Greenpeace of New Zealand Incorporated v Environmental Protection Authority

[2014] NZHC 999

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

CIV-2013-485-9572 [2014] NZHC 999

UNDER

the Judicature Amendment Act 1972

IN THE MATTER

of an application for judicial review

BETWEEN

GREENPEACE OF NEW ZEALAND INCORPORATED

Plaintiff

AND

THE ENVIRONMENTAL PROTECTION AUTHORITY

First Respondent

ANADARKO NZ TARANAKI COMPANY

Second Respondent

Hearing:	On the papers
Counsel:	I T F Hikaka and E D Nilsson for Plaintiff P J Radich for First Respondent M G Colson and K J Dobbs for Second Respondent
Judgment:	14 May 2014

COSTS JUDGMENT OF MACKENZIE J

I direct that the delivery time of this judgment is

4 pm on the 14th day of May 2014.

Solicitors:           Lee Salmon Long, Auckland, for plaintiff

Environmental Protection Authority, Wellington, for first respondent

Bell Gully, Wellington, for second respondent

GREENPEACE OF NEW ZEALAND INC v THE ENVIRONMENTAL PROTECTION AUTHORITY [2014] NZHC 999 [14 May 2014]

[1]       In my judgment delivered on 19 December 2013 I reserved costs and invited the parties to submit memoranda.

[2]       The first respondent seeks costs against the plaintiff on a 2B basis.   The second respondent seeks costs on a 2B basis, plus increased costs, of an uplift of

50 per cent to the scale costs.  It also seeks disbursements, including, in particular, witness  costs  in  respect  of  Mr Tang  a  consultant  at  Environmental  Resources Management, a firm engaged by the second respondent to provide services in connection with the impact assessments.

[3]       The general principle, in r 14.2 of the High Court Rules is that costs follow the event; that is that the party who fails should pay costs to the party who succeeds. Counsel  for  the  plaintiff  does  not  contest  that  outcome,  and  agrees  that  the appropriate costs categorisation is category 2 band B.  The plaintiff does not, as the respondents’ cost  memoranda  had  anticipated,  seek  a  reduction  of  costs  under r 14.7(e) of the High Court Rules.

[4]       The only issues in contest between the two parties, and the matters which I

must address, are:

(a)        the second respondent’s request for increased costs;

(b)the inclusion by the second respondent in its claim for costs, of an allowance for the attendances in preparing its costs memorandum; and

(c)       the claim, as a disbursement, for Mr Tang’s witness expenses.

[5]      Under r 14.6, the Court may order increased costs if the party opposing costs has contributed unnecessarily to the time or expense of the proceeding in one or more of the ways specified in r 14.6(3)(b).   The second respondent notes that it indicated in its written submissions on the substantive proceeding that it would seek increased costs if successful.  It submits that an increase is warranted on three bases:

(a)      the significance of the proceeding and the resource commitment that was  required  by  the  second  respondent,  both  internally  and  by counsel, to prepare for an urgent judicial review hearing.

(b)      delay by the plaintiff in commencing the proceedings; and

(c)      the proceedings lacked merit, the plaintiff pursued arguments without merit and did not act reasonably in pursing the proceedings.

[6]      The significance of the proceeding and the level of resources committed to the proceeding by the party claiming costs are not of themselves relevant factors in determining whether an order for increased costs should be made.   They must be considered under r 14.6(3)(a).   The relevant question is whether the nature of the proceeding is such that the time required by the party claiming costs would substantially exceed the time allocated under band C.  Here, all parties agree that the appropriate  allocation  is  band  B.     The  level  of  resources  which  the  second respondent committed to the litigation was a matter for it to determine, and the significance of the proceeding to it was a relevant consideration in that assessment. However, I consider that there is nothing in the nature of the proceeding, or in the urgency  with  which  it  was  heard,  which  justifies  the  conclusion  that  the  time involved would substantially exceed the appropriate time allocation.

[7]      Delay was a factor which might have been relevant to the grant of relief if the plaintiff had otherwise succeeded in its arguments, but is not a factor justifying an award of increased costs against the plaintiff.

[8]      The merits of the proceeding are relevant under r 14.6(3)(b)(ii), to the extent that the plaintiff has contributed unnecessarily to the time or expense of the proceeding.   The question is whether the costs have been unnecessarily increased. The essence of the second respondent’s contention on this issue is not that the time or expense involved was increased unnecessarily; rather, it is that the weakness of the claim should lead to an increased award beyond the normal award to a successful party. The fact that the plaintiff’s claim was unsuccessful is reflected in the award of costs under r 14.2(a).  The assertion that the overall merits of the claim were weak

does not, in the circumstances of this case, constitute a basis for increased costs under r 14.6(3)(b)(ii) or (d).  The principle that the determination of costs should be predictable and expeditious weighs against any proposition that the overall merits of an unsuccessful claim should be further assessed on a costs application.

[9]      For these reasons, I decline to award increased costs.

[10]     Counsel for the first respondent has calculated scale costs on a 2B basis at

$20,099.  Counsel for the second respondent has calculated them at $24,875.  There are two components in the difference between those figures:

(a)      a  claim   by  the  second   respondent   of  $3,980   (two  days)  for “defendant’s  preparation of list of  issues,  authorities and  common bundles”;  and

(b)      a claim of $796 (0.4 day) for preparation of the costs memorandum.

[11]     Counsel for the plaintiff accepts that the first of those claims is appropriate, but not the second.  The first is allowable under item 32 of schedule 3 of the High Court Rules. The second is not provided for in schedule 3.  In those circumstances, I disallow that claim.

[12]     In the claim for disbursements, the only item in issue is the claim for fees charged by Environmental Resource Management for the preparation of Mr Tang’s affidavit.   The basic rule is that a witness’s expenses are recoverable as a disbursement, but, as they are not listed in r 14.12(1)(b), may be disallowed or reduced if they are disproportionate in the circumstances of the proceeding, under

r 14.12(3).1     Counsel for the plaintiff submits that, in general, fees payable to a

witness will be recoverable only where the witness is an expert witness.  It submits that Mr Tang’s evidence is not expert evidence, and did not relate to an issue which

could properly be the subject of expert evidence.

1      Progressive Enterprises v North Short City Council (2005) 17 PRNZ 919 (HC) at [22]-[26].

[13]     Counsel  for the second  respondent  submits  that  Mr Tang’s  evidence  was highly technical and in the nature of expert evidence and that he provided valuable assistance to counsel for Anadarko in circumstances where counsel was faced with the need to prepare for an urgent hearing.

[14]     A litigant will often need to incur significant internal costs in providing the necessary instructions and assistance to its lawyers.  These costs are not recoverable under an award of costs.  Such costs cannot be made recoverable by externalising them, by engaging consultants.   That consideration must be borne in mind in assessing whether the fees paid to a witness meet the requirements of r 14.12(2)(b)- (d), namely that those fees are specific to and reasonably necessary for the conduct of the proceedings, and reasonable in amount.

[15]     Mr Tang’s  affidavit  gave evidence of the regulatory requirements  for  the second respondent’s operations in New Zealand; the steps taken in the preparation of the impact assessment and the discharge management plan; and interactions with the regulatory authorities over these matters.  Mr Tang also provided comments on the statement of claim.   His evidence about the preparation of the plan and the interactions with authorities is essentially factual evidence.  His evidence about the regulatory requirements and the comments on the statement of claim are in the nature of submissions.  His evidence is not on my assessment similar in nature to the type of expert evidence which is routinely accepted by the courts as meeting the requirements  of  r 14.12(2).    Neither  the  nature  of  Mr Tang’s  evidence  nor  the assistance he provided to counsel bring the fees paid to him within the category of a disbursement which was reasonably necessary to the conduct of the proceeding for the purposes of that rule.

[16]     The outcome is that I award costs and disbursements against the plaintiff as follows:

(a)       to the first respondent, costs of $20,099; and

(b)      to  the second  respondent,  costs  of $24,079  plus  disbursements  of

$890.25.

“A D MacKenzie J”