GRAHAM WILLIAM D’ARCY-SMITH AND CHIEF EXECUTIVE OF THE MINISTRY OF SOCIAL DEVELOPMENT

[2024] NZHC 3168

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

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

CIV-2023-485-000712

[2024] NZHC 3168

UNDER

the Privacy Act 2020

BETWEEN

GRAHAM WILLIAM D’ARCY-SMITH

Appellant

AND

CHIEF EXECUTIVE OF THE MINISTRY OF SOCIAL DEVELOPMENT

Respondent

Hearing:

(On the papers)

Counsel:

Appellant in person

S P R Conway and S J Edwards for Respondent

Judgment:

30 October 2024

JUDGMENT OF LA HOOD J

AND LAY MEMBERS DR MALAKAI KOLOAMATANGI AND MS BRONWEN KLIPPEL

(Costs)

[1]    In a judgment delivered on 13 June 2024, we dismissed Mr D’Arcy-Smith’s appeal against a decision of the Human Rights Review Tribunal (the Tribunal) dismissing his claim under the Privacy Act 2020 (the Act).1 We found that the Tribunal had not erred in its approach to the test for establishing significant harm under          s 69(2)(b)(iii) of the Act, nor had it erred in determining that the test had not been met by the appellant on the facts.2

1      D’Arcy-Smith v Chief Executive of the Ministry of Social Development [2024] NZHC 1550 [High Court judgment]; and D’Arcy-Smith v The Chief Executive, Ministry of Social Development [2023] NZHRRT 26 [Tribunal decision].

2      High Court judgment, above 1, at [3]–[4].

D’ARCY-SMITH v CHIEF EXECUTIVE OF THE MINISTRY OF SOCIAL DEVELOPMENT [2024] NZHC

3168 [30 October 2024]

[2]    Due to oversight, the judgment did not address costs. The respondent stated that costs were sought on a 2B basis in the concluding paragraphs of its submissions dated 14 February 2024. It had also opposed Mr D’Arcy-Smith’s application for a waiver of security for costs.3 Therefore, although costs had not been sought by the respondent in the Tribunal, it was clear that the respondent sought costs on the appeal.

[3]    The respondent filed a memorandum seeking costs on 13 September 2024. Upon receipt of that memorandum, directions were made for the filing of further memoranda. Mr D’Arcy-Smith filed a memorandum in response on 25 September 2024 and the respondent filed a memorandum in reply to Mr D’Arcy-Smith’s memorandum on 2 October 2024.

[4]    We accept the respondent’s submission that the Court’s failure to address costs does not preclude an application for costs following the delivery of judgment on the merits of the appeal.4

[5]    The respondent submits that the usual principle that costs should follow the event ought to apply and seeks scale costs on a 2B basis totalling $15,057. The respondent submits that financial hardship is not a ground for declining costs but may be relevant to whether a costs order is enforced,5 and that a reduction or refusal of costs on the basis the proceeding concerned a matter of public interest requires the matter to have genuine public interest and importance beyond the interests of the unsuccessful litigant.6

[6]    Mr D’Arcy-Smith opposes costs because of the respondent’s delay in seeking them and because Cull J’s decision on his application for waiver of security for costs determined that the appeal raised a matter of public interest, namely, appellate

3      That application was granted by Cull J in her minute of 20 December 2023: D’Arcy-Smith v Chief Executive of the Ministry of Social Development HC Wellington CIV-2023-485-712, 20 December 2023 (Minute of Cull J).

4      Dowden v Commissioner of Inland Revenue [2021] NZCA 206.

5      Strickland v DFW Holdings Ltd [2023] NZHC 3856 at [32].

6      High Court Rules 2016, r 14.7(e); Taylor v District Court at North Shore (No 2) HC Auckland CIV-2009-404-2350, 13 October 2010 at [9], cited in New Zealand Climate Science Education Trust v National Institute of Water and Atmosphere Research Ltd [2013] NZCA 555 at [11].

clarification of the threshold required to meet the test for significant harm under       s 69(2)(b)(iii) of the Act.7

[7]    Both parties refer to a “without prejudice save as to costs” (Calderbank) offer of settlement that the respondent made prior to the Tribunal hearing. The respondent does so to show that it sought to resolve Mr D’Arcy-Smith’s claim at an early stage of the Tribunal proceedings with an offer that exceeded the result in the Tribunal, which was upheld on appeal. However, no increase is sought to reflect the Calderbank offer. In response, Mr D’Arcy-Smith submits his rejection of the Calderbank offer was reasonable as it contained a denial of any wrongdoing, which was contrary to the Tribunal’s finding (unchallenged on appeal) that the respondent breached Information Privacy Principle 8. He also notes that no Calderbank offer was made in respect of the appeal. In these circumstances, we put the Calderbank offer to one side.

[8]    In respect of the delay in seeking costs, we accept the respondent’s submission that the principle that costs should be determined expeditiously is to “ensure that the party entitled to costs is able to recover them within the minimum time”.8 Any discretionary reduction in costs under r 14.7 due to delay by a person entitled to costs would require something more than the three-month delay that occurred here. For example, in Baker v Harding,9 Gordon J held that a reduction in costs of 50 per cent was appropriate given there was an egregious 14-month delay in complying with the directions of the Court. We consider the respondent’s delay in this case does not require a reduction in costs.

[9]    The remaining issue is whether the public interest in the proceeding is sufficient to displace the principle that costs should follow the event. As the respondent submits, a reduction or refusal of costs requires that the matter must have merit and be of genuine public interest and importance beyond the interests of the unsuccessful litigant.10

7 At [16].

8      Baker v Harding [2020] NZHC 1859 at [16].

9      Baker v Harding, above n 8.

10 Taylor v District Court at North Shore (No 2), above n 6, at [9]; New Zealand Climate Science Education Trust v National Institute of Water and Atmosphere Research Ltd, above n 6, at [11]. See also Gorgus v Chief Executive of the Department of Corrections [2023] NZHC 2097 at [17].

[10]   In the decision on the application for waiver of security for costs, Cull J held there was “a matter of public interest in having the threshold test in s 69(2)(b)(iii) of the Privacy Act considered on appeal”.11 The Judge noted “[w]hilst it may be a matter of misplaced language” the Tribunal had used the term “significant emotional harm” rather than the statutory language of “significant humiliation, significant loss of dignity, or significant injury to the feelings of the individual” and concluded:12

Whether a stress related symptom requiring medical treatment meets the statutory threshold needs clarification, particularly if emotional harm is a criterion considered by the Tribunal.

[12]   Despite Cull J’s views, the respondent submits there was no wider public interest in having this point clarified on appeal in relation to a well-established test. In support of this submission the respondent notes that in dismissing the appeal we held that, while the Tribunal had used the term “significant emotional harm” rather than “significant injury to feelings”, there was no material difference.13 The respondent further notes that we held the Tribunal had referred to matters captured by the concept of injury to feelings in s 69(2)(b)(iii) when determining that the evidence did not meet the required threshold.14 Finally, the respondent submits there was no wider public interest in clarifying whether a stress related symptom requiring medical treatment meets the statutory threshold as there was no dispute that, as a matter of law, such symptoms can meet the threshold. Rather, the question was whether the evidence of such symptoms was sufficient to meet the threshold.

First possible decision

[13]   Although we held Cull J’s concerns that the Tribunal had erred in principle in its approach to the statutory test were not established, Mr D’Arcy-Smith pursued this appeal following a finding by the Court that there was a public interest in having the test clarified. And our decision may have assisted to some degree to clarify the law in this area.

11 Minute of Cull J, above n 3, at [16].

12 At [13]; in reference to Tribunal decision, above n 1, at [32].

13 High Court judgment, above n 1, at [29].

14 At [29].

[14]   In addition, this is a case where the Tribunal held that the respondent had breached a privacy principle in its handling of Mr D’Arcy-Smith’s case (although the consequences were insufficient to amount to  an  interference  with  his  privacy).  Mr D’Arcy-Smith clearly acted reasonably in pursuing the appeal and did so on the basis that the Court had determined the appeal had a wider public interest beyond his personal interests. We note that in another case involving a legal challenge to the Tribunal’s approach to privacy principles where waiver of security for costs was granted on public interest grounds, the Court’s preliminary view was that costs should lie where they fall.15 In all the circumstances, we consider costs should lie where they fall.16

For the Court: La Hood J

Solicitors:

Crown Law Office, Wellington for Respondent

15 Taylor v Chief Executive of the Department of Corrections [2020] NZHC 383.

16 We note for completeness that we consider there is no merit in Mr D’Arcy-Smith’s suggestion that an adverse finding against the respondent in respect of a complaint to the Office of the Ombudsman has improperly motivated the respondent to belatedly seek costs in these proceedings. We accept the respondent’s submission that that complaint is not relevant to the issue of costs in these proceedings and that the respondent’s position on costs has not changed since its submissions on 14 February 2024.