Clements v Auckland Council

[2018] NZHC 553

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2017-404-2792 [2018] NZHC 553

BETWEEN

MIRIAM CLEMENTS

Applicant

AND

AUCKLAND COUNCIL

First Respondent

COUNCILLOR RICHARD HILLS
Second Respondent

COUNCILLOR CHRIS DARBY
Third Respondent

……………….continued

Hearing:

22 March 2018

Counsel:

Appearance:

RJ Wilson for respondents

M Clements, applicant in person

Judgment:

28 March 2018

JUDGMENT OF FITZGERALD J

[As to applications for discovery and security for costs]

This judgment was delivered by me on 28 March 2018 at 10 am, pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date……………

Solicitors:           Meredith Connell, Auckland

M Clements, Auckland

Clements v Auckland Council [2018] NZHC 553 [28 March 2018]

COUNCILLOR LINDA COOPER

Fourth Respondent

COUNCILLOR ROSS CLOW
Fifth Respondent

COUNCILLOR ALF FILIPAINA
Sixth Respondent

DEPUTY MAYOR BILL CASHMORE
Seventh Respondent

Introduction and summary

[1]    Ms Clements has filed an application for judicial review of Auckland Council’s decision, in March 2016, to authorise Panuku Development Ltd (“Panuku”) to sell a car park located at 40 Anzac Street, Takapuna (“the Property”).

[2]    The grounds upon which judicial review are sought are broad and many, but key amongst them are allegations that the Council’s decision to authorise Panuku to sell the Property:1

(a)was unlawful, as it breached reasonable expectations of certain local residents that the Property would never be sold, and unlawfully removed the “Citizens of the City of Takapuna” from the Property’s certificate of title;

(b)was made on the basis of an error of fact, namely that the Property was “superfluous to use”;

(c)was irrational, as the Property’s disposal was disproportionate to the Council’s overriding objective of raising finance and developing public value;

(d)exceeded the decision-maker’s powers in two primary ways: in that the purpose of local government is to enable democratic local decision- making, but a majority of local residents and businesses opposed the decision to sell; and because relevant law was ignored, namely citizens’ freedom of expression under the New Zealand Bill of Rights Act 1990, including to drive a car rather than utilise public transport; and

(e)was tainted by procedural impropriety, including misleading marketing of the underlying “Unlock Takapuna” policy, pre-determination and lack of consultation.

1      See “Grounds for Judicial Review” in Ms Clements’ document titled “Interlocutory Application for Stay of Execution Pending Judicial Review Proceedings” dated 19 February 2018.

[3]The Council and other respondents oppose the application.

[4]    Ms Clements now applies for orders that the respondents give discovery of a range of documents. The Council and other respondents oppose that application, on the basis the documents are not relevant, and in any event, discovery in the terms sought would be unduly oppressive and disproportionate to the matters in issue.

[5]    The Council applies for an order that Ms Clements give security for costs.  Ms Clements is presently  an  undischarged  bankrupt.  It  is  not  in  dispute  that  Ms Clements will be unable to meet an order of costs if her judicial review application is unsuccessful. It is also not in dispute that Ms Clements will not be able to pay the sum sought by the Council by way of security (approximately $32,000) or any other substantive sum. In support of its application, the  Council points to the  fact  that  Ms Clements herself has no direct personal interest in this matter, and that others with a more direct interest are shielded from costs as a result of the proceeding being brought by her. The Council also points to the manner in which the proceeding has been conducted to date, and that it has already been put to considerable and unnecessary cost given Ms Clements represents herself and is unfamiliar with the Court’s processes. It also says the claim is weak and unlikely to succeed.

[6]    Ms Clements opposes the application. While, as noted, she accepts she is unlikely to be able to meet any costs award in the event her application for judicial review is unsuccessful, and that she does not have a direct personal interest in this matter, she emphasises the validity of the Council’s decision is nevertheless a matter of considerable public interest which ought to be ventilated before the Court. She further submits that if security for costs is ordered, it would have the effect of stifling what she says is a meritorious claim.

[7]I turn first to the discovery application.

Application for discovery

The documents sought/preliminary matters

[8]    The Council has filed affidavits on this application, placing before the Court the record of the Council’s decision making in relation to the Property, and outlining the process for subsequent consultation which was followed in relation to the Property.2

[9]    Ms Clements seeks discovery of the following categories of additional documents:

(a)Category 1: In accordance with Condition iii),3 which approved Panuku’s disposal of seven public asset properties in Takapuna, with the objective of achieving urban renewal and housing, Ms Clements seeks discovery of:

(i)all “mechanisms” approved for use to achieve the disposal of use and ownership by Panuku to date, including contractual arrangements, such as reference briefs and design agreements;

(ii)most importantly “development agreements” that Panuku was authorised to use by Condition iii); and

(iii)any other agreements signed, unsigned or represented in written form, verbally or in good faith, that exist which are relevant to the authority under Conditions i) ii) and iii) that approved Panuku to dispose of asset use and ownership in the 10 March 2016 Development Committee decision.

(b)Category 2: Correspondence between Panuku and potential buyers, investors, financiers and agents relevant to the Property, and the seven

2      Public consultation was one of the conditions of the Council’s 10 March 2016 decision to sell the Property.

3      The Council’s decision to authorise Panuku to sell the Property was subject to a number of conditions, which are referred to as “Condition i)”, “Condition ii)” and “Condition iii)”.

other Takapuna public properties approved for disposal on 10 March 2016. This includes all correspondence between any staff of Panuku, board members of Panuku, contractors to Panuku or individuals within related entities to Panuku, with relevance to any discussion or contact with potential buyers, investors, financiers, agents or such like, between the dates of Panuku being established in 2015 and today’s date.

(c)Category 3:  Panuku and Auckland Council correspondence relevant to the Property, and the seven other Takapuna properties approved for disposal on 10 March 2016. This includes all correspondence between any staff member of Panuku, board member of Panuku or contractor or related individual to Panuku on the matter of the Property, or any person with whom discussion arose about the Property, and any staff member, contractor to, individual related to in any way or elected member of the Auckland Council, between the dates of Panuku’s establishment in 2015 and today’s date.

(d)Category 4: Panuku and Auckland  Transport  correspondence relevant to the Property, and the seven other Takapuna properties approved for disposal on 10 March 2016. This includes all correspondence between any staff member of Panuku, board member of Panuku or contractor or related individual to Panuku on the matter of the Property, or any person with whom discussion arose about the Property; and with any staff member, contractor to, individual related to in any way or elected member of Auckland Transport between the dates of Panuku’s establishment in 2015 and today’s date.

(e)Category 5: Auckland Transport and Auckland Council correspondence relevant to the Property, and the seven other Takapuna properties approved for disposal on 10 March 2016. This includes all correspondence between any staff member of Auckland Transport, board member of Auckland Transport or contractor or related individual to Auckland Transport on the matter of the Property, or any person with whom discussion arose about the Property and any staff

member, contractor to, individual related to in any way or elected member of the Auckland Council, between the dates of Panuku’s establishment in 2015 and today’s date.

(f)Category 6:     Previous page copies of the following websites published or edited within the period of October 2017-March 2018:

(i)Panuku’s website; and

(ii)Cr Chris Darby’s website.

[10]   As will be appreciated, the above categories (other than Category 6) are framed in very broad terms. I explored with Ms Clements whether the categories could be narrowed. However, other than acknowledging that documents relating to Auckland Transport after March 2017 were unlikely to be relevant, Ms Clements did not suggest any amended or narrowed categories.

[11]   Some of the categories also seek documents in Panuku and Auckland Transport’s possession. Mr Wilson acknowledged that in practical terms, documents in those entities’ possession (but not the Council’s) are within the Council’s power, possession or control. However, Mr Wilson submitted that to the extent the documents are not in the Council’s physical possession, it is difficult to see how they could be relevant, given they will not have been material available to the Council at the time of its decision to authorise Panuku to sell the Property.

Legal principles

[12]   The legal principles concerning discovery in judicial review proceedings are well settled and may be briefly stated.

[13]   First, discovery in judicial review proceedings is discretionary.4 This reflects the fact that judicial review concerns the process by which statutory or public decision- making occurs, and that judicial review proceedings are to be disposed of in an

4      Judicial Review Procedure Act 2016, s 14.  See Keenan v Attorney General [2014] NZHC 1649;

Air New Zealand Ltd v Auckland International Airport Ltd (2001) 16 PRNZ 783 (HC).

efficient  and  timely  fashion.5     As  Wild   J  observed  in  BNZ  Investments  Ltd     v Commissioner of Inland Revenue, judicial review is intended to be:6

[A] comparatively simple process of testing that public powers have been exercised after a fair process, and in a manner which is both lawful and reasonable.

[14]   As Edwards J recently observed in Smith v Attorney-General, discovery must also be proportionate, in terms of the processes of discovery and inspection being proportionate to the subject matter of the proceeding.7 This reflects the current approach to discovery under the High Court Rules and the retreat from the earlier “Peruvian Guano” approach,8 which saw a wider range of relevant, and potentially relevant, documents subject to the obligation of discovery. In all cases, however, the central issue is relevance, and discovery orders will not be granted where the categories do not relate to a pleaded relevant issue.9

[15]I turn now to each of these categories of documents sought by Ms Clements.

Category 1

[16]   I am not satisfied the Category 1 documents are relevant, or even if some have tangential relevance, ordering discovery of them would be proportionate.

[17]   First, and as I explored with Ms Clements at the hearing, Category 1 seeks documents in relation to seven additional properties in Takapuna, over and above the Property. The Council’s decision of March 2016 did relate to seven other properties. However, Ms Clements’ proceeding relates only to the Property. Ms Clements submitted that the eight properties are “all linked”, but was not able to clearly articulate how that is so.

[18]   Further and in any event, it is difficult to see how documents which post-date the decision to authorise Panuku to sell the Property could be relevant to the lawfulness

5      Air New Zealand Ltd v Auckland International Airport Ltd, above n 4, at [29] and [35].

6      BNZ Investments Ltd v Commissioner of Inland Revenue (2007) 23 NZTC 21,078 (HC) at [15].

7      Smith v Attorney-General [2017] NZHC 2810 at [30].

8      So named after Compagnie Financiere du Pacifique v Peruvian Guano Co (1882) 11 QBD 55 (CA).

9      Commerce Commission v Cathay Pacific Airways Ltd [2012] NZHC 726 at [13].

or  validity  of  that  decision.  Doogue  J  observed  in  Comalco  New  Zealand Ltd v Broadcasting Standards Authority that documents which were not available to the decision-maker at the time of the decision in issue cannot be relevant.10 While I would not frame the proposition in absolute terms (in theory at least, documents which post- date a decision may, in some cases, be relevant to the earlier decision-making process), some clear “linking” between “post-decision” documents and the issues before the Court is required. In this case, and by way of example only, how “development agreements” Panuku was authorised to use as a means of selling the Property are relevant to the validity of the Council’s underlying decision is unclear.

[19] Despite exploring these issues at some length with Ms Clements at the hearing, I am not persuaded that documents demonstrating the “mechanisms” by which Panuku was approved to sell the Property are relevant to the validity of the Council’s 10 March 2016 decision, and the basis for challenging it (as summarised at [2] above).

[20]   I accordingly decline to order the Council (or any of the other respondents) to give discovery of the Category 1 documents.

Category 2

[21]   I am similarly unpersuaded that I ought to order discovery of the Category 2 documents.

[22]   First, this Category also extends to the seven other properties which were the subject of the Council’s 10 March 2016 decision. As Ms Clements’ application for judicial review does not extend beyond the decision to sell the Property, documents concerning the potential sale of any one or more of the seven other properties are not relevant.

[23]   Moreover, correspondence between Panuku and, for example, potential purchasers of the Property, is not relevant to the validity or otherwise of the Council’s decision in March 2016 to authorise Panuku to sell the Property. There is no doubt Panuku has been and is currently authorised to dispose of the Property. It is the

10     Comalco New Zealand Ltd v Broadcasting Standards Authority [1995] NZAR 428 (HC).

Council’s decision to authorise it to do so which is being challenged. What steps Panuku may have taken, or is now taking, in the exercise of its authority are not themselves relevant to the lawfulness or otherwise of the Council’s underlying decision. Again, I sought clarification from Ms Clements as to any suggested relevance. She submitted that she does not “know what’s going on” in terms of any potential disposal of the Property, and discovery would enable her to ascertain the current status of the sale. She submits this is relevant to any application for interim relief, pending the hearing of her judicial review application.

[24]   That is not, however, a valid reason for ordering discovery in the substantive proceeding. The imminence or otherwise of any potential sale is an issue that would need to be considered on any application for interim relief (if Ms Clements’ existing application for interim relief is pursued). Discovery is not normally ordered on interlocutory applications. Moreover, the Council, as a responsible litigant, would be expected to be transparent in any evidence it placed before the Court as to the status of any proposed sale. Further, Ms Clements’ position is protected by the requirement that the Council give her five working days’ notice of any entry into an unconditional contract to sell the Property.

[25]   Finally, Ms Clements suggests the documents may shed light on the lawfulness of the Council’s earlier decision. Again, that does not satisfactorily explain the relevance of the documents; rather it is akin to a fishing expedition.

[26]   I accordingly decline to order the Council (or any of the other respondents) to give discovery of the Category 2 documents.

Categories 3, 4 and 5

[27]   These three categories seek the same documents, but are split across communications between Panuku and the Council (Category 3), Panuku and Auckland Transport (Category 4) and Auckland Transport and the Council (Category 5). As noted, these three categories in particular are framed in very broad terms, and effectively seek any document in the possession, power or control of Panuku, Auckland Transport or Auckland Council relating to the Property, over a three-year period. I also sought to explore with Ms Clements whether she could refine these

categories. No progress was made, though Ms Clements did accept Auckland Transport “drops out” of the picture by March 2017.

[28]   As discovery is not routinely ordered on applications for judicial review, I am not prepared to grant discovery in the terms sought by these categories. The requests in their current form are again akin to a fishing expedition, in the hope that something of use might be turned up which bolsters the challenge to the Council’s decision to sell the Property. Further, to order wide-ranging discovery of this nature in a judicial review proceeding, where relevance has not been demonstrated, would be disproportionate.

Category 6

[29]   This category seeks (presumably electronic) copies of earlier iterations of websites. I proceed on the assumption (for present purposes only) that such earlier iterations exist in some shape or form; in other words, the Council and/or the other respondents would not need to “recreate” those earlier iterations if discovery were ordered.

[30]   At the heart of Ms Clements’ request for these materials is her submission that the earlier iterations of Panuku’s website stated Panuku had approximately

$600,000,000 worth of assets for disposal, and that earlier iterations of Mr Darby’s website (during an election process) indicated his support for Panuku’s programme generally. Again, I questioned Ms Clements about the relevance of these matters to the Council’s decision-making in March 2016. Ms Clements submits the earlier iterations of Panuku’s website suggest that, instead of looking at the merits of the decision to sell, the Council was instead looking at divestment for financial purposes. Ms Clements characterised it as “one community being divested for another community”. She also suggested that Mr Darby’s stated support for Panuku indicated pre-determination.

[31]   Again, it is difficult to understand the relevance of these matters to the various grounds of judicial review. References on Panuku’s recent website to the total assets available to it for disposal say nothing about the Council’s decision-making some two years’ earlier in relation to one particular asset. Further and in any event, as

Ms Clements noted in her oral submissions, evidence of the assets available to Panuku for disposal is  accessible  from  other  sources  in  any  event.  Nor,  if  correct,  is Mr Darby’s recent support of Panuku’s programme of work generally relevant to the Council’s decision of 10 March 2016 in relation to the Property as a specific asset.

[32]I accordingly decline to order discovery of the Category 6 documents.

Result

[33]Ms Clements’ application for discovery is therefore dismissed.

Application for security for costs

Introduction

[34]   The Council seeks approximately $32,000 in security for costs. This sum is arrived at by a conservative approach to the steps taken, and to be taken, by the Council in this proceeding, through to a hearing, on a 2B basis. As noted, Ms Clements accepts she is unlikely to be able to meet an award of costs against her if her application for judicial review is unsuccessful.

Legal principles

[35]   The legal principles applicable to an application for security for costs are well settled. Collins J recently summarised the key principles as follows, which I gratefully adopt:11

(1)Security for costs should not be ordered at first instance if the effect of such an order would risk stifling a worthy claim.

(2)Assessing the worthiness of a plaintiff’s claim at an interlocutory stage is a difficult task and does not involve the detailed analysis associated with determining the outcome of  substantive proceedings.

(3)The diligence with which the application for security for costs has been made may also be a relevant consideration.

11     Friends of Houghton Valley Inc v Wellington City Council [2015] NZHC 1515, (2015) 22 PRNZ 653 at [24] (footnotes omitted).

(4)Cases in which the  plaintiff  is  merely  a  nominal  defendant  that is representing the interests of others may be more amenable to orders for security for costs.

(6)The extent to which the litigation involves public interest considerations may also be a factor that weighs in the evaluation.

(7)Providing it is of substance, an undertaking to meet any costs awarded given by a body associated with the plaintiff may be acceptable.

[36]   In addition to the above, the defendant’s position is to be considered. The defendant ought not to be drawn into unjustified litigation, particularly where it is over-complicated and unnecessarily protracted.12 Nevertheless, where it is clear that ordering security to be given would likely bring an end to a proceeding, an order should only be made after careful consideration, and in a case where the claim has little chance of success.13

Analysis

[37]   There is no doubt that the threshold issue of whether Ms Clements is unlikely to be able to meet an adverse costs award is met. The key matter for my determination is whether I ought to exercise my discretion to order Ms Clements to give security for costs in the circumstances. The matter is finely balanced. However, on balance, I have determined not to order security for costs, at least as the proceeding currently stands. I have reached this conclusion for the following six reasons.

[38]   First, and most importantly, there is a real prospect that ordering security in the sum sought, or in any other substantive amount, will bring this proceeding to an end. It was not seriously in dispute that Ms Clements would be unable to pay the security ordered, or anything approaching it.

[39]   Second, given the nature and manner in which the materials have been presented to date, it is difficult to make any meaningful assessment of the merits of Ms Clements’ claim. Certainly, as matters presently stand, the claim does not strike me as particularly strong (though it may be more that the plethora of paper obscures

12     A S McLachlan Ltd v MEL Network (2002) 16 PRNZ 747 (CA) at [16].

13 At [15].

key points and arguments). There are aspects which appear relatively weak, and much focusses on the underlying policy or merits on which the Council’s decision was based, which is not the proper focus of a judicial review proceeding. Nevertheless, I am equally not prepared to make a finding at this stage that the claim is, on its face, wholly unmeritorious.

[40]   Third, I accept there is a reasonable sense that Ms Clements is “representing” the interests of others who have a much more direct interest in the disposal of the Property, and who will thus be shielded from the risk of costs. Other than as a citizen of Auckland, Ms Clements does not suggest she has any personal or business interest in the proposed disposal of the Property.

[41]   I questioned Ms Clements about these matters at the hearing, and she firmly denies she is acting in any kind of representative capacity, or that there are any other links or relationships between her and others who might have an interest in the subject of this proceeding. She explained how she regularly takes on matters such as this, although her focus to date has been overseas. In summary, she submitted that rather than “representing” other interested parties, taking on issues like this is “just what she does”.

[42]   Taking  Ms  Clements’  explanations  at  face  value,  I  am  satisfied  that   Ms Clements is not a “nominal” plaintiff, at least in the sense considered in Highgate on Broadway Ltd v Devine, and which might otherwise have provided a strong pointer in favour of security for costs.14

[43]   Fourth, there is no particular evidence Ms Clements can reasonably draw upon resources from other persons interested in the subject matter of this litigation to meet an order for security for costs. A small number of persons have been prepared to give an affidavit in support of her application for judicial review. However, that is some way from being prepared to contribute funds in a substantive way. I am bound to observe, however, that it does strike the Court as somewhat incongruous that if the

14  Highgate on Broadway Ltd v Devine [2012] NZHC 2288, [2013] NZAR 1017 at [22](a), where the plaintiff is in effect representing the interests of others. See also Friends of Houghton Valley Incorporated v Wellington City Council, above n 11, at [26].

matter is of such public interest and importance as Ms Clements suggests (see below), there is not more support for this proceeding, in terms of funding to enable counsel to be briefed to assist in presenting the case for judicial review in the most advantageous manner.

[44]   Fifth, I accept the matter is of some public interest, rather than being an application seeking to protect private interests only. There seems to have been a reasonable degree of public debate and opposition to the Council’s decision to sell the Property, and later decisions taken in that context (for example to change the Property’s authorised use). In this sense, the proceeding does not concern a statutory or other public decision affecting a sole or very narrow category of persons only.

[45]   Finally, I accept that to date at least, the litigation has been over-complicated and unnecessarily protracted. However, I am not presently persuaded that even a modest award of security for costs would resolve this issue (by, for example, injecting some “discipline” into the proceeding). I am also mindful of the fact that the substantive hearing is now only a matter of months away, such that there is not the risk of any such difficulties continuing for a protracted period. Ms Clements has also expressed her desire to heed the Court’s guidance that her case will be most persuasively presented if done in a clear and succinct manner.

[46]   As noted, I consider the issue of security for costs to be finely balanced. However, at least as matters presently stand, and taking into account those matters discussed above, I am not prepared to order security for costs. Ultimately, I am satisfied there is a real risk that such an order would have the effect of stifling this proceeding. While in its present form the claim does not appear strong, nor is it possible to say at this stage that it is wholly without merit.

[47]   For completeness, I record that had I ordered security for costs, it would have been for a modest sum only, to enable some prospect of this proceeding continuing despite security being ordered. A modest sum would not, however, have provided the Council with any real protection on costs. In the present circumstances, the best protection against any undue prejudice to the Council is to ensure this proceeding is progressed in an efficient manner, so that costs are kept to a minimum.

[48]   I accordingly decline to grant the Council’s application for security for costs. I record, however, that this decision may be revisited if circumstances were to materially change; for example, if the proceeding was to take on a substantially different scope from its current form and which would substantively increase the costs burden on the Council; or if the current substantive hearing date were in jeopardy.

Result

[49]Ms Clements’ application for discovery is dismissed.

[50]The Council’s application for security for costs is dismissed.

[51]   If any party wishes to seek costs in relation to either of the applications, that party is to file a memorandum as to costs, no longer than five pages in length, within 10 working days of the date of this judgment. The other party may then file a memorandum in response within a further five working days. That memorandum is also not to exceed five pages in length.

Fitzgerald J