Spider Properties Limited v Body Corporate 68792

[2018] NZHC 2846

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE

CIV-2017-485-297 [2018] NZHC 2846

UNDER

Section 290 of the Companies Act 1993

BETWEEN

SPIDER PROPERTIES LIMITED Applicant

AND

BODY CORPORATE 68792

Respondent

CIV-2017-485-234

BETWEEN  LUXE ONE LIMITED Applicant

AND  BODY CORPORATE 68792

Respondent

Counsel:

Mr John Dallas for the applicant in CIV-2017-485-234

Mr Alwyn O’Connor for respondent in both proceedings

Judgment:

2 November 2018

COSTS JUDGMENT OF ASSOCIATE JUDGE JOHNSTON [On the papers]

[1]      This judgment addresses costs in these two proceedings which were heard together in mid 2017.

[2]      In both, the applicants, Spider Properties Ltd and Luxe One Ltd, sought orders setting aside statutory demands served by Body Corporate 69792 based on unpaid levies – Spider and Luxe being owners of units in the unit title complex connected

with BC 68792.

SPIDER PROPERTIES LIMITED v BODY CORPORATE 68792 [2018] NZHC 2846 [2 November 2018]

[3]      The applications were heard by Smith AJ on 25 July 2017. They were clearly complex as there was extensive affidavit evidence before the Court, deponents were required for cross-examination and the submissions were detailed.  Both applications were dismissed in a judgment dated 31 October 2017, at the conclusion of which the Associate Judge said:

[175]    The Body Corporate is entitled to costs.   In accordance with the decision of the Court of Appeal in Body Corporate 162791 v Gilbert,1 it may be that those costs should be reasonable costs on an indemnity basis, together with full disbursements. If counsel are unable to agree, costs  memoranda  may  be  filed.    Any  memorandum  from  the Body Corporate is to be filed and served within 15 working days of the date of this judgment.  Spider may file and serve a memorandum in reply within 10 working days of its receipt of the Body Corporate’s memorandum.

[4]      Nothing happened.

[5]      Some eleven months later the Court has received a memorandum from counsel now engaged for BC 68792 seeking a formal order quantifying costs. These are sought on a 2B basis (though fractionally less than scale costs are sought against Spider).  I am proceeding on the assumption that Mr O’Connor’s memorandum has been properly served on those acting for Spider and Luxe.

[6]      The  application  is  unopposed  by  Spider.    However,  on  behalf  of  Luxe,

Mr Dallas has filed and served a memorandum in response.  Luxe opposes any order for costs on three grounds:

(a)      the Body Corporate’s memorandum was not filed and served within the

15 day period specified by Smith AJ;

(b)      the applicant is now “grossly out of time”;

(c)the statutory demands which were the subject of the applications in the first place expired without BC 68792 commencing winding up proceedings.

1      Body Corporate 162791 v Gilbert [2015] 3 NZLR 601, [2015] NZCA 185 at [74]–[78].

[7]      The merits of the competing positions can be summarised very briefly. On the one hand BC 68792 as the successful party in the proceedings was entitled to its costs. Its failure to come back to the Court within the time allowed should only deprive it of that entitlement if no reasonable explanation for its delay is offered. Some explanation has been offered – there have apparently been changes at the administrative level within the body corporate and much going on, with the result that costs orders in relation to these matters were overlooked.  On the other hand, Spider and Luxe are entitled to say – as Mr Dallas says on behalf of the latter – that litigation must come to an end, that that is the rationale for time limits in the rules and time restraints imposed by the Court.  The failure to comply with time limits is often excusable and excused, but gross or extended non-compliance must be justified.  The fact that there have been changes at the administrative level in BC 68792 and other things going on is not a justification for a delay of eleven months.  Spider and Luxe were entitled to assume, and arrange their affairs on the basis that, the matter was at an end.

[8]      Those positions both have merit.

[9]      However, in my judgment, BC 68792’s delay in taking steps to finalise costs in this matter is so extreme that it has effectively waived its entitlement.  If the body corporate had been able to put forward compelling reasons for the delay the position might be different.  But the explanation offered here simply indicates that BC 68792 has not given the matter adequate priority which is no explanation for a delay of the best part of a year. As Mr Dallas submits, there must be an end to litigation.

[10]     In the exercise of my discretion I decline to make an order fixing costs in this matter in the body corporate’s favour against either of the applicants.

Associate Judge Johnston

Solicitors:

J D Dallas, for the applicant in CIV-2017-485-234

Iorns Legal, Porirua for respondent