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Clearwater Cove Apartments Body Corporate No 170989 v Auckland Council (HC)

We acted for the council and its insurer in this appeal to the High Court on the costs awarded by the Weathertight Homes Tribunal.  The Tribunal is a cost neutral environment unless the claim lacks merit or was brought in bad faith.  The High Court found that the claims for 10 out of the 12 units were meritless.  It also found that the body corporate’s failure to disclose relevant valuation documents amounted to bad faith.  The body corporate was ordered to pay 85% of the council’s actual costs and disbursements in respect of the tribunal hearing.  The costs were sent back to the tribunal for it to undertake an assessment of the reasonableness of the actual costs incurred.  Indemnity cost awards are very rare, particularly so in the Tribunal jurisdiction, where the general rule is that the parties bear their own costs.   Once the tribunal made its assessment of reasonableness the council was awarded costs and disbursements of $395,924.54.

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