OKEY v KINGSBEER [2019] NZCA 419

OKEY v KINGSBEER [2019] NZCA 419 [9 September 2019]IN THE COURT OF APPEAL OF NEW ZEALANDI TE KŌTI PĪRA O AOTEAROACA32/2019[2019] NZCA 419BETWEEN RONALD GORDON OKEYFirst AppellantMCKENZIE MCPHAIL CORPORATETRUSTEES LIMITEDSecond AppellantAND PAULINE ANNE KINGSBEER ANDBERNADETTE PLAW AS TRUSTEES OFTHE PAK TRUSTRespondentsHearing: 2 September 2019Court: Collins, Wylie and Ellis JJCounsel: J K Mahuta-Coyle for AppellantsG P Mason for RespondentsJudgment: 9 September 2019 at 3.00 pmJUDGMENT OF THE COURTA The appeal is dismissed.B The respondents are entitled to one set of costs in this Court for a standardappeal on a band A basis plus any disbursements.____________________________________________________________________REASONS OF THE COURT(Given by Collins J)Introduction[1] The appellants challenge a costs judgment of Cooke J delivered inthe High Court on 14 December 2018.1 The costs judgment was a further stage inwhat has been a protracted dispute that has seen a substantive judgment delivered inthe High Court2 and a successful appeal from that judgment.3[2] The costs judgment necessitated Cooke J to determine costs in the High Courtas a consequence of this Court's decision allowing the appeal from the substantivejudgment in the High Court. We note that Cooke J was not the Judge who heardthe case in the first instance in the High Court.[3] The gravamen of the dispute is a roading easement over land owned bythe respondents in their capacities as trustees of the PAK Trust. For many years,the appellants benefitted from that easement. A dispute arose about upgrading andmaintenance of the road.[4] In 2013, the respondents commenced proceedings for orders extinguishingthe easement and for the appellants to pay the cost of repair to bring the road back tothe condition it was prior to the appellants' use of it. Alternatively, if the easementwas upheld, the respondents sought the costs of upgrading the road.[5] In its substantive judgment, the High Court held that the easement was invalidbecause of a failure to comply with s 348(1) of the Local Government Act 1974, whichrequired local authorities to give permission before private roads are created.4 It washeld in the alternative that the use of the road had changed since the grant ofthe easement to such a degree that the equitable easement had been extinguished.5On appeal, this Court held the appellants' equitable easement had not been1 Kingsbeer v Okey [2018] NZHC 3309 [costs judgment].2 Kingsbeer v Okey [2017] NZHC 57 [substantive judgment].3 Okey v Kingsbeer [2017] NZCA 625, (2017) 19 NZCPR 25.4 Substantive judgment, above n 2, at [65].5 At [92]–[93].extinguished and that it prevailed over s 348(1) of the Local Government Act but that,an upgrade of the road was required.6 This Court directed the appellants meet75 per cent of the costs of the upgrade, and the respondents 25 per cent. This Courtdid not expressly address in its judgment how costs in the High Court were to bedetermined.7 The respondents applied to the High Court for determination of costs inthat Court.[6] In his costs decision, Cooke J determined that the respondents were entitled tocosts in the High Court on a scale 2B basis, but only 50 per cent of the costs that wouldotherwise be payable.8 Costs were fixed at $30,337.88.[7] The appeal is based on the contention that the appellants substantiallysucceeded as a result of this Court's decision and that they are therefore entitled toa full award of costs, namely $60,675.76. Alternatively, if it is accepted that each partyhad some measure of success, costs should lie where they fall. In contrast,the respondents contend that they also succeeded, albeit not to the degree they hoped.Mr Mason, for the respondents, submitted his clients could have benefitted from ahigher percentage of costs than were awarded, but that in any event the orders madeby Cooke J were within the range that was reasonably available and ought not to bedisturbed. Both counsel accept that the issues raised by the appeal concern Cooke J'sassessment of which party succeeded as a result of this Court's judgment.Basis of costs decision[8] Cooke J recognised that the costs decision he was required to make was"not necessarily straightforward".9 There were two complicating factors:(a) The issue concerning the scope and application of s 348 ofthe Local Government Act emerged during the trial, largely atthe instigation of the High Court Judge at the substantive hearing.6 Okey v Kingsbeer, above n 3, at [80]–[81].7 Okey v Kingsbeer CA106/2017, 27 March 2018 at [3].8 Costs judgment, above n 1, at [23].9 At [20].(b) Prior to the hearing in the High Court, the appellants made an offer topay 50 per cent of the costs of upgrading the road.[9] In his costs judgment, Cooke J observed that the starting point is thatthe unsuccessful party should be liable for costs to the successful party, and thatsuccess on a limited basis is still generally regarded as success.10[10] In making an overall assessment, Cooke J had regard to the fact thatthe appellants succeeded in establishing a valid easement, but that their offer to payprior to trial 50 per cent of the costs of the upgrade of the road was less than the amountthat this Court directed. In these circumstances, the Judge reasoned that it would notbe appropriate to make a full award of costs in favour of the respondents and thatthe 50 per cent award that he settled upon was appropriate.Analysis[11] It is accepted by both parties that a costs decision involves the exercise ofjudicial discretion. Nevertheless, that discretion is to be exercised in accordance withthe principles that underpin the relevant rules.11[12] We have examined the methodology adopted by Cooke J and are satisfied thathis decision was one that was reasonably available to him. In our assessment, Cooke Japplied appropriate principles, took into account relevant considerations and did nottake into consideration irrelevant matters.[13] The appellants are correct to emphasise that they successfully defendedthe claim that the equitable easement should be extinguished. Their offer prior to trialto pay half of the costs of the upgrade of the road was, however, significantly belowthe amount that this Court ultimately directed them to pay. In reality, the respondentsalso succeeded, although not to the degree they wished when they sought to havethe appellants pay the entire cost of upgrading the road.10 High Court Rules 2016, r 14.2(1)(a); and Weaver v Auckland Council [2017] NZCA 330, (2017)24 PRNZ 379 at [26].11 Cunningham v Butterfield [2014] NZCA 213, (2014) 22 PRNZ 521 at [60].[14] This was one of those cases in which the High Court was justified inconsidering not only which party won the principal contest at trial, but also makinga realistic overall appraisal of the end result. We endorse the approach Cooke Jfollowed and the result he reached.Result[15] The appeal is dismissed.[16] The respondents are entitled to one set of costs in this Court for a standardappeal on a band A basis plus any disbursements.Solicitors:Brittens Lawyers, Palmerston North for AppellantsStrachan O'Connor, Upper Hutt for Respondents