9.34. Associate Judge Bell made the order, by consent, in a minute dated 16 December 2020. He made the order in terms of paragraphs 7 and 8 of a joint memorandum dated 16 December 2020. Those paragraphs provided:

7	In relation to Inspection etc. under r 9.34:

a	The defendant will give advanced notice of at least five working days of its intention to observe construction works undertaken to the arena, the subject to these proceedings and/or carry out Inspection, etc.;

b	The defendant will give advanced notice of at least two working days of names of those attending the property to undertake the Inspection, etc.;

c	The defendant and its experts will park on the metal part of the main driveway so as to not interfere with the ingress or egress of the plaintiff’s or their neighbours (shared drive);

d	The defendant and its experts will remain on the property for the minimum amount of time necessary; and

e	The plaintiff will allow access to the defendant’s representative and its experts to the area marked in red in “B”, in the attached plan, for the purposes of the Inspection, etc.

8	In relation to destructive investigation and/or works:

a	The plaintiff is to provide at least five working days’ advanced notice to the defendant of any destructive investigation and/or construction works to be undertaken to the arena, the subject of these proceedings, to enable the defendant and/or its experts to decide whether they would like, or it is necessary for them, to attend unless the circumstances require a shorter period in which case advanced notice is required immediately together with advice as to the nature of the tests and/or works concerning the arena.

[36]	Mr Kemp submitted that it was unclear which of the particular types of activity anticipated by subparagraphs (a) through (f) of r 9.34(1) were allowed by the order. Rule 9.34 provides:

9.34 Order for inspection, etc

(1)	The court may, for the purpose of enabling the proper determination of any matter in question in a proceeding, make orders, on terms, for—

(a)	the inspection of any property:

(b)	the taking of samples of any property:

(c)	the observation of any property:

(d)	the measuring, weighing, or photographing of any property:

(e)	the conduct of an experiment on or with any property:

(f)	the observation of a process.

(2)	An order may authorise a person to enter any land or do anything else for the purpose of getting access to the property.

(3)	In this rule, property includes any land and any document or other chattel, whether in the control of a party or not.

[37]	Ms Mills submitted that the order made by Associate Judge Bell encompassed all of the activities anticipated by r 9.34(1).

[38]	To resolve this dispute, the order must be interpreted in context. Associate Judge Bell made the order by reference to a joint memorandum dated 16 December 2020. The first paragraph of that joint memorandum referred to Knaggs’ memorandum dated 11 November 2020 and the Judge’s earlier minute dated 27 November 2020. That memorandum and minute provide context for the order.

[39]	Knaggs’ memorandum dated 11 November 2020 said, at paragraph 8:

The defendant requires to inspect the property (and undertake tests, observations, photos and the like) insofar as it relates to the subject of these proceedings to establish for itself whether the plaintiffs’ allegations are correct. Rule 9.34(1)(a)-(f) covers the very matters necessary for the defendant to properly defend this proceeding (hereinafter such matters referred to “Inspection, etc.”).

[40]	Associate Judge Bell’s minute of 27 November 2020 merely recorded “it should go without saying that the defendant’s experts should be entitled to come on site and inspect the works, and also inspect any remedial works”. He observed that the parties were not completely in agreement as to a protocol for this to happen. He was optimistic that the parties could settle on an acceptable protocol.

[41]	Given that context, I conclude that the order encompassed all of the activities in subparagraphs (a) through (f) of r 9.34(1). Knaggs’ memorandum of 11 November 2020 specifically said that the shorthand “Inspection, etc.” would be used to refer to all of subparagraphs (a) through (f). That shorthand was used in paragraph 7 of the joint memorandum, by reference to which the order was made. The shorthand is explained by, and consistent with, the heading to r 9.34, which refers to an order for “inspection, etc”.

The alleged non-compliance

[42]	Ms Mills submitted that on several occasions the Doyles prevented Knaggs’ representatives from inspecting the designated site in accordance with the inspection order. I address these allegations below. I note that there were other occasions on which inspections took place, about which no complaint has been made.

[43]	On 14 December 2020, the Doyles’ solicitor advised Knaggs’ solicitor that remedial works would be undertaken, commencing 21 December 2020, to move the equestrian arena platform. There appeared to be a narrow window of time within which to conduct inspections before the platform was moved. On 16 December 2020, Knaggs’ solicitor proposed by email a number of dates for inspections. The email proposed some inspections pre-Christmas, and about four inspections over the period 24 December to 6 January 2021.

[44]	The inspection order was made on 16 December 2020. It was made in the context of the exchanges to which I have just referred. The order did not identify any days on which inspections could not take place.

[45]	On 18 December 2020, Knaggs’ solicitor proposed by email further dates for inspection. The dates included days that were public holidays over the Christmas to New Year period. The Doyles’ solicitor replied that the Doyles would not respond until Knaggs provided the results of soil tests that Knaggs had undertaken. Knaggs’ solicitor replied that the inspection order was not conditional on Knaggs providing those results. I agree. The Doyles were not entitled to condition their response in this way. That was a breach of the inspection order.

[46]	On 23 December 2020, the Doyles’ solicitor advised Knaggs’ solicitor by email that Knaggs’ expert could visit the site either that day or the following day. He said that after that no inspection could take place until “after the holidays”. The Doyles’ view was that it was inappropriate for Knaggs to request inspections on public holidays. Ordinarily, that would be a justifiable position. But given the narrow window for inspections, that before the inspection order was made Knaggs had proposed dates that included public holidays, and that the inspection order had not excluded any dates, the Doyles were not entitled to tell Knaggs that further inspections

had to wait until after the holidays. That was a breach of the inspection order. Having said that, I acknowledge that the Doyles did subsequently allow Knaggs’ expert, Keith Dick, to inspect the property on 30 December 2020.

[47]	On 3 February 2021, Knaggs’ solicitor notified the Doyles’ solicitor that the Knaggs’ representatives Mr Dick and Chris Witty wished to visit the site and take photographs on 10 February 2021 at 2.00pm. The Doyles’ solicitor responded that nothing had been done to disturb the fill since Mr Dick’s previous visit and the Doyles “[did] not see the need” for an inspection. From the email exchanges that followed it seems that the Doyles regarded the inspection order as applying only when remedial works were being carried out. Knaggs disagreed with that limitation. Knaggs was right to do so. The inspection order is not limited to observing the remedial works.

[48]	The Doyles’ solicitor eventually asked what Mr Dick and Mr Witty would photograph, so they could discuss this with their client. Knaggs’ solicitor advised they would photograph the equestrian arena. The Doyles then consented, on 5 February 2021, to an inspection on 12 February 2021 at 9.30am. However, through an email from their solicitor, the Doyles said their consent was conditional on (i) the Doyles agreeing to any item or object that Mr Dick or Mr Witty wished to photograph and (ii) the Doyles being provided with copies of all photographs taken.

[49]	Mr Dick has made an affidavit addressing what occurred on the site inspection of 12 February 2021. He says he arrived at the site at around 9.30am. Mr Witty was already there. The Doyles were waiting on an access way. The Doyles said their approval was required before any photographs could be taken. Mr Dick says he knew he did not have to comply with this requirement, but did so to keep the peace. The Doyles told him he could only take photographs of part of the site designated in the inspection order, and that he could not take notes. The Doyles, Mr Dick says, demanded a photograph of notes taken by Mr Witty of discussions on site. Owing to the restrictions the Doyles were imposing on the scope of his inspection, Mr Dick decided against proceeding further.

[50]	Mr and Mrs Doyle have each made affidavits. Neither of them addresses the 12 February 2021 site inspection.

[51]	Mr Dick’s account is therefore not disputed. His account is consistent with the emails from the Doyles’ solicitor that preceded the meeting. I find that the Doyles obstructed Mr Dick and Mr Witty in their inspection of the designated site. That was a breach of the inspection order.

[52]	Following that failed inspection, counsel for Knaggs filed a memorandum expressing Knaggs’ concern that the Doyles had not been complying with the inspection order. On 18 February 2021, there was a face-to-face case management conference. Associate Judge Andrew varied the terms of the inspection order to preclude the Doyles from entering the designated site while an inspection was in progress.

[53]	On 22 February 2021, Knaggs’ solicitor emailed the Doyles’ solicitor advising that “our client’s expert” would like to conduct an inspection on 25 or 26 February. That was less than the five days’ notice required under the inspection order. The Doyles’ solicitor suggested 9.30am on 1 March 2021 (which was five days from Knaggs’ notice), and Knaggs agreed to that. Doyles’ solicitor did not ask the name of the expert who would be attending. That is not surprising. It was clear from the context of prior exchanges that Knaggs’ expert was Mr Dick.

[54]	On 28 February 2021, Auckland moved to COVID-19 Alert Level 3. Building and construction work could continue so long as workers maintained physical distancing of at least one metre. Mr Dick assumed, rightly, that the inspection could proceed.

[55]	The Doyles assumed otherwise. They were therefore surprised when Mr Dick arrived on 1 March 2021 to carry out an inspection. They were even more surprised that another person, Mohit Samy, a surveyor at Knaggs, also arrived for the inspection. Knaggs had not given any notice that Mr Samy would attend.

[56]	The Doyles met Mr Dick and Mr Samy on the access way, where they had parked their cars. The Doyles were told that Mr Samy was there to conduct a survey. The Doyles, after consulting their solicitor, told Mr Dick and Mr Samy that they would not allow the survey to proceed. They said Mr Dick could take photographs, though

there is a dispute about what part of the property they said Mr Dick could photograph. An argument then developed about COVID-19 distancing. Mr Dick and Mr Samy left the property without conducting any inspection.

[57]	Knaggs’ position is that the Doyles breached the inspection order on 1 March 2021 in two respects: first, by meeting and interacting with Mr Dick and Mr Samy on the access way (rather than staying in the residential part of their property); secondly, by not allowing the survey to proceed.

[58]	As to the first point, Ms Mills submitted that the primary point of the variation that was made to the inspection order on 18 February 2021 was to avoid interaction and ensure no discussions between the Doyles and Knaggs’ representatives. She said the Doyles breached the inspection order as soon as Mr Dick and Mr Samy arrived, by deliberately meeting them on the access way.

[59]	I do not accept that submission. All that the variation requires is that the Doyles remain outside the designated site during the inspection. It does not require, expressly or implicitly, that the Doyles refrain from interaction with Knaggs’ representatives. The place where the Doyles met Mr Dick and Mr Samy is outside the designated site. The Doyles were entitled to be there.

[60]	As to the second point, the Doyles were entitled to decline to permit the survey to proceed. Knaggs had not given any notice that Mr Samy would attend. Knaggs, not the Doyles, was in breach of the inspection order on this occasion.

What should be done about the Doyles’ non-compliance with the inspection order?

[61]	I have found that the Doyles failed to comply with the inspection order several times: on 18 December 2020 (by purporting to condition an inspection on Knaggs first providing the results of soil tests); on 23 December 2020 (by not allowing inspections until after the holidays, though an inspection on 30 December was subsequently allowed); and on 12 February 2021 (by obstructing Mr Dick and Mr Witty in their inspection). In respect of the inspection on 1 March 2021, I find that Knaggs, but not the Doyles, breached the inspection order.

[62]	The Doyles’ breaches are of concern. They have repeatedly attempted to impose unjustified conditions and limitations on inspections. This must stop.

[63]	I appreciate that the inspections are occurring on the Doyles’ property, and that their home is located there. But they are suing Knaggs for substantial damages.  It is a basic and fundamental principle of justice that Knaggs have a proper opportunity to defend itself. That opportunity includes, in this case, being able to inspect the equestrian arena that is the subject of this proceeding. This was recognised and accepted by the Doyles when they consented to the inspection order. They must comply with it.

[64]	Knaggs seeks an unless order. Ms Mills accepted that this is an order of last resort, but submitted it was appropriate given the Doyles’ history of non-compliance.

[65]	Ms Mills’ submission was premised on the Doyles having breached the inspection order on 1 March 2021. I have found against Knaggs on that point. I have reached the conclusion that an unless order is not warranted. The Doyles’ breaches occurred prior to the inspection order being varied on 18 February 2021. At that point Knaggs had not regarded it as necessary to seek an unless order. Similarly, I find that the Doyles’ breaches do not yet justify an unless order, particularly where it is Knaggs that was in breach in respect of the 1 March 2021 incident.

[66]	However, this judgment should bring home to the Doyles that the conditions and limitations that they have purported to impose on the inspections have been unjustified. If there is any further breach by the Doyles, an unless order is likely.

[67]	Knaggs also sought orders under s 16 of the Contempt of Court Act. Such orders were not a realistic possibility.

Costs

[68]	Knaggs has succeeded on the part of its application dealing with the discovery order. Knaggs has had some success in respect of the inspection order (establishing several breaches by the Doyles), but has failed to obtain any orders.

[69]	In these circumstances I regard Knaggs as the successful party overall, and therefore entitled to costs. However, there should be a substantial reduction in costs, given that Knaggs failed on a significant point in respect of the inspection order (the 1 March inspection), and that Knaggs pursued a meritless claim for orders under the Contempt of Court Act.

[70]	I make a 50 per cent reduction to the costs and disbursements to which Knaggs would otherwise be entitled on the application. Band B is appropriate for all steps. The proceeding is already category 2 for costs purposes. I record that the hearing took only a quarter day.

Result

[71]	I find that the Doyles breached the discovery order and the inspection order in the respects identified in this judgment, but I decline to make any orders in respect of those breaches.

[72]	The Doyles are to pay costs to Knaggs as set out in [70].

Campbell J