Minister of Education v McKee Fehl Constructions Limited [2018] NZHC 1647 (5 July 2018)

Last Updated: 12 July 2018

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-Ā-TARA ROHE

CIV-2017-485-173 [2018] NZHC 1647

IN THE MATTER	of Te Aho o Te Kura Pounamu
BETWEEN	MINISTER OF EDUCATION First Plaintiff SECRETARY OF EDUCATION Second Plaintiff BOARD OF TRUSTEES OF TE AHO O TE KURA POUNAMU Third Plaintiff
AND	McKEE FEHL CONSTRUCTORS LIMITED First Defendant PREMIER ROOFING WELLINGTON LIMITED Second Defendant RDT PACIFIC LIMITED Third Defendant SEALCO WATERPROOFING SYSTEMS LIMITED Fourth Defendant LUMLEY GENERAL INSURANCE (NZ) LIMITED, DUAL NEW ZEALAND LIMITED AND AIG INSURANCE NEW ZEALAND LIMITED First Third Parties

On the papers
Counsel:	M S R Lucas for Applicant (Third Defendant) J N Bierre for Respondent (Third Parties)
Judgment:	5 July 2018

MINISTER OF EDUCATION v McKEE FEHL CONSTRUCTORS LIMITED [2018] NZHC 1647 [5 July 2018]

JUDGMENT OF THOMAS J (COSTS)

[1] By my judgment dated 23 May 2018, I granted leave to RDT Pacific Limited, the third defendant, to commence proceedings against third parties pursuant to s 9 of the Law Reform Act 1936.¹ The proposed third parties were Lumley General Insurance (NZ) Limited, DUAL New Zealand Limited and AIG Insurance New Zealand Limited. The decision noted that RDT did not seek costs.

[2] By memorandum dated 6 June 2017, counsel for RDT says that the advice to the Court that RDT did not seek costs was in error. RDT now seeks costs on a 2B basis and disbursements on the grounds its application was successful.

[3] The third parties oppose the costs application.

[4] RDT’s interlocutory application for leave to commence proceedings against the third parties was dated 16 November 2017. Costs were not sought in the application. At the hearing on 10 May 2018, I specifically enquired of counsel for RDT as to its position on costs. I was advised RDT did not seek costs. That was recorded in the judgment and no costs order was made.

[5] Rule 14.8 of the High Court Rules 2016 provides that costs on an interlocutory application must be fixed when the application is determined and become payable when fixed. The Court has the ability to reverse, discharge or vary a costs order if satisfied that the original order should not have been made.²

[6] The earlier version of r 14.8 was considered in Crusader Meats New Zealand Ltd v New Zealand Meat Board,³ where Master Gendall, as he then was, held that the rule allowed an interlocutory costs order to be reversed, discharged or varied only if

¹ Minister of Education v McKee Fehl Constructors Ltd [2018] NZHC 1177.

² High Court Rules 2016, r 14.8(2).

3. Crusader Meats New Zealand Ltd v New Zealand Meat Board HC Wellington CIV-2002-485-958, 30 September 2003.

the Court was satisfied the original costs order should not have been made. He therefore declined to disturb an earlier order that the costs of a partially successful strikeout application should lie where they fall. He noted there was nothing to indicate the order refusing costs should not have been made, given the Judge had heard argument and noted that counsel had agreed costs should follow the event and, with both parties having been partly successful, costs should lie where they fall.⁴

[7] I accept counsel made an error in advising the Court RDT did not seek costs. However, I accept Mr Bierre’s submission that the decision has been made and the Court is functus officio. This is not an application where the so-called slip rule applies. There is no reason requiring recall of the judgment.

[8] The position appears to be on all fours with Moring v Reeves Moses Hudig Mortgage Nominee Company Ltd,⁵ where the Court of Appeal said it was not in a position to rectify an omission to deal with costs at the hearing where judgment had been delivered and costs were not reserved.

[9] While it is an unfortunate result for RDT, it is no longer open to RDT to seek costs of the application for leave.

Thomas J

Solicitors:

Meredith Connell, Auckland for Plaintiffs Wotton Kearney, Auckland for Third Defendant Morgan Coakle, Auckland for First Third Parties

⁴ At [21].

5. Moring v Reeves Moses Hudig Mortgage Nominee Company Ltd CA 249/97, 29 September 1998. I note the present proceeding and the Court of Appeal case are distinguishable from Sao Paulo Alpargatas SA v But Fashion Solutions Comercio E Industria de Artigos Em Pele LDA [2013] NZHC 602, where costs were awarded in similar circumstances. However, in that case, the judgment had not been sealed, costs had been sought in the pleadings, and costs were not dealt with at all in the decision concerning the substantive proceeding.