Wheeldon v Body Corporate 342525 [2016] NZHC 862 (3 May 2016)

Last Updated: 23 May 2016

IN THE HIGH COURT OF NEW ZEALAND WHANGAREI REGISTRY

CIV-2014-488-0122 [2016] NZHC 862

BETWEEN	DEREK PETER WHEELDON AND CAROL ANN WHEELDON (FORMER PROPRIETOR OF UNIT 2.4) , ANTHONY JOHN BUTCHER AND RUTH BARBARA ROGERS (UNIT 3.1), LARRY LAWRENCE SMALL AND KM TRUSTEE SERVICES LTD (UNIT 2.6), IVOR ANTHONY MILLINGTON UNIT 3.7) AND NEVILLE EADE (UNIT 3.10), ALL OF BRIDGEWATER BAY APARTMENTS, 3 PAIHIA ROAD, PAIHIA Plaintiffs/Respondents
AND	BODY CORPORATE 342525 Defendant/Applicant
AND	ROBYN KATHLEEN STENT Counterclaim Respondent/Applicant

On the papers
Appearances:	BE Brill for Plaintiffs/Respondents TJ G Allan and TJP Gavigan for Defendants/Applicants
Judgment:	3 May 2016

_{COSTS JUDGMENT OF TOOGOOD J}

This judgment was delivered by me on 3 May 2016 at 4:00 pm

Pursuant to Rule 11.5 High Court Rules

_{Registrar/Deputy Registrar}

WHEELDON v BODY CORPORATE 342525 [2016] NZHC 862 [3 May 2016]

[1] On 19 January 2016, I heard an application for an interim injunction brought by Body Corporate 342525 against Ms Stent. Ms Stent opposed the application and also applied to strike out the amended statement of claim which was purported to form the basis of the interim injunction application.

[2] Early in the hearing, it became apparent the matter could be resolved through settlement and compromise, and the parties were able to reach an accord. Ms Stent made an undertaking, which I noted in my minute, dated 19 January 2016. It was, therefore, unnecessary for me to adjudicate on either of the parties’ applications.

[3] The parties are now unable to agree as to costs. Both claim to have been the successful party at the hearing, and both allege that the other party acted unreasonably.

Brief background

[4] Ms Stent lives in the Bridgewater Bay Apartments in Paihia. The apartments have been undergoing construction work to repair damage related to leaky building syndrome.

[5] On 13 January 2016, the Body Corporate applied for a without notice injunction against Ms Stent, seeking to restrain Ms Stent from occupying her apartment unless, or until, she erected a plywood partition between the interior of her apartment and her deck. The Body Corporate said the partition was necessary to ensure compliance with the health and safety related Certificate of Public Use, issued by the Far North District Council. The partition was said to have cost approximately

$400, and the Body Corporate said that the building work on the apartments could not legally continue unless Ms Stent erected it. In support of its application, the Body Corporate filed a statement of claim alleging that Ms Stent had breached her statutory duties under the Unit Titles Act 2010.

[6] Ms Stent opposed the injunction application, and also filed to strike out the supporting statement of claim. Her counsel, Mr Brill, noted that there were procedural issues with the injunction application, including whether a Court could

grant a final injunction on an interlocutory claim. He also questioned the necessity of the partition, and disputed whether the Certificate of Public Use actually required her to erect the partition. Mr Brill also submitted that the injunction proceeding was unnecessary because his client had previously allowed contractors access to her apartment

[7] Several matters were canvassed at the hearing. There was discussion about whether it was appropriate for the Court to issue an interim injunction in this case, given that it would have the effect of a final injunction. I expressed my hesitation about making such an order. I also considered it to be arguable that the local authority did not have the power to issue a Certificate of Public Use applying exclusively to Ms Stent’s apartment, a private space to which members of the general public did not have access. It was evident that the contractors were unwilling to continue their building work on the apartments without the partition in place and there were disputed factual claims about whether Ms Stent would have allowed the building contractors into her apartment to erect the partition, in the absence of an order of the Court.

[8] After hearing from both parties and expressing the tentative views referred to above, I adjourned the hearing to allow the parties to negotiate. They were able to reach a compromise. Ms Stent gave an undertaking to allow a contractor entry to her apartment to erect the partition. The partition was then to remain in place until the contractor approved the removal of the majority of all other hoardings in other apartment units. The injunction application and the strike-out application were, informally, discontinued. There was no agreement as to costs on the application and hearing, so I reserved my decision as to costs and invited the parties to file memoranda.

Costs claims

[9] Ms Stent seeks a total of $27,546.01 in costs and disbursements. This includes the costs for both her opposition to the injunction application and her strike- out application. The costs are claimed on a 2B basis and include a 50 per cent uplift

on the grounds that the Body Corporate’s injunction application lacked merit, was

unnecessary, and was unreasonable.

[10] The Body Corporate also claims costs and disbursements. It does not agree that Ms Stent was the successful party. It claims that the compromise reached was in its own favour because it ultimately got it what it sought: the erection of the partition. It cross-applies for $14,185 in indemnity costs or, alternatively, costs of

$9,346 calculated on a category 2B basis.

Analysis

[11] Part 14 of the High Court Rules governs the award of costs. While all matters in relation to costs are at the discretion of the Court, that discretion is not unfettered. It is qualified by the specific rules contained in rr 14.2 to 14.10. The discretion is exercisable only in situations not contemplated by the rules, or which are not fairly recognised by them. It is a general principle that a party who fails with

respect to a proceeding should pay costs to the party who succeeds.¹ The Court may

order increased costs in situations where the party opposing costs has acted unreasonably or took unnecessary steps.² Indemnity costs are available where a party has acted frivolously or vexatiously.³

[12] Usually, where a proceeding is discontinued, the costs are presumed to lie with the plaintiff.⁴ That does not apply, however, where the parties have settled.⁵ In those circumstances, the usual rules as to the fixing of costs apply. This requires some determination of the parties’ relative success, even though a final determination about the merits is not possible.⁶

[13] Both parties in this case had some measure of success as a result of the compromise. The Body Corporate achieved its goal of having the partition erected,

_{and the building work was able to continue. Ms Stent successfully resisted the}

¹ _{Rule 14.2(a).}

² _{Rule 14.6(3).}

³ _{Rule 14.6(4).}

⁴ Rule 15.23.

⁵ _{Uttinger v Baycity New Zealand Ltd [2008] NZCA 330; (2008) 19 PRNZ 54 (CA).}

⁶ Morris Crock Ltd v Cycletreads Ltd HC Auckland CIV-2004-404-4764, 5 December 2005.

making of a coercive order on the basis of her undertaking to co-operate. She also avoided the cost of purchasing and erecting the partition herself, albeit that the sum was not substantial. I was left with the impression that Ms Stent had not been strongly opposed to the erection of the partition as an alternative to having to vacate her apartment altogether, but that she objected to what she regarded as the high- handed manner in which the Body Corporate had approached the issue.

[14] I do not consider it appropriate for the Court to ascribe responsibility for the failure of the parties to agree to a resolution of their differences until submissions had been presented to the Court, but the correspondence between the parties prior to the hearing indicates that a compromise could have been available at an earlier stage.

[15] After consideration, I am not persuaded that either party should be held to have succeeded to such an extent as to justify the making a costs order in their favour. Each party has had a measure of success, and I consider in the exercise of the Court’s general discretion that costs should lie where they fall.

[16] I dismiss both applications for costs.

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

Toogood J