BODY CORPORATE 417948 AND OTHERS NAMED AT SCHEDULE 1 v WATTS & HUGHES CONSTRUCTION LIMITED [2019] NZCA 469

BODY CORPORATE 417948 AND OTHERS NAMED AT SCHEDULE 1 v WATTS & HUGHESCONSTRUCTION LIMITED [2019] NZCA 469 [1 October 2019]IN THE COURT OF APPEAL OF NEW ZEALANDI TE KŌTI PĪRA O AOTEAROACA484/2018[2019] NZCA 469BETWEEN BODY CORPORATE 417948 ANDOTHERS NAMED AT SCHEDULE 1AppellantsAND WATTS & HUGHES CONSTRUCTIONLIMITEDFirst RespondentTAURANGA CITY COUNCILSecond RespondentAVERY TEAM ARCHITECTS LIMITEDThird RespondentMPM PROJECTS (2003) LIMITEDFourth RespondentGMR HOLMAC LIMITEDFifth RespondentTILE TRENDS LIMITEDSixth RespondentARMSTRONG PLUMBING (BOP)LIMITEDSeventh RespondentHOLMES STRUCTURES LIMITED(IN LIQUIDATION)Eighth RespondentOMAHA INVESTMENTS NO 1 LIMITEDNinth RespondentROBERT JAMES FOSTERTenth RespondentBAY OF PLENTY ASPHALT LIMITEDEleventh RespondentCourt: Brown and Collins JJCounsel: B M Easton and A K Hough for AppellantsA V Davison for Second RespondentNo appearance for other partiesJudgment:(On the papers)1 October 2019 at 4.00 pmJUDGMENT OF THE COURTA The appellants' application for costs is granted.B The second respondent's application for costs is declined.C The second respondent must pay the appellants costs and disbursementsin the sum of $11,866.70.____________________________________________________________________REASONS OF THE COURT(Given by Brown J)Introduction[1] This case concerns a residential complex in Mt Maunganui which leaks.The appellants' preference to have a trial deferred until after the repair costs aredetermined was opposed by the second respondent and other parties. On 27 July 2018Downs J rejected the appellants' request and made a direction that the trial commenceon 13 July 2020 for 10 weeks duration.1[2] The appellants sought leave to appeal that direction, wishing to argue thatunder r 7.6 of the High Court Rules 2016 a judge may allocate a trial only when theproceeding can be readied for trial. They contended that if in a building defects1 Body Corporate 417948 v Watts & Hughes Construction Ltd HC Auckland CIV-2017-404-557,27 July 2018 (Minute of Downs J).proceeding a plaintiff elects to repair first before trial, the proceeding cannot be readiedfor trial until the repairs are complete.[3] The application for leave to appeal under s 56(3) of the Senior Courts Act 2016,which was opposed by the second respondent and others, was declined in theHigh Court.2 However on 16 April 2019 this Court granted leave to appeal unders 56(5).3 On 1 July 2019 the Registrar advised that the appeal would be heard on21 August 2019.[4] The appellants proceeded to prepare for the appeal. However on 2 August 2019the parties to the proceeding filed in the High Court a consent memorandum seekingan adjournment of the trial to the first available date after 13 January 2022.On 7 August 2019 the appellants filed in this Court a notice of abandonment of theappeal.[5] The appellants now seek costs on the abandonment in the sum of $14,547.70.The second respondent opposes the application for costs. It seeks costs itself in thesum of $3,840.28.4Costs on abandonment of appeal — principles[6] Rule 44(3) of the Court of Appeal (Civil) Rules 2005 provides that theabandonment of an appeal does not affect the power of the Court to make any order asto costs in respect of the appeal.[7] Ordinarily costs are payable to the respondent where an appeal is abandonedbut particular circumstances may justify a departure from that approach.5 The onus ison an appellant to displace the presumption that a respondent is entitled to an awardof costs on an abandoned appeal.62 Body Corporate 417948 v Watts & Hughes Construction Ltd [2018] NZHC 2692.3 Body Corporate 417948 v Watts & Hughes Construction [2019] NZCA 113.4 An additional sum of $478 is sought by the second respondent in respect of its memorandumseeking costs.5 Pub Charity Inc v Department of Internal Affairs [2016] NZCA 11, (2016) 22 PRNZ 814 at [12].6 Chen v Yang [2009] NZCA 458, (2009) 19 PRNZ 810 at [6].[8] In reliance on authorities in relation to r 15.23 of the High Court Rules theappellants submitted that where a discontinuing plaintiff achieves the object of itsclaim without the need to continue the litigation it is appropriate to award the plaintiffcosts.7Parties' submissionsAppellants' submissions[9] The appellants first observed that the second respondent sought a trial datebefore the repairs to the leaky building were completed. It then opposed the appealagainst the trial date direction, including the application for leave to appeal. Yet some19 days prior to the appeal hearing, the second respondent effectively capitulated andconsented to an adjournment of the trial to 2022.[10] The second respondent's actions caused the need for the appeal and thenrendered it unnecessary. In the result the appellants have achieved the object of theirappeal without the need for a hearing and costs should follow the event.[11] The appellants sought costs as follows:Date # Description Allocation Total23/08/2018 n/a Application to dispensewith security0.5 $ 1,115.0014/11/2018 8 Application forextension of time0.5 $ 1,115.0013/05/2019 14(b) Commencement ofappeal followinggiving of leave0.5 $ 1,195.0010/07/2019 15 Preparation of case onappeal1 $ 2,390.00Jul-19 17 Preparation for hearingof appeal3 $ 7,170.00TOTAL $12,985.0020/08/2018 Filing fee to file noticeappeal (Court ofAppeal)$ 1,100.007 Powell v Hally Labels Ltd [2014] NZCA 572 at [21]; Moodie v Strachan [2015] NZHC 327, (2015)22 PRNZ 419 at [15]; Earthquake Commission v Whiting [2015] NZCA 144, (2015) 23 PRNZ411 at [69]; and Carmel College Auckland Ltd v North Shore City Council HC AucklandCIV-2007-404-5894, 20 January 2009 at [18]–[19].14/11/2018 Filing fee forapplication forextension of time(Court of Appeal)$ 400.0011/07/2019 Courier to Court ofAppeal filing casebook$ 37.0418/07/2019 Courier to Court ofAppeal filing updatedcasebook and synopsis$ 25.66TOTAL $ 1,562.70FINALTOTAL$14,547.70Second respondent's submissions[12] The second respondent submitted that as the appellants have abandoned theirappeal it should receive costs as in the normal course. It rejected the proposition thatit had "effectively capitulated" in respect of the appeal, making the point that theapproved question for the appeal was whether the proceeding should have been setdown for trial at all, not the timing of the trial. The fact that the parties to theproceeding have now agreed to an adjournment of the trial does not resolve thequestion on appeal of whether the proceeding was ready to be set down at all in termsof r 7.6.[13] The second respondent further contends that it appears from the appellants'costs memorandum that their ulterior motive in appealing the setting down order wasto achieve an adjournment of the trial date. It submitted that instead of appealing theappellant should simply have sought an adjournment pursuant to r 10.2.The appellants having failed to take the proper procedural pathway to achieve theiractual objective, the second respondent is not at fault. Its opposition to the appeal wasbased on an opposition to any finding that plaintiffs in defective building cases havea "right" to prevent the trial being set down pursuant to r 7.6 until all repairs arecompleted. That question has not been answered, disposed of, or rendered moot bythe adjournment of the substantive proceeding.[14] Consequently the second respondent sought costs of $3,840.28.Alternatively, if this Court was not minded to award it costs, the second respondentsubmitted that the situation was closer to that of Myoak Holdings Ltd v MillstoneGrazing Ltd8 than Pub Charity Inc v Department of Internal Affairs9 and thatconsequently costs should lie where they fall.[15] Nevertheless, if the Court accepted that the appellants were entitled to costs,then the second respondent submitted that those costs should be in the sum of$8,810.70 rather than the $14,547.70 which the appellants sought.Discussion[16] As Downs J recorded in his minute of 27 July 2018, the stance of thedefendants and third parties was that a trial date should be allocated even if that meantthat the case against them was based on anticipated cost.10 As that was an interlocutorydecision, it was necessary for the appellants to seek leave to appeal.[17] The second respondent took an active role in opposing the application for leaveto appeal, succeeding in the High Court. In its memorandum in opposition to theapplication for leave to appeal dated 29 November 2018 filed in this Court the secondrespondent submitted:The subject matter of the appeal is not sufficiently meritorious in substanceand does not relate to a sufficiently important issue as to outweigh the cost ofan appeal. This is, in essence, a proposed appeal of a scheduling decisionmade by the High Court.[18] Then in its submissions in this Court in opposition to the application for leaveto appeal, the second respondent contended that the appellants' main point ofcontention appeared to be not the fact of setting down but that the trial date was priorto their anticipated completion of repairs. It submitted that the circumstances did notwarrant further delay. The second respondent filed an affidavit of a quantity surveyorin reply to the appellants' affidavits in support of their application for leave to appeal.8 Myoak Holdings Ltd v Millstone Grazing Ltd [2017] NZCA 273 where following the appeal beingbrought the High Court issued its substantive judgment. Costs lay where they fell.9 Pub Charity Inc v Department of Internal Affairs, above n 5, where the respondent reversed thedecision that had lead to the High Court judgment and appeal leading directly to the appeal'sabandonment.10 Body Corporate 417948 v Watts & Hughes Construction Ltd, above n 1, at [3].[19] Leave to appeal was granted and the appellants duly filed their submissions.On 31 July 2019 the second respondent filed a memorandum seeking an extension oftime for the filing of its synopsis of argument. The memorandum recorded that thesecond respondent and the appellants were the only active parties to the appeal, thatthey were exploring options to resolve the appeal without the need for a hearing, andthat in light of the potential resolution of the appeal they were agreed that the secondrespondent's synopsis of argument could be delayed while resolution was explored.[20] There is no evidence before us concerning the circumstances that led to theresolution. However in the appellants' reply memorandum on costs they stated thatthey abandoned their appeal because the second respondent approached them with aproposal to adjourn the High Court trial to which they agreed. The second respondenthas not sought to take issue with that submission.[21] While it is correct that the subject of the appeal was the interpretation of r 7.6,the essence of the different stances of the appellants and the second respondent waswhether the trial should proceed in 2020 or at a significantly later date. The secondrespondent was successful in the High Court in obtaining the earlier date. It resistedthe appeal, including the application for leave. It then changed its mind. As theappellants put it in their reply submissions, the second respondent "experienced anunexplained change of heart and obtained an adjournment of the trial by consent".[22] This had been the appellants' preferred outcome throughout. The practicalnecessity for the appeal was removed. In these circumstances we consider that theappellants are entitled to an award of costs against the second respondent.[23] As to the quantum of the costs award, we agree with the second respondentthat the allocation of half a day for the appellants' informal application to dispensewith security is excessive: we allow 0.3 days. We also agree that the secondrespondent should not be required to pay costs or disbursements in connection withthe appellants' application for an extension of time for the filing of their applicationfor leave to appeal.[24] However we reject the second respondent's contention that the appellants arenot entitled to the full 3 day allowance for preparation of hearing the appeal.The appellants were required to file their synopsis and bundle of authorities on orbefore 17 July 2019 which was prior to the adjournment of the trial by consent.The fact that the second respondents were not put to the burden of filing theirsubmissions does not mean that the costs to which the appellants would otherwise beentitled should be reduced.[25] We further note that in respect of the steps taken in May and July of 2019 theappellants' costs schedule was calculated by reference to the daily rate of $2,390.However that rate applied only from 1 August 2019. 11 We consider that the applicabledaily rate for all the relevant steps was $2,230. We have calculated costs on that basis.[26] Consequently we decline the second respondent's application for costs andgrant the appellants' application for costs. We award costs to the appellants in the sumof $10,704.00 and disbursements of $1,162.70.Result[27] The second respondent must pay the appellants costs and disbursements in thesum of $11,866.70.Solicitors:Grimshaw & Co, Auckland for AppellantsRice Speir, Auckland for Second Respondent11 See High Court Amendment Rules 2019, rr 2 and 11.