Financial Services Complaints Limited v Chief Parliamentary Ombudsman

[2021] NZHC 855

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

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

CIV-2019-485-527

[2021] NZHC 855

IN THE MATTER

of an application for judicial review under the Judicial Review Procedure Act 2016

BETWEEN

FINANCIAL SERVICES COMPLAINTS LIMITED

Plaintiff

AND

THE CHIEF PARLIAMENTARY OMBUDSMAN

Defendant

On the papers:

Counsel:

K Murray and N F Flaws for Plaintiff

M T Scholtens QC and D W Ballinger for Defendant

Judgment:

22 April 2021

JUDGMENT OF GRICE J

(Re costs third party discovery)

[1]                 Following the substantive determination,1 the parties have reached agreement on all costs and disbursements except for the plaintiff’s claimed disbursements for “Ministry of Justice non-party discovery costs” of $16,780.55.2 The defendant says that this item is not properly claimable as a disbursement.

[2]                 The itemised detail of the attendances making up the invoice from Crown Law for the non-party discovery costs is not before the Court. The figure of $16,780.55, inclusive of GST, includes disbursements of $704.88 but beyond that Crown Law has refused to provide the detail based on a claim of legal professional privilege. The

1      Financial Services Complaints Ltd v Chief Ombudsman [2021] NZHC 307.

2      This Court had made non-party discovery orders by consent on 11 November 2019.

FINANCIAL SERVICES COMPLAINTS LTD v THE CHIEF PARLIAMENTARY OMBUDSMAN [2021] NZHC 855 [22 April 2021]

invoice in general terms refers to the disbursements for arranging for documents to be scanned and data entry to be completed, reviewing all the documents for relevance, redacting the documents for legal privilege or confidentiality if necessary, providing a list of the documents discovered to counsel, attending the chambers list on 29 October 2019 and filing two memoranda relating to the application for non-party discovery.

[3]                 The usual position is that the party who pays for non-party discovery should pay the non-party’s costs. Financial Services Complaints Ltd (FSCL) has indicated that if the Court finds that the disbursement is not payable by the defendant, FSCL may maintain its objection to paying the disbursement on the basis of the Minister’s conduct, which was eventually disclosed by the documents that were obtained in non-party discovery.

[4]                 The defendant says the information obtained in the non-party discovery was not directly relevant to this case. It says it had already discovered the relevant correspondence between the Ministry officials and the Ombudsman’s office as well as the letters and emails between the Chief Ombudsman and the Minister. It was those documents that were crucial to the Court’s finding of pre-determination. The defendant submits that while the volumes of the non-party discovery material were before the Court, they were not referred to by either the Court in its judgment or the defendant in its written submissions.

[5]                 FSCL however points to the fact that it had become essential for it to try and ascertain full information about the role of the Chief Ombudsman, his general counsel, the speaker, the Minister and officials in relation to the Chief Ombudsman’s decision- making process. FSCL was not privy to the fact that there had been discussions concerning amending the Ombudsmen Act 1975 nor that an approval for FSCL to use the name “ombudsman” might be rendered otiose by the proposed amendment.

[6]                 FSCL also points out that it only sought documents in non-party discovery that were additional to those discoverable by the defendant. There was extensive non-party discovery provided in the affidavit of Ms Denoual. FSCL notes this was largely without redactions except in relation to legally privileged material. In contrast, the

information it obtained under the Official Information Act 1982, contained significant redactions based on various grounds.

[7]                 FSCL also says that during its submissions at the hearing, it made extensive reference to the Ministry documents. The material was originally attached to the second affidavit of Susan Taylor sworn on 10 February 2020.

[8]                 I note that there is reference to the “legislative response” in FSCL’s written submissions as well as a reference to Susan Taylor’s second affidavit and the discovered documents supported the plaintiff’s argument in part.

[9]                 In addition, FSCL points to its detailed chronology, which included extensive cross-referencing based on information obtained through the non-party discovery. This enabled a picture to be provided of the circumstances of the defendant’s pre-determination, among other grounds of review. FSCL says that in particular the material shows that at critical stages of the defendant’s decision-making there was serious jeopardy that the Court of Appeal’s judgment3 directing a reconsideration of the Chief Ombudsman’s decision would be avoided by a legislative amendment. It also points out that this Court’s finding of pre-determination had among other things been based on the fact that the Chief Ombudsman had taken no steps to protect FSCL’s position during the legislative process.

The law

[10]              Rule 14.12(2) of the High Court Rules 2016 allows a party to claim a disbursement to the extent that is specific to the conduct of the proceeding, reasonably necessary for the conduct of the proceeding, reasonable in amount, and has not been disallowed or reduced on the basis it is disproportionate in the circumstances of the proceeding.

[11]              FSCL faces some difficulty when Crown Law will not disclose the detailed make up of the amount sought. However, in the circumstances in view of the volume of the material produced and the attendances in general referred to by Crown Law as

3      Financial Services Complaints Ltd v Chief Ombudsman [2018] NZCA 27, [2018] 2 NZLR 884.

being included, I accept the invoiced amount is reasonable in amount for the non-party discovery. The defendant has not raised any objection based on quantum.

[12]              The issue becomes whether it is specific to the conduct of the proceeding and was reasonably necessary for the conduct of the proceeding.

[13]              The defendant pointed to the decision of Heath J in Aldrie Holdings Ltd v Clover Bay Park Ltd.4 In that decision, Heath J rejected a claim for an amount to cover costs for non-party discovery. The basis for the dismissal of the application was that the discovery was not reasonably necessary for the conduct of the proceeding as none of the documents were material to the real issues in the case. In that case, there were also complaints about the reasonableness of the costs incurred.5 The Judge disallowed the costs on the basis that they did not contribute to the cause of action on which Aldrie succeeded. He said, “[t]o a significant extent, they were relevant to the claims for consequential losses that failed”. The Judge went on to say that he did not consider it right for the defendants to be asked to bear those costs.6

[14]              In this case, I am faced with a different situation to that in Aldrie. The documentation was relevant to the finding of predetermination, in a contextual way. The plaintiff did use the material in particular in relation to the chronology, which provided a useful picture of what was going on at the time. In view of the significant redactions to the Official Information Act material, the plaintiff reasonably sought non-party discovery. The discovery was tailored as far as possible to manage the volume of material to be discovered.

[15]              In those circumstances, I am of the view that the non-party discovery in this case was specific to and reasonably necessary for the conduct of the proceeding.

[16]              In those circumstances, I allow the claim for a disbursement of $16,780.55 for non-party discovery costs, being an invoice from the Crown Law Office to the Ministry of Justice. It is not clear whether in fact this invoice has yet been paid by

4      Aldrie Holdings Ltd v Clover Bay Park Ltd [2016] NZHC 1482.

5      At [63] and [64].

6 At [65].

FSCL. Therefore before payment of this invoice, the defendant is entitled to proof that it has been actually paid by FSCL.

Grice J

Solicitors:

Michael Leggat, Barrister & Solicitor, Wellington for Plaintiff Simpson Grierson, Wellington for Defendant