Marborough District Council v Evans
[2024] NZHC 475
•7 March 2024
IN THE HIGH COURT OF NEW ZEALAND BLENHEIM REGISTRY
I TE KŌTI MATUA O AOTEAROA TE WAIHARAKEKE ROHE
CIV-2023-406-10
[2024] NZHC 475
UNDER the Biosecurity Act 1993 IN THE MATTER
of an application under section 76 of the Act
BETWEEN
MARLBOROUGH DISTRICT COUNCIL
Appellant
AND
G I T EVANS
Respondent
Hearing: On the Papers Counsel:
P A C Maw and M A Mehlhopt for Appellant
Q A M Davies and J S Marshall for Respondent
Judgment:
7 March 2024
JUDGMENT OF McQUEEN J
[Costs]
[1] The Marlborough District Council (the Council) appealed against an interim decision of the Environment Court dated 17 March 2023 regarding an application by Mr Evans under s 76 of the Biosecurity Act 1993 (the BSA). In a judgment dated 21 December 2023 (the substantive judgment), I dismissed the Council’s appeal and Mr Evan’s cross-appeal.1
[2] In the substantive judgment, I recorded that Mr Evans is entitled to costs in this Court and that if counsel were unable to agree costs, memoranda should be filed, and
1 Marlborough District Council v Evans [2023] NZHC 3849 at [179].
MARLBOROUGH DISTRICT COUNCIL v EVANS [2024] NZHC 475 [7 March 2024]
I would decide costs on the papers.2 Agreement was not reached, memoranda have been filed and I am required to determine costs.
Parties’ positions
[3] Mr Evans seeks costs on a 2B basis and an allowance for second counsel. Counsel for Mr Evans, Mr Davies and Mr Marshall, submit that this is justified as the appeal was novel as the first appeal of its type under the BSA, both parties had second counsel at the hearing, and the case required examination of the statutory text at a reasonably detailed level.
[4] Mr Evans also seeks an uplift of costs of 20 per cent. Mr Davies and Mr Marshall rely on the approach in relation to the uplift of costs set out by the Court of Appeal in Holdfast NZ Ltd v Selleys Pty Ltd.3 They submit that the Council made an argument that directly contradicted the position it took before the Environment Court.4 They contend that the Council’s approach was unreasonable and unnecessarily increased costs of the litigation.
[5] The Council agrees that costs should be determined on a 2B basis and accepts an allowance for second counsel. It disagrees with one item included in the costs claimed by Mr Evans, and the disbursement claimed. The Council also opposes any uplift of costs.
Discussion
[6] I accept the parties’ agreed position that costs on a 2B basis is appropriate, together with an allowance for second counsel.
Contested item and disbursement
[7] The Council contests two minor points in the claim for costs and disbursements made by Mr Evans. These can be readily dealt with.
2 At [181].
3 Holdfast NZ Ltd v Selleys Pty Ltd (2005) 17 PRNZ 897 (CA).
4 See Browne v Afele [2003] 3 NZLR 433 (CA); and Ihaka Te Rou v Love (1891) 10 NZLR 529 (CA).
[8] The first relates to Mr Evans’ claim for costs in relation to the first case management conference under item 10 in sch 3 to the High Court Rules 2016 (the Rules). This conference was vacated a week before it was due to occur, following the parties filing a joint memorandum which, amongst other things, sought that the conference be vacated. The Council’s position is that this item is therefore not properly claimed as “no preparation was required”. The Council does not object to Mr Evans’ claim for filing a memorandum for case management under item 11 in sch 3 to the Rules.
[9] The vacation of the conference reflects that counsel were co-operative in dealing with case management matters such that the Judge who received the memorandum was satisfied that matters were dealt with appropriately without the need for a conference. While the conference itself was vacated, in my view, Mr Evans is entitled to claim for preparation for that conference as that preparation (which relates to matters necessary for a party to advance their case) was required in any event. Quite properly, Mr Evans did not claim for appearing at a conference.
[10] Accordingly, I consider that a claim under item 10 (and item 11, which relates to the preparation of the memorandum) is properly made by Mr Evans.
[11] Mr Evans also claims $23 as a disbursement for search fees. As submitted for the Council, no detail has been provided as to what the search fee was for. I am not satisfied that the disbursement meets the requirements in r 14.12(2) of the Rules. Accordingly, I do not allow this claim.
[12] As a result, I consider that the calculation of costs on this basis would result in an award to Mr Evans of $13,862. No disbursements are payable.
Uplift of costs
[13]I turn now to consider whether an uplift of costs is appropriate.
[14] Rules 14.1 to 14.2 provide that costs are at the discretion of the Court and outline the general principles applying to the determination of costs. The general principles include that costs usually follow the event and that the determination of
costs should be predictable and expeditious. Nonetheless, under r 14.6 the Court can order increased costs in certain circumstances. Rule 14.6 provides, relevantly:
14.6 Increased costs and indemnity costs
…
(3)The court may order a party to pay increased costs if—
(a)the nature of the proceeding or the step in it is such that the time required by the party claiming costs would substantially exceed the time allocated under band C; or
(b)the party opposing costs has contributed unnecessarily to the time or expense of the proceeding or step in it by—
…
(ii)taking or pursuing an unnecessary step or an argument that lacks merit; or
…
[15] Mr Davies and Mr Marshall refer to the recent decision of Cooke J in Lepionka & Company Investments Ltd v Gibson Sheat, in which His Honour discusses the correct approach to costs (including where an uplift is sought).5 Mr Davies and Mr Marshall say they are mindful that applications for increased costs are often made when they are not justified. Their submission appears to acknowledge Cooke J’s warning that applications to depart from a standard award of costs determined under pt 14 of the Rules should be discouraged unless there is a clear basis for such an application.6 They submit that this is an appropriate case for a modest uplift in accordance with the Rules.
[16] Counsel agree that the correct approach when considering an uplift of costs is set out by the Court of Appeal in Holdfast NZ Ltd v Selleys Pty Ltd.7 This is summarised by the learned authors of McGechan on Procedure as involving the following steps:8
5 Lepionka & Company Investments Ltd v Gibson Sheat [2023] NZHC 2745.
6 At [3].
7 Holdfast NZ Ltd v Selleys Pty Ltd, above n 3.
8 Jessica Gorman and others McGechan on Procedure (online ed, Thomson Reuters) at [HR14.6.02(2)].
(a)Step one: Categorise the proceeding under r 14.3.
(b)Step two: Work out a reasonable time for each step in the proceeding under r 14.5.
(c)Step three: As part of the step two exercise, a party can, under r 14.6(3)(a), apply for extra time for a particular step.
(d)Step four: The applicant for costs should step back and look at the costs award it could be entitled to at this point. If it considers it can argue for additional costs under r 14.6(3)(b) it should do so, but any increase above 50 per cent on the costs produced by steps one and two is unlikely, given that the daily recovery rate is two-thirds of the daily rate considered reasonable for the particular proceeding.
[17] Mr Evans does not identify any particular step for which he says extra time is appropriate. Rather, he says that the Council made an argument in this Court that directly contradicted its position before the Environment Court and an argument that relied on an untenable reading of the Environment Court’s decision. He argues that this was unreasonable and unnecessarily increased the costs of the litigation, thus justifying an overall uplift to the calculation of costs on a 2B basis by 20 per cent.
[18] Mr Evans relies on r 14.6(3)(b)(ii). As set out above, this rule provides that the Court may order a party to pay increased costs if the party opposing costs has contributed unnecessarily to the time or expense of the proceeding or step in it by taking or pursuing an unnecessary step or an argument that lacks merit.
[19] Counsel for the Council, Mr Maw and Ms Mehlhopt, submit that the failure to identify any steps taken by the Council that were unnecessary or where the Council contributed unnecessarily to the time or expense of that step means there is no basis for an increased costs award. They say that Mr Evans has not provided any explanation of how his costs were increased and that this is essential to justify an order for increased costs. I agree that Mr Evans has not done this in relation to any step in the
litigation. His is a broader argument that the proceeding as a whole has been affected by the Council’s unreasonable pursuit of arguments that lack merit.9
[20] First, Mr Evans says that the Council made an argument before me which directly contradicted the position it took before the Environment Court.10 While accepting that this is not necessarily a jurisdictional bar, Mr Evans argues that there is a line of authority from the Court of Appeal that a change of position by a party on appeal is extraordinary. I do not find the two Court of Appeal decisions relied on of great assistance in determining the question before me.11 They both involve changes of position of a very different nature to the factual circumstances before me. Nor did either decision relate to the impact of a change in position on an award of costs. In the context of assessing an appropriate costs award, I consider that the test I should apply is whether the Council’s argument was so lacking in merit that it was unreasonable, as contemplated by r 14.6(3)(b)(ii) and relevant case law.12
[21] Here, before the Environment Court, the Council argued that the Environment Court had jurisdiction on an application under s 76 of the BSA on a point of law only. Counsel for the Council in this Court accepted that this is incorrect but continued to argue that the Environment Court’s jurisdiction was limited, in that the jurisdiction was only in relation to amendments to the plan resulting from the Council’s decision and in respect of the matters listed in s 76(2) of the BSA. I concluded that the Environment Court did not act outside its jurisdiction. I do not consider that the arguments advanced by the Council, although unsuccessful, were so unreasonable that an order for increased costs is justified. This is a high threshold.13 It would be unattractive to suggest that a party should not accept on appeal that an argument made at first instance was incorrect. The Council properly accepted that an aspect of its case as earlier advanced was wrong in law and it was in my view entitled
9 Broadspectrum (New Zealand) Ltd v Nathan [2017] NZCA 434 at [57] citing NR v MR [2014] NZCA 623, (2014) 22 PRNZ 636.
10 This relates to the second alleged error of law, as discussed in the substantive judgment
Marlborough District Council v Evans, above n 1, at [105]–[115].
11 Browne v Afele and Ihaka Te Rou v Love, above n 4.
12 Bradbury v Westpac Banking Corporation [2009] NZCA 234, [2009] 3 NZLR 400 at [29] citing Hedley v Kiwi Co-operative Dairies Ltd (2002) 16 PRNZ 694 (HC) at [11]; Lepionka & Company Investments Ltd v Gibson Sheat, above n 5, at [29]. See also the discussion in McIntyre v Body Corporate 80146 [2024] NZHC 306 at [5].
13 Lepionka & Company Investments Ltd v Gibson Sheat, above n 5, at [29].
to advance before me, albeit ultimately unsuccessfully, its other arguments as to the correct extent of the Environment Court’s jurisdiction.
[22] Mr Evans’s second argument is that the third error of law raised by the Council in its appeal was based on an untenable reading of the Environment Court’s decision and therefore had no reasonable prospects of success. The third error of law alleged that the Environment Court applied the wrong legal test when it concluded that it must be satisfied that there had been adequate consultation in relation to the amendments it considered that the Council should make to the Marlborough Regional Pest Management Plan 2018. The Council argued before me that the question of adequate consultation on amendments to a plan is a matter for the Council and that the Court’s consideration of whether consultation was required supports the Council’s allegation that the Court granted relief beyond its jurisdiction.
[23] Mr Evans emphasised that the Council itself raised with the Environment Court the issue of adequacy of consultation, resulting in the direction that all submitters on the plan be served with the application. He also says that it was then unreasonable for the Council to challenge in this Court the Environment Court’s decision to do what the Council asked for. The Council does not accept that this was what it was appealing, rather it says the error of law it identified was that the Court concluded that it must be satisfied there had been adequate consultation.
[24] In the substantive judgment, I concluded that, following on from my conclusions in relation to the second alleged error of law, whether a decision made under s 75(3) and the resulting plan complies with the BSA in the first instance is a matter that is within the jurisdiction of the Environment Court. I was not satisfied that the Environment Court’s conclusion that it was necessary to hear from the parties as to whether further consultation should occur constituted an error of law or established that the Court granted relief beyond its jurisdiction.
[25] Again, I do not consider that the arguments advanced by the Council, although unsuccessful, were so unreasonable that an order for increased costs is justified. I also note that there was overlap between some of the errors of law alleged by the Council in its appeal, which was reflected in the parties’ arguments and then my judgment.
This has the effect of reducing the force of the contention by Mr Evans that the specified matters should not have been pursued by the Council on appeal. I consider this further supports my view that this is not a case where an increased award of costs is appropriate.
[26] Mr Davies and Mr Marshall sought also to support their arguments by referring to the fact that Mr Maw and Ms Mehlhopt asked them for copies of the Council’s submissions before the Environment Court. They say this request demonstrates that Mr Maw and Ms Mehlhopt had not reviewed the submissions made in the Environment Court by former counsel for the Council and this led them to make contradictory submissions before this Court. Mr Maw and Ms Mehlhopt explain in their submissions that the reason for this request was because they no longer held a clean copy of the submissions suitable for inclusion in the bundle on appeal. They say that they had read and considered the earlier submissions. I accept their explanation and accordingly do not find any merit in this argument.
Mr Evan’s cross-appeal
[27] Mr Evans filed a notice of additional appeal points, effectively amounting to a cross-appeal on a single point as to whether the Council was an “exacerbator” under the National Policy Direction for Pest Management 2015. I dismissed the cross-appeal, recording that Mr Evans accepted that I should only deal with the cross-appeal in the event the Council was wholly or partially successful. The Council submits that the cross-appeal did not arise from any of the errors alleged by Mr Evans and led to unnecessary costs for both parties. Neither party expressly addressed in their submissions what the costs implications should be in relation to the cross-appeal. In all the circumstances, I do not consider that the outcome of the cross-appeal affects the view I have come to as to costs.
Conclusion
[28] Overall, then, I am not satisfied in terms of r 14(6)(3)(b)(ii) of the Rules that the Council has reached the high threshold of contributing unnecessarily to the time or expense of the proceeding by pursuing arguments that lack merit. I conclude that
an award of costs on a 2B basis as set out in the schedule to the memorandum for Mr Evans is appropriate. No disbursements are payable.
Award of costs
[29]I award costs to Mr Evans in the sum of $13,862.
McQueen J
Solicitors:
Wynn Williams, Christchurch for Appellant Gascoigne Wicks, Blenheim for Respondent
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