COROMANDEL WATCHDOG OF HAURAKI (INCORPORATED) AND MINISTER OF FINANCE AND ASSOCIATE MINISTER OF FINANCE s OCEANA GOLD (NEW ZEALAND) LIMITED
[2020] NZHC 3445
•18 December 2020
IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY
I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE
CIV-2020-404-0138
[2020] NZHC 3445
UNDER the Judicial Review Procedure Act 2016 IN THE MATTER OF
the Overseas Investment Act 2005
BETWEEN
COROMANDEL WATCHDOG OF HAURAKI (INCORPORATED)
Applicant
AND
MINISTER OF FINANCE AND ASSOCIATE MINISTER OF FINANCE
First Respondents
OCEANA GOLD (NEW ZEALAND) LIMITED
Second Respondent
Hearing: On the papers Appearances:
B O’Callaghan, R Enright, H Z L Krebs for Applicant J B Smith QC, K Anderson and K G Stephen for First Respondents
J Hodder QC, S V McKechnie and F J Thorp for Second Respondent
Judgment:
18 December 2020
JUDGMENT OF CLARK J (COSTS)
Introduction
[1] Coromandel Watchdog of Hauraki Incorporated (Coromandel) challenged the consent of the first respondents to Oceana Gold’s application to acquire three parcels of rural land totalling approximately 178 hectares near Waihi. The issue at the heart of the challenge was whether, in assessing benefit to New Zealand under the Overseas
COROMANDEL WATCHDOG OF HAURAKI (INCORPORATED) v MINISTER OF FINANCE AND ASSOCIATE MINISTER OF FINANCE [2020] NZHC 3445 [18 December 2020]
Investment Act 2005 (the Act), the Ministers (the first respondents) had to have regard to detrimental effects as well as the benefits of the proposed investment.
[2] In a judgment issued on 9 September 2020 I dismissed Coromandel’s application for judicial review.1 I concluded that, as costs follow the event, Coromandel was liable to pay the respondents’ costs.
[3]The parties have been unable to agree on costs.
Coromandel’s position
[4] Coromandel argues that no order for costs should be made and that public interest immunity may apply where an issue of public importance is raised on the pleadings.2
[5] Although unsuccessful, Coromandel contends the essential issue was one of public interest — relating to the interpretation of a statute that deals with the important issue of foreign investment and ownership of rural land. It says the question as to whether the Ministers had correctly applied the law in relation to the benefit of New Zealand test had not been litigated before. And, Coromandel submits, the Crown regarded the benefit to New Zealand test as an important issue that needed to be resolved by the courts.
[6] Coromandel denies Oceana Gold’s contention that Coromandel’s conduct of the proceeding put the respondents to additional cost.
[7] Finally, Coromandel submits only one set of costs should be considered as between the first and second respondents as the Court did not resolve issues of discretion raised by Oceana Gold.
1 Coromandel Watchdog of Hauraki (Incorporated) v Minister of Finance and Ors [2020] NZHC 2345.
2 Citing West Coast ENT Inc v Buller Coal Ltd (Costs) [2013] NZSC 133; New Zealand Maori Council v Attorney-General [1994] 1 NZLR 513 (PC); EDS v New Zealand King Salmon [2014] NZSC 167.
First respondents
[8] As they were successful in the proceeding, the first respondents say the Court should exercise its discretion to award costs in their favour. Costs in the sum of
$44,310.65 are sought.
Second respondent
[9]Oceana Gold calculates costs on a 2B basis,3 with second counsel, to be
$48,337.75 and disbursements of $620. It seeks costs in the sum of $48,957.75.
[10]Oceana Gold submits:
(a)Coromandel’s claim had limited merit. The question of law regarding the benefit to New Zealand test had previously been settled by the Court of Appeal.4 And, the second respondent was fully successful at trial.
(b)Coromandel’s conduct of the proceeding put the respondents to additional costs because:
(i)Until less than a week before the hearing Coromandel pursued grounds of review the respondents had maintained lacked merit;
(ii)Coromandel made interlocutory applications, taking a half-day hearing to resolve, for discovery of material that was held to be irrelevant;5
(iii)Coromandel filed further evidence without notice, which the Court found was not relevant and that “threatened” the approaching fixture “for little useful reason”;6 and
3 Category 2 was agreed by the parties on 12 March 2020 in a consent memorandum.
4 Tiroa E and Te Hape B Trusts v Chief Executive of Land Information [2012] NZCA 355.
5 See Coromandel Watchdog of Hauraki (Incorporated) v Minister of Finance and Ors [2020] NZHC 888 per Churchman J at [30], [35] and [38].
6 See Coromandel Watchdog of Hauraki (Incorporated) v Minister of Finance and Ors [2020] NZHC 1012 per Simon France J at [18].
(iv)Coromandel failed to engage with the litigation timeframes which meant the second respondent had to take steps to ensure timetabling was met;7
[11] Any public interest in these proceedings, the second respondent submits, is not sufficient to indemnify Coromandel against costs.
[12] Oceana Gold also submits two sets of costs are appropriate in these circumstances. Its interest in the proceeding was distinct from that of the first respondents. A joint defence or joint representation was therefore not appropriate. Their distinct interests justified the first and second respondents remaining at arms’ length from each other. They defended their positions differently, including in relation to whether the Court should grant relief. If the Ministers’ decision had been declared unlawful the second respondent says the effects on both parties would have been substantial although for different reasons.
[13] Generally, the second respondent submits two sets of 2B costs are a fair contribution given the nature and urgency of the proceedings as well as the resources actually applied and expenses actually incurred.
Discussion
Public interest
[14] Under r 14.7(e) of the High Court Rules 2016 costs otherwise payable may be declined or reduced if the proceeding concerned a matter of public interest and the party opposing costs acted reasonably in the conduct of the proceeding. The test for determining whether a proceeding is in fact in the public interest, and therefore justifies a departure from the usual rule that costs follow the event, was summarised in Taylor v District Court at North Shore (No 2):8
7 The second respondent drafted each of the joint and consent memoranda of counsel and led the correspondence between the parties regarding timetabling.
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].
… the proceeding must concern a matter of genuine public interest, have merit and be of general public importance beyond the interests of the particular unsuccessful litigant. To obtain the benefit of the exception in rule [14.7(e)], the unsuccessful litigant must also have acted reasonably in the conduct of the proceeding.
[15] The requirements that the proceeding should have general public importance beyond the interests of the particular litigant, and should have merit, limit the opportunity for the ‘public interest’ to become a mere appellation by which litigants may seek to shield themselves from an otherwise legitimate costs liability.
[16] At the heart of this proceeding were Oceana Gold’s applications to purchase more land for the purpose of developing additional tailing storage as part of its mining activities at its Waihi mine site. There can be little doubt that the Government’s policy on climate change is a matter of genuine public interest and public importance. Contrary to Coromandel’s pleaded case, however, the policy was not ultimately relevant and the fact it was pleaded does not make the proceeding one of public importance attracting the application of r 14.7(e).
[17] The cases cited by Coromandel can, I think, be readily distinguished. They were finely balanced and concerned contentious or emerging areas of the law, and all were ultimately resolved in a final appellate jurisdiction.
[18] In declining to make an order against the unsuccessful public interest litigant in West Coast ENT Inc v Buller Coal Ltd (Costs), the Supreme Court said:9
… The issue before us was very much a subset of the Environment Court proceedings which were plainly closely balanced. The challenge to Whata J’s judgment was dealt with by this Court (rather than by the Court of Appeal) primarily because of the stance taken by Buller Coal. As well, the underlying issue of law was difficult and its resolution had a significance which went well beyond the present case.
[19] In declining to order costs against the appellants in New Zealand Maori Council v Attorney-General (the “Broadcasting Assets Case”), the Privy Council stated:10
9 At [4].
10 New Zealand Maori Council v Attorney-General, above n 2, at [17].
… Although the appeal is to be dismissed, the appellants were not bringing the proceedings out of any motive of personal gain. They were pursuing the proceedings in the interest of taonga which is an important part of the heritage of the New Zealand. Because of the different views expressed by the members of the Court of Appeal on the issues raised on this appeal, an undesirable lack of clarity inevitably existed in an important area of the law which it was important that their Lordships examine and in the circumstances their Lordships regard it as just that there should be no order as to the costs on this appeal.
[20]And in EDS v New Zealand King Salmon the Supreme Court noted that:11
… The legislation required King Salmon to demonstrate public interest in the consents it sought. It substantially discharged that burden on the facts, losing the EDS appeal on a view of the law which reversed authority applied in the lower Courts. The case, like West Coast ENT, was of real difficulty (as the division of opinion in this Court indicates) and the principles of interpretation applied had significance well beyond it.
[21] By contrast, this proceeding was relatively straightforward. There was no “closely balanced” or difficult issue having significance beyond the present case. There was no “undesirable lack of clarity” about the matters to which the relevant Ministers must have regard under the Act when considering whether to consent to an application to acquire land and the statutory interpretation issue raised by the pleadings presented no “real difficulty” as reflected in the following passages from the judgment:12
[39] The Society is essentially asking the Court to read into the Act a mandatory relevant consideration, namely the potential detriments of an overseas investment. I am unable to accept the Society’s position because it is unsupported by the Act itself.
[40] The consent and conditions regime in Part 2 of the Act is not only clear but unusually prescriptive. The nature of the (mandatory) criteria in s 16, and the nature of the (mandatory) factors in s 17, require of the relevant Ministers an identification of benefits. The criteria and with one exception, the factors, are, as Mr Smith QC put it, exclusively focussed on the possible benefits of an overseas investment. There is no reference to detriments or anything of that kind.
(footnotes omitted)
[22] There being no merit in the proceeding there is no basis for refusing to make an order for costs under r 14.7(e).
11 EDS v New Zealand King Salmon, above n 2, at [28].
12 Coromandel Watchdog of Hauraki (Incorporated) v Minister of Finance and Ors, above n 1.
Separate costs
[23]Rule 14.15 of the High Court Rules provides that:
The court must not allow more than 1 set of costs, unless it appears to the court that there is good reason to do so, if—
(a)several defendants defended a proceeding separately; and
(b)it appears to the court that all or some of them could have joined in their defence.
[24] In Norfolk Trustee Co Ltd v Tattersfield Securities Ltd, the Court considered the rule required a cautious approach to awards of separate costs, particularly when there is some overlap or community of interest in the litigation position of the parties.13
[25] The rule seeks to minimise costs by shortening proceedings where a joint defence can reasonably be expected.14 In deciding whether it is appropriate to award costs separately:15
The Court should look in a realistic way at whether the parties have common or overlapping interests, and if so, to what extent. It can consider whether the parties took legal advice as to the appropriateness of separate/joint representation, and if so, what it was, and whether it was followed. The Court can consider the extent to which parties did or could have relied upon the evidence or submissions of another.
[26] In contexts such as this there is some, albeit limited, authority suggesting an unsuccessful applicant for judicial review will be ordered to pay only one set of costs.16 In Rongotai Investments Ltd v Land Valuation Tribunal, Cooke J summarised the core issue faced by courts when assessing costs in a judicial review context:17
[6] An issue can emerge for such cases if the judicial review claim is not successful, and all named respondents seek costs. That can be seen as potentially unjust, particularly if an applicant for review faces multiple costs claims, yet would only be entitled to a single award if successful. The right of access to the court to pursue judicial review is a fundamental one, recognised
13 Norfolk Trustee Co Ltd v Tattersfield Securities Ltd HC Auckland CIV-2004-404-3668, 30 March 2005 at [51].
14 Independent Māori Statutory Board v Auckland Council [2017] NZHC 678 at [8]–[9].
15 At [9].
16 See for example Enterprise Miramar Peninsula Inc v Wellington City Council [2018] NZHC 1041 citing Independent Fisheries Ltd v The Minister for Canterbury Earthquake Recovery [2015] NZHC 1353 at [10] and Jonathan Auburn, Jonathan Moffett & Andrew Sharland Judicial Review (Oxford University Press, Oxford, 2013).
17 Rongotai Investments Ltd v Land Valuation Tribunal [2020] NZHC 730.
by s 27(2) of the New Zealand Bill of Rights Act 1990. It is features of this kind that have resulted in the practice in England and Wales that usually only one award of costs will be awarded in an unsuccessful claim for judicial review. In New Zealand there is no such well established practice — it is a matter of applying the discretion in r 14.1. Additional respondents who support a decision-maker can be awarded costs, or receive a partial award of costs, depending on the circumstances.
(footnotes omitted)
[27] That this was a judicial review proceeding is, however, to be balanced against the fact that the first and second respondents had different interests at play and the consequences of a finding of unlawfulness were substantively different for each. Oceana Gold for example filed extensive evidence relating to such matters as its future mining plans at Waihi, the fundamental importance to those plans of the further tailings storage facility (and thus the acquisition of land) and the economic implications of not maintaining continuity of operations at Waihi. Oceana Gold’s evidence also bore on its claim of substantial prejudice if relief were granted.
[28] Beyond the respondents’ common interest in the construction of the relevant legislation provisions (a matter already determined in the Court of Appeal) there were no common or overlapping interests. The first respondents could not have produced the evidence of the second respondent, covering as it did highly confidential and specific investment related information. It was neither realistic, nor reasonable therefore to expect the parties to have joined in their defences. Oceana Gold had a tangible economic interest in adducing evidence and advancing detailed submissions on the question of relief, an interest the Ministers addressed almost in passing in a two-paragraph written submission. There was little need for the Ministers to do more.
[29] Consistent with their respective interests the Ministers and Oceana Gold argued their cases differently but I do not consider that difference of itself to be such as to justify a separate costs award. In combination with the other considerations I have discussed, however, the difference cements the fact there was little community of interest between the first and second respondents.
Disposition
[30] The applicant is to pay separately the costs of the first respondents and the second respondent.
[31] In recognition of the fact that this is a judicial review proceeding, and that there was a commonality of interest, albeit to a small degree, the costs sought by the first respondents and the second respondent are reduced by 15 per cent.
Karen Clark J
Solicitors:
K3 Legal Ltd, Auckland for Applicant
Crown Law Office, Wellington for First Respondents Simpson Grierson, Wellington for Second Respondent
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