Miles v Kendall

[2019] NZHC 3167

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2019-404-339

[2019] NZHC 3167

IN THE MATTER

of s 142 of the Land Transfer Act 2017

AND

IN THE MATTER

of an application that Caveat 11347531.1 not lapse

BETWEEN

KEVIN VERNON MILES and TAMMY CAROLINE MILES

Applicants

AND

PETER JOHN KENDALL, ROBERT GRAEME McGUIGAN and ROBYN MARY McGUIGAN

Respondents

Hearing:

On the papers

Appearances:

P R Cogswell for the Applicants

J E McLennan for the Respondents

Judgment:

4 December 2019

JUDGMENT OF GAULT J

(Costs)

This judgment was delivered by me on 4 December 2019 at 10:00 a.m. pursuant to r 11.5 of the High Court Rules 2016.

Registrar/Deputy Registrar

……………………………………

Solicitors:

Mr P R Cogswell, Cogswell Law, Auckland

Ms D W Dorrington (applicants’ instructing solicitor), Alexander Dorrington Lawyers, Auckland Mr J E McLennan, Holmden Horrocks, Auckland

MILES v KENDALL [2019] NZHC 3167 [4 December 2019]

[1]                 The respondents seek costs following discontinuance of an application to sustain a caveat in a boundary dispute.

[2]                 A timetable for the filing of memoranda as to costs reserved leave for the parties to seek amendment if they were engaged in discussions seeking to agree costs. Time was extended but agreement was not reached and the parties filed written submissions.

[3]In the circumstances, it is appropriate to deal with costs on the papers.

[4]                 In a narrow case, the parties’ positions are well apart. The respondents filed detailed memoranda, including in reply, seeking indemnity costs, or alternatively increased costs at a 50 per cent uplift from 2B costs. The applicants seek that costs lie where they fall, or alternatively 2B scale costs.

[5]                 Costs memoranda should be brief, especially in a case like this. The time and other pressures on Judges leave room for robust judgment as to the costs considered reasonable in all the circumstances.1

[6]                 On a discontinuance, the starting point is that unless a 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.2 This presumption may be displaced if the Court finds there are circumstances which make it just and equitable that it should not apply.3

[7]                 The parties agree that the appropriate costs scale for this proceeding is 2B. The respondents’ scale costs on a 2B basis total $10,035 (including preparation of written submissions,  which  were  prepared  but  not  filed  prior  to  resolution).  The respondents also seek costs on costs, submitting there should be a one day allowance of $2,390.

1      Frater Williams & Co Ltd v Australian Guarantee Corp (NZ) Ltd (1994) 2 NZ ConvC 191,873 (CA) at 191,887.

2      Rule 15.23 of the High Court Rules 2016.

3      Kroma Colour Prints Ltd v Tridonicato NZ Ltd [2008] NZCA 150, (2008) 18 PRNZ 973 at [12].

[8]                 The respondents’ claim for indemnity costs of $39,095.74 (including GST, which the respondents are unable to recover) is based on r 14.6(4)(a) which provides that indemnity costs may be awarded if a party has acted vexatiously, frivolously, improperly, or unnecessarily in commencing, continuing, or defending a proceeding or a step in a proceeding. Essentially, the respondents claim that there was no legal basis for the caveat proceedings and the plaintiff acted improperly or unnecessarily.

[9]                 The respondents’ fall-back position is for increased costs with a 50 per cent uplift pursuant to r 14.6(3)(b)(ii) which provides that increased costs may be awarded if a party has contributed unnecessarily to the time or expense of the proceeding or a step in it by taking or pursuing an unnecessary step or an argument that lacks merit. Again, the respondents’ essential submission is that the applicants’ case was meritless.

[10]            The applicants submit costs should lie where they fall because the parties were neighbours who were both innocent. When the respondents decided to embark on a development of their property, it became apparent that the property boundary was not the legal boundary. The applicants say they took the reasonable step of caveating the respondents’ site whilst investigation was undertaken. The applicants subsequently took the reasonable step of conceding to the boundary adjustment, to their detriment. The applicants resist an award of costs because of the unfortunate position they found themselves in, lodging the caveat was a reasonable step while they considered their rights, and their case was not meritless – this is a technical, difficult area, evidenced by the fact that the ground of opposition under s 159(e) of the Land Transfer Act 2017 was only raised in the respondents’ third iteration of their notice of opposition.

[11]            Alternatively, the applicants seek a reduction in respect of joint memoranda prepared by them and resist costs for preparation of submissions and costs on costs.

[12]            Indemnity or increased costs may be awarded on a discontinuance. But the Court will generally be less well placed to consider the merits on a discontinuance.

[13]            I consider the respondents are entitled to scale costs. They have not made out a basis for indemnity or increased costs on this discontinuance. The position might have been different if the applicants had persisted once s 159(e) was raised. Equally,

I am not persuaded by the applicants that no costs should be ordered. Both sides bear some responsibility for the situation.

[14]In relation to the three disputed scale items:

(a)The respondents are entitled to the 0.8 allowance for filing memoranda (item 11).

(b)The respondents are not entitled to an allowance for preparation of their submissions (item 40, totalling $3,345) given that resolution occurred on the day the applicants’ submissions were due.

(c)The respondents are not entitled to costs on costs. Costs on costs are unusual and the Court is reluctant to award them.4 Here, the respondents’ cost submissions went too far.

[15]That reduces 2B costs to $6,690.5

[16]The claim for disbursements of $160 is accepted.

Result

[17]The respondents are entitled to 2B costs of $6,690 plus disbursements of $160.

Gault J

4      Jeffreys v Morgenstern [2013] NZHC 1361 at [40]; and Barry Park Investments Ltd v Body Corporate Number 95388 [2016] NZHC 1527 at [25].

5      $10,035 - $3,345.