Davis v The Plumbers, Gasfitters and Drainlayers Board
[2020] NZHC 1523
•1 July 2020
IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY
I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE
CIV-2019-485-000136
[2020] NZHC 1523
BETWEEN LANCE DAVIS
Applicant
AND
THE PLUMBERS, GASFITTERS AND DRAINLAYERS BOARD
Respondent
Hearing: On the papers Appearances:
J W Maassen and N Koating for the Applicant M J Hodge for the Respondent
Judgment:
1 July 2020
JUDGMENT OF GRICE J
(Costs)
Introduction
[1] The Board has applied for costs following the dismissal of an application for judicial review relating to its statutory investigation against Mr Davis and work carried out by his firm Star Plumbing Limited.1 Mr Davis is registered under the Plumbers, Gasfitters and Drainlayers Act 2006 (the Act).
[2] Before the first call of these proceedings, on 29 April 2019, the respondent advised the Court that it had decided to withdraw the charges laid against Mr Davis and reinvestigate the matter. That action meant a number of the grounds pleaded in the judicial review proceedings were otiose. They therefore did not proceed to hearing.
1 Davis v The Plumbers, Gasfitters and Drainlayers Board [2020] NZHC 782.
DAVIS v THE PLUMBERS, GASFITTERS AND DRAINLAYERS BOARD [2020] NZHC 1523 [1 July 2020]
[3] The remaining issue on judicial review related to a “contested statement”. This was the subject of my judgment of 21 April 2020. The contested statement had been given by Mr Davis to the original investigator (Mr Costelloe). The respondent took the position that the new investigator (Mr Thomas) should have the ability to look at all the material that had been gathered in the previous investigation by Mr Costelloe including the contested statement.
[4] Mr Davis sought a declaration that the contested statement had been obtained contrary to the requirements of the Act and therefore it would follow that the statement was inadmissible and could not be relied upon in the reinvestigation. On the other hand the Board said that it would be up to the new investigator as to whether he relied on the contested statement or offered it in evidence in any resulting disciplinary proceedings. The respondent argued that any objection to the use of the contested statement could then be dealt with by the Board.
[5] The Board was successful in its argument. The arguments at the hearing ranged more widely than is apparent from my summary but, as is not unusual narrowed in the course of oral argument. A number of other allegations were raised but not specifically pursued at the hearing.2
[6] In accordance with the request of counsel I reserved costs and directed an application and memoranda should be filed in accordance with a timetable if counsel were unable to agree.
Late application
[7] The Board filed its application for costs and supporting memorandum outside the directed time period. It indicated that this was a result of oversight. It submitted that there was no prejudice to the applicant. In addition the Board said it had made a proposal as to costs but had received no response from the applicant.
[8] Mr Davis does not take specific issue with the fact the application was late. That was a responsible approach. The decision was delivered during the period of the
2 At [61].
COVID-19 lockdown. The Courts have been sympathetic to time table slippage in view of that.
[9] In the circumstances there is no prejudice to the applicant due to the late application. Full submissions filed by the applicant indicate that it has had ample opportunity to respond to the applicant’s application.
The respondent’s application for costs
[10] The respondent seeks costs of $18,400 (plus disbursements including a filing fee for a statement of defence of $110) which is less than the amount claimable for costs on a 2B basis.
[11] The respondent also seeks costs in relation to its memorandum seeking costs. It says agreement should have been forthcoming on costs and it should have not had to apply. It claims $478 (0.2 of a category 2 daily rate) together with a prospective disbursement for a filing fee on sealing an order for costs.
[12]The total amount sought is therefore $18,878 plus $160 disbursements.
The applicant’s cross-application for costs
[13] The respondent does not take issue with the calculation or the quantum of costs claimed. Rather it says the respondent should only be entitled to costs based on partial success. Mr Davis says he was successful in the majority of his claims set out in the statement of claim and the Board by its decision to withdraw the charges and to reinvestigate had responded to his concerns about the statutory decisions. Mr Maassen for Mr Davis says these decisions had been the principal target of the judicial review proceedings.
[14] Mr Davis says that costs for everything up to and including the first case management conference (29 April 2019) when the Board formally advised the Court that it had decided to withdraw the disciplinary charges and reinvestigate, should be awarded to Mr Davis. He claims costs based on a category B basis totalling
$13,384.64 plus disbursements.
[15] Mr Davis accepts that costs should be awarded in favour of the Board but only in relation to the claims for judicial review which were dismissed by me. He says the Board was only partially successful and is entitled to costs of $3,868. In support of his submission that he should receive costs for the claims which did not need to go to a hearing he refers to the decision in McGuire v Wellington Standards Committee (1).3
[16] Mr Davis takes no issue with the quantum or calculation of the Board’s claim for costs. He also adopts category 2B for the calculation of costs on his cross- application. Mr Davis also seeks 0.5 of a day for costs in the preparation of his memorandum on costs.
[17] I accept that the appropriate basis for calculating the quantum of costs would be 2B (or in the case of the Board its actual and reasonable costs which it has claimed being less than a 2B award). I also consider it is appropriate that costs be awarded for the preparation of the memoranda on costs and that the fee for sealing any order of costs is an appropriate disbursement payable once the order is sealed.4
Costs jurisdiction rules and principles
[18]Costs are at the discretion of the Court.5
[19] The principles applying to the determination of costs as are relevant to the issues in dispute in this application are:
14.2 Principles applying to determination of costs
(1)The following general principles apply to the determination of costs:
(a)the party who fails with respect to a proceeding or an interlocutory application should pay costs to the party who succeeds:
(b)an award of costs should reflect the complexity and significance of the proceeding:
…
3 McGuire v Wellington Standards Committee (1) [2015] NZHC 448.
4 McGuire v Wellington Standards Committee (1) [2015] NZHC 448.
5 High Court Rules 2016, r 14.1.
(f)an award of costs should not exceed the costs incurred by the party claiming costs:
(g)so far as possible the determination of costs should be predictable and expeditious.
...
[20] Increased costs and indemnity costs may be awarded in certain circumstances.6 However, these are not relevant here. In this case the applicant points out that it made Calderbank offers to Mr Davis. Rule 14.10 is therefore relevant. It provides:
14.10Written offers without prejudice except as to costs
(1) A party to a proceeding may make a written offer to another party at any time that—
(a)is expressly stated to be without prejudice except as to costs; and
(b)relates to an issue in the proceeding.
(2) The fact that the offer has been made must not be communicated to the court until the question of costs is to be decided.
[21]The effect of such an offer is as follows:
14.11Effect on costs
…
(3) Party A is entitled to costs on the steps taken in the proceeding after the offer is made, if party A—
(a)offers a sum of money to party B that exceeds the amount of a judgment obtained by party B against party A; or
(b)makes an offer that would have been more beneficial to party B than the judgment obtained by party B against party A.
(4)The offer may be taken into account, if party A makes an offer that—
(a)does not fall within paragraph (a) or (b) of subclause (3); and
(b)is close to the value or benefit of the judgment obtained by party B.
6 High Court Rules 2016, r 14.1.
[22] Therefore, in this case although there is no amount of money at issue, if an offer was made that would have been more beneficial to the other party than the judgment7 actually obtained, the provisions relating to offers are applicable subject always to the Court’s discretion. 8
[23]There is also provision for set off if costs are allowed to both parties.9
[24] The applicant pointed to the decision of McGuire10 in support of his submission that he should be entitled to costs because he was “practically” successful in the majority of the claims he made in his statement of claim.
[25] Mr Davis said that by withdrawing the charges and reinvestigating the Board was effectively “recanting the exercise of statutory powers concerning Mr Costelloe’s decision to lay charges and the Board’s decision to hear them”. He submitted that “these statutory decisions were the principal target of the judicial review proceedings and “therefore, everything up to and including the first case management conference concerns costs that should be recoverable by the applicant”.11
[26] Mr Davis said public bodies should not be able to avoid costs on judicial review by merely actioning the relief and belatedly renouncing the exercise of statutory powers “but not accepting the basis for relief”.12
[27] The difficulty with this submission is that the Board did not accept the validity of the claims raised by Davis in his statement of claim. It expressly withdrew the charges and reinvestigated without any concession that it was required to do so. There is a variety of reasons for withdrawing the charges. The Board might have preferred to take a practical approach and move on to have the complaint against Mr Davis in a timely manner. It is entirely possible that the Board weighed the costs and benefits in both time and money of continuing to defend a number of the heads of claim against withdrawing the charges and starting again. Indeed, by the time of the hearing before
7 Judgment includes a decree or order of the court: High Court Rules 2016, r 11.1.
8 High Court Rules 2016, r 14.11.
9 High Court Rules 2016, r 14.17.
10 McGuire v Wellington Standards Committee (1) [2015] NZHC 448.
11 High Court Rules 2016, r 14.17.
12 Memorandum for the applicant on costs dated 17 June 2020 at 7.
me, on an issue on which the Board would not compromise, another investigator had already been appointed and the investigation was well under way although a recommendation had not been made concerning whether charges should be laid. If all claims had been heard further submissions and more hearing time would have been required. The legal costs incurred would likely have been considerably more.
[28] I do not consider the fact that the Board withdrew the charges and commenced a reinvestigation as an indication that all Mr Davis’ claims would have been successful.
[29] The situation faced by Mallon J in McGuire was different. In that case Mr McGuire’s application for judicial review went to a full hearing on a number of grounds which were not successful. He succeeded only on one ground. The Judge commented that a number of the grounds were ultimately completely without merit but that they nevertheless had required a detailed review of the evidence and accordingly increased the respondent’s costs.13
[30] On that basis the Judge reduced Mr McGuire’s costs for his lack of success in arguing those grounds and made a further reduction to his award to recognise the increased costs Mr McGuire had caused through the filing of unnecessary pleadings and evidence.14
[31] In this case the claims for which Mr Davis now seeks costs were not argued before me. I am not in a position to assess their merits or otherwise. It is also relevant that the Board had offered to resolve matters by withdrawing the charges and reinvestigating as it is now, well before the High Court proceedings were filed. There is no basis upon which to award costs in favour of Mr Davis.
[32]Accordingly, I dismiss Mr Davis’ application for costs.
13 McGechan on Procedure HR 14.2.01 and Weaver v Auckland Council [2017] NZCA 330.
14 Memorandum for the applicant on costs dated 17 June 2020 at [11].
The Board’s offers to settle
[33] On 30 November 2018 the Board wrote to Mr Davis on a without prejudice basis offering a proposal “on a pragmatic basis in order to avoid the unnecessary cost and expense of an appeal and in order to meet the concerns you have expressed on your client’s behalf. However, we wish to emphasise at the outset that the making of the following proposal does not reflect acceptance of the various points you have raised. …”.
[34] The proposal that followed was to reopen the investigation and appoint another investigator to be responsible for the conduct of the investigation (Mr Thomas). It went on to offer to withdraw the charges which had been referred to the Board on a without prejudice basis but made it clear that Mr Thomas could have regard to any material previously obtained. Whether he took it into account would be a matter for him subject to any information or submissions made by Mr Davis.
[35] The offer went on to address the specific allegations which had been made by Mr Davis concerning the investigation. These were subsequently the grounds for judicial review.
[36] A second letter from the Board reiterated that offer on a without prejudice save as to costs basis on 20 December 2018. It advised that the offer contained in the earlier letter would remain open until 5 pm on 21 January 2019.
[37] Further offers were made in May and September 2019 repeating the 2018 offers with an added condition requiring the applicant pay 2B costs incurred up to the date of the letters. Had those offers been accepted, in the Board’s submission which I accept, the parties would have been in the same position they find themselves in now as a result of my judgment dismissing the “contested statement” claim on which the Board would not compromise.
[38] The Board submitted that these offers “would have justified an award of increased or indemnity costs if the respondent’s actual costs had exceeded 2B costs”. In the circumstances the Board has indicated that its costs do not exceed the 2B costs and therefore it does not pursue any additional costs.
[39] Nevertheless, the offers reinforce my view that Mr Davis is not entitled to costs on the matters which did not proceed to hearing. The matter could have been settled along the lines put forward by the Board before the proceedings were even commenced.
Conclusion
[40] In summary the successful respondent is entitled to costs in accordance with the usual principles.
[41] I award costs and disbursements in favour of the respondent as claimed including in relation to the application for costs. The disbursement for the sealing of the costs order is allowed and claimable when incurred.
[42]The application for costs by Mr Davis is dismissed.
Grice J
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