DAVIS V REAL ESTATE INSTITUTE OF NEW ZEALAND INC HC AK CIV 2008-404-007408

DAVIS V REAL ESTATE INSTITUTE OF NEW ZEALAND INC HC AK CIV 2008-404-007408 4 August 2009IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY CIV 2008-404-007408BETWEEN ANNE LESLEY DAVIS Appellant AND THE REAL ESTATE INSTITUTE OF NEW ZEALAND INCORPORATED Respondent Hearing: 30 July 2009 (by telephone) Appearances: Mr McDonald for appellant Ms Herdson for respondent Judgment: 4 August 2009 at 2.00 pmCOSTS JUDGMENT OF WINKELMANN JThis judgment was delivered by me on 4 August 2009 at 2.00 pm pursuant to Rule 11.5 of the High Court Rules. Registrar/ Deputy RegistrarPeter McDonald, Solicitor, Auckland Meredith Connell, Auckland Simpson Grierson, Auckland[1] On 1 May 2009 I allowed Ms Davis' appeal against a three month suspension of her real estate license and a monetary penalty of $750. At hearing the appellant had submitted that if she were successful on appeal, indemnity costs were appropriate. At paragraphs [56] and [57] of the judgment I said as follows:The appellant seeks indemnity costs for this hearing, and before the Board. There is no basis for an award of indemnity costs in this case. Mrs Davis' conduct fell below the standard expected of real estate sales people. As the Board highlighted in its reasons, the provisions of s 99 create a high threshold. But even so, in this case the Institute cannot be criticised for bringing the s 99 application. If the parties are unable to agree costs, they should ask the registry to assign a tele-conference before me and I will hear counsel in relation to the issue.[2] The parties have been unable to agree costs. In a letter dated 15 June 2009, the lawyer for the appellant informed the Court that the parties had agreed that the costs of the appeal should be on a 2B basis with costs of $2,720 and disbursements of $4,043.91. The parties have been unable to agree the appropriate level of costs in respect of the proceedings before the Board. The appellant sought 60% of actual costs, together with travel and accommodation expenses for one counsel. In support of this level, the appellant argued that while there is no scale of the costs before the Board, the Board's practice is to award 60% of actual costs. The Board is expressly authorised by s 105(a) of the Real Estate Agents Act 1976 to award costs to the salesperson against whom the complainant is made, and this Court is able to make such an order under the provisions of s 115 of that Act. [3] In submissions filed in response to that letter, the Institute agreed that the letter accurately reflected the agreement reached between counsel, but said that the offer to pay $6,763.91 was to reflect the Institute's contribution to overall costs, both at appeal and initial hearing. The Institute submitted that it was reasonable that there be no additional costs award because the Court had found that the respondent could not be criticised for bringing the initial application before the Board, the respondent had a statutory obligation to bring the application before the Board, and was also obliged to appear at the appeal hearing in order to assist the Court.[4] In the telephone conference before me, I asked Ms Herdson if she could articulate a principled basis for a refusal or reduction of costs in terms of the general principles underlying the costs regime in the High Court Rules, and in particular the rule that the party who fails with respect to a proceeding should pay the costs to the party who succeeds, a rule only to be departed from on a principled basis. [5] Ms Herdson agreed that she could not argue that any of the particular categories identified in Rule 14.7 ("Refusal of, or reduction in, costs) applied. She explained that the Institute's primary concern is that there should be no suggestion arising from any award of costs that it is an expression of disapproval of the Institute's conduct in bringing the charges against Ms Davis. [6] In light of those submissions, I see no basis for departing from the usual practice in relation to costs before the Board. Costs should be awarded at the level requested by Ms Davis. In stating that, I reiterate what I consider to be implicit in my judgment of 1 May 2009, that the Institute cannot be criticised for the decision to bring the charge against Ms Davis. As I have found, Ms Davis was guilty of serious negligence at a level suggesting an indifference to her obligations to Ms Thom. Nevertheless the thresholds created by s 99 are so high that such a finding was not sufficient basis to meet the character test in s 99. As was noted in the Board's decision, s 99 is a problematic provision, thankfully now repealed, along with the rest of the1976 Act, by the Real Estate Agents Act 2008. [7] Accordingly, Ms Davis is entitled to costs in respect of the appeal at the agreed rate of $2,720 and disbursements of $4,043.91. In relation to the proceedings before the Board, she is entitled to 60% of her actual costs in the sum of $33,174.90 and travel and accommodation expenses of one counsel in the sum of $1,391.54. Winkelmann J