Filleul Apartments JV Limited v Sergio Salis and Christopher Robertson [2019] NZHC 2806
This was an application seeking leave of the Court to appeal to the Court of Appeal solely on issues relating to costs. The application was opposed.
The background is that the parties were involved in a hearing in the District Court following an application being made by Filleul Apartments JV Ltd (Filleul) under ss 319 and 320 of the Property Law Act 2007. The respondents to the present application for costs, (Salis & Robertson) took the District Court decision on appeal to the High Court. However, by the time the appeal was considered, it had largely been overtaken by the events, including the construction work that had occurred in the meantime. As Gendall J put it in the appeal decision, “the horse had effectively bolted”. Salis & Robertson chose to proceed with the appeal in any case, seeking vindication of their position, as well as the reversal of the costs orders made in the District Court (in favour of Filleul).
In determining the High Court appeal, Gendall J noted there was now no practical purpose for the relief sought by the appellants, namely referral back to the District Court. He did however reverse the costs orders, ordering that costs lie where they fell. Filleul sought leave to appeal this decision regarding costs, and set out a number of questions which it contended were questions of law. Those questions largely related to Gendall J having made the decision regarding costs without hearing orally from counsel or giving reasons.
In considering the application for leave to appeal, Gendall J reviewed the commentary on the test for leave to bring a second appeal. In particular, the appeal must raise some question capable of bona fide and serious argument in a case involving public interest of sufficient importance to outweigh the cost and delay of further appeal. An entirely or largely factual issue would rarely be considered of public importance. It may have qualifying private importance if the amount at stake was very substantial, the decision reflected seriously on the conduct or character of the would-be appellant, or the judgment had special consequences for the losing party. The scarce time and resources of the Court of Appeal are not to be wasted. On a second appeal, the Court of Appeal’s function is not general correction of error, but rather to clarify law and determine whether it was properly interpreted and applied by the court below.
Rule 14.1 of the High Court Rules provides that all matters relating to costs are at the discretion of the Court. Gendall J noted that this general discretion is not unfettered, and it is qualified by the specific rules set out in rr 14.2-14.10. Any departure from those rules must be a considered and particularised exercise of the general discretion. But importantly, an award of costs still has a discretionary element, given it is made by the judge who has heard the case and parties in question. He noted that the Court of Appeal is “very slow to upset costs awards in the High Court”.
The Supreme Court has reiterated the basis upon which an appellate court might interfere with an exercise of a costs decision. In allowing a costs appeal, the court must be satisfied that the High Court has:
(a) Acted on a wrong principle;
(b) Failed to take into account some relevant matter;
(c) Took account of some irrelevant matter; or
(d) Was plainly wrong.
Gendall J refused leave to appeal. He considered that his costs decision was made for pragmatic reasons given the longstanding legal fight that had taken place between the parties. He noted that in reality, both had achieved some measure of success in the matters before the court. Effectively no finding was made on the substantive appeal, given the relief sought had been overtaken by events. He also noted that the granting of the application by the District Court had been a significant indulgence to Filleul. He considered that Filleul had achieved some significant reduction in its overall construction costs given the way the District Court had approached matters. The District Court costs were not unduly significant, and given both parties had achieved some success, the awards would probably go some way towards cancelling each other out. Finally, he considered that even if he had made an error in his decision relating to costs, there was no public or private interest of sufficient importance to outweigh the cost and delay of a further appeal. The commercial development was now complete. The ongoing disagreements needed to be brought to an end. In his judgment, the cost and delay of further appeal outweighed the importance of the private interest to the parties of the relatively minor costs in this case. “The time and resources of the Court of Appeal are scarce and need to be applied with proportionality relating to the increasing demands of civil litigation.”
Authors: Steve Keall & Katy Barker, 13 December 2019
Copyright Steve Keall 2019, All Rights Reserved.