Bartle Group Limited v New Zealand Transport Agency

[2020] NZHC 511

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE

CIV-2019-485-378

[2020] NZHC 511

BETWEEN

BARTLE GROUP LTD

Plaintiff

AND

NEW ZEALAND TRANSPORT AGENCY

Defendant

On the papers:

Counsel:

P A Morten for Plaintiff

K C Francis and K R Muirhead for Defendant

Judgment:

13 March 2020

JUDGMENT OF CHURCHMAN J (COSTS)

Introduction

[1]    This proceeding concerns a declaratory judgment sought by Bartle Group Ltd (BGL) as to the interpretation of cl 3.14(11) of the Land Transport Rule: Vehicle Dimensions and Mass 2016. BGL’s claim was dismissed on 29 January 2020, and now the defendant, the New Zealand Transport Agency (NZTA), seeks costs.

NZTA

[2]    NZTA seeks costs calculated on a 2B basis, as well as disbursements for the filing fee on the statement of defence, and for the travel and accommodation of counsel. BGL disputes the payment of disbursements, and submits that either there should be no costs or that the costs award should be reduced by the Court on the basis of this proceeding being taken in the public interest. If costs are to be awarded, there

BARTLE GROUP LTD v NEW ZEALAND TRANSPORT AGENCY [2020] NZHC 511 [13 March 2020]

does not appear to be a challenge to the 2B categorisation or to the calculation as to the amount to be awarded on a 2B basis.

[3]In summary, my conclusions are:

(a)disbursements for the travel and accommodation of counsel should not be included in the award of costs, as the relevant authorities (discussed below) indicate that it would be unreasonable to do so; and

(b)this proceeding does not reach the threshold set out in Taylor v District Court at North Shore (No 2) as being a matter of genuine public interest, and therefore costs should not be reduced.

Position of the parties

NZTA

[4]Counsel for NZTA seeks costs calculated on a 2B scale basis for all steps:

(a)Step 2: commencement of defence by filing statement of defence, calculated at two days with a daily rate of $2,390, totalling $4,780;

(b)Step 30: preparation of two affidavits and the authorities bundle for substantive hearing, calculated at two days with a daily rate of $2,390, totalling $4,780;

(c)Step 32: preparation for hearing, calculated at two days with a daily rate of $2,390, totalling $4,780;

(d)Step 34: appearance by counsel at  full-day  hearing,  calculated  at one day with a daily rate of $2,390, totalling $2,390.

[5]This comes to a total of $16,730. Counsel also seek disbursements totalling

$845.49, which includes a $110 filing fee for the statement of defences, and travel and accommodation costs for sole counsel at $735.49.

[6]    NZTA dispute that the proceedings brought by BGL are eligible for reduced costs on the basis of being in the public interest under r 14.7(e), referring to an earlier decision of Grice J in the dispute (relating to the grant of scale costs to the NZTA on a successful interlocutory application to join Police in the proceeding), where her Honour stated:1

I do not attach much weight to the argument that this is a “public interest” matter. While other parties may always benefit from any declaration that the Court might make each case here is likely to be fact specific. I do not consider there is a high degree of public interest involved. It is primarily the parties involved who will benefit from any declaration although there may be some wider application.

BGL

[7]    BGL dispute the suggested award of costs on a 2B basis, submitting that costs are either not warranted or should be reduced under r 14.7(e), because the proceeding had merit, involved a matter of genuine public interest and importance (namely an issue of interpretation “applicable to all citizens”) and that they had acted reasonably in the conduct of the proceeding. It was submitted that BGL’s proceeding therefore met the public interest test set out in Taylor v District Court at North Shore (No 2). BGL also disputed the inclusion of counsel for NZTA’s travel and accommodation costs being included as disbursements in the award of costs. BGL also point to the fact that NZTA were not successful on a point regarding jurisdiction.

Relevant law and analysis

Payment of costs/disbursements for travelling counsel

[8]    Rule 14.12 of the High Court Rules 2016 defines a disbursement as an expense paid or incurred for the purposes of the proceeding that would ordinarily be charged for separately from legal professional services in a solicitor’s bill of costs.2 A Court may include disbursements as part of a costs award under r 14.12. Rule 14.12 indicates the fees of court for the proceeding, such as filing fees, can be included as disbursements. Disbursements must be either approved by the Court or specified in

1      Bartle Group Ltd v New Zealand Transport Agency [2019] NZHC 1828 at [5].

2      High Court Rules 2016, r 14.12.

r 14.12(1(b) and must be specific to the conduct of the proceeding, reasonably necessary for the conduct of the proceeding, and reasonable in amount.3

[9]    This is not a case where disbursements, in the form of counsel for NZTA’s travel and accommodation costs, should be included within an award of costs. In Buis v Accident Compensation Corporation, Rodney Hansen J observed that there are “no hard and fast rules” in relation to including the cost of counsel’s travel as a disbursement, and that the question of reasonableness would depend on the circumstances of each case.4 However, the Judge stressed that the cost of counsel’s travel will not be reasonable when there is no special justification for instructing out of town counsel.5 In Buis, Rodney Hansen J referred to Russell v Taxation Review Authority, where Fisher J made similar observations on the appropriateness of including counsel’s travel and accommodation expenses within an award of costs, holding that:6

[24]      Practitioners almost invariably charge their clients for counsel’s travel and accommodation as separate disbursements. The principal question under item 11 will be necessity. I accept Mr Judd’s submission that the custom of allowing travel and accommodation expenses for out of town counsel in the Court of Appeal is distinguishable given the limited locations in which that Court sits and the likelihood that counsel already familiar with the case will need to travel from other centres.

[25]      The position is different in the High Court. It would be hard to argue necessity where there is an adequate choice of suitable counsel in the High Court centre involved and no other special justification for instructing out of town counsel. Of course that is only the starting point. Available experience and expertise is one obvious dimension. I hope that Gisborne practitioners will not take it amiss if I speculate that there would be few counsel there equipped to lead in a microbiology patent case. Another could be the location of the client. If the client comes from a different region the cost of transporting counsel from that region might well be outweighed by efficiencies gained during the preparatory stage. A third could be disqualifying associations between local counsel and the parties or issues at stake e.g. proceedings against a local lawyer.

[10]   Upon assessment of the relevant authorities, the expectation that BGL pay for the travel and accommodation costs of NZTA’s Auckland-based counsel is not

3      High Court Rules 2016, r 14.12(2).

4      Buis v Accident Compensation Commission HC Auckland CIV-2007-404-4703, 25 February 2010 at [25].

5      Buis v Accident Compensation Commission, above n 4, at [25].

6      Russell v Taxation Review Authority HC Auckland CP526-SD99, 19 December 2000 at [24]-[25].

reasonable in this case, given that NZTA were located in Wellington, a High Court centre that has a sufficient number of lawyers for NZTA to have instructed local counsel, and there does not appear to be any particularly special or pressing reason for NZTA to have instructed Auckland counsel.

[11]   Although disbursements for travel and accommodation are not be awarded, given the costs of court (such as filing fees) are specifically mentioned in r 14.12(1)(b), and that these are specific to the conduct of the proceeding, reasonably necessary for the conduct of the proceeding and reasonable in amount, they are awarded here.

Refusal or deduction of costs in the public interest

[12]   Rule 14.7 dictates that a court may refuse to make an order for costs, or reduce the costs otherwise payable under those rules if the proceeding concerned a matter of public interest, and the party opposing costs acted reasonably in the conduct of the proceeding.7

[13]   The relevant test for determining whether a proceeding is in fact in the public interest (thus justifying a possible refusal or reduction in costs) was laid down in Taylor v District Court at North Shore (No 2).8 The proceeding must be a matter of genuine public interest, have merit and be of general importance beyond the interests of the particular unsuccessful litigant.9

[14]   In Environmental Defence Society Inc v New Zealand King Salmon Ltd, the Supreme Court held that whether a company is seeking to further its commercial objectives (or use a public resource for commercial purposes) through the litigation will be a relevant factor  in determining whether costs ought to be reduced under      r 14.7.10 In Wong v Registrar of the Auckland High Court, Duffy J indicated that costs may be refused or reduced for cases in the public interest, but only if that case concerns something that is “truly in the public interest and not merely to the public's benefit,

7      High Court Rules 2016, r 14.7.

8      Taylor v District Court at North Shore (No 2) HC Auckland CIV-2009-404-2350, 13 October 2010 at [9]. Affirmed in New Health New Zealand Inc v South Taranaki District Council [2014] NZHC 993 at [10]. See also New Zealand Climate Science Education Trust v National Institute of Water and Atmospheric Research Ltd [2013] NZCA 555 at [11].

9      Taylor v District Court at North Shore (No 2), above n 8, at [9].

10 Environmental Defence Society Inc v New Zealand King Salmon Ltd [2014] NZSC 167 at [41].

such as the correct interpretation of a piece of legislation. It should also not arise out of a private interest” (although the Judge was discussing costs mainly in the context of judicial review actions in the public interest).11

[15]   Applying the test set out in Taylor and upon consideration of the other relevant authorities, I conclude that this is not a case where there is a genuine public interest under r 14.7 which would justify a reduction of costs. While there may be some public interest in the decision, and there is nothing to suggest that the plaintiffs acted unreasonably, it does not reach the threshold of a matter of genuine public interest that is “truly in the interests of the public” and not being advanced for commercial or private purposes. The plaintiffs, in seeking a declaration, were not only acting in the public interest, but also for commercial purposes and to further commercial objectives. Consequently, the award of costs should not be reduced under r 14.7(e).

[16]   As to the jurisdiction point, this was a minor issue. On the main issues, NZTA was entirely successful. There was no justification for reducing scale costs on this ground.

Outcome

[17]   Costs are awarded to the defendant on a 2B basis as set out in the memorandum of counsel filed in support of the application. The disbursement of the filing fee of

$110 is approved. The claim for travel and accommodation of counsel of $735.49 is declined.

Churchman J

Solicitors:

Meredith Connell, Auckland for Defendant

cc:        P Morten, Harbour Chambers, Wellington for Plaintiff

11     Wong v Registrar of the Auckland High Court HC Auckland CIV-2007-404-5292, 3 March 2008, at [18].