Lee v Rotorua District Council
[2022] NZHC 2719
•20 October 2022
IN THE HIGH COURT OF NEW ZEALAND ROTORUA REGISTRY
I TE KŌTI MATUA O AOTEAROA
TE ROTORUA-NUI-A-KAHUMATAMOMOE ROHE
CIV-2022-463-000025
[2022] NZHC 2719
UNDER Judicial Review Procedure Act 2016; the New Zealand Bill of Rights Act 19690; and the Declaratory Judgments Act 1908 IN THE MATTER OF
an application for Judicial Review of a decision of the Rotorua District Council to submit the Rotorua District Council (Representation Arrangements) Bill to Parliament
BETWEEN
ROBERT LEE
Applicant
AND
ROTORUA DISTRICT COUNCIL
Respondent
AND
THE ATTORNEY GENERAL
As Intervenor
Hearing: On the papers Appearances:
R Lee, Applicant in person
L F Muldowney for the Respondent A F Todd for the Attorney General
Judgment:
20 October 2022
JUDGMENT OF HARVEY J
This judgment was delivered by me on 20 October 2022 at 11.30am
…………………………
Registrar/Deputy Registrar
Solicitors:Tompkins Wake, Hamilton – L F Muldowney Crown Law Office, Wellington – A F Todd
And to: R Lee
LEE v ROTORUA DISTRICT COUNCIL [2022] NZHC 2719 [20 October 2022]
Introduction
[1] Robert Lee commenced judicial review proceedings against the Rotorua District Council on 29 April 2022 concerning a proposed law change by the Council to alter its voting system. Six weeks later, the Attorney-General sought leave to participate in the proceedings, given the procedural and constitutional issues. Then on 26 July 2022, citing the mismanagement of the file by the Court and the involvement of the Attorney-General as his reasons, Mr Lee discontinued the proceedings.
[2] The Council now seeks costs against Mr Lee on a 2B basis, with the preparation of the statement of defence and affidavits on a 2C basis. In total, legal costs of $39,196 and disbursements of $500 are sought from Mr Lee. In support of its claim, the Council submitted that there is a presumption that when a proceeding is discontinued, the plaintiff must pay the defendant’s costs up to and including the discontinuance.1 In addition, the Council submitted that this is not a case where the Court should depart from that usual presumption.
[3] Mr Lee disagreed, contending that the presumption was displaced as he was deprived of his day in court by the Attorney-General’s intervention and due to case “mismanagement” by the Court which left him no option but to withdraw. He also argued that the 2C rates are wrongly claimed. If costs are awarded, he submitted that the sum should be $29,158.
[4] The issues for determination are, firstly, should the presumption be displaced? Secondly, are the 2C costs claimed appropriate?
Background
[5] On 19 November 2021, the Council passed two motions regarding its representation model for Rotorua. The first motion was that:
…that the ideal representation model for Rotorua would comprise;
· 1 Mayor elected at large
· 1 Māori ward with 3 seats (Te Ipu Wai Taketake ward)
1 High Court Rules 2016, r 15.23.
· 1 General ward with 3 seats (Te Ipu Wai Auraki ward)
· 4 “At large” seats
· A Rotorua Lakes Community Board
· A Rural Community Board
(the preferred model)
[6] In a second related motion, noting that the preferred model was not possible under the current legislation, the Council instructed the Chief Executive to promptly pursue legislative change through which the preferred model could be adopted, “including if possible, prior to the 2022 election.”
[7] The Rotorua District Council (Representation Arrangements) Bill was introduced to the House of Representative on 29 March 2022. The purpose of the Bill is to enable the lawful implementation of the preferred model. After the first reading on 6 April 2022, the Bill was referred to the Māori Affairs Select Committee.2
Applications for judicial review and injunctive relief
[8] Just over three weeks later, on 29 April 2022, Mr Lee filed an application for judicial review, together with an application for urgent injunctive relief to preserve the status quo representation model for the October local elections pending the outcome of the substantive claim, stating in his Statement of Claim that:
The Applicant seeks urgent injunctive relief to set aside the impugned Decision and enjoin the Respondent from pursuing legislative reform through Parliament on the grounds that:
(a)The process was PROCEDURALLY UNFAIR because:
(i)The impugned Decision was predetermined; and
(ii)The majority of Elected Members who are affiliated with Ngāti Whakaue / Te Arawa were biased in favour of the four Ngāti Whakaue corporate entities whose submission is uniquely reflection in the Substantive Motion: and;
(b)It is ILEGAL because:
(i)The majority of elected members had an improper purpose of seeking to rig the relection to effectively secure permanent control of Council on behalf of Ngāti Whakaue / Te Arawa;
2 As at the time of writing the Bill has not progressed to its second reading.
(ii)The Council did not follow the statutory principles of consultation for either the 1M:1G;8AL or 3M:3G:4AL [the preferred model] models;
(iii)The 3M:3G;4AL model [the preferred model] is a limitation on our rights and freedoms as set out in the New Zealand Bill of Rights Act 1990 that cannot be demonstrably justified in a free and democratic society;
(iv)The Fenton Agreement 1880, the Treaty of Waitangi 1840 / Te Tiriti and co-governance were irrelevant considerations
[9] The Council opposed both applications. Due to the timing of the select committee process, the Council confirmed that the status quo would remain for the October 2022 local election. On that basis, by memorandum dated 5 May 2022, Mr Lee discontinued the interim injunction application.
Procedural history
[10] On 6 May 2022, following a teleconference, Woolford J set down the substantive application for judicial review for a one-day hearing in Rotorua on 4 August 2022, and issued timetabling orders directed towards that hearing. Among those timetabling orders, he directed that any application for security for costs be filed and served by Friday 8 July 2022. Woolford J also directed that Mr Lee serve the proceeding on both the Attorney-General and Ngāti Whakaue and Te Arawa, because of the declarations sought relating to the limitation on rights and freedoms contained in the New Zealand Bill of Rights Act 1990 (NZBORA) and the relevance of both the Fenton agreement and Te Tiriti.3
[11] On 10 June 2022, the Attorney-General filed a memorandum giving notice that he wished to participate in the proceeding as an intervener to address the scope and application of Parliamentary privilege stemming from the Parliamentary Privilege Act 2014. The Attorney-General submitted that there were serious questions regarding the jurisdiction of the Court to entertain the claim for judicial review, and that intervention was appropriate given the constitution and general public importance of the principle of non-interference and the complex application of the principle in this proceeding.
3 Lee v Rotorua District Council HC Rotorua CIV-2022-463-25, 6 May 2022 [Minute of Woolford J].
[12] On 5 July 2022, the parties filed a joint memorandum confirming that they had agreed to resolve the question of security for costs for the Council on the basis that Mr Lee would pay $15,000 into court by 22 July 2022 and seeking orders accordingly.
[13] On 13 July 2022, the Attorney-General filed a further memorandum noting that counsel understood that neither the applicant nor the respondent objected to the proposed intervention but raised a concern as to how the intervention could be accommodated within the one-day hearing schedule. Accordingly, a case management conference was sought to address these procedural issue.
[14] By joint memorandum of 18 July 2022, the parties sought a case management conference for the purpose of the Attorney-General’s application for intervention. They noted that counsel for the Attorney-General had raised an issue as to whether his participation could be accommodated within a one-day hearing. The parties then recorded that there was “broad agreement that, even with the A-G’s intervention” it could be heard within the one-day fixture with an earlier start time.
[15] On 21 July 2022, a second teleconference was convened before Davison J. He issued a minute recording the details of the Attorney-General’s proposed intervention and how the parties had raised no objection.4 Davison J granted the application on the basis that the issues of Parliamentary privilege which the Attorney-General wished to put before the Court involved matters of general and wide importance where the Court would be assisted by the Attorney-General as intervenor. With respect to procedural matters, Davison J determined that:
[9] The issues raised by the Attorney-General are appropriately determined prior to the Court hearing and determining the substantive judicial review application and it is apparent from counsel’s estimates that the time required to hear and determine the intervenor’s issue means that the one-day hearing scheduled for 4 August 2022 will be insufficient to hear both the intervenor’s arguments and arguments in reply as well as the submissions for judicial review. I am also satisfied that until the issues related to Parliamentary privilege are heard and determined it would be inefficient for the Court to embark upon hearing the judicial review, irrespective of whether the outcome of the Attorney-General’s intervention is dispositive of the judicial review proceeding itself.
4 Lee v Rotorua District Council HC Rotorua CIV-2022-463-25, 21 July 2022 [Minute of Davison J].
[16] Davison J then noted that he would further amend the timetable to allow Mr Lee and the Council to review their previously expressed positions on security for costs, given the new issues raised by the Attorney-General’s intervention. Accordingly, Davison J then amended the timetable, including that the 4 August 2022 fixture was to be limited to the issues raised by the Attorney-General in his 10 June 2022 memorandum. Further directions for a substantive hearing would be considered following determination of the issues raised by the Attorney-General as intervenor.
[17] On 25 July 2022, the Council filed an interlocutory application on notice for security for costs in the sum of $28,500. As foreshadowed, the next day, on 26 July 2022, Mr Lee filed a memorandum advising the Court that he was, effectively, withdrawing the proceeding. Among the reasons given, he stated that:
Since the intervention of Counsel for the Attorney General and more particularly the intervention of His Honour Davison J, this case has transitioned from being on-track for a substantive hearing to becoming shambolic.
[18] Mr Lee considered that the delays in reaching a substantive hearing meant that, even if he were to succeed, the case could be moot by that stage as the Bill may be withdrawn either by Parliament or by an incoming Council after the October local body elections. He argued that the above circumstances, including the new “unworkable” timetable and mismanagement of the case by the Court, had created fatal prejudice to his case not attributable to any fault of his own. He thus had no option but to withdraw the proceeding. Mr Lee submitted that costs should lie where they fall.
[19] On 27 July 2022, Fitzgerald J issued a memorandum addressing Mr Lee’s concerns regarding the “fairly compressed timetable” as issued by Davison J.5 She explained the logistical reasons why there had been some changes in the date of the telephone conference scheduled now for 28 July 2022, including that the High Court at Rotorua does not have a permanent Judge sitting there. Her Honour recorded that:6
5 Lee v Rotorua District Council HC Rotorua CIV-2022-463-25, 27 July 2022 [Minute of Fitzgerald J].
6 At [4].
…despite the parties’ (optimistic) view that the hearing of both the implications of Parliamentary privilege and the substantive application for judicial review might be able to be accommodated in one day, I endorse Davison J’s concerns in that regard. In my experience, parties very often agree as to the likely hearing duration of a matter, when in the Court’s experience, that can be unrealistic. … I have very real doubts whether both those matters arising from the Attorney-General’s intervention and the substantive judicial review hearing could have been accommodated in one day …
[20] Later that day, the parties filed a joint memorandum noting that the only outstanding issue was as to costs following Mr Lee’s withdrawal of proceedings. They proposed that the application be dealt with on the papers, with a timeline of submissions from the Council and Mr Lee (with the Attorney-General not seeking costs), as well as seeking that the balance of timetabling directions of Davison J be vacated as well as the teleconference scheduled for 28 July 2022.
[21] By minute of 29 July 2022, Fitzgerald J issued timetabling directions for the costs memoranda, accompanied by a direction that “no memorandum is to be longer than five pages in length (excluding scheduled)”. Costs were to be determined on the papers, and the remaining timetable orders and directions in Davison J’s minute of 21 July 2022 were vacated.7
Preliminary matter
[22] Mr Lee’s nine-page long costs memorandum, dated 26 August 2022, fails to comply with Fitzgerald J’s direction that no memoranda be longer than five pages.8 Mr Lee acknowledged this non-compliance but submitted that the parties did not consent to the direction; that the direction is unreasonable given there is $40,000 in dispute to be determined on the papers; and that he has done his best to keep the memorandum to a bare minimum, while still making the essential points. He seeks “the Court’s indulgence in accepting this memorandum as is and without prejudice”.
[23] The Council filed its five-page costs memorandum on 12 August 2022. Accordingly, it has now been put at a comparative disadvantage regarding the length of the submissions considered by the Court. That said, I note that Mr Lee is self-
7 Lee v Rotorua District Council HC Rotorua CIV-2022-463-25, 29 July 2022 [ Minute of Fitzgerald J].
8 Excluding the cover page and schedule.
represented, and that this issue is being determined on the papers. Moreover, as I consider the additional length does not add significantly to the strength of Mr Lee’s case, there is minimal prejudice to the Council. For those reasons I would accept the memorandum as it is.
Legal principles
[24]Rule 15.23 of the High Court Rules 2016 provides that:
15.23 Costs
Unless the defendant otherwise agrees or the court otherwise orders, a plaintiff who discontinues a proceeding against a defendant must pay costs to the defendant of and incidental to the proceeding up to and including the discontinuance.
[25] Under this rule there is an obligation on a plaintiff to pay costs to the defendant upon discontinuance. The only exceptions are when the defendant agrees otherwise or the Court orders otherwise.9 Given that the Council has not agreed, the question is whether this Court should order that Mr Lee not pay costs. The onus rests with Mr Lee to persuade the Court to exercise its discretion in his favour.10
[26]As set out in McGechan on Procedure:11
HR15.23.01 Principles
The following emerge from Kroma Colour Prints Ltd v Tridonicatco NZ Ltd
[2008] NZCA 150, (2008) 18 PRNZ 973, FM Custodians Ltd v Pati [2012]
NZHC 1902 at [10] – [12] and Opus International Consultants Ltd v Colac Bay Vision Ltd [2015] NZHC 1782, [2015] NZCCLR 19 at [20] – [24]:
(a)The r 15.23 presumption obviates any requirement for the defendant to demonstrate that the plaintiff acted unreasonably in commencing and then discontinuing the proceeding. The defendant has the advantage of the presumption even where there has not been such unreasonableness.
(b)Although the r 15.23 presumption is designed to give a certain and predictable outcome upon discontinuance, it may be displaced if the court finds there are circumstances which make it just and equitable that it should not apply.
9 See Wylie J’s comments in Yarrall v Earthquake Commission [2015] NZHC 1451 at [16]; as approved in Yarrall v Earthquake Commission [2016] NZCA 517 at [12].
10 Earthquake Commission v Whiting [2015] NZCA 144 at [68].
11 Andrew Beck McGechan on Procedure (online ed, Westlaw NZ) at [15.23.01].
(c)Although the court is not limited in the factors it may take into account when considering whether the presumption is displaced, generally:
(i)The court will not consider the merits of the respective cases, unless they are so obvious that they should influence the costs outcome.
(ii)The court will consider the reasonableness of the stance of both parties up to the point of discontinuance: whether it was reasonable for the plaintiff to bring and continue the proceeding; and for the defendant to oppose the proceeding. The plaintiff will not be able to avoid the presumption by showing that at one point it had reasonable grounds for believing it would be successful in the proceeding.
(iii)The reason for discontinuing may be relevant, for example a change of circumstances rendering the proceeding unnecessary. However, it must be clear that the plaintiff would have succeeded had the circumstances (in this case new legislation) not changed: The Star Trust v Hamilton City Council [2016] NZHC 821 at [10].
(d)The court’s general discretion in r 14.1 as to costs can also override the general principles relating to discontinuance.
Rotorua District Council’s submissions
[27] The Council submitted that the Court should not depart from the usual rule and exercise its discretion in favour of Mr Lee. Neither the Council nor the Attorney- General nor the Court rendered the proceeding redundant. The Council incurred cost in responding to the six causes of action against them which, inter alia, included allegations of bias, pre-determination, racism and attempts to “rig” the local election.
[28] In addition, the Council contended that even if Mr Lee’s criticisms of the case management process were warranted, this would not be a basis to depart from the presumption and deprive the Council of costs. There is no justification for Mr Lee’s assumption that but for the Attorney’s intervention and the case management, he would have succeeded. It is unreasonable for Mr Lee to now contend, when faced with an adverse costs award, that he was prejudiced by his lack of expertise and the intervention, when he elected to bring proceedings without counsel and when the Attorney-General’s intervention is inextricably linked to the issues raised in the statement of claim. Just as Mr Lee has not had his day in court, so too has the Council been denied the opportunity to defend the serious claims made against it.
Mr Lee’s submissions
[29] Mr Lee disagreed that he should have to pay costs and submitted that this was a case brought in good faith and in the public interest and was on track for a 4 August 2022 hearing prior to the Attorney-General’s intervention. However, after that intervention, he contended that the case management became “shambolic”. Inter alia, he argued that the High Court sat on its hands for five weeks, unilaterally and without notice cancelled the substantive hearing, set and then repeatedly changed a new unworkable and unreasonable timetable, and re-scheduled matters at the last minute.
[30] In addition, Mr Lee submitted that he was confident of winning the predetermination, improper purpose and irrelevant consideration claims. He contended that changes to the timetable have been prejudicial to him because the re- scheduling resulted in additional costs of $8,604 being incurred and now claimed by the Council.
[31] Mr Lee argued that but for the Attorney General’s intervention and the Court mishandling the case management, the substantive proceeding would have proceeded as originally timetabled and he would have adjusted his presentation to accommodate the Attorney General, and his submissions as to parliamentary privilege, within the allotted time. He submitted that the counsel did not identify parliamentary privilege as an obstacle and that it was unreasonable for a lay litigant to have foreseen this intervention. In terms of wider considerations, Mr Lee contended that a costs award against him would have a chilling effect on anyone wishing to hold governments to account by judicial review. Any prudent litigant would have withdrawn when he did.
Discussion
Should the presumption be displaced?
[32] None of Mr Lee’s arguments are sufficient to displace the presumption that a discontinuing plaintiff must pay the defendant’s costs. Acknowledging that Mr Lee is a self-represented litigant, his submissions misunderstand the purpose of the costs
regime and the presumption since it is compensatory, not punitive.12 The fact remains that Mr Lee commenced proceedings and the Council had a duty to respond and to thus incur legal costs. Mr Lee then unilaterally withdrew those proceedings. Consistent with the rules and the presumption, the Council should be compensated. No compelling reason has been advanced as to why it should not be entitled to costs.
[33] For Mr Lee to suggest that he had no option but to withdraw proceedings is incorrect. His proceeding was subject to the usual ebbs and flows of case management. The Attorney-General’s intervention and the delay of the substantive hearing could not reasonably be described as fatally prejudicial. Moreover, the reasons given by Davison J in his minute of 21 July 2022 for adjourning the proceeding and determining the preliminary issues raised by the Attorney-General are correct and cannot properly be described as mis-management by any measure. As Fitzgerald J noted in her minute of 27 July 2022, parties often agree to a duration of a hearing which is unrealistic. In any event it is for the Court to manage its own processes.
[34] Moreover, it was Mr Lee who decided to commence a complex proceeding and he did so without the assistance of counsel. It was his pleadings which raised the issue requiring the Attorney-General’s intervention, which he could have reasonably anticipated given he pleaded breaches of the NZBORA, as well as questioning the validity of a Bill presently before a Select Committee. That he found the case management of the proceedings unsatisfactory does not change the fact that the Council has been put to significant cost defending proceedings which Mr Lee chose to pursue and then unilaterally withdraw. The Council should not have to pay for that decision.
[35] In short, Mr Lee has chosen to forego his “day in court” rather than being denied it, as he claimed. In such circumstances, I do not consider that there are sufficient reasons justifying the displacement of the presumption that the discontinuing plaintiff must pay the costs of the defendant.
12 See, for example, Edwards J’s discussion in Taylor v Roper [2019] NZHC 16 at [6]– [8] of the purpose of a costs award.
Are the 2C costs claimed appropriate?
[36] Mr Lee submitted, in response to the 2C costs claimed, that his filing of 30 affidavits is a practice consistent with another recent judicial review, where a large number of affidavits attracted judicial acknowledgment rather than criticism and provides no justification for 2C rates.13
[37] This submission also misunderstands the position.14 Under the High Court Rules, the Court may apply different time bands for different steps in the proceeding.15 Band C will be appropriate to apply if a comparative large amount of time for the particular step is considered reasonable.16 I consider that Band C as claimed by the Council is appropriate for steps 2 and 30.
[38] As previously stated, the purpose of the costs regime is compensation. Awarding 2C costs for steps 2 and 30 reflects the reality that, in the context of responding to the proceeding brought by Mr Lee, a comparatively large amount of time was reasonable for those steps and is properly claimable by the Council. It is not a criticism of Mr Lee.
Decision
[39]Robert Lee is ordered to pay the Rotorua District Council $39,696 in costs.
Harvey J
13 Yardley v Commissioner of Police [2022] NZHC 291 at [2], in which 37 workers (in addition to the applicants) had sworn affidavits in support of the claim.
14 Moreover, Cooke J in fact awarded 2C costs to the plaintiff for the filing of those affidavits in the related costs decision Yardley v Minister for Workplace Relations & Safety [2022] NZHC 975 at [4].
15 Houghton v Saunders [2013] NZHC 3452 at [28].
16 High Court Rules 2016, r 14.5.
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