EA v Rennie Cox Lawyers (No 3)

[2020] NZHC 1372

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2018-404-2580

[2020] NZHC 1372

BETWEEN

EA

Appellant

AND

RENNIE COX LAWYERS

Respondent

Hearing:	On the papers
Appearances:	R J Hollyman QC and P B Friedlander for the appellant S P Bryers for the respondent
Judgment:	18 June 2020

JUDGMENT NO 3 OF PALMER J

This judgment was delivered by me on Thursday 18 June 2020 at 11.00am.

Pursuant to Rule 11.5 of the High Court Rules

…………………………

Registrar/Deputy Registrar

Counsel/Solicitors:

R J Hollyman QC, Auckland

Friedlander & Co Limited, Auckland S P Bryers, Barrister, Auckland

Rennie Cox Lawyers, Auckland

EA v RENNIE COX LAWYERS NO 3 [2020] NZHC 1372 [18 June 2020]

What happened?

[1]On 5 December 2019, I issued judgment in these proceedings, stating:1

[28] It follows from my conclusion that the costs award in favour of Rennie Cox must also be quashed. I order costs and reasonable disbursements be awarded, on a 2B basis, to Ms EA in respect of this application in the District Court and this appeal in the High Court. I do not consider there is sufficient reason to order increased costs.

[2]        Counsel filed further memoranda with the Registry about costs on 18 December 2019 and 3 February 2020, but these were not referred to me.

[3]        On 4 March 2020 I heard, and on 12 May 2020 I issued judgment on, Rennie Cox’s application for leave to appeal the 5 December 2019 judgment, stating:2

[5]     The proposed appeal needs to raise a question capable of serious argument, in a case involving public or private interest of sufficient importance to outweigh the cost and delay of the appeal. I do not consider Mr Bryers’ submissions come close to establishing that because:

…

(d) The public interest is best served by enforcing the interests of finality on this litigation, rather than extending it yet again. And the outstanding costs orders against Rennie Cox must be paid forthwith.

[6]     I dismiss the application for leave to appeal. I award costs for the application to Ms EA on a 1B basis.

[4]        While short-staffed during Alert Level 3, the Registry interpreted the statement in paragraph [5](d) to mean all costs orders could be sealed. The Registry sealed the the 5 December 2019 and the 12 May 2020 judgments, fixing the quantity of costs on the basis sought by Ms EA.

[5]        The Registry now understands Mr Bryers, for Rennie Cox, agreed only that costs regarding the interlocutory hearing were ready to be settled but considered the costs issues outlined in the memorandum were still to be settled. Mr Friedlander, for Ms EA, submits that she understood paragraph [5](d) to settle any question as to the

1      EA v Rennie Cox [2019] NZHC 3191.

2      EA v Rennie Cox (No 2) [2020] NZHC 958.

costs award and the respondent must have accepted that was the case. The Registry has referred the issue to me.

[6]        At the time of the 4 March 2020 hearing, which resulted in the 12 May 2020 judgment, I was not aware there were outstanding issues regarding the costs award in the 5 December 2019 judgment. Paragraph [5](d) of the judgment of 12 May 2020 related to submissions made by counsel about Rennie Cox not having paid a number of previous costs awards. I now examine the two issues raised by counsel about the costs awarded in the 5 December 2019 judgment.

Issue 1: Were the correct rates used?

Submissions

[7]        Ms EA claimed costs for all steps taken at the rate of $2,390 per day. Mr Bryers submits that rate is incorrect because it applies only to steps taken on or after 1 August 2019 and all steps taken before that should be claimed at the previously applicable rate of $2,230 per day. He relies on Delegat v Norman.3

[8]        Mr Hollyman QC, for Ms EA, submits the High Court Rules 2016 do not save the former rate. He submits the approach in Delegat assumed a legislative oversight in omitting transitional provisions in the 2012 rules. He submits that view was not affirmed in subsequent amendments and the omission must be seen as deliberate, recognising the extent to which sch 2 had failed to reflect actual costs over the preceding years.

Law of transition of costs schedules

[9]        Rule 14.2(1)(c) of the High Court Rules 2016 (the Rules) provides that “costs should be assessed by applying the appropriate daily recovery rate to the time considered reasonable for each step reasonably required in relation to the proceeding or interlocutory application”.

[10]Rule 14.4 provides:

3      Delegat v Norman [2014] NZHC 1099 at [31].

14.4 Appropriate daily recovery rates

For the purposes of rule 14.2(c), the appropriate daily recovery rates for the categories referred to in rule 14.3—

(a)are the rates specified in Schedule 2; and

(b)must be applied to those categories.

[11]      Schedule 2 was amended by the High Court Amendment Rules 2019, which came into force on 1 August 2019. The 2019 Amendment contained no savings or transitional provisions.

[12]      There have been transitional provisions in a number of new versions of the High Court Rules, as recognised and preserved by cl 12 of sch 5 of the Senior Courts Act 2016. In Delegat v Norman, Woolford J agreed that the two versions of sch 3 should be applied, depending on when the trial preparation work was undertaken.4 He relied on a decision by Associate Judge Abbott in FM Custodians v Pati regarding schedules that came into force in 2012, which had been followed in other cases.5 The 2012 rules did not include a transitional provision, unlike previous amendments to the costs schedules. Judge Abbott noted that an enactment does not generally have retrospective effect, by virtue of s 7 of the Interpretation Act 1999. But he considered the history of changes to the schedules, the absence of discussion of transitional provisions in any Rules Committee meetings and the absence of any “conceivable reason” to alter the previous pattern suggested it was an oversight.6

[13]      In its meeting of 30 March 2015, the Rules Committee specifically discussed a transition period for a new sch 2 of the then Rules, considered the change would apply only to steps taken after the rule change was made and referred to there being “case law on the matter”.7 As Mr Hollyman submits, the Rules Committee did not explicitly affirm the view adopted in Delegat and FM Custodians. But it appears to have assumed that view was correct. At the meeting on 11 June 2018, at which the

4      Delegat v Norman [2014] NZHC 1099 at [31].

5      FM Custodians Ltd v Pati [2012] NZHC 1902 at [39].

6      At [36]-[38].

7      Justice Asher, Chair of the Rules Committee Minutes of the Rules Committee Meeting of 30 March 2015 (Judicial Office for Senior Courts, Wellington, 23 April 2015) at [8].

Committee approved the 2019 Amendment at issue here, they did not discuss transitional provisions.8

[14]      Section 7 of the Interpretation Act 1999 provides “[a]n enactment does not have retrospective effect”. Section 12 of the Legislation Act 2019, which appears not yet to be in force, states “[l]egislation does not have retrospective effect” and defines “legislation” to mean “the whole or a part of an Act or any secondary legislation”. The High Court Rules 2016 are deemed to be part of the Senior Courts Act 2016, by s 147 of that Act.

New costs schedules should apply to steps not yet taken

[15]      Prospective application of legislation is an important element of the rule of law. The courts presume that, unless stated clearly and expressly to the contrary, legislation has a prospective and not retrospective effect. That is recognised by Parliament in s 7 of the Interpretation Act 1999 and the pending s 12 of the Legislation Act 2019. It is recognised by the executive’s current Legislation Guidelines.9 It is recognised in relation to criminal penalties by s 26 of the New Zealand Bill of Rights Act 1990. The presumption is relevant when the issue at stake is a fee charged under authority of legislation, which is required to be clearly expressed anyway.

[16]      Transitional provisions can give rise to difficult issues. But that means the body promulgating the substantive provisions should address those issues in the provisions, rather than avoid them. Not doing so “can lead to uncertainty and injustice”, and litigation, as the Legislation Guidelines state.10 It also says, as a statement of best practice, the need for transitional provisions should be identified early in the policy development process. In relation to the issue here, whether costs are calculated prospectively or retrospectively should not have to depend on whether counsel are aware of case law on that issue in respect of previous rules.

8      Justice Asher, Chair of the Rules Committee Minutes of the Rules Committee Meeting of 11 June 2018 (Judicial Office for Senior Courts, Wellington, 25 June 2018) at [6].

9      Legislation Design and Advisory Committee Legislation Guidelines (March 2018) at ch 12.

10     Legislation Design and Advisory Committee at ch 12.

[17]      Here, the text of r 14.4 provides that the rates specified in sch 2 apply. There is no express provision stating that the rates set in new schedules apply retrospectively. There is nothing to indicate that their purpose requires them to apply retrospectively or that the Rules Committee intended that they should. The case law in Delegat and FM Custodians Ltd applies costs schedules prospectively. The Rules Committee appears to have been aware of that. The requirement for Parliament to use clear and express wording if it wishes to derogate from prospectivity is just as applicable to the Rules Committee. And the effect of the new cost schedules is not procedural, but places a substantive additional financial burden on the losing party in favour of the winning party.

[18]      I conclude that the 2019 cost schedules should be applied prospectively. Costs awarded for steps taken before the new schedule’s commencement date of 1 August 2019 must be calculated at the old rates and costs awarded for steps taken thereafter must be calculated at the new rates.

Issue 2: Were costs claimable for two memoranda?

[19]      Mr Bryers submits two memoranda were filed on 6 September 2019 and     19 September 2019 as a result of a request by me for further information about suppression orders in the proceeding. He submits they were additional submissions, not case management memoranda, and no additional costs should be allowed for them.

[20]      Mr Hollyman submits the issue of suppression arose in the ordinary course of case management and was not a ground of appeal. He notes that, in a related matter, the Registrar allowed costs for separate memoranda irrespective of when they were filed.

[21]      The memoranda filed regarding suppression issues were in response to questions from me at the substantive hearing regarding submissions. They are not case management memoranda and should not attract further costs.

Result

[22]      The award of costs to Ms EA in the 5 December 2019 judgment stands. This judgment clarifies the quantity of costs that was sealed. This is due to a technical error, arising from an accidental omission. It does not change the substantive outcome of the judgment. I apply the slip rule in r 11.10 of the High Court Rules 2016 to amend the amount of costs ordered, in accordance with this judgment.11

Palmer J

11     As was done for an award of damages in Dodds v Southern Response Earthquake Services Ltd

[2019] NZHC 2741.