DAVIS V REAL ESTATE INSTITUTE OF NEW ZEALAND INC HC AK CIV 2008-404-007408 [2009] NZHC 931 (4 August 2009)

IN THE HIGH COURT OF NEW ZEALAND
AUCKLAND REGISTRY
                                                                CIV 2008-404-007408



                BETWEEN                      ANNE LESLEY DAVIS
                                             Appellant

      
         AND                          THE REAL ESTATE INSTITUTE OF
                                             NEW ZEALAND INCORPORATED
                                             Respondent


Hearing:        30 July 2009 (by telephone)

Appearances: Mr McDonald for
appellant
             Ms Herdson for respondent

Judgment:       4 August 2009 at 2.00 pm


                     COSTS JUDGMENT
OF WINKELMANN J



        This judgment was delivered by me on 4 August 2009 at 2.00 pm pursuant to
                           Rule
11.5 of the High Court Rules.




                                 Registrar/ Deputy Registrar




Peter McDonald, Solicitor, Auckland
Meredith Connell, Auckland
Simpson Grierson, Auckland




DAVIS V REAL ESTATE INSTITUTE OF NEW ZEALAND INC HC AK CIV 2008-404-007408
4 August
2009

[1]    On 1 May 2009 I allowed Ms Davis' appeal against a three month suspension
of her real estate license and a
monetary penalty of $750. At hearing the appellant
had submitted that if she were successful on appeal, indemnity costs were
appropriate.
At paragraphs [56] and [57] of the judgment I said as follows:

       The appellant seeks indemnity costs for this hearing, and
before the Board.
       There is no basis for an award of indemnity costs in this case. Mrs Davis'
       conduct fell below the
standard expected of real estate sales people. As the
       Board highlighted in its reasons, the provisions of s 99 create a high
       threshold. But even so, in this case the Institute cannot be criticised for
       bringing the s 99 application.

      
If the parties are unable to agree costs, they should ask the registry to assign
       a tele-conference before me and I will hear
counsel in relation to the issue.

[2]    The parties have been unable to agree costs. In a letter dated 15 June 2009,
the lawyer
for the appellant informed the Court that the parties had agreed that the
costs of the appeal should be on a 2B basis with costs
of $2,720 and disbursements
of $4,043.91. The parties have been unable to agree the appropriate level of costs in
respect of the
proceedings before the Board. The appellant sought 60% of actual
costs, together with travel and accommodation expenses for one counsel.
In support
of this level, the appellant argued that while there is no scale of the costs before the
Board, the Board's practice is
to award 60% of actual costs. The Board is expressly
authorised by s 105(a) of the Real Estate Agents Act 1976 to award costs to
the
salesperson against whom the complainant is made, and this Court is able to make
such an order under the provisions of s 115
of that Act.


[3]    In submissions filed in response to that letter, the Institute agreed that the
letter accurately reflected
the agreement reached between counsel, but said that the
offer to pay $6,763.91 was to reflect the Institute's contribution to overall
costs, both
at appeal and initial hearing. The Institute submitted that it was reasonable that there
be no additional costs award
because the Court had found that the respondent could
not be criticised for bringing the initial application before the Board, the
respondent
had a statutory obligation to bring the application before the Board, and was also
obliged to appear at the appeal hearing
in order to assist the Court.

[4]    In the telephone conference before me, I asked Ms Herdson if she could
articulate a principled
basis for a refusal or reduction of costs in terms of the general
principles underlying the costs regime in the High Court Rules,
and in particular the
rule that the party who fails with respect to a proceeding should pay the costs to the
party who succeeds,
a rule only to be departed from on a principled basis.


[5]    Ms Herdson agreed that she could not argue that any of the particular
categories identified in Rule 14.7 ("Refusal
of, or reduction in, costs) applied. She
explained that the Institute's primary concern is that there should be no suggestion
arising
from any award of costs that it is an expression of disapproval of the
Institute's conduct in bringing the charges against Ms Davis.


[6]    In light of those submissions, I see no basis for departing from the usual
practice in relation to costs before the Board.
Costs should be awarded at the level
requested by Ms Davis. In stating that, I reiterate what I consider to be implicit in
my judgment
of 1 May 2009, that the Institute cannot be criticised for the decision to
bring the charge against Ms Davis. As I have found, Ms
Davis was guilty of serious
negligence at a level suggesting an indifference to her obligations to Ms Thom.
Nevertheless the thresholds
created by s 99 are so high that such a finding was not
sufficient basis to meet the character test in s 99. As was noted in the
Board's
decision, s 99 is a problematic provision, thankfully now repealed, along with the
rest of the1976 Act, by the Real Estate
Agents Act 2008.


[7]    Accordingly, Ms Davis is entitled to costs in respect of the appeal at the
agreed rate of $2,720 and disbursements
of $4,043.91. In relation to the proceedings
before the Board, she is entitled to 60% of her actual costs in the sum of $33,174.90
and travel and accommodation expenses of one counsel in the sum of $1,391.54.




                                              
       Winkelmann J