Mihos v Attorney-General HC WN CIV 2004-485-1399

[2008] NZHC 2286

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

CIV-2004-485-1399

BETWEEN  GEORGE MIHOS Applicant

ANDATTORNEY-GENERAL Respondent

Counsel:         T Ellis and A W Rossiter for Applicant

W G Liddell, W L Aldred and C A Brown for Respondent

Judgment:      29 April 2008         at 10.30 am

COSTS JUDGMENT OF BARAGWANATH J

[1]      The application for review challenged the manner in which the forfeiture provisions of the Customs and Excise Act 1996 are exercised by asserting that there can  be  no  forfeiture without  conviction  because  of  the  requirements  of  various constitutional  statutes.    It  further  claimed  that  there  had  been  no  valid  seizure because the relevant customs officer lacked delegated authority to make decisions. Thirdly, it contended  that  the Minister of  Custom’s  refusal  to  waiver  forfeiture infringed the principles in common law and of s 9 of the New Zealand Bill of Rights Act 1990.

[2] As is apparent from the judgment now reported at [2008] NZAR 177, the Crown was required to engage in substantial research in preparation for the one and a half-day oral argument. It contended that the case was of such importance as to justify a 3C cost category in respect of major components and 3B for others, resulting in a total claim of some $62,500 plus disbursements of $2,964 (including

GST).

GEORGE MIHOS V ATTORNEY-GENERAL HC WN CIV-2004-485-1399  29 April 2008

[3]      The applicant acknowledged the importance of the case but submitted that the factors resulting in the Crown’s submission as to cost category pointed rather to an abatement of costs to reflect the public interest in the answers to significant points. His starting assessment is of $19,285 for costs fixed on a 2B basis.  But he submits that the public interest reasons justify no award of costs.

[4] It is never open to a litigant to take recondite points of purely esoteric interest and then simply contend that the burden placed on the opponent is justified by the elucidation of previously obscure questions. While such research is the function of interested researchers rather than of the courts whose task is to administer justice. The question of public interest is to be assessed in terms of the public benefit issues discussed at [8] below.

[5]      Insofar as the present case entailed examination of the need for conviction to justify forfeiture, it is relevant that the construction of the legislation successfully defended by the Crown accords with the law of England, Canada, United States, Australia and New Zealand according to decisions going back as far as the early 19th century.   There was little utility in the exercise.   The second issue, of delegation, turned on the construction of an instrument of delegation the decision in favour of the Crown was reached in accordance with settled principles.   The point was, however, argued succinctly and efficiently.

[6]      The third and major contention had greater merit.  As has recently been spelt out by the divisional court in R (Corner House Research and Campaign Against Arms Trade) v The Director of the Serious Fraud Office (2008) EWHC 714 (Admin)

10 April 2008, a crucial function of the judiciary is to give effect to the rule of law. The decision of the English Court of Appeal in Lindsay v Customs and Excise Commissioners  [2002] 1 WLR 1767, holding that the confiscation of a car worth some £12,000 containing tobacco that had cost £3,396 were disproportionate and should be set aside, illustrates the difficulty for the executive, the judiciary and particularly the public in determining where the boundary between lawful and unlawful conduct runs.

[7]      It happens that the question whether the proportionality as  a measure of lawfulness should be generalised from its human right context is one of topical importance in New Zealand as in England where the House of Lords in Somerville v Scottish Ministers [2007] 1 WLR at 2734 has declined to decide the point. Had Mr Mihos been content with a challenge confined to that point he would have been entitled to a more sympathetic result.

[8]      I accept the Crown submission that the case warranted counsel of the rank of Mr Liddell assisted by two juniors to deal with topics some of which were of real difficulty as well as of public importance.   But I decline to exercise discretion to employ cost categories 3C and 3B.  The first two issues could have been handled by a competent junior and the starting point should be 2B.  While the third issue is of very real importance, the very factors that have led the Crown to claim 3C costs also point in the opposite direction.   There should, as Mr Ellis submits, be reasonably ready access to the Court for argument of points of real importance.  As Professor Finnis argues in Natural Law and Natural Rights (Oxford) 1980 at 270, among the factors exemplifying the rule of law is that the rules are sufficiently clear that people may be guided by their knowledge of their content.   Responsibly selected cases presented efficiently may serve the public interest to such extent as to justify some departure from the principle that costs follow the event, and result in a reduction or refusal of costs as occurred in New Zealand Māori Council v Attorney General [1994] 1 NZLR 513 (PC). For a recent example of the principle see R (Compton) v Wiltshire  Primary  Care  Trust  [2008]  WLR  (D)  123  citing  R  (Corner  House Research) v Secretary for State and Industry [2005] 1 WLR 2600. There a preemptive order was made limiting potential costs liability; the principle is to:

…allow claimants of limited means access to the court in public law cases raising issues of general public importance without the fear of substantial orders for costs being made against them.  The court had to be satisfied the issues raised were of general public importance.

[9]      I accept the Crown’s submission that the applicant’s analysis of category 2B costs must be increased to allow for further submissions and memoranda in response on the important and difficult question of the relevance and proportionality.   On a simple 2B basis costs would have to be fixed at $22,000.

[10]     Had  the case been  limited  to  the challenge to  the proportionality of  the penalty the costs awarded in favour of the Crown would have been a relatively modest sum, assessed to recognise the importance of access to the court on a significant question as well as the result.  But the addition of the first ground requires the costs to be increased significantly to mark its lack of merit.  Some regard is also to be had to the failure of the second claim.

[11]     I have concluded that the costs order in favour of the Crown should be

$12,000 together with disbursements $2,964.08.