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North Shore City Council v Attorney-General on Behalf of Department of Building and Housing [2012] NZHC 734 (19 April 2012)

Last Updated: 22 May 2012


IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2010-404-008227 [2012] NZHC 734

IN THE MATTER OF an application for review of a decision made pursuant to the Weathertight Homes Resolution Services Act 2002/Weathertight Homes Resolution Services Act 2006

BETWEEN NORTH SHORE CITY COUNCIL Applicant

AND ATTORNEY-GENERAL ON BEHALF OF DEPARTMENT OF BUILDING AND HOUSING

First Respondent

AND PAUL EDMUND DEAN AND SARAH LOUISE DEAN

Second Respondents

AND ALISTAIR DOW Third Respondent

AND ALEXANDER ROYCE MATSON Fourth Respondent

Counsel: SB Mitchell for Applicant

R Chan for First Respondent

SJ Tee for Second Respondents

Judgment: 19 April 2012

JUDGMENT OF ASHER J (Costs)

This judgment was delivered by me on Thursday, 19 April 2012 at 11am pursuant to r 11.5 of the High Court Rules.


Registrar/Deputy Registrar

NORTH SHORE CITY COUNCIL V ATTORNEY-GENERAL ON BEHALF OF DEPARTMENT OF BUILDING AND HOUSING HC AK CIV-2010-404-008227 [19 April 2012]

[1] The respondents’ application for costs has been referred to me for a decision. I have the benefit of memoranda from the applicant and the first and second respondents. The first and second respondents are the only parties who seek costs.

[2] The North Shore City Council filed the judicial review proceedings. The first respondent was the Department of Building and Housing, which was formerly an administrative unit established within the Department of Internal Affairs to administer the Weathertight Homes Resolution Services Act 2002. The second respondents were the Deans who were claimants against the Council before the Weathertight Homes Tribunal in respect of a dwelling they owned at 13 Mandeville Place, Unsworth Heights. The Deans made a claim in 2003.

[3] The Council asserted in its amended statement of claim that the Deans’ claim was discontinued in 2004. The Council pleaded that in 2009 the Deans requested an eligibility assessor’s report, and the claim was accepted as an eligible claim on

13 March 2009. It was claimed that there was procedural impropriety and a breach of the principles of natural justice in the decision to accept the 2009 claim and an error of law. Affidavits in support were filed.

[4] In their statements of defence, the first and second respondents deny that there was a separate 2009 claim and assert that it was the 2003 claim that proceeded. They deny the 2003 claim was withdrawn.

The claim for costs

[5] The judicial review proceeding was discontinued by a notice dated

30 September 2011. Both the first and second respondents sought costs. They were separately represented. In memoranda they have set out the details of their cost claims.

[6] The applicant has filed a lengthy memorandum arguing that costs should not be ordered. It submits that costs should lie where they fall or, alternatively, that the

first respondent should pay the second respondents’ costs. The Council argues that the case was unusual in that the Department failed to provide necessary information to the Council to enable it to identify what had occurred. It submits that because of the conduct of the Department an award of costs should not be made.

[7] The Council says that the Department had by its own admission mismanaged the application of the Deans, and failed to provide an explanation to the Council or the Deans as to how the application had been managed. The Weathertight Homes assessor had advised in 2004 that the Deans no longer wanted to proceed with their claim. The action notes on the Deans’ file stated that the claim was “discontinued at the claimant’s request”. It later transpired that this was not the case. The Deans had not actually lodged a claim in 2003 but merely wanted the property assessed. It was not until 2009 that the Deans became aware that their property’s Land Information Memorandum (LIM) report noted that a Weathertight Homes claim had been lodged. The Deans accordingly contacted the Department. The Department considered there was a legitimate argument that the Deans’ claim had been inappropriately closed, and decided to reopen the claim and complete a report. Evidence from the first respondent filed on 29 July 2011 explained that the Department’s practice of marking claims that had been completed or withdrawn as “closed” was merely done as a matter of administrative convenience, and that a reopened claim would not be treated as a new claim. The Council’s submission appears to be that, in light of this evidence from the first respondent, it decided to discontinue the proceeding.

[8] It is also alleged that “[w]ithin the judicial review proceedings” the Department had delayed in providing the evidence that ultimately led to the Council’s decision to withdraw the application. Timetable directions were given for the Council to file its evidence by 10 May 2011, and the Department to file its evidence by 8 June 2011. The Council’s evidence was filed by 16 May 2011. On

29 June 2011, the first respondent gave notice that its proposed evidence could not be filed until 5 July 2011 because the relevant assessor, Mr Andrew McIntyre, was overseas. It was not until 29 July 2011 that the first respondent’s evidence was filed. The evidence was not from Mr McIntyre, but by a Mr Montgomery.

[9] Rule 15.23 of the High Court Rules provides:

Unless the defendant otherwise agrees or the court otherwise orders, a plaintiff who discontinues a proceeding against a defendant must pay costs to the defendant of and incidental to the proceeding up to and including the discontinuance.

[10] The purpose of r 15.23 is to give a certain and predictable outcome upon a discontinuance. While costs may not be ordered if there are just and equitable circumstances not to do so, the Court will not speculate on the merits of the case. This would defeat the whole purpose of a discontinuance, which is to provide a quick end to proceedings that will inevitably, if they proceed, continue to incur costs.[1] To allow parties to traverse the merits of a claim following a discontinuance would greatly add to the cost of all parties and defeat the object of providing a speedy and inexpensive resolution. However, there may be occasions where justice

requires some consideration of the merits but only where those merits are established and clear.[2]

Discussion

[11] No particular reasons are put forward as to why the Deans should not have the benefit of a costs order. It is not suggested that they were at fault in relation to the matters complained of by the Council. The Council’s complaints are directed rather at the Attorney-General.

[12] The primary complaint against the Attorney-General is directed at the pre- proceeding conduct of the Department prior to the judicial review proceedings being filed. However, the determination of how costs should fall, focuses on how parties

acted during litigation, not before it.[3] There are in the event other steps that could

have been taken by the Council to obtain the information it sought, other than the issuing of Court proceedings. As the Attorney-General points out in his submissions, the Council does not explain why other steps such as an Official Information Act

1982 request could not have resolved the issue. There is no explanation as to why some form of pretrial discovery was not sought. I do not accept that the affidavit evidence filed discloses any unreasonable failure on the part of the Department to provide information after the proceedings had issued.

[13] However, the Department had breached timetable orders by not filing evidence until 29 July, when they were directed to file by 8 June. There was almost two months’ delay. No reason was given for this delay in the first respondent’s memorandum. This delay warrants some reduction in the costs awarded to the Department. The Council says the Department had explained on 29 June 2011 that it could not file evidence before 5 July because the relevant assessor was overseas, but the evidence was not filed by the Department until 29 July and by a different Department employee to the assessor. I am not satisfied that there was a reasonable explanation for the delay.

[14] In the end I am not persuaded that there was any clear and obvious failure by the first or second respondents warranting a reversal of the usual rule. The discontinuing applicant must pay the respondents’ scale costs up to the point of discontinuance. However, it is appropriate that the costs claimed by the Department for preparation of the affidavit evidence not be awarded, to reflect the timetable breach.

Result

[15] The applicant is to pay scale costs to the first respondent, and the scale costs of the second respondents.

[16] Those costs are as set out in the memorandum of the first respondent of

12 October 2011, minus the two days claimed for preparation of the affidavit, and the memorandum of the second respondents’ of 9 November 2011.


...................................


Asher J

Solicitors/Counsel:

Heaney & Co, DX CP 18503, Auckland. Email: sbm@heaneyco.com

Crown Law, DX SP 20208, Wellington. Email: roanna.chan@crownlaw.govt.nz

Morton Tee & Co, DX BP 66025, Takapuna, Auckland. Email: stee@mortontee.co.nz


[1] See for example Kroma Colour Prints Ltd v Tridonicatco NZ Ltd [2008] NZCA 150, (2008) 18

PRNZ 973 at [15]–[31].

[2] Stollery v Fruit 2Go Ltd HC Tauranga CIV-2009-470-283, 10 March 2011 at [15].

[3] Thames-Coromandel District Council v Coromandel Heritage Protection Society Inc [2009] NZCA 204, (2009) 19 PRNZ 365; Paper Reclaim Ltd v Aotearoa International Ltd [2007] NZSC 26, [2007] 3 NZLR 169 at [40–[41].


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