Hunter v Auckland Council
[2018] NZHC 2975
•16 November 2018
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2018-404-766
[2018] NZHC 2975
UNDER the Judicature Amendment Act 1972 IN THE MATTER
of decisions made pursuant to sections 95B and 104 and 104D of the Resource Management Act 1991
BETWEEN
KEITH MERVYN GEORGE HUNTER
Plaintiff/Applicant
AND
AUCKLAND COUNCIL
First Defendant/First Respondent
PHILIP MARTIN BURLEY
Second Defendant/Second RespondentACL TRUSTEES LIMITED
Third Defendant/Third Respondent
Hearing: On the papers Counsel:
Appearance:
SM Derber for the first defendant/respondent
S Stienstra for second and third defendants/respondents
KMG Hunter, plaintiff/applicant in person
Judgment:
16 November 2018
JUDGMENT OF FITZGERALD J
[As to award of disbursements to lay litigant]
This judgment was delivered by me on 16 November 2018 at 2 pm pursuant to Rule 11.5 of the High Court Rules.
Registrar/Deputy Registrar ………………………….. Date………………………….…
Hunter v Auckland Council [2018] NZHC 2975 [16 November 2018]
The disbursements application
[1] Mr Hunter, the applicant, sought to judicially review decisions made by the Auckland Council under the Resource Management Act 1991. Those decisions had the effect of granting resource consent to the second and third respondents on an unnotified basis. Before the matter proceeded to a hearing, the second and third respondents notified the Council and Mr Hunter that they had lodged a fresh application for resource consent, to proceed on a limited notified basis. Mr Hunter’s proceedings were ultimately resolved by Mr Hunter filing a notice of discontinuance, with acknowledgment from the Court that he would not be subject to an adverse costs award.1 Mr Hunter was self-represented throughout the proceedings and now seeks recovery of various disbursements.
[2] In earlier minutes in this file, Lang J and I separately observed that Mr Hunter was the substantively successful party and therefore ought to be awarded his reasonable disbursements.2 The parties have not, however, been able to agree on all the disbursements to be awarded to Mr Hunter.
Claimed disbursements
[3] Disbursements are expenses “paid or incurred for the purposes of the proceeding that would ordinarily be charged for separately from legal professional services in a solicitor’s bill of costs”.3 Expenses meeting that definition will be awarded if “specific to the conduct of the proceeding”, “reasonably necessary” and “reasonable in amount.”4
[4] I note at the outset that several of Mr Hunter’s claimed disbursements are uncontroversial and consented to by the respondents — in particular (and by reference to a schedule of disbursements set out in Mr Hunter’s memorandum), court fees (items C, J and K), fees related to an expert witness’s opinion (item D) and an Auckland Council fee to obtain a property file (item I). I propose to award those disbursements.
1 Under r 15.23 of the High Court Rules 2016, a plaintiff who files a notice of discontinuance is not liable for a costs award where “the court otherwise orders”.
2 Hunter v Auckland Council, Minute, Lang J, 26 July 2018; Hunter v Auckland Council, Minute, Fitzgerald J, 6 September 2018.
3 High Court Rules 2016, r 14.2(1).
4 Rule 14.2(2).
[5] But Mr Hunter also seeks disbursements that are challenged by the respondents. They are:
(a)Planning fees (items A, B and M). Mr Hunter explains that a planner was engaged prior to the court proceedings and that he incurred a fee obtaining the property file, in which there was material he relied on subsequently. He engaged a second planner to discuss matters absent from the first planner’s report and, later, discussed with them his own analysis of the planning consent. The respondents say the fee to obtain the file appears to be double counting the accepted charge from the Auckland Council to obtain the same file, and are otherwise unreasonable when compared to the service provided. They also argue the second planner’s advice is not a disbursement within r 14.2.
(b)“Legal Advice” (items E and F). Mr Hunter sought the services of a barrister, in his words, as “my advisor, not my representative at law.” Two invoices from Ms E James, barrister, have been filed with Mr Hunter’s materials, and set out the various attendances by her, including drafting various documents at the commencement of the proceedings. Mr Hunter explains that legal advice was particularly helpful initially, but relied on less as he became more familiar with Court procedure. He submits it would have been irresponsible to attempt to represent himself without a legal advisor. There is also evidence of some communications between counsel for the respondents and Ms James, though all court documents were filed by Mr Hunter personally,5 and Mr Hunter appeared personally in all court appearances. At no time was there a solicitor on the record or counsel appearing on behalf of Mr Hunter in the proceedings themselves. The respondents argue any fees charged to Mr Hunter in this context are not a disbursement as defined, because they are not an expense that would be charged separately to legal professional services. Nor, the respondents say, is this a case in which legal fees have been recognised
5 Though I note that as an exception to this, the intituling to the undertaking as to damages records J MacDonald as solicitor and E James as counsel.
as recoverable as disbursements, namely where a barrister or solicitor appears as an expert witness in the proceedings.
(c)Fees resulting from an undertaking as to damages (items G and H). Mr Hunter provided an undertaking as to damages on the basis of a facility made available by a private lender. He was charged fees of
$1,500 and $500 in that regard, and seeks those as disbursements. The respondents oppose these expenses on the basis they are unproven and fall outside r 14.2 as not having been “reasonably necessary” or reasonable in amount.
(d)Purchase of a hardcopy of the Resource Management Act from a bookshop (item L). Though Mr Hunter accepts the legislation was available online, he says it was “safer to get a copy that was in force at the time”. The respondents say this would have been possible using online provisions and therefore this was not a “reasonably necessary expense”.
(e)Interest on a private loan (item N). Having been unable to obtain a bank loan to fund the litigation, Mr Hunter obtained a loan of $20,000 from his brother on a “handshake basis” with interest of 7.95 per cent per annum. He claims the interest as a disbursement — $561.72. The respondents take issue with the absence of proof of payment, and again say it fails to meet the requirements of r 14.2(2); not being specific to the proceeding, reasonably necessary or reasonable in amount.
Analysis of the disputed disbursements
Legal fees
[6] As noted above, the respondents submit the definition of disbursement, an expense “that would ordinarily be charged for separately from legal professional services in a solicitor’s bill of costs”, indicates that the costs of the legal advice cannot be a disbursement. To the contrary, however, the word “ordinarily” suggests there may be circumstances in which legal advice is treated as a disbursement. As the
respondents observe, an example is where a barrister or solicitor is retained to give expert legal evidence in a trial.
[7] There is no doubt litigants in person are not entitled to costs (as opposed to disbursements) except in exceptional cases.6 That principle applies, however, to the lay litigant’s own time and costs in relation to the proceeding. There is authority and commentary that costs (or a contribution to costs) actually incurred by a lay litigant for legal advice received by them in connection with a proceeding can be recovered as disbursements, even though the advice received did not extend to appearing as solicitor on the record or counsel in the proceeding.
[8] In this context, the authors of McGechan on Procedure state the following may be included as disbursements:7
Sums paid to a solicitor for help in preparing documents, and preparing to appear and argue the case in person: Working Capital Solutions Holdings Ltd v Pezaro [2014] NZHC 2480 at [15]–[20]; Harrison v Keogh [2015] 3320 at [10]. The rationale is that the incurring of those costs has assisted in relieving the unsuccessful party from having to pay costs for the lay litigant’s legal representation at the hearing.
[9] The authorities referred to by McGechan on Procedure, and an earlier decision of Clifford J, in Knight v Veterinary Council of New Zealand,8 note that such an approach is consistent with the decision of the House of Lords in Malloch v Aberdeen Corp (No 2), in which Lord Reid explained the principle as being that:9
… [the petitioner should] be allowed such sums as were reasonably necessary for him to spend in order to prepare his written case and equip himself to appear and argue his case in person.
[10] Associate Judge Osborne in Working Capital Solutions Holdings Ltd v Pezaro10 also referred to observations of the Court of Appeal in a 1935 decision in Lysnar v National Bank of New Zealand Ltd (No 2) in which the Court stated:11
6 Commissioner of Inland Revenue v Chesterfields Preschools Ltd [2010] NZCA 400, (2010) NZTC 24,500 at [162]; Re Collier (a bankrupt) [1996] 2 NZLR 438 (CA).
7 Andrew Beck and others McGechan on Procedure (Thomson Reuters, online ed) at [HRPt14.10(2)(b)].
8 Knight v Veterinary Council of New Zealand HC Wellington CIV-2007-485-1300, 31 July 2009.
9 Malloch v Aberdeen Corp (No 2) [1973] 1 WLR 71 (HL).
10 Working Capital Solutions Holdings Ltd v Pezaro [2014] NZHC 2480.
11 Lysnar v National Bank of New Zealand Ltd (No 2) [1935] NZLR 557 (CA) at 562.
The most that can be said of the English cases as applied to our scale is that they can be looked at as indicating that the Court will provide to a successful layman litigant:
(a)An indemnity for his Court disbursements;
(b)A possible partial indemnity for any fees he pays by way of professional assistance; and
(c)Nothing for his own time and trouble.
[11] In Harrision v Keogh, Nation J noted the respondent in that case (who had appeared in person in the proceedings) had paid fees of $4,694.97 to a firm of solicitors to assist him with his appeal.12 The Judge noted that had the respondent been represented, he would have been entitled to scale costs on a 2B basis of $6,690. Nation J awarded the $4,694.97 sum as a disbursement.
[12] For completeness, I note that Duffy J in Sax v Simpson doubted that a lay litigant could be awarded costs for the services of a barrister providing “behind the scenes” advice in relation to a proceeding.13 It does not seem, however, that the above authorities were brought to her Honour’s attention. Further, Duffy J did observe that there might be room for recognition of the exceptional case where the assistance is on a difficult area of the law and it has largely contributed to the successful outcome of a lay litigant’s case.14
[13] In this case, the form and content of the initiating documents in this proceeding and the application for interim orders (and supporting affidavits) appear to have been professionally prepared, consistent with the attendances listed in Ms James’ invoices. The subject matter of the proceedings was not straightforward. I also have no doubt the professional presentation and content of at least Mr Hunter’s originating documents would have assisted the respondents and the Court in understanding and absorbing his claim.
[14] Given the authorities discussed above, I am satisfied Ms James’ fees were an out of pocket expense reasonably incurred by Mr Hunter in connection with the
12 Harrision v Keogh [2015] NZHC 3320 at [7].
13 Sax v Simpson [2017] NZHC 1128 at [9].
14 At [11].
proceedings. Accordingly, there is jurisdiction to award Mr Hunter a contribution to Ms James’ fees by way of a disbursement.
[15] Consistent with the approach taken by Nation J, however, when considering whether the legal costs incurred, as a disbursement, are reasonable, I consider regard should be had to what the party seeking costs could have been awarded (by way of scale costs) had they been represented in the proceedings. Awarding the full expense may otherwise result in lay litigants engaging lawyers to act “behind the scenes”, and obtaining what is effectively recovery of legal costs on an indemnity basis, in circumstances where represented litigants would be unable to do so, even for the same type of work or assistance provided. That is particularly so when proceedings conducted by lay litigants are, for understandable reasons, often more drawn out and complicated than they might otherwise be. In those circumstances, I do not consider it appropriate for a lay litigant to obtain what could be seen as a “windfall” from a costs perspective, when assessed against their position had they been legally represented.
[16] In this case, had Mr Hunter been legally represented, on a 2B scale basis he would have been entitled to costs of $8,028 for commencing the proceedings and filing an interlocutory application.15 The total costs paid by Mr Hunter in respect of Ms James’ fees are $9,312.50,16 though her attendances extend beyond the commencement of proceedings and preparation of an interlocutory application. It is, however, unclear what proportion of the fees charged relate to steps which might have been recoverable through the scale costs regime had Mr Hunter been represented. For example, it is not clear to what extent Ms James’ fees related to advice to Mr Hunter on the resource consent more generally and prior to proceedings being commenced, which would not be costs “specific to the conduct of the proceeding”.17
[17] In the above circumstances, I consider a contribution to the costs incurred by Mr Hunter by way of legal advice is an appropriate and reasonable outcome. Taking
15 There may have been other steps for which a costs award would have been made, but these two steps align with steps in the proceeding with which it appears Ms James assisted Mr Hunter.
16 Excluding GST and disbursements.
17 The invoice supplied by Mr Hunter would tend to suggest that at least some of the costs related to such general advice, as “reviewing file, consent decision and correspondence between Keith Hunter and Auckland Council” and general research.
what can only be a reasonably broad-brush approach, I propose to award Mr Hunter the sum of $5,500 by way of a contribution to costs incurred by him for legal fees.
Loan interest
[18] I am not satisfied the interest Mr Hunter may have incurred on his “handshake” loan with his brother is sufficiently specific to the conduct of the proceeding to qualify a disbursement. No evidence has been provided to show the interest has been paid. And in the absence of evidence as to how the funds have been disbursed, I am not satisfied the loan was “reasonably necessary for the conduct of the proceeding”.18
Planning expenses
[19] The planning expenses incurred likewise lack specificity. In terms of item A in Mr Hunter’s Schedule, it seems the “file” he obtained is the same file as that obtained from the Auckland Council in any event. More broadly, however, this and item B (“Planner advice”) appear to be advice taken prior to commencing proceedings, on resource consent matters generally, including advice about Mr Hunter not being considered in the resource consent as an affected party and to determine the feasibility of litigation.19 They are therefore not expenses related to the conduct of the litigation itself.
Copy of legislation
[20] I am satisfied it is appropriate for Mr Hunter to recover the cost of the hard- copy of the Resource Management Act 1991 ($65). The respondents are correct that the legislation is available for free online, but it would need to be printed in any event. The printing costs would have been recoverable and would likely have been similarly expensive. This disbursement was reasonably necessary, specific to the proceedings, reasonable in amount and will be awarded.
18 High Court Rules 2016, r 14.12(2)(c).
19 Items A and B in Mr Hunter’s schedule are dated 29 September 2017 and 14 December 2017 respectively. Mr Hunter’s proceedings were not commenced until April 2018.
Fees associated with undertaking
[21] So too the fees associated with the undertaking as to damages. That undertaking was required by the respondents and accepted by Mr Hunter due to his application for interim orders.20 Expenses arising from the undertaking are clearly specific to the conduct of the proceeding, therefore, and were reasonably necessary (the undertaking being required the respondents). The respondents claim the amount is not reasonable but have provided no evidence suggesting why that is so. In light of the quantum of the undertaking ($250,000), I am not satisfied the $2,000 incurred was unreasonable in the circumstances. As such these fees are properly awarded to Mr Hunter as disbursements.
[22] For completeness, I record the respondents’ observation that aspects of Mr Hunter’s memorandum alleging, among other things, dishonesty, were irrelevant to the determination of the disbursements. I agree and accordingly have not taken them into account.
Orders
[23] As the respondents jointly filed their costs memorandum and have not made submissions to the contrary, they shall be jointly liable for the costs award.
[24] The respondents are to pay Mr Hunter the disbursements claimed in his memorandum of 13 September 2018, excluding items A, B, M and N. The quantum of items E and F is limited to a total of $5,500.00.
Fitzgerald J
Solicitors: Auckland Council — Legal Services
Clark & Co Lawyers, Auckland (J Clark)
To: K Hunter, Auckland
20 Judicial Review Procedure Act 2016, s 15. While not mandatory under s 15, undertakings as to damages are sometimes ordered on an application for interim orders, particularly where, as in this case, in addition to the decision-maker (here, the Council), there are other parties who will be affected by any grant of interim orders.
2
2
0