BODY CORPORATE 199348 & ORS V AUCKLAND CITY COUNCIL & ORS HC AK CIV 2004-404-3989

BODY CORPORATE 199348 & ORS V AUCKLAND CITY COUNCIL & ORS HC AK CIV 2004-404-3989 31 August 2006IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY CIV 2004-404-3989BETWEEN BODY CORPORATE 199348 First Plaintiff AND MEI NAH AND OTHERS Second Plaintiffs AND AUCKLAND CITY COUNCIL First Defendant AND PROGRESSIVE BUILDING SYSTEMS LIMITED Second Defendant AND VERO INSURANCE NEW ZEALAND LIMITED Third Party Hearing: 29 August 2006 Counsel: T Rainey for plaintiffs D Heaney and E Tan for first defendant C Brick for third party Judgment: 31 August 2006 at 15:30JUDGMENT OF ASSOCIATE JUDGE FAIRE [on costs]Solicitors: Grimshaw & Co, PO Box 6646, Auckland for plaintiffs Heaney & Co, PO Box 105 391, Auckland for first defendant Jones Fee, PO Box 1801, Auckland for third party[1] This judgment deals with applications for costs made by the third party and the plaintiffs in respect of applications for particulars. [2] The third party had applied for further particulars against the defendant. The defendant had applied for further particulars against the plaintiffs. [3] Both applications were given a fixture for 28 August 2006 and were due to be heard by Randerson J at that time. [4] On Friday, 25 August 2006: a) The plaintiffs' counsel was advised that the defendant had reached agreement with the third party and, as a result, would not proceed with the application against the plaintiffs; and b) The defendant's counsel advised the third party's counsel that the defendant would consent to orders for particulars as sought. [5] Prior to the notification of the position referred to in the previous paragraph, counsel for the third party and counsel for the plaintiffs had both filed and served their respective submissions in accordance with a direction made which varied r 251A of the High Court Rules. In each case, the preparation for the opposed hearing had been completed. [6] The third party seeks costs against the defendant calculated on a Category 2 Band B basis as follows: Preparing and filing application 0.6 days @ $1600 per day $960.00 Appearance at mention of application on 28 July 2006 0.2 days @ $1600 per day $320.00 Preparation for hearing (equating to time allocated for hearing, in quarter days) 0.5 days @ $1600 per day $800.00 Disbursement – filing fee for application $600.00Total $2,680.00[7] The plaintiffs seek costs against the defendant based on Category 2 Band B as follows: Preparing and filing application 0.6 days @ $1600 per day $960.00 Appearance at mention of application on 28 July 2006 0.2 days @ $1600 per day $320.00 Preparation for hearing (equating to time allocated for hearing, in quarter days) 0.5 days @ $1600 per day $800.00Total $2,080.00[8] Counsel for the third party and counsel for the plaintiffs both submit, in reliance on rr 47(a) and 48E: a) Both applications were opposed applications; b) Their respective clients are the successful parties in respect of the opposed applications; and c) Costs should be fixed now as the applications have been determined. [9] In this case the third party has obtained an order in terms sought. The plaintiffs have successfully resisted the order sought against them. In the plaintiffs' case, therefore, the position is analogous to a discontinuance of the proceeding and is covered by r 476(c) of the High Court Rules. That Rule raises a presumption that a discontinuing party will be liable for costs: North Shore City Council v Local Government Commission 9 PRNZ 182. Generally, the Court will not inquire into the merits of the case unless the answer is clear and obvious. Although Rule 476(c) does not specifically apply to interlocutory applications, the principles which I have set out are in line with the costs regime that was introduced on 1 January 2006 and is found in rr46 to 53 of the High Court Rules. [10] In Glaister v Amalgamated Dairies Ltd [2004] 2 NZLR 606 the Court of Appeal said:[18] Rule 46(1) of the High Court Rules continues to provide that all matters relating to costs in the proceeding, or a step in the proceeding, are for the discretion of the trial Court. And R 46(2) provides that the operation of the proceeding rules is subject to the overriding discretion in R 46(1). [19] In Body Corporate 97010 v Auckland City Council (2001) 15 PRNZ 372 this Court held that although R 46 provides the High Court with an overriding discretion, that discretion is generally to be exercised in accordance with the specific rules in RR 47 – 48G. The Court noted that although the general discretion is thereby qualified by the specific rules, the High Court Rules do not cover every eventuality. Hence, occasionally the Judges will have to resort to the general discretion. And in Mansfield Drycleaners this Court said at p 668, "while R 46 preserves the Court's overriding discretion, there is a strong implication that a Court is to apply the regime in the absence of some reason to the contrary." [21] The new costs regime, as between competing parties, is of a regulatory character. It is important that the integrity of that scheme be maintained, and that if monetary adjustments to the scale are to be made that they be made on a national basis by the rules committee. In fact certain monetary adjustments were made to have effect from 1 January 2004, and there is no present reason to think that the former problem of rate obsolescence will arise. [22] When a departure is to be made from the High Court Rules' allowances, it is necessary that it be done in a particularised, and principled way. As was observed by this Court during the course of argument, the problem is a familiar one in our jurisprudence – a scheme of general application is laid down, but provision then has to be made for something that is not contemplated within the scheme or which is unfairly recognised by it. [23] The allowances in the High Court Rules may be inappropriate in a given case. In commercial litigation, the difficulties will usually arise in one of two areas – where there is an unusual volume of discovery; or where, for some reason, the quite generous allowance of two days' preparation for trial for every day of trial is inadequate. [24] To put this another way, there is a relatively obvious logic to the monetary allowances in the new rules and the discretion exists to enable the unexpected and the unforeseen to be fairly accommodated. It is not a case of R 46 having an exclusionary primacy over R 47 (or any other rules): the rules are complementary, and designed to produce an effective whole.[11] Mr Heaney, for the defendant, did not disagree with the costs calculation of either counsel for the third party or the plaintiffs. He accepted that the case is a Category 2 case. He emphasised, however, that this is a case where the plaintiffs, as current building owners, allege that the building is defective and that the defects are causing damage, and that that was caused by steps taken at the time of construction.Apart from the defendant, however, there are no parties who were directly involved in the building named as defendants. Mr Heaney submitted the defendant, therefore, has had to endeavour to locate the parties really responsible for the problem which is at the centre of this proceeding. He submitted that until the precise extent of the plaintiffs' case is know, it was not possible to know how the defendant could respond to the third party's application for particulars. [12] It is appropriate that I record that there is really nothing in the submissions that Mr Heaney made to me that would justify me refusing or reducing costs to the successful parties in reliance on the matters set out in r 48D unless I considered the application of subrule (f) of that Rule could be invoked.Conclusions[13] I have carefully considered the pleading and the submissions which were advanced and I reach the conclusion that both successful parties, that is the third party and the plaintiffs, have, themselves, not taken any step which would justify the invocation of r 48D of the High Court Rules. That being the case, and having regard to rr47(a) and 48E, to which I have already made reference, there is no justification for reducing the costs, particularly when I apply the guidance given to the Court by the Court of Appeal in applying the costs regime in Glaister v Amalgamated Dairies Ltd.Orders[14] I order that the defendant pay: a) The third party's costs and disbursements in relation to the application for particulars in the sum of $2,680.00; and b) The plaintiffs' costs in relation to the application for further and betterparticulars in the sum of $2,080.00 _____________________ JA Faire Associate Judge