SAFFIOTI V AUCKLAND COUNCIL HC AK CIV-2012-404-002091

SAFFIOTI V AUCKLAND COUNCIL HC AK CIV-2012-404-002091 [11 April 2013]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYCIV-2012-404-002091[2013] NZHC 722IN THE MATTER OF a appeal against the decision of theWeathertight Homes Tribunal at AucklandBETWEEN CARL SANTO SAFFIOTI AND EIJAMARITA LINDEN SAFFIOTIApplicantsAND AUCKLAND COUNCILDefendantHearing: (on the papers)Counsel: R J Hooker for the ApplicantsD J Barr for the RespondentJudgment: 11 April 2013JUDGMENT OF WOODHOUSE J (Costs)This judgment was delivered by me on 11 April 2013 at 3:00 p.m. pursuant to r 11.5 of the High Court Rules 1985.Registrar/Deputy RegistrarSolicitors / Counsel: Mr R J Hooker, Vallant Hooker & Partners, Solicitors, Auckland Mr G J Christie / Mr D J Barr, Simpson Grierson, Solicitors, Auckland[1] The applicants' leave to appeal against a decision of the Weathertight HomesTribunal was dismissed.1 The respondent, in accordance with that judgment, is entitled to costs. The parties have been unable to agree on quantum and the Court is now asked to fix costs.[2] The respondent seeks indemnity costs in a sum of $13,432 (inclusive of GST) and disbursements of $428.63 (inclusive of GST). The applicants oppose indemnitycosts. They submit that costs should be fixed on a 2B basis. Costs on a 2B basistotal $6,766.[3] The respondent seeks indemnity costs on the basis that the applicants commenced or continued the proceeding "in wilful disregard of clearlyestablished law". This is one of a number of circumstances listed by the Court ofAppeal in Bradbury v Westpac Banking Corporation in which indemnity costs havebeen ordered.2 The respondent submits that the applicants persisted in seeking toadvance what amounted to a hopeless case because the claims were clearly contraryto the statutory defence in s 50(3) of the Building Act 1991, the decision of theSupreme Court in McNamara v Auckland City Council,3 and the decision of theCourt of Appeal in Vining Realty Group v Moorhouse.4 These are matters discussedin the substantive judgment and do not require elaboration here.[4] For the applicants, Mr Hooker submitted that the issue on appeal, as summarised at [9] of the substantive judgment, was novel, and that it was therefore reasonable for the applicants to continue with their claim by seeking leave to appeal.Mr Hooker advanced other arguments in opposition to the application for indemnitycosts, but this is at the heart of the submission.[5] I am satisfied that the applicants persisted with their claim, by seeking leave to appeal, in the face of a statutory provision, s 50(3), and Court decisions binding on the High Court, which indicated that the claim had little prospect of success.1 Saffioti v Auckland Council [2012] NZHC 2394.2 Bradbury v Westpac Banking Corporation [2009] NZCA 324, [2009] 3 NZLR 400 at [29].3 McNamara v Auckland City Council [2012] NZSC 34, [2012] 3 NZLR 701.4 Vining Realty Group Ltd v Moorhouse [2010] NZCA 104, (2011) NZCPR 879.However, that in itself is not sufficient to justify indemnity costs. The list of circumstances in the Bradbury case does not constitute some sort of exclusive list of circumstances which will justify indemnity costs. This is an illustrative list. More is required. If a party seeks indemnity costs based on contentions about the conduct of the other party, in reliance on paragraph (a), (b) or (f) of r 14.6(4), the party against whom costs are sought must have behaved badly or very unreasonably;5 there mustbe misconduct which is "flagrant".6 I am not persuaded that the conduct of the applicants in pursuing their application for leave to appeal amounts to misconduct of the sort contemplated in the leading cases.[6] It is a matter of some concern that costs above scale are sought fairly regularly. The rules do of course provide for increased or indemnity costs. But the rules are founded on the principles stated in r 14.2, including the principle that "sofar as possible the determination of costs should be predictable and expeditious".That principle applies in all cases, but it has added emphasis when the quantum ofactual costs incurred by the successful party are, as here, reasonably modest.[7] The respondent's application for indemnity costs is declined. The respondent's costs are fixed on a 2B basis in a sum of $6,766 together withdisbursements of $437.52.__________________________________Woodhouse J5 Bradbury v Westpac Banking Corporation, above n 2, at [27].6 Prebble v Awatere Huata (No 2) [2005] 2 NZLR 467 (SCNZ), (2005) 17 PRNZ 581 at [6].