McLellan v Attorney-General

[2016] NZHC 812

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

CIV-2010-485-1762 [2016] NZHC 812

UNDER THE	Judicature Amendment Act 1972
BETWEEN	NOEL EDWARD MCLELLAN Plaintiff
AND	THE ATTORNEY-GENERAL Defendant

CIV-2010-485-2575

BETWEEN  PRANFIELD HOLDINGS LIMITED First Plaintiff

UNITED FISHERIES LIMITED Second Plaintiff

ANDTHE ATTORNEY-GENERAL Defendant

In Chambers:	On the papers
Judgment:	27 April 2016

JUDGMENT OF THE HON JUSTICE KÓS (Costs)

[1]      My judgment of 15 December 2015 declined applications for judicial review by the plaintiffs in these two proceedings heard together.1   In a nutshell, the plaintiffs had suffered loss as a result of mismanagement by Fisheries officials in the 1990/91 fishery year.  A Parliamentary select committee recommended ex gratia payments of up to $400,000 to the plaintiffs Mr McLellan  and United, and $900,000 to the

plaintiff Pranfield.   Negotiations took place but failed to reach resolution.   Each

1      McLellan v The Attorney-General [2015] NZHC 3218.

MCLELLAN v THE ATTORNEY-GENERAL [2016] NZHC 812 [27 April 2016]

wanted more than was offered to them.   The offers lapsed.   United and Pranfield litigated,  but  ultimately  were  unsuccessful.    Mr McLellan  did  not  litigate,  but watched events from the sideline.  The Crown spent over $1 million in fighting that litigation.   After the litigation failed the plaintiffs sought renewal of the ex gratia negotiations that had previously lapsed.  Both Cabinet and subsequently the Minister of Fisheries decided not to renew negotiations.  It was these decisions that were the subject of the judicial review applications.

[2]      In my judgment I concluded that:

(a)       the  challenged  decisions  of  Cabinet  and  the  Minister  were  not justiciable; and

(b)neither  in  any event  were they unlawful  on  the  pleaded  bases  of breach of legitimate expectation or irrationality.

[3]      At the conclusion of my judgment I said:

Costs must follow the event.   Memoranda may be filed if costs cannot be agreed.

[4]      Now, five months later, I have received those memoranda.  The Crown seeks costs on a category 2 band B basis overall.  For the Crown Ms Dixon submits:

8Initially these were separate proceedings but since June 2012 the two proceedings were managed together by consent.   They were heard together.     Therefore  in  calculating  costs  there  are  attendances relevant to the proceedings when they were separate and others following them being managed together.  Costs calculated on a 2B scale of costs basis are summarised below with a full breakdown attached to this memorandum.

8.1$7,962.80   (steps   taken   only   in   regard   to   McLellan proceeding)

8.2$7,118.80   (steps   taken   only   in   regard   to   Pranfield proceeding)

8.3      $22,089.00 (steps taken in regard to both proceedings)

9The    defendant   seeks   costs   of   $37,170.60,   which   includes disbursements of $2,417.60, as itemised in the attached schedule.

[5]      Mr  Upton  QC  for  the  plaintiffs  submits  the  particular  and  peculiar circumstances of this case means his clients should be relieved of costs altogether:

It would be grossly unfair to the plaintiffs, having secured no compensation at all from the Crown for the unlawfulness and injustice, for them now to be saddled with costs in the case.

Reference is made to the misfortunes of the litigants (Pranfield having succeeded in the High Court but lost in the Court of Appeal, and adverse health suffered by some of the key participants including Mr McLellan).   Reference is also made to the different position of Mr McLellan, who had not litigated his claim.  There was, as I noted in my judgment, an egregious delay by the Crown advising the plaintiffs of Cabinet’s decision.2     By September 2008, however, Cabinet had resolved not to make any further settlement offer to any one of the three plaintiffs.  In doing so it expressly  noted  that  Mr  McLellan  had  rejected  a  previous  settlement  offer  of

$400,000 but had not commenced litigation.

[6]      Sensibly, Mr Upton acknowledges that if costs are to be granted, a category 2 band B award could not be resisted.   No issue is taken by the plaintiffs with the Crown’s computation of costs and disbursements.  Mr Upton suggests that if costs are awarded, a single set of costs should be awarded, with the three plaintiffs jointly responsible for them.

Decision

[7]      The ultimate outcome for the plaintiffs has been most unfortunate.  But it is a direct consequence of their  tactical decision to attempt  to improve the Crown’s compensation  offers  by  additional  negotiation  (unsuccessfully,  with  the  offers lapsing) and by commencing litigation (also unsuccessfully).3    That course has its consequences.  One of those must be costs in this further failed litigation.  Nothing submitted to me by Mr Upton in his thoughtful submissions can possibly justify

varying the ordinary outcome that costs must follow the event.

2      See [41]–[43] of my substantive judgment.

3      I am not unaware of course that Mr McLellan did not issue proceedings prior to the present case.

He has not had to pay costs hitherto.   But he hedged his bets, waiting to see if the earlier litigation succeeded.

[8]      Bearing  in  mind  that  I  am  dealing  with  two  separate  proceedings,  not consolidated, the just outcome is as follows:

(a)      Mr McLellan is to be liable for the whole of the costs identified in paragraph 8.1 of the Crown memorandum, one-third of the costs identified in paragraph 8.3 thereof and one-third of the disbursements identified in paragraph 9 thereof.

(b)Pranfield Holdings Limited and United Fisheries Limited are each liable for half the costs identified in paragraph 8.2, one-third of the costs identified in paragraph 8.3, and one-third of the disbursements identified in paragraph 9.

[9]      So ordered.

Stephen Kós J

Solicitors:

Crown Law, Wellington for Defendant