Graham v Scott [2012] NZHC 2834 (26 October 2012)

Last Updated: 17 November 2012

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

CIV 2012-485-1722 [2012] NZHC 2834

BETWEEN TONY GEORGE GRAHAM and ELMSLIE ESTATE LIMITED Appellants

AND GAVIN ROBERT SCOTT and PATRICK ROBIN VAN BERKEL

Respondents

Hearing: 25 October 2012

Counsel: P W Michalik for the Appellants

Respondents in person

Judgment: 26 October 2012

_{JUDGMENT OF MALLON J}

Contents

Introduction ....................................................................................................................................... [1] The background ................................................................................................................................ [2] The proceedings ................................................................................................................................. [6] The settlement...................................................................................................................................[11] Exemplary damages ........................................................................................................................ [13] Costs ................................................................................................................................................. [32]

_{Result ................................................................................................................................................ [41]}

GRAHAM v SCOTT HC WN CIV 2012-485-1722 [26 October 2012]

Introduction

[1] Mr Graham/Elmslie Estate Ltd appeals against a District Court judgment awarding exemplary damages to Mr Scott in the sum of $5,000 and ordering costs in Mr Scott and Mr van Berkel’s favour on a 2B basis (amounting to $13,842.55 including disbursements). The appeal is on the basis that:

(a) No claim for exemplary damages was pleaded nor addressed in the

parties’ submissions to the District Court; and

(b) In awarding costs, the District Court Judge erred in taking into account conduct that did not relate to the conduct of the proceeding, that he was wrong on a factual matter, and that he should have taken into account that Mr Graham/Elmslie Estate Ltd was the successful party.

The background

[2] The proceeding involves a dispute between neighbours. Elmslie Estate Ltd, of which Mr Graham is the principal, owns an undeveloped section in Upper Hutt. Mr van Berkel and Mr Scott own and live on developed neighbouring properties. They each enjoy the benefit of a right of way over the land owned by Elmslie Estate Ltd. That right of way was obtained at a time when the Elmslie Estate land was in the possession of the mortgagee following financial difficulties experienced by Mr Graham. Mr Graham later settled with the mortgagee and regained possession. He has never been happy with the right of way arrangements that were negotiated in his absence.

[3] Later Mr Graham wished to develop his property. He began felling trees in preparation for a possible subdivision. He also approached Mr Scott and Mr van Berkel for consent. They refused to provide that consent. Mr Graham saw this as unfair when they had enjoyed living in their houses with the benefit of access over

his land. He then went on the offensive in taking action against Mr Scott and Mr van

Berkel.

[4] The action taken is set out in more detail in the District Court judgment.[1] In summary it involved:

(a) Sending invoices to Mr van Berkel for encroachment of a garage (by one square metre) onto Elmslie Estate land, for using the right of way for car parking, and use of part of the right of way for the storage of firewood;

(b) Sending invoices to Mr van Berkel and Mr Scott for the cost of replacing a potentially dangerous power pole, threatening referral to a debt collection agency and approaching Mr van Berkel’s bank for payment;

(c) Spraying a “cut” sign on Mr van Berkel’s garage;

(d) Placing one two-tonne concrete block on the right of way (in an area used for parking), and another one on the last portion of the accessway to Mr Scott’s property which was on land owned by a third party and in respect of which there was no formal right of way; and

(e) Serving a trespass notice on Mr Scott and attaching signs on a pole on the right of way stating “No Trespassing” and “Vehicles will be towed”.

[5] Mr Scott and Mr van Berkel had no success in seeking to discuss matters with Mr Graham. They decided to commence proceedings.

[6] The claim was prepared and filed by counsel for Mr Scott and Mr van Berkel (Mr Langford). The claim sought various orders by way of relief. An application for interim relief was also sought. The interim orders sought were as follows:

a. That the Defendants/Respondents do not restrain the

Plaintiffs/Applicants from their lawful use of the right of way;

b. Directing the Defendants/Respondents to remove the two concrete blocks from the driveway;

c. Restraining the Defendants/Respondents from taking any action to remove or otherwise change the garage of the Second Plaintiff/Applicant;

d. Preserving the garage of the Second Plaintiff/Applicant.

[7] Interim orders were granted in the following terms:

a. That the Defendants/Respondents do not restrain the

Plaintiffs/Applicants from their lawful use of the right of way;

b. Directing the Defendants/Respondents to remove the two concrete blocks from the driveway;

c. Restraining the Defendants/Respondents from taking any action to remove or otherwise change the garage of the Second Plaintiff/Applicant;

d. Preserving the garage of the Second Plaintiff/Applicant.

NOTE this Order in terms of 3.a. to d. above is made on the following basis:

...

3. Costs are reserved, including the costs of the

Respondents/Defendants in removing the block referred to below;

4. This order applies only to the block shown in the top photo in page 2 of the bundle of photos produced today by the Respondents/Defendants, which is to be removed within 5 days;

...

[8] Following these orders, Mr Graham removed the concrete block from the last portion of Mr Scott’s accessway and placed it alongside the other block in the parking area on the right of way.

[9] Subsequently Mr Scott and Mr van Berkel amended the relief being sought in their substantive claim. The amendment claimed damages for the first time, and made other changes to the orders that were sought. The relief claimed was as follows:

1. An order requiring the Defendants to tend to the hazardous trees over the right of way.

2. An order or declaration stating that the Plaintiffs’ do not owe money

towards the invoices for the power pole.

3. An order restraining the Defendants from taking any action to remove or otherwise change the garage of the Second Plaintiff.

a. If the Court is not minded to grant a permanent preservation order as described above, then an order is sought restraining the Defendants from taking any action to remove or otherwise change the garage of the Second Plaintiff for a period of three (3) years.

4. An order directing the Defendants to remove the two concrete blocks from the driveway and to repair the damage done previously and at final removal.

5. An order that the Defendants do not restrain the Plaintiffs from their lawful use of the right of way.

6. An order for payment of $10,000 from the Defendants to the

Plaintiffs in damages for:

a. the private nuisance resulting from disturbance of the easement;

b. unlawful interference with the relationship with the Second

Plaintiff’s bank.

7. Costs.

8. Interest.

[10] Along the way attempts were made to settle the proceeding. Offers were made by each side. The sticking point from Mr Scott and Mr van Berkel’s perspective was that Mr Graham required their consent to his house development as part of any settlement. They were not prepared to give that without information from Mr Graham on stability issues. Eventually, on the morning of the hearing, the parties negotiated a settlement.

[11] The settlement reached was in these terms:

[1] This proceeding having come on for hearing on 23 April, the following orders are made by consent:

1. Within 18 months, the second plaintiff will relocate the garage that encroaches on the right-of-way, so as to end the encroachment. Within 14 days, the second plaintiff will pay the defendants $365.00 for the right to occupy the land encroached upon until the garage is removed. Should the garage remain in place at the end of 18 months from 23 April 2012, the defendants shall be entitled to remove the encroaching portion of the garage, without liability to the second plaintiff.

2. No order is sought in relation to trees.

3. The defendants agree to permit non-obstructive parking on the right- of-way by the plaintiffs and their invitees.

4. Neither defendant will obstruct the right-of-way, or the first plaintiffs’ informal rights of access including at or beyond the boundary between the first defendant’s land and that owned by Silverstream Forestry Limited. The defendants will remove the concrete blocks currently on the right-of-way within 14 days.

5 It is recorded that the first and second plaintiffs will give their consent as affected parties to the plans presented to them by the second defendant for the construction of a house on 92 Elmslie Road.

[2] Two issues remain outstanding, as to damages and as to costs. The damages issue relates to the plaintiffs’ claims for damages, which remain disputed by the defendants; and the issue as to costs relates to the cost of the proceeding.

[3] As proposed by the parties, I will resolve these issues on the basis of

Memoranda to be filed.

[4] The plaintiffs are to file and serve submissions within 14 days of

23 April 2012, and the defendants are to file and serve submissions in reply within a further 7 days.

[12] In accordance with this agreement, the parties each made submissions on damages and costs and the Judge gave his decision. The Judge awarded $5,000 exemplary damages to Mr Scott (in relation to blocking the right of way with the concrete blocks) and costs in favour of Mr Scott and Mr van Berkel on a 2B basis. Mr van Berkel’s claim for damages failed.

[13] Mr Graham/Elmslie Estate Ltd contends that exemplary damages should not have been awarded because none were claimed in the pleading nor was there anything in the submissions to alert him that they were being sought. If that is correct then Mr Graham/Elmslie Estate Ltd must succeed. A defendant to litigation is entitled to know the case he has to meet. Whitten-Hannah v Davis[2] provides an example where an award of exemplary damages was set aside because it was not pleaded nor referred to in submissions.

[14] There is no doubt that the claim did not refer to exemplary damages and that the submissions for Mr Scott and Mr van Berkel did not specifically refer to them. Mr Scott and Mr van Berkel respond that it was obvious that exemplary damages were being claimed because no loss (other than minor damage to the right of way) was alleged to have been suffered. It is necessary to consider what the submission did say on the issue of damages to determine whether it was obvious that they were being claimed.

[15] On this topic, the submissions for Mr Scott and Mr van Berkel (which were filed on their behalf by counsel) commenced by stating that the amended relief sought in order for payment of $10,000 “in damages for the private nuisance resulting from disturbance of the easement, and for the unlawful interference with the relationship between [Mr van Berkel] and his bank.” The submissions also said that Mr Scott and Mr van Berkel had suffered loss of time spent dealing with the nuisance and that Mr van Berkel had lost pay in attending a court hearing.

[16] Under the heading “Disturbance of easement” the submissions:

(a) set out the time sequence relating to the concrete blocks, beginning with their placement on the right of way on 4 May 2010 and their

_{eventual removal (pursuant to the consent orders) on 2 May 2012;}

(b) referred to Mr Scott having a serious heart condition, requiring him to have unhindered access to his property to allow ambulance access in the case of an emergency;

(c) said that the disturbance of the right of way had caused Mr Scott and Mr van Berkel “great stress, and damage and expense, over a considerable period”; and

(d) referred to legal commentary which stated that the disturbance of an easement is a private nuisance, that it is necessary to show some substantial interference with the enjoyment of the easement, and that proof of actual pecuniary loss was not essential.

[17] Submissions were also made under the heading “Unlawful interference with

relationship between [Mr van Berkel] and his bank”. These submissions:

(a) set out the chronology in relation to the electricity pole invoices;

(b) recorded that the invoices were not rescinded and noted that no apology had been made; and

(c) submitted that the approach to the bank which had been made on Mr Graham’s behalf, was “underhanded” and caused Mr van Berkel “considerable stress and embarrassment.”

[18] The submission concluded:

27. Both the interference with the easement, and the purported invoice for the power pole, were some form of attempted “payback” by the Defendants. Accordingly, due to the disturbance of the easement and unlawful interference with the relationship with the Second Plaintiff’s bank it is submitted that an order be made for payment of damages of $10,000.00 from the Defendants to the Plaintiffs.

28. In addition to the above, the Plaintiffs have incurred stress and had their time wasted from the time they received the power pole invoices until final conclusion of this matter. They have also incurred wasted time, stress and cost in obtaining information, and making futile attempts to communicate with the Second Defendant to resolve matters.

[19] It can be seen that the claim was for compensatory damages (for the minor damage to the road and for the wasted time, inconvenience and stress caused by disturbance to the easement and the interference with Mr van Berkel’s relationship with the bank). The loss arising from damage to the road was not proven with evidence as to the cost of repair. The claim for damages was essentially one for general damages to compensate for the disturbance. The only mention of matters that might possibly have gone to exemplary damages (had they been claimed) was the reference to Mr Graham’s actions as a form of “payback”. The reply submissions on behalf of Mr Graham and Mr Scott added nothing of significance on the topic of damages. I conclude that the submissions did not alert Mr Graham/Elmslie Estate Ltd (or counsel) that exemplary damages were being sought.

[20] That is confirmed by a review of the submissions for Mr Graham/Elmslie

Estate Ltd. On the topic of damages, they commenced with this:

30. In principle, damages compensate a plaintiff for loss suffered when a wrong is done. First the plaintiff must succeed by proving its case on a recognised cause of action. Second, the plaintiff must prove what loss it has suffered, and therefore what sum of money would properly compensate it for that loss.

[21] Surprisingly when the claim was for “nuisance”, the submissions then went on to discuss the claim as one for trespass. It was said that on the one hand the parked cars and the garage encroached unlawfully onto Mr Graham’s land and on the other hand Mr Graham had deliberately placed the concrete blocks on the rights of way. The submissions referred to legal authority to the effect that trespass is actionable per se (without proof of damage), but only nominal damages are awarded for the purposes of vindicating the right where no damage is proven. The submissions included a quote from that authority which included the statement “exemplary damages may be awarded where the conduct of the defendant merits

punishment, where he acts in contumelious disregard of the plaintiff ’s rights”.[3] This

was the only mention anywhere in the submissions for any party of exemplary damages.

[22] It was submitted that one of the blocks did not impede access and, while the other block may have inconvenienced Mr Scott, the offending block was placed on land over which Mr Scott had no formal right of way. It was submitted that the offending block caused inconvenience (because Mr Scott had to park 200 metres from his house for six and a half weeks) rather than loss. The reliability of the evidence about Mr Scott’s heart condition was doubted and it was contended that Mr Scott and Mr van Berkel had not mitigated their position (by accepting proposals made by Mr Graham’s solicitor).

[23] The submissions on this claim concluded that each party could recover a nominal award against each other and could recover compensation for any actual loss they could show in respect of each other’s trespass. It was accepted that Elmslie Estate Ltd and Mr Graham had brought no counterclaim for damages for the trespass and had not proven loss. It was submitted that, as Mr Scott and Mr van Berkel had also not proven loss, the possible awards of nominal damages could cancel each other out.

[24] On the question of damages for the alleged unlawful interference in the relationship with the bank, it was submitted that no tort was committed because the contract between Mr van Berkel and his bank was not broken. It was submitted that without a cause of action, Mr van Berkel had no right to any damages.

[25] The relevant parts of the District Court judgment on this topic are as follows:

[27] The plaintiffs claim $10,000.00 damages covering two aspects of the disputes between the parties:

1. Private nuisance resulting from disturbance of the easement.

2. Unlawful interference with the relationship between the second plaintiff and his bank.

[28] I deal with the unlawful interference claim first. It seems to be common ground that Mr Graham’s solicitor approached Mr van Berkel’s bank in an attempt to get the invoice paid. As I have already observed, it is unclear to me why the solicitor could possibly have thought that it was appropriate for him to approach the bank in this way, much less that the bank might actually make payment. Be that as it may, however, there is no evidence that the bank took any step to alter the nature or quality of its relationship with Mr van Berkel or to cause him loss in any way. So far as the evidence goes, it simply (and of course correctly) took no action at all in response to the solicitor’s

approach – apart from advising Mr van Berkel that the approach had been made. As no loss can be demonstrated, the claim for damages cannot succeed.

[29] The claim in respect of the “disturbance of the easement” is in a different category. That claim can relate only to the deposit of the concrete blocks and to the damage allegedly done to the surface of the driveway. ...

...

[32] I accept that, with the exception of a complaint about minor damage to the tar seal and gravel surfaces of the driveway, no loss or damage has been sustained by the plaintiffs. It seems that Mr Scott himself repaired the surfaces, but there is no evidence of any actual cost being incurred. As Mr Scott’s claim for interference with his access lies in trespass, it is actionable without proof of loss or damage; but a mere infraction of the plaintiffs’ rights to use the right-of-way, without such proof, would normally give rise only to nominal damages. Nevertheless, as Mr Michalik accepts, exemplary damages may be awarded in tort in cases where a defendant “acts in contumelious disregard of the plaintiffs rights” (Taylor v Beere [1982] 1

NZLR 81).

[33] In my view, this is such a case. As Mr Graham well knew, Mr Scott and his visitors had every right to use the right of way for vehicle access, and he had not the vestige of a right to interfere with that. As he freely accepts, he chose to block the right of way for the purpose of applying pressure on Mr Scott to achieve the collateral objective of getting Mr Scott to agree to his building plans. The means he chose were clearly unlawful. There were of course lawful means open to Mr Graham to proceed without Mr Scott’s agreement: he could have at least embarked on a formal application to the Council for consent, so that the validity of any objection Mr Scott might have had could be tested.

[34] I consider that this behaviour on the part of Mr Graham merits an award of exemplary damages.

[35] In calculating such damages, I take into account also the following matters: the inconvenience caused to Mr Scott and his family by having to park some distance from the property and walk back and forth to their cars for a period of some 6 weeks; the fact that Mr Graham did not fully comply with the injunction so that access around the blocks remained restricted (there are issues of both contempt of court and exemplary damages bound up in that); and the modest damage to the surface of the right of way.

[36] I fix the damages at $5,000, payable to Mr Scott.

[26] No formal cross-appeal was filed in relation to the Judge’s finding that no loss was suffered by Mr van Berkel. However Mr van Berkel’s written submissions on this appeal claimed exemplary damages in relation to the claim for interference with his relationship with his bank. Mr Scott supports him in this claim. Although Mr van Berkel understandably feels aggrieved by Mr Graham’s actions, the Judge’s

conclusion that no loss was suffered is correct. The relevant tort was inducing a breach of contract or (possibly) intentionally causing loss by unlawful means. Neither torts were made out because there was no breach of contract nor unlawful means as those causes of action require.[4] Further, both torts require that damage be suffered.[5] There was nothing that might qualify as damage here. In any event, it was not open to the Judge to award exemplary damages on this claim when they had not

been pleaded nor signalled in the submissions to the Judge. If they had been pleaded or signalled there may have been matters which Mr Graham would wish to raise in his defence of them.

[27] On the nuisance claim the Judge appears to have thought, wrongly, that it was for trespass (presumably on the basis of the submissions for Mr Graham). The claim and submissions in support of the claim was for nuisance, for disturbance of an easement (by the concrete blocks). There is no doubt that exemplary damages were not specifically pleaded nor addressed in the submissions and that award cannot stand. If they had been claimed Mr Graham would have wished the Court to consider his view that he was attempting merely to insist that Mr Scott and Mr van Berkel adhere to their strict legal rights rather than intending to disregard their rights.

[28] However it does not follow that only nominal damages of, say, $1 were recoverable as is contended for Mr Graham/Elmslie Estate Ltd. A claim for nuisance protects a person’s right to the use or enjoyment of an interest in land. The nuisance need not be directly on the plaintiff’s land. Indirect interference with land can

qualify, provided that the interference is substantial and unreasonable.[6] The concrete

block on the parking area on the right of way was a lesser intrusion than the other concrete block, because it did not impede access to either Mr Scott and Mr van Berkel’s properties. The concrete block that was placed on the portion of the driveway owned by a third party did, however, substantially and unreasonably impede Mr Scott’s access until it was removed after the injunction. That was an interference with Mr Scott’s use or enjoyment of his land in that he could no longer

_{access that land by car.}

[29] Damages in nuisance are available to compensate the person for any diminution in the value of the plaintiff’s interest in land or possibly,[7] in the alternative, for the cost of restoring the property. A transitory nuisance may not cause any loss of this kind. Nevertheless the plaintiff can claim for “the depreciation in the amenity value of the property during the period for which the nuisance persisted”.[8] In the absence of any other appropriate measure of this loss the court can award a sum of general damages for the loss of amenity.[9] That award can include an amount for stress and inconvenience.[10]

[30] In my view Mr Scott is entitled to general damages for his loss of amenity for the six week period that the concrete block impeded his access and for the associated stress from that loss of amenity. The Judge essentially accepted that there was a loss of amenity in referring to the evidence that Mr Scott and his family were forced to park some distance from their property and walk back and forth from their cars for a period of some weeks. This was one of the factors that he took into account in assessing the amount of exemplary damages. However he also took into account other factors which he saw as warranting an award of exemplary damages. I reduce the award made by the District Court to $2,500 to reflect the irrelevant factors taken into account. I consider that the award needs to be more than minimal in order to be compensatory, but cannot be too high because the obstruction did not extend for a lengthy period.

[31] For completeness I note that Mr van Berkel sought exemplary damages in relation to this appeal. Such an award is not, however, available for this.

Costs

[32] Mr Graham/Elmslie Estate Ltd submits that the Judge was in error in awarding costs in favour of Mr Scott and Mr van Berkel. They submit that costs

_{could have been awarded in their favour in respect of the injunction, but thereafter}

they continued their claim on matters on which they were not ultimately successful. Mr Graham/Elmslie Estate Ltd submit that if the terms of the settlement are considered, both parties achieved a measure of success. They submit that in awarding costs, the Judge wrongly considered that the conduct of Mr Graham/Elmslie Estate Ltd prior to the commencement of the proceeding was relevant. They also submit that the Judge was wrong to think that Mr Graham/Elmslie Ltd had caused any problems in the conduct of the proceeding when they were without representation. That was for a short period only and the evidence showed that Mr Scott and Mr van Berkel had no difficulty in contacting the lawyers acting for Mr Graham/Elmslie Ltd.

[33] The relevant part of the District Court Judgment on this topic is as follows:

[38] Essentially, the plaintiffs say that they had no choice but to issue proceedings in June 2010 after Mr Graham threatened damage to Mr van Berkel’s garage and placed the concrete blocks on the right of way. The injunction issued in the proceeding resulted in the partial removal of the concrete blocks so that the right of way could at least be used by Mr Scott. It also dealt with the risk of any imminent attempt to interfere with the garage.

...

[44] The usual position, as Mr Michalik submitted, is that costs follow the event, so that, in general, an award of costs would reflect the degree of success of the party recovering costs. On that basis, the plaintiffs would not be entitled to costs. But I note that Mr Michalik did not take into account the interim injunction which the plaintiffs successfully sought and held, and which, essentially permanently, solved Mr Scott’s immediate access problems.

[45] As r 4.1 of the District Court Rules 2009 makes clear, all matters concerning costs are at the discretion of the Court. That discretion is a general and, by virtue of r 4.1.3, overriding one. I consider that the existence of this overriding discretion is a critical factor in determining costs in this case; and that in exercising that discretion I should consider the stance of the parties in their approach to the litigation.

[46] Rules 4.6 and 4.7 deal with increased costs and indemnity costs and the refusal of or reduction in costs. They proceed on the basis of entitlements or obligations concerning costs which already exist. But they do not deal with a situation like the present one, where the entitlement to costs is at large and neither party can be deemed the successful one.

[47] Nevertheless those rules give guidance, in my opinion, as to the way in which the overriding discretion should be exercised in this case. Both rules refer to the conduct of a party in contributing unnecessarily to the time or expense of the proceeding by, inter alia, pursuing unnecessary steps or

advancing arguments that lack merit, failing, without reasonable justification, to accept legal argument, or failing, without reasonable justification, to accept an offer to settle or dispose of the proceeding. Rule

4.6.4 (which deals with indemnity costs) also refers to a party acting

“vexatiously, frivolously, improperly, or unnecessarily” in relation to the

proceeding.

[48] I therefore consider that I have a general discretion to order costs if the defendants can be shown to have behaved in a way comparable with the conduct referred to in Rules 4.6 and 4.7. I make it clear that I am not referring to an award of increased or indemnity costs: the question is simply whether, even accepting that Mr Michalik is correct in his analysis of the outcome of the proceeding, the plaintiffs may nevertheless be awarded costs on the grounds of the defendants’ behaviour. The plaintiffs do not seek increased or indemnity costs.

[49] The question remains whether in fact the defendants were guilty of the behaviour asserted by Mr Langford.

[34] The Judge then considered the conduct of Mr Graham in taking actions without warning (re the encroachments and in relation to the electricity pole invoices), being unresponsive to approaches from Mr Scott and Mr van Berkel to discuss matters (before and after the litigation was commenced) and in taking the various action he had out of anger and frustration.

[35] He concluded:

[51] In the light of these actions and attitudes on Mr Graham’s part, and regardless of the overall rights and wrongs of the situation, the plaintiffs had no alternative but to commence the proceeding. In my opinion, the defendants’ conduct of its case resonates with the conduct identified in the parts of the rules earlier referred to. Those parts of the rules also go some way towards capturing the flavour of what Mr Langford asserts.

[52] The answer to Mr Michalik’s analysis of the ultimate outcome is that this is one of those cases where the outcome of the process rather than success or otherwise in formal terms is the correct standard by which to measure entitlement to costs. For the plaintiffs, success lay in achieving resolution of disputes which had festered for a decade rather than in receiving an award of money or orders in their favour. The fact is that, had the defendants behaved in the manner sought by the plaintiffs in their initial pleading (see [40] and [41] above), it is unlikely that the litigation would have been required at all. That is evident from the fact that, once Mr Graham had engaged experienced counsel, a settlement was negotiated, on terms which were of benefit to the defendants, within the space of a morning. That negotiation and its outcome speaks for itself as to the consequences of Mr Graham’s discourteous and obstructive attitude to resolution of the matters in dispute.

[53] I therefore consider that I should exercise my discretion to award costs to the plaintiffs despite their limited success in the litigation.

[36] Counsel for Mr Graham/Elmslie Estate Ltd may be correct that there were errors by the Judge as to Mr Graham’s availability and responsiveness to discussions once the litigation commenced. Mr Scott and Mr van Berkel respond that the problem with the discussions was that Mr Graham was not prepared to settle anything unless they consented to his house proposal. They wanted data from Mr Graham before they would do that and the data was never provided.

[37] However, in my view what was more important to the Judge’s assessment of costs was his view that Mr Scott and Mr van Berkel had succeeded in their proceeding simply because they had achieved a resolution. The Judge was not seeking to impose costs because Mr Graham had been difficult prior to the proceedings being commenced. Rather, he saw Mr Graham’s conduct as demonstrating that a resolution was needed to the disputes that had arisen between the three neighbours. The precise form that resolution took was not really the point. I consider that this was an available approach under the costs discretion for the reasons the Judge explained.

[38] Moreover, in my view Mr Scott and Mr van Berkel were entitled to costs for other reasons. They were the successful party in the injunction application. Mr Scott was also successful in the only issue (apart from costs) that went to the Court for determination, that being the claim for damages.

[39] The Court would not normally order costs on the basis of an assessment of who succeeded the most in a settlement they reached. Even if the settlement terms were to be considered, however, I disagree that they show that the parties were equally successful in the proceeding or that Mr Graham/Elmslie Estate Ltd were more successful. Mr van Berkel obtained more time to remove the encroaching portion of his garage, Mr Scott and their invitees were able to park on the right of way, and the two concrete blocks were to be removed. The only matter they did not succeed on was the claim in relation to the trees which were on Mr Graham’s property and which Mr Scott and Mr van Berkel believed were dangerous. The payment of rent for the encroachment of the garage and the consent for the house

proposal were not claims that had been brought by Mr Graham/Elmslie Estate Ltd. They were compromises Mr Scott and Mr Graham were prepared to make to achieve a resolution of matters.

[40] For completeness I note that Mr Scott submits that the Judge made an error in calculating the costs. Although no cross-appeal was filed, I am not satisfied that there was any error made. Where a settlement proceeds “on the courtroom door” there is no “hearing” even though the preparatory work may all have been done.

Result

[41] Mr Graham/Elmslie Estate Ltd succeed in part. The award of exemplary damages in Mr Scott’s favour is quashed. It is replaced with an award of general damages of $2,500 in Mr Scott’s favour. The costs order in the District Court remains. Costs on this appeal are to lie where they fall.

Mallon J

Solicitors:

Morrison Kent, Wellington for the Appellants

---

[1] Scott v Elmslie Estate Ltd DC Wellington CIV-2010-085-550, 20 July 2012.

[2] Whitten-Hannah v Davis [1995] 2 NZLR 141 (CA) at 150.

[3] Taylor v Beere [1982] 1 NZLR 81 (CA) referred to in Mayfair Ltd v Pears [1987] 1 NZLR 459 (CA) at 465.

[4] Stephen Todd (ed) The Law of Torts in New Zealand (5th ed, Brookers, Wellington 2009) at

_{[13.2.02] and [13.3.02].}

[5] _{At [13.2.06] and [13.3] where the tort is described as one of intentionally causing “loss”.}

[6] At [10.2.01] and [10.2.03].
[7] Subject to issues about whether the cost of restoration is disproportionate to the diminution in value of the property.
[8] _{At [10.2.09].}
[9] _{At [10.2.09] and [25.2.09].}
[10] At [25.2.09].