O’SULLIVAN v HEMPEL (WATTYL) NEW ZEALAND LTD [2023] NZHC 1477

O'SULLIVAN v HEMPEL (WATTYL) NEW ZEALAND LTD [2023] NZHC 1477 [13 June 2023]IN THE HIGH COURT OF NEW ZEALANDINVERCARGILL REGISTRYI TE KŌTI MATUA O AOTEAROAWAIHŌPAI ROHECIV-2023-425-23[2023] NZHC 1477BETWEEN HELEN BERNADETTE O'SULLIVAN,FIONA CHERIE WHITE AND ANDREWRODGER WILTON AS TRUSTEES OFTHE WILTON FAMILY TRUSTAppellantsAND HEMPEL (WATTYL) NEW ZEALANDLTD (FORMERLY VALSPAR PAINT (NZ)LMIMITED)RespondentHearing: 6 June 2023 (by way of telephone conference)Appearances: J Eckford for AppellantsA V Davison for RespondentsJudgment: 13 June 2023JUDGMENT OF EATON JThis judgment was delivered by me on 13 June2023 at 4.15 pmpursuant to Rule 11.5 of the High Court RulesRegistrar/Deputy RegistrarDate:[1] On 1 May 2023, the appellants filed an appeal against the refusal of theWeathertight Homes Tribunal's Procedural Order 21 refusing the appellants'application for costs. The appeal was set down for a telephone conference before meon 6 June 2023.[2] In advance of the appeal, Ms Davison, on behalf of the respondent, filed anappearance under protest to jurisdiction and a memorandum seeking an order that theappeal be dismissed under r 5.49(3) of the High Court Rules 2016 on the grounds thatthis Court has no jurisdiction to hear and determine the appeal.[3] Ms Eckford filed a memorandum on behalf of the appellant submitting that thisCourt does have jurisdiction and, if not, an order that the appeal be transferred to theDistrict Court.[4] I heard brief argument from counsel at the telephone conference.Relevant facts[5] The appellants brought proceedings in the Weathertight Homes Tribunal (theTribunal) against several parties, including the respondent. The appellants say therespondent failed, without notice, to appear at a mediation scheduled by the Tribunalto take place on 29 November 2022. The dispute did not settle at mediation. Theappellants maintain they would not have attended the mediation if they had known ofthe respondent's non-appearance. They sought wasted costs in the sum of $26,134.18pursuant to s 91 of the Weathertight Homes Resolution Services Act 2006 (the Act).In Procedural Order 21, the Tribunal declined to award costs.[6] The amount in dispute before the Tribunal is a claim for damages in the sumof $705,203. A substantive hearing has been held, and a decision is pending.Legal principles[7] Section s 3(a) of the Act provides:3 Purpose of this ActThe purpose of this Act is—(a) to provide owners of dwellinghouses that are leaky buildingswith access to speedy, flexible, and cost-effective proceduresfor the assessment and resolution of claims relating to thosebuildings;...[8] A right of appeal is prescribed in s 93 of the Act:93 Right of appeal(1) A party to a claim that has been determined by the tribunal may appealon a question of law or fact that arises from the determination.(2) An appeal must be filed in—(a) the District Court if the amount at issue does not exceed$350,000; and(b) the High Court if the amount at issue exceeds $350,000.(3) For the purposes of subsection (2), the amount at issue in relation to adetermination is—(a) the amount of any money required to be paid under thedetermination by the person filing the appeal (including anyamount determined under section 90(2)); or(b) if the appeal relates to a determination in which the tribunalhas declined to require payment of any amount of money (ormoney's worth in terms of section 90(2)) to a claimant, or hasrequired payment of an amount of money (or money's worthin terms of section 90(2)) that is less than the amount claimedby the claimant, the amount claimed unsuccessfully by theclaimant....[9] Costs may be awarded under s 91:91 Costs of adjudication proceedings(1) The tribunal may determine that costs and expenses must be met byany of the parties to the adjudication (whether those parties are or arenot, on the whole, successful in the adjudication) if it considers thatthe party has caused those costs and expenses to be incurredunnecessarily by—(a) bad faith on the part of that party; or(b) allegations or objections by that party that are withoutsubstantial merit.(2) If the tribunal does not make a determination under subsection (1), theparties to the adjudication must meet their own costs and expenses.Discussion[10] Ms Eckford raised three arguments in submitting this Court has jurisdiction tohear this appeal.[11] First, Ms Eckford submitted that a procedural order is not a "determination"by the Tribunal for the purpose of s 93(1) and, consequently, the jurisdictionalrestriction, being an amount in issue exceeding $350,000, does not apply. Ms Eckfordcontends that s 93 applies only to the determination of the substantive claim.[12] A right of appeal arises only when a claim has been determined by theTribunal. Section 8 defines a claim:claim means a claim by the owner of a dwellinghouse that the owner believes—(a) has been penetrated by water because of some aspect of its design,construction, or alteration, or of materials used in its construction oralteration; and(b) has suffered damage as a consequence of its penetration by water[13] In my view, a costs decision falls outside the definition of a claim. The costsdecision under appeal was made in relation to a claim that is yet to be determined bythe Tribunal. That does not, however, aid the appellant. A party to a claim may appealagainst a costs decision,1 but not before the substantive claim is determined. Thatlimitation is consistent with the objective of achieving speedy, flexible, and cost-effective procedures to resolve leaky building disputes. The Act does not provide foran appeal against a procedural order made prior to determination of the claim. Theappellant's right to appeal the costs decision will not crystallise until the claim isdetermined.1 IAG New Zealand Ltd v Dewes [2022] NZHC 3555.[14] The appeal must therefore be dismissed. I deal briefly with the other argumentsadvanced by Ms Eckford.[15] Ms Eckford has referred, I believe, to the District Court Act 2016 as providingthat the High Court may be seized of jurisdiction notwithstanding that the amount atissue may be the amount of the costs determination. She notes s 89, which providesthat the High Court must have regard to particular factors in exercising its discretionand ordering removal of a proceeding to the High Court. That rule only has applicationto a proceeding that has been filed in the District Court. It does not apply to thisappeal.[16] Alternatively, Ms Eckford submitted that if the Court was not satisfied as tojurisdiction, that an order should be made transferring the appeal to the District Court.However, in my view, if the Court does not have jurisdiction to entertain the appeal, itdoes not have jurisdiction to order the transfer of the appeal to the District Court.[17] Ms Eckford referred to the appeal involving matters of general publicimportance and, in particular, the costs consequences of a party's non-attendance at amediation. Again, absent statutory jurisdiction to entertain the appeal, an issue ofpublic or general importance is of no relevance.[18] I am satisfied Ms Davison is correct. This Court does not have jurisdiction toentertain this appeal. I dismiss the appeal under r 5.49(3). In the absence ofjurisdiction, it is not open to this Court to make an order transferring the appeal to theDistrict Court.[19] Ms Davison seeks uplifted or indemnity costs. She submits that the respondentpointed out the jurisdictional problem immediately upon receipt of the appeal, but theappellants were persistent in pursing it, notwithstanding the jurisdictional barrier.[20] In the circumstances, I am satisfied an order for increased costs is appropriate.I invite counsel for the respondent to file a costs submission of no more than two pageswithin five working days. The appellants are to respond within three working daysthereafter.[21] Given what I anticipate is the limited sum involved, the parties are stronglyencouraged to resolve the question of costs....................................................Eaton JSolicitors:Parker Cowan, QueenstownJackson Russell, Auckland