Commissioner of New Zealand Police v Rae

[2022] NZHC 253

ORDER PROHIBITING PUBLICATION OF NAMES, ADDRESSES OR IDENTIFYING PARTICULARS OF CONNECTED PERSONS

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

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

CIV-2020-485-43

[2022] NZHC 253

BETWEEN

COMMISSIONER OF NEW ZEALAND POLICE
Applicant

AND

DAVID CHARLES RAE

Respondent

SARAH LOUISE RAE
First Interested Party

S LTD

Second Interested Party

R LP
Third Interested Party

AVA CONSULTING LTD

Fourth Interested Party

On the papers:
Counsel:	A W M Britton and S B McCusker for Applicant
Judgment:	22 February 2022

JUDGMENT OF CHURCHMAN J (COSTS)

Background

[1]                 The respondent applied for orders under s 28 of the Criminal Proceeds (Recovery) Act 2009 (CPRA).

COMMISSIONER OF NEW ZEALAND POLICE v RAE (COSTS) [2022] NZHC 253 [22 February 2022]

[2]                 On 15 October 2021, I issued a judgment dismissing the application and inviting the parties to agree costs.

[3]                 The respondent, through his counsel, promptly entered into negotiations with counsel for the applicant as to costs.

[4]                 Counsel for the respondent offered to pay the applicant $28,972.78 in costs, and $699.81 in disbursements (the Agreed Costs).

[5]                 One matter not agreed between the parties was the date upon which the payment was to be made.

[6]                 Requests  for  payment  came  and  went,  and  no  payment  was  made.  On 3 December 2021, the Court granted the respondent’s counsel and solicitor leave to withdraw.

[7]                 Subsequent communication between counsel for the applicant and the respondent has not been replied to.

The issue

[8]                 The applicant asks the Court to fix costs and disbursements at the Agreed Costs figure. Although the parties agreed as to the quantum of cots that was appropriate because the parties did not agree on the date for payment, it cannot be said that they reached a concluded and enforceable contract.

[9]                 A similar matter was dealt with by the Court in White v Allen. In that case, the Court said:1

However, whether there is a binding contract depends on whether the parties’ communications lead objectively to a conclusion that they intended to create legal relations and had agreed upon all the terms which they regarded or the law requires as essential for the formation of legally binding relations. There is no dispute that the parties intended to create legal relations. I consider the real question is whether the absence of agreement as to when payment would be made precludes a binding agreement. Unless there has been express or implied agreement on all the essential terms, there is insufficient certainty to

1      White v Allen [2020] NZHC 819 at [19].

create a binding agreement. Terms of payment are essential and therefore the question is whether, in the absence of express agreement, there was not an implied term that payment would be made within a reasonable timeframe.

[footnote omitted]

[10]              The Commissioner accepts that the approach taken by the Court in White v Allen is applicable in the present case.

[11]              I therefore approach the question of costs afresh and determine what the order of costs should be.

Approach to costs

[12]              The rules relating to costs in civil proceedings are found in the High Court Rules 2016 (HCR). Rules 14.2–14.22 apply generally to every civil proceeding and to each “step” in the proceeding. All matters as to costs are at the direction of the Court. The overall objective is to achieve an outcome that best meets the interests of justice.

[13]              The discretion is not unfettered but is qualified by the applicable costs’ rules, and the Court’s approach should be consistent with established principles.

[14]              Where the Court is departing from established principles, it would generally be expected to give reasons for such a departure.

[15]              Rule 14.2(1) HCR sets out the principles applying to the determination of costs. Generally, the party who fails with respect to a proceeding or an interlocutory application, should pay costs to the party who succeeds. An award of costs should reflect the complexity and significance of the proceeding. Costs are assessed by applying the appropriate daily recovery rate to the time considered reasonable for each step. An appropriate daily recovery rate should normally be two-thirds of the daily rate considered reasonable in relation to the proceeding.

The parties’ positions

[16]              The applicant submits that costs should be fixed in accordance with the Agreed Costs. This represents a 30 per cent uplift from 2B scale costs. There are two modifications to the standard 2B costs scale:

(a)three days are sought for Item 38 (“filing application and supporting affidavits) to reflect the volume of affidavit evidence filed by the Commissioner in support of the application; and

(b)deductions of 50 per cent have been made to Item 11 (“filing a memorandum for first or subsequent case management conference) and Item 12 (“appearance at a mentions hearing or callover”) where those attendances were dealt with in relation to the Commissioner’s substantive application for forfeiture orders.

[17]              The Commissioner submits that, in accordance with White v Allen, it would be appropriate for there to be an uplift. It is submitted that, in accordance with the cases, the uplift upon which the Agreed Costs was based (30 per cent) was less than uplifts of 50 per cent applied in similarly unsuccessful applications under s 28 of the Criminal Proceeds (Recovery) Act 2009 and refers to decisions such as Commissioner of Police v Zhang.2

[18]              In support of the proposed uplift, counsel refer to the case falling within the line of authority that supports an uplift where a party has pursued an unnecessary step or steps, or advanced arguments that lacked a merit.3

[19]              Counsel refers to the applicant’s claims of not being in effective control over unrestrained assets as being clearly contrary to the documentary evidence.

[20]              Reference is also made to the lack of evidence supporting the number of contentions advanced by Mr Rae including his assertions that he had made payments

2      Commissioner of Police v Zhang [2021] NZHC 1752 at [17]-[21]; and Commissioner of Police v Gong [2018] NZHC 1686 at [25] and [27].

3      HCR 14.6(3)(b)(ii).

to his former wife and his parents. Note was also made of the fact that Mr Rae had made serious allegations against the Commissioner with such allegations having been found by the Court to be “entirely baseless”4 and “far-fetched”5

[21]              Counsel also referred to the evidence which demonstrated that the application was not for the release of funds to fund current living expenses but related to further unspecified business activities in other countries.

Analysis

[22]              The various factors referred to by counsel confirm that this case is one where an uplift is justified. In accordance with other similar cases an uplift of 50 per cent could have been successfully contended for.

[23]              Implicit in the agreement of counsel for Mr Rae to the Agreed Costs is a concession that some uplift was justified. Counsel does not seek anything more than the amount of Agreed Costs. In the circumstances, an award of costs and disbursements as set out in the Agreed Costs is consistent with the applicable principles.

Conclusion

[24]              An order for costs is made for the respondent to pay the applicant’s costs in the sum of $28,972.78, together with disbursements of $699.81.

Churchman J

Solicitors:
Crown Solicitor, Wellington for Applicant

4      Commissioner of New Zealand Police v Rae [2021] NZHC 2766 at [71].

5 At [74].