Body Corporate 323716 v Manson Developments Limited [2014] NZHC 779 (15 April 2014)

Last Updated: 30 April 2014

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2012-404-3811 [2014] NZHC 779

BETWEEN BODY CORPORATE 323716

First Plaintiff

Second Plaintiffs continued over

AND MANSON DEVLEOPMENTS LIMITED First Defendant

Defendants continued over

Hearing: On the papers

Counsel: SC Price and JK Wilson for third defendant RG Simpson and BJ Ward for first third party RO Parmenter for second third party

J Long for third third party

BA Tompkins for fourth third party

Judgment: 15 April 2014

JUDGMENT OF FAIRE J [on costs]

Solicitors: MinterEllisonRuddWatts, Auckland

Bell Gully, Auckland

Daniel Overton & Goulding, Onehunga (TJ Goulding) LeeSalmonLong, Auckland

Gilbert/Walker, Auckland

BODY CORPORATE 323716 v MANSON DEVLEOPMENTS LIMITED [2014] NZHC 779 [15 April 2014]

JAMES GLOVER MASON AND MARGARET MARY CONSTANCE MASON; RUSSELL ROY MALONEY and JENEFER ANN MALONEY; NICOLA MARGARET VAN OOSTEROM, PAUL MERVYN COLLINS, JUDITH LESLIE BARRETT and ANNE LUCINDA HARRISON; ALLAN CHARLES MORRIS, BEVERLEY ANNE MORRIS and MICHAEL ANTHONY COHEN; DONALD FLEMING McKAY; JOHN DAVID KING and DUNCAN DOWNES

BOSWELL; JOHN HEGMAN LEONARD FOSTER and DURHAM HEGMAN, LEONARD FOSTER; TREVOR ALLAN VAN DER HARST-WILLIAMS, MARIA ELISABETH VAN DER HARST- WILLIAMS and REDMOND TRUSTEES NO 6 LIMITED; HARVIE FRASER FERGUSON, GAYLENE ANN CORKIN and LEE-ANN FERGUSON; VICTOR NIKOLAEVICH SHUMILO and

LARISSA VLADIMIROVNA SHUMILO; ROBYN MARY WINSTONE and ANNE MARGARET WYLDE; GARETH

LLOYD JONES, VALERIE JANE JONES, ROB WILLS TRUSTEE SERVICES LIMITED and KINGSTON TRUSTEE SERVICES LIMITED; GRAEME JOHN EVANS and CORRINE LI KOON EVANS Second Plaintiffs

Defendants and other parties

ECM DEVELOPMENTS LIMITED

Second Defendant

AUCKLAND COUNCIL Third Defendant

MANSONS TCLM LIMITED Fourth Defendant

AND DOWNER NEW ZEALAND LIMITED First Third party

FORMSTRESS LIMITED Second Third Party

WILSON PRECAST CONSTRUCTION LIMITED

Third Third Party

JENSEN CHAMBERS YOUNG LIMITED Fourth Third party

PETER and RONWYN SAGER t/as SAGER COATINGS & TEXTURE Fifth Third party

McALPINE HUSSMAN LIMITED Sixth Third party

KIWI ROOFING LIMITED Seventh Third party

MAJOLIKA LIMITED Eighth Third party

OTIS ELEVATOR COMPANY LIMITED Ninth Third party

LASER ELECTRICAL LIMITED Tenth Third party

MARINE & ARCHITECTURAL STAINLESS LIMITED

Eleventh Third party

ALBANY STONEMASONS LIMITED Twelfth Third party

BUTTWELD INDUSTRIES LIMITED Thirteenth Third party

DESIGNER STAINLESS NZ LIMITED Fourteenth Third party

FRAMERITE INSTALLATIONS LIMITED

Fifteenth Third party

ARMITAGE GROUP LIMITED Sixteenth Third party

[1] In my minute of 17 December 2013 I granted leave to the third defendant to discontinue claims against a number of the third parties. I set a timetable for the filing of memoranda on costs if the parties were unable to agree.

[2] The parties were not able to agree on costs. Separate memoranda seeking costs have filed on behalf of the first, second, third and fourth third parties. A memorandum in answer by the third defendant has been filed. Replies, or an indication that no reply will be filed, have been received on behalf of the first, second, third and fourth third parties.

[3] In my minute of 17 December 2013, and after hearing from counsel present, I fixed the categorisation of the proceeding in accordance with r 14.3 as Category 2. The proceeding is a defective building claim relating to the apartment complex at

7 The Promenade, Takapuna, Auckland. The principal parties involved in this litigation are the Body Corporate, as first plaintiff, and the Unit owners, as second plaintiffs. The first and second defendants are alleged to be the property developers and builders. The third defendant is the relevant territorial authority. The fourth defendant is a construction company which undertook repairs to the property. The third parties, by and large, were subcontractors.

[4] The apartments were constructed between March 2002 and September 2003. It is alleged that they contain defects and that damage has been caused as a result of defendants’ breaches of duty of care.

[5] The first third party seeks an order for costs in the sum of $6,279. That figure includes the filing fee disbursement on the statement of defence of $110. The balance represents the calculation of the steps taken based on Category 2 Band B as follows:

Step taken Time Daily rate

_$

Subtotal

$

_{2 Commencement of defence 2 1,990.00 3,980.00}

10. Preparation for first case management conference

0.4 1,990.00 796.00

11. Filing memorandum for first case management conference

0.4 1,990.00 796.00

13. Appearance at first case management conference

0.3 1,990.00 597.00

_{Subtotal $6,169.00}

[6] The second third party seeks an order for costs in the sum of $10,348. In addition the filing fee disbursement on the statement of defence of $110 is claimed. The costs are calculated based on the steps taken in accordance with Category 2

_{Band B as follows:}

Step taken Time Daily rate

_$

Subtotal

$

_{2 Commencement of defence 2 1,990.00 3,980.00}

10. Preparation for first case management conference

0.4 1,990.00 796.00

11. Filing memorandum for first case management conference

0.4 1,990.00 796.00

13. Appearance at first case management conference

0.3 1,990.00 597.00

22 Summary judgment application 0.6 1,990.00 1,194.00

_{22 Submissions (given to counsel) 1.5 1990.00 2,985.00}

_{Subtotal $10,348.00}

[7] The third third party seeks an order for costs in the sum of $6,279. That figure includes the filing fee disbursement on the statement of defence of $110. The

_{calculation of the steps taken based on Category 2 Band B is as follows:}

Step taken Time Daily rate

_$

Subtotal

$

_{2 Commencement of defence 2 1,990.00 3,980.00}

10. Preparation for first case management conference

0.4 1,990.00 796.00

11. Filing memorandum for first case management conference

0.4 1,990.00 796.00

13. Appearance at first case management conference

0.3 1,990.00 597.00

_{Total $6,169.00}

[8] The fourth third party seeks an order for costs in the sum of $6,279. That figure includes the filing fee disbursement on the statement of defence of $110. The balance represents the calculation of the steps taken based on Category 2 Band B as follows:

Step taken Time Daily rate

_$

Subtotal

$

_{2 Commencement of defence 2 1,990.00 3,980.00}

10. Preparation for first case management conference

0.4 1,990.00 796.00

11. Filing memorandum for first case management conference

0.4 1,990.00 796.00

13. Appearance at first case management conference

0.3 1,990.00 597.00

_{Subtotal $6,169.00}

[9] The question of costs is governed by the combined operations of r 4.7, which provides a third party with the same rights of defence as a defendant, and r 15.23 which deals with costs on a discontinuance. The effect is that the party who discontinues against the third party, must pay costs to the third party of and incidental to the proceeding up to and including the discontinuance, unless the court otherwise orders.

[10] In all other respects the costs regime set out in Part 14 of the High Court

Rules applies.

[11] Save for the claim by the second third party for costs relating to a summary judgment application, the position adopted by the third defendant is that it does not take issue with the various third parties’ entitlement to costs on the discontinuance of the claim against them. It accepts that this a Category 2 case. Counsel, however, submits that in all in respects Band A is the appropriate basis that should be used for the steps that were undertaken by each of the third parties.

[12] In terms of r 14.5(2), Band A deals with a situation where the court finds “a

comparatively small amount of time is considered reasonable for the step that is

taken”. By contrast, Band B is appropriate if “a normal amount of time is considered

reasonable” in respect of the step that is undertaken.

[13] It is therefore necessary to consider each step in the claims that have been made and whether they properly fall within either Band A or Band B as I have described them.

[14] I deal with each third party’s claim.

The first third party’s claim

[15] I deal with each item recorded in paragraph 5.

Commencement of the defence

[16] The memorandum of counsel for the first third party gives a description of the work carried out in the commencement of the defence, which has involved a careful consideration of the claim as pleaded, reaching a determination that particularisation of the claim is insufficient, informal request for particulars, visiting of the site to understand the case and reviewing a number of documents.

[17] I see no reason to depart from Band B as the appropriate allowance for the commencement of the defence. What has been described is certainly easily within what would be classified as the normal amount of time in commencing the defence.

Preparation for first case management conference and filing of the memorandum

[18] I next consider together Items 10 and 11 in the schedule, which relates to preparation for the first case management conference and the filing of the memoranda. I have reviewed the memorandum that was filed. It does not address the agenda items that Asher J required counsel to address in his minute of 12 April

2013. That is understandable having regard to the state of the pleadings, but it does given an indication of what was involved in preparation for the conference on behalf of this client and in preparing the appropriate memorandum. I consider that both

would have required a comparatively small amount of time and, for that reason, I am allowing Band A for items 10 and 11.

[19] There is no need to consider Item 13 because the same allowance is made for

Bands A and B.

[20] The overall effect is to reduce the amount claimed by .4 of a day. That indicates that $5,373 is the appropriate cost sum. The filing fee disbursement is correct.

[21] Accordingly, I order that the third defendant pay the first third party’s costs in the sum of $5,373 plus disbursements of $110.

The second third party’s claim

Commencement of the defence

[22] Although there is not a precise description of the steps taken in this party’s case an application for summary judgment was prepared which indicates to me that the commencement of defence would have been a matter carefully considered. There is nothing in the material that I have seen which would justify reducing this from Band B. In short, all the material indicates that the normal amount of time that one would expect to be set aside for the commencement of the defence is appropriate in respect of this third party. I allow Band B for the commencement of the defence.

Preparation for first case management conference and filing of the memorandum

[23] I next consider together Items 10 and 11 in the schedule, which relates to preparation for the first case management conference and the filing of the memoranda. As with the first third party, counsel’s memorandum did not analyse each item in the agenda set by Asher J which is understandable having regard to the state of the pleadings. However, what that indicates to me is that the preparation for the conference and the conference memorandum would have involved a comparatively small amount of time and, for that reason, I am allowing Band A for items 10 and 11 set out in paragraph 6.

The summary judgment application

[24] The third defendant takes issue with the claim made in terms of Item 22 for preparation of the submissions. The material before me discloses that the application had a fixture for 6 December 2013. The submissions were not in fact exchanged precisely when directed. Counsel for the third defendant acknowledges, however, that the submissions of counsel for the second third party had been received by him and that they were received on the day the parties agreed to vacate the hearing date. Bearing in mind that counsel for the second third party had followed, what I shall call, a prudent practise in preparing submissions in support of the application I see no reason to disallow the claim for the submissions.

[25] The overall effect is to reduce the amount claimed by .4 of a day. That indicates that $9,552 is the appropriate cost sum. The filing fee disbursement is correct.

[26] Accordingly, I order that the third defendant pay the second third party’s

costs in the sum of $9,552 plus disbursements of $110.

The third third party’s claim

Commencement of the defence

[27] I have reviewed the third third party’s memorandum. It is clear to me that significant steps were taken in the commencement of the defence and I see no reason to reduce Item 2. In short, all the material indicates that the normal amount of time that one would expect to be set aside for the commencement of the defence is appropriate in respect of this third party. I allow Band B for the commencement of the defence.

Preparation for first case management conference and filing of the memorandum

[28] Once again, the comments made in respect of the first and second third parties apply to the position relating to the preparation for the first case management conference and the memorandum for it and I intend, therefore, to adopt the position

as applied in relation to the first third party. I consider that both would have required a comparatively small amount of time and, for that reason, I allow Band A for items

10 and 11.

[29] The overall effect is to reduce the amount claimed by .4 of a day. That indicates that $5,373 is the appropriate cost sum. The filing fee disbursement is correct.

[30] Accordingly, I order that the third defendant pay the third third party’s costs

in the sum of $5,373 plus disbursements of $110.

The fourth third party’s claim

Commencement of the defence

[31] I have reviewed the fourth third party’s memorandum. It is clear to me that significant steps were taken in the commencement of the defence and I see no reason to reduce Item 2. In short, all the material indicates that the normal amount of time that one would expect to be set aside for the commencement of the defence is appropriate in respect of this third party. I allow Band B for the commencement of the defence.

Preparation for first case management conference and filing of the memorandum

[32] Once again, the comments made in respect of the first and second third parties apply to the position relating to the preparation for the first case management conference and the memorandum for it and I intend, therefore, to adopt the position as applied in relation to the first third party. I consider that both would have required a comparatively small amount of time and, for that reason, I allow Band A for items

10 and 11.

[33] The overall effect is to reduce the amount claimed by .4 of a day. That indicates that $5,373 is the appropriate cost sum. The filing fee disbursement is correct.

[34] Accordingly, I order that the third defendant pay the fourth third party’s costs

in the sum of $5,373 plus disbursements of $110.

Conclusion

[35] Orders for costs are made as recorded in [21], [26], [30] and [34] of this judgment.

Faire J