Independent Fisheries Limited v Minister for Canterbury Earthquake Recovery

[2015] NZHC 1353

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

CIV-2014-409-000105 [2015] NZHC 1353

BETWEEN

INDEPENDENT FISHERIES LIMITED

Applicant

AND

THE MINISTER FOR CANTERBURY EARTHQUAKE RECOVERY

First Respondent

CANTERBURY REGIONAL COUNCIL AND OTHERS

Second Respondent

CHRISTCHURCH INTERNATIONAL AIRPORT LIMITED

Intervener

Judgment:                15 June 2015

JUDGMENT OF GENDALL (As to Costs)

Introduction

[1]      In  September  2014,  Independent  Fisheries  Limited  (IFL)  sought  judicial review of the decision of the Minister for Canterbury Earthquake Recovery (the Minister) pursuant to his powers under the Canterbury Earthquake Recovery Act

2011 (CER Act). That decision was to introduce a Land Use Recovery Plan (LURP), which included introducing a noise contour corridor around the Christchurch International Airport.    The  LURP,  and  particularly  this  noise  contour  corridor, restricted residential development in the area.  For IFL, this meant 21.9 hectares of rural land it had purchased in the area in November 2007 at a price of over $11 million (no doubt with the commercial incentive that it would be zoned in the future for  residential  developments)  would  be  effectively  precluded  from  its  intended

residential development.

INDEPENDENT FISHERIES LIMITED v MINISTER FOR CANTERBURY EARTHQUAKE RECOVERY [2015] NZHC 1353 [15 June 2015]

[2]      Canterbury  Regional  Council,  Christchurch  City  Council,  Waimakariri District Council, Selwyn District Council, the New Zealand Transport Agency and Te Rununga o Ngai Tahu, who made up a group of partners in the LURP, appeared as second respondents (the Responsible Authorities).

[3]      IFL’s judicial review came before me for hearing on 15 September 2014.  On

12 November 2014, I issued a judgment dismissing IFL’s application for review.1   In that judgment, I expressed the hope that the parties might be able to come to some amicable agreement on the question of costs.  I went on to state that, if costs could not be agreed, the parties were to file memoranda.  In doing so, I also observed that in the earlier judicial review proceedings between these parties, on virtually the same issue determined by Chisholm J in this Court, costs were awarded to IFL as the successful party on a category 3 basis.

[4]      The parties have not been able to agree on costs, so have filed memoranda. There are two issues arising:

(a)       the first is whether there should be two sets of costs awards (one for the Minister and one for the Responsible Authorities);

(b)the second relates to disputes as to particular items of costs that are claimed.

[5]      The parties are agreed that IFL, as the unsuccessful party, should meet some costs here, in terms of the basic principle in r 14.2(a) of the High Court Rules that costs should follow the event.   The parties also appear to agree that those costs should be awarded on a category 3 basis and that there should be an allowance for costs of second counsel.  There is some dispute as to the time band for certain costs

however.

1  Independent Fisheries Limited v the Minister for Canterbury Earthquake Recovery [2014] NZHC

2810.

Submissions

[6]      For the Minister it is contended that there should be two sets of costs awards. The respondents, it is claimed, co-ordinated so as to avoid duplication of evidence and  submissions.    There  can  also  be  no  question  that  both  respondents  were successful here.

[7]      Counsel for the Minister submits IFL should pay all steps up to and including the joinder application/case management conference on a band B basis.  After that stage, as a comparatively large of amount of time was required for each step, costs should be on a band C basis.   Allowing for actual time incurred by counsel, the Minister  seeks  total  costs  of  $86,695.97  (including  GST)  and  disbursements  of

$5,419.72.

[8]      The Responsible Authorities also submit there should be two sets of costs awards.   They were joined as second respondents, and not as interveners or third parties, and so are parties under the High Court Rules.  As such they contend they are entitled to costs as a successful party.   The Responsible Authorities note they were joined by Wylie J because he was satisfied their presence was necessary.  And, on all this, it is said it is clear that IFL directly challenged actions by the Responsible Authorities.

[9]      The Responsible Authorities agree generally with the Minister with regard to the category 3 mixture of bands B and C, with the exception that they suggest the filing of an amended statement of defence should be band C.  The proceeding was a complex one with a large amount of evidence and for the Responsible Authorities’ part, it involved six large entities.  Complying with the discovery order particularly they say took a large amount of time.  They seek actual costs of $112,455.00 along with reasonable disbursements.

[10]     In response, IFL argues there should only be one set of costs awarded, shared between both respondents.   It submits this is generally the practice with regard to

judicial review claims unless there are special circumstances.  That principle is set out in Auburn, Moffett and Sharland Judicial Review2 in the following way:

28.41   The normal practice is that on a claim for judicial review the court will not order an unsuccessful claimant to pay more than one set of costs. Accordingly, where an order is made requiring a claimant to pay the defendant’s costs, the court will generally not also order the claimant to pay the costs of an interested party or intervener unless that third party can show that, at the time that it decided to participate in the litigation, there was likely to be a separate issue on which it was entitled to be heard and which would not be covered by the defendant, or that it had an interest that required separate representation.

28.42   In this respect, the mere fact that a third party has a separate interest is not, of itself, sufficient to justify the award of a second set of costs, even though the third party might be able to make a significant contribution to the argument and the evidence.   A third party will have the requisite type of separate interest if the case impacts on it in a particularly profound way, such as  where  the  claim raises ‘difficult  questions  of  principle’ in  which the importance of the outcome for an interested party is ‘of exceptional size and weight’.   An example of a situation where the necessary type of separate interest might arise is where an allegation of criminality or bad faith is made against the third party.

[11]   IFL accepts that the Responsible Authorities were properly joined as respondents given their interest in the proceedings.   It conceded there is also no doubt that in appropriate cases parties so joining a proceeding can be awarded costs (in effect, a second set of costs) particularly if they are the private party who has benefitted from a statutory power of decision.

[12]     Here,  the  Responsible  Authorities  were  also  public  bodies  who  were exercising powers and statutory functions arising from the Minister’s decisions that were being challenged.  The interests of the two respondents IFL says are the same. Further, IFL contends that it had a strong case and judicial review challenges are a fundamental right of constitutional significance.

[13]     IFL’s fundamental position is that total costs of no more than $79,711.22 for both respondents are appropriate here.   If however the Court decides two sets of

costs are appropriate, then Mr Cooke QC suggests a maximum of $55,987.72 to the

2      Auburn,  Moffet  and  Sharlan  Judicial  Review  (Oxford  University  Press,  Oxford,  2013)  at

[28.41]-[28.42].

Minister and $56,063.50 to the Responsible Authorities is all that could possibly be justified here.

Analysis

Two sets of costs?

[14] As to the first issue noted at [4] above, I need to say at the outset that in my view, there should be only one set of costs awarded to be shared amongst the respondents here.

[15]     In that context it is useful to note also r 14.15 of the High Court Rules which provides:

14.15   Defendants defending separately

The court must not allow more than 1 set of costs, unless it appears to the court that there is good reason to do so, if –

(a)       several defendants defended a proceeding separately; and

(b)      it appears to the court that all or some of them could have joined in their defence.

[16]     Rule 14.15 addresses a situation where the Court believes that some or all of the defendants should have joined their defence.  The aim of the rule, according to McGechan on Procedure,3  is to minimise costs by shortening the hearing where a joint defence can be reasonably expected.  Rule 14.15 would seem to contemplate a situation where the court, on awarding costs, considers the defence should have been a  combined  one  where  similar  issues  were  argued  on  behalf  of  the  several defendants, or there is some overlap or community of interest in their litigation position.

[17]     I find that in the present case there is no good reason to award two sets of costs and indeed a single award is appropriate for the following reasons:

(a)       The interests of the Minister and the Responsible Authorities was the same with the Responsible Authorities effectively just supporting the

3      McGechan on Procedure (online looseleaf ed, Brookers) at [HR.14.15.01].

Minister’s decisions.  As I see it, they had no conflicting or separate interest requiring separate representation.  Their only interest was an overlapping one simply as the public bodies who had made the proposal for the challenged decisions.  As such, the role they adopted was simply to fulfil their wish to assist in defending the decisions.

(b)I note that previously IFL had successfully brought its first judicial review proceeding against the same parties (who again defended it separately).   On this occasion when IFL succeeded it obtained from Chisholm J in this Court one single set of scale costs from the Crown. A question might be fairly asked now as to why then should IFL be liable to pay two sets of costs for what is the same kind of challenge in the present case, albeit an unsuccessful one?

(c)      At [60] of my judgment dated 20 November 2014 I observed that IFL’s first ground of challenge to the decision here was a “reasonably fine balanced matter”.  Then, at [67] to [70] I rejected the alternative argument advanced for the Minister and the Responsible Authorities on that ground of challenge.  In the end emergency legislation powers were held to override IFL’s rights arising out of the Independent Hearings   Commissioner’s   decision   and   the   Environment   Court appeals.  A double award of costs in those circumstances in my view might be seen as punitive.  It is not justified in this case.

(d)Here, counsel for the Minister has conceded that an award of scale costs under the Schedule in the High Court Rules is well in excess of the  Minister’s  actual  legal  expenditure.    That  would  seem  to  be perhaps because the respondents defended the claim separately and shared the burden of the defence.  It is difficult to see how it can be appropriate  for  separate  awards  of  costs  to  be  made  that  in  fact amount to over $110,000 more than the Minister’s actual legal expenditure  in  this  case.     This  would  in  effect  be  an  award significantly greater than an award to the Minister on an indemnity basis. That, in my view, cannot be appropriate here.

[18]     I conclude therefore that there should only be one set of costs, awarded here to reflect the respondents’ positions.  This award, to be made to the Minister and the Responsible Authorities together, is to be generally on a 3B basis (except for the four instances set out below), reflecting the level of complexity of the case.

Is any departure from Schedule 3B costs justified?

[19]     There were several items generally in dispute between the parties and also regarding bands C and B allocations.   I have reviewed the arguments and decided that all costs should be on a band B basis, with only four departures.  Also, whilst counsel  for  both  the  Minister  and  the  Responsible  Authorities  each  requested

15 days’ allocation for preparation of affidavits, in my judgment, this is excessive under all the circumstances.   The Minister and the Responsible Authorities, it is accepted, were involved anyway in extensive affidavit preparation here.  Whilst on a

3C basis each would anyway have received five days for this, as I see it, a total

10 day award is appropriate for the work involved here.  Thus, preparation of all the affidavits is awarded on a 3C basis, with ten   days allowed in total for both respondents.

[20]     Both the Minister and the Responsible Authorities make a claim for providing discovery under time band C, amounting to seven days each.  In my view this cannot be justified.  Discovery in judicial review claims is by its very nature more limited than  ordinary  proceedings.4    Although,  as  I  understand  it,  both  respondents discovered a large quantity of material, much of it, according to IFL, is irrelevant and included many duplicates.  There is no reason, in my judgment, why discovery should be regarded here as needing any more than the 2.5 days provided for in time band B in the Schedule, for each of the Minister and the Responsible Authorities

who were both required to provide discovery.

[21]     Taking into account these findings, an analysis of the total time and costs

involved is attached to this judgment as Annexure “A”.   This shows total costs of

$93,051.00 due from IFL here.   An order to this effect plus disbursements to be approved by the Registrar is to follow.  I note that this $93,051.00 order for costs is

4      See Te Runanga O Ngati Awa v Attorney-General, CIV-2006-485-1025, 28 March 2008, Miller J

at [6].

some $6,300.00 more than the actual amount sought by the Minister for his costs in this proceeding.   It will be up to the Minister and the Responsible Authorities to decide a proper proportionate division of this costs award as between themselves.

Conclusion

[22]     For all the reasons I outline above, I now order IFL on their unsuccessful judicial review application to pay to the Minister and to the Responsible Authorities a total amount  for  costs of $93,051.00  (plus reasonable  disbursements  for each Respondent, such disbursements to be approved by the Registrar).

...................................................

Gendall J

Solicitors:

Anthony Harper, Christchurch

Crown Law, Wellington

Wynn Williams, Christchurch

Chapman Tripp, Christchurch

ANNEXURE “A” Minister and Responsible Authorities Scale Costs – All Schedule 3

Step	Category A, B or C	Days	$
1	Commencement of defence	B	2.00	5,880.00
9	Pleading re amended pleading	B	0.6	1,764.00
10	Preparation 1st case management conference	B	0.4	1,176.00
11	Filing memorandum 1st case management	B	0.4	1,176.00
13	Appearance 1st case management	B	0.3	882.00
20	List documents discovery	B	5	14,700.00
21	Inspection documents discovery	B	1.5	4,410.00
22	Filing interlocutory application	B	0.6	1,764.00
24	Preparing written submissions	B	1.5	4,410.00
25	Preparing bundle for hearing	B	0.6	1,764.00
26	Appearance at interlocutory hearing	B	0.75	2,205.00
30	Respondents' preparation of affidavits	C	10	$29,400.00
32	Respondents' preparation of key bundle, list of issues, authorities	B	2.0	5,880.00
33	Preparation for hearing	C	3.0	8,820.00
34	Appearance principal counsel	C	2.0	5,880.00
35	Second counsel	C	1.0	2,940.00
Total	31.65	$93,051.00