IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2012-404-002091 [2013] NZHC 722

IN THE MATTER OF	a appeal against the decision of the
Weathertight Homes Tribunal at Auckland

BETWEEN	CARL SANTO SAFFIOTI AND EIJA MARITA LINDEN SAFFIOTI Applicants

AND	AUCKLAND COUNCIL Defendant

Hearing:	(on the papers)

Counsel:	R J Hooker for the Applicants
D J Barr for the Respondent

Judgment:	11 April 2013

JUDGMENT OF WOODHOUSE J (Costs)

This judgment was delivered by me on 11 April 2013 at 3:00 p.m. pursuant to r 11.5 of the High Court Rules 1985.

Registrar/Deputy Registrar

……………………………………

Solicitors / Counsel:
Mr R J Hooker, Vallant Hooker & Partners, Solicitors, Auckland
Mr G J Christie / Mr D J Barr, Simpson Grierson, Solicitors, Auckland

SAFFIOTI V AUCKLAND COUNCIL HC AK CIV-2012-404-002091 [11 April 2013]

[1]       The applicants’ leave to appeal against a decision of the Weathertight Homes Tribunal was dismissed.1    The respondent, in accordance with that judgment, is entitled to costs.  The parties have been unable to agree on quantum and the Court is now asked to fix costs.

[2]       The respondent seeks indemnity costs in a sum of $13,432 (inclusive of GST) and disbursements of $428.63 (inclusive of GST).  The applicants oppose indemnity costs.  They submit that costs should be fixed on a 2B basis.  Costs on a 2B basis total $6,766.

[3]     The respondent seeks indemnity costs on the basis that the applicants commenced  or  continued  the  proceeding  “in  wilful  disregard  of  …  clearly established law”.  This is one of a number of circumstances listed by the Court of Appeal in Bradbury v Westpac Banking Corporation in which indemnity costs have been ordered.2   The respondent submits that the applicants persisted in seeking to advance what amounted to a hopeless case because the claims were clearly contrary to the statutory defence in s 50(3) of the Building Act 1991, the decision of the Supreme Court in McNamara v Auckland City Council,3  and the decision of the
Court of Appeal in Vining Realty Group v Moorhouse.4   These are matters discussed

in the substantive judgment and do not require elaboration here.

[4]       For  the  applicants,  Mr  Hooker  submitted  that  the  issue  on  appeal,  as summarised at [9] of the substantive judgment, was novel, and that it was therefore reasonable for the applicants to continue with their claim by seeking leave to appeal. Mr Hooker advanced other arguments in opposition to the application for indemnity costs, but this is at the heart of the submission.

[5]       I am satisfied that the applicants persisted with their claim, by seeking leave to appeal, in the face of a statutory provision, s 50(3), and Court decisions binding
on the High Court, which indicated that the claim had little prospect of success.

1 Saffioti v Auckland Council [2012] NZHC 2394.
2 Bradbury v Westpac Banking Corporation [2009] NZCA 324, [2009] 3 NZLR 400 at [29].
3 McNamara v Auckland City Council [2012] NZSC 34, [2012] 3 NZLR 701.
4 Vining Realty Group Ltd v Moorhouse [2010] NZCA 104, (2011) NZCPR 879.

However, that in itself is not sufficient to justify indemnity costs.   The list of circumstances in the Bradbury case does not constitute some sort of exclusive list of circumstances which will justify indemnity costs.  This is an illustrative list.  More is required.  If a party seeks indemnity costs based on contentions about the conduct of the other party, in reliance on paragraph (a), (b) or (f) of r 14.6(4), the party against
whom costs are sought must have behaved badly or very unreasonably;5 there must

be misconduct which is “flagrant”.6    I am not persuaded that the conduct of the applicants in pursuing their application for leave to appeal amounts to misconduct of the sort contemplated in the leading cases.

[6]       It  is  a  matter  of  some  concern  that  costs  above  scale  are  sought  fairly regularly.  The rules do of course provide for increased or indemnity costs.  But the rules are founded on the principles stated in r 14.2, including the principle that “so far as possible the determination of costs should be predictable and expeditious”. That principle applies in all cases, but it has added emphasis when the quantum of actual costs incurred by the successful party are, as here, reasonably modest.

[7]       The   respondent’s   application   for   indemnity   costs   is   declined.      The respondent’s  costs  are  fixed  on  a  2B  basis  in  a  sum  of  $6,766  together  with
disbursements of $437.52.

Woodhouse J

5 Bradbury v Westpac Banking Corporation, above n 2, at [27].
6 Prebble v Awatere Huata (No 2) [2005] 2 NZLR 467 (SCNZ), (2005) 17 PRNZ 581 at [6].