Morrison v Financial Markets Authority - [2023] NZHC 3307

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE

CIV-2021-485-433

[2023] NZHC 3307

BETWEEN
LANCE DAVID MORRISON

First Plaintiff

RICHARD TIMOTHY BLACKWOOD
Second Plaintiff

AND

FINANCIAL MARKETS AUTHORITY

First Defendant

ATTORNEY-GENERAL

Second Defendant

Hearing: On the Papers

Counsel:

J P Cartwright for Plaintiffs

T C Stephens and J B Orpin-Dowell for First Defendant A M Powell for Second Defendant

Judgment:

15 November 2023

Reissued:

21 November 2023

JUDGMENT OF McQUEEN J

[Costs (Reissued)]

[1] I issued a costs judgment in this proceeding on 15 November 2023. It then came to my attention that, due to an administrative oversight, the submissions in reply from the plaintiffs dated 28 July 2023 had not been made available to me before I issued that judgment. Accordingly, I recalled the judgment and now reissue it.1

1 High Court Rules 2016, r 11.9; Patel v Dunbar [2021] NZHC 2634 at [10]–[11]; citing Munro v Gladvale Farms Ltd [2017] NZHC 2692 at [14].

MORRISON v FINANCIAL MARKETS AUTHORITY [2023] NZHC 3307 [21 November 2023]

[2] In a judgment dated 30 June 2023, I found for the plaintiffs on their third cause of action (against the Attorney-General) and granted declaratory relief and damages pursuant to the New Zealand Bill of Rights Act 1990 (the NZBORA).2 I dismissed the plaintiffs’ claims in their first and second causes of action (against the FMA and the Attorney-General respectively).

[3] At the conclusion of my judgment, I directed that if the parties were unable to agree to costs, counsel were to file memoranda on costs within fifteen working days, with a further five working days for replies.3 Memoranda were filed by counsel on 21 July 2023, 24 July 2023, 26 July, and 28 July 2023. Owing to administrative oversights, regrettably, there were delays in those memoranda being referred to me.

The plaintiffs’ position

[4] The plaintiffs jointly seek indemnity costs or increased costs against the Attorney-General. Counsel for the plaintiffs, Mr Cartwright, relies on Attorney- General v Udompun, in which the majority of a full bench of the Court of Appeal noted:4
In our view, the Judge was not wrong in principle to award indemnity costs, even though not all of Mrs Udompun’s claims succeeded before him. In this area it may not always be appropriate to allow costs to follow the event. It is important to remember that Baigent damages are awarded only where other remedies are not sufficient and awards are, in any event, modest. Applying the normal costs rules in such circumstances may discourage litigants from bringing BORA claims. This would clearly have the result of weakening BORA protections. Indemnity costs could also, in suitable cases, be seen as necessary for a proper vindication of the right. This does not mean, however, that indemnity costs are to be awarded as a matter of course in BORA cases.

[5] Hammond J, dissenting from the majority on the issue of whether costs should be remitted back to the High Court, but…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2023] NZHC 3307
Decision Date: 15 November 2023

CaseChat Overview and Summary

In Morrison v Financial Markets Authority, the High Court of New Zealand addressed a complex issue of costs following a case with mixed success for the plaintiffs, Lance David Morrison and Richard Timothy Blackwood, against the Financial Markets Authority (FMA) and the Attorney-General. The plaintiffs initially sought indemnity costs or increased costs against the Attorney-General, arguing that such an award was necessary to vindicate their rights under the New Zealand Bill of Rights Act 1990 (NZBORA). They contended that without indemnity costs, the modest damages awarded would not sufficiently vindicate their rights, and future litigants might be discouraged from bringing similar claims. The FMA, on the other hand, sought costs from the plaintiffs for its successful defence of the plaintiffs' tortious claim against it.

The court considered the principles governing costs awards, emphasizing that costs generally follow the event, and that costs should be predictable and expeditious. The court noted that while indemnity costs could be awarded in New Zealand Bill of Rights Act cases, they do not automatically follow a successful claim. Instead, the court must consider the totality of the remedy and the circumstances of each case. The court also examined whether a Sanderson or Bullock order, which would shift the cost burden from the plaintiffs to the Attorney-General, was appropriate. It concluded that such orders were not warranted as the plaintiffs' causes of action against the two defendants were distinct and not connected.

In determining the quantum of costs, the court awarded the plaintiffs 50% of their claimed costs on a 2B scale basis for their successful cause of action against the Attorney-General, with a reduction to account for the Attorney-General's successful defence of the second cause of action. The court also ruled that the plaintiffs were liable for the FMA's costs for its successful defence, and that the plaintiffs' claims for costs related to filing amended statements of claim were not allowable. The FMA's claims for discovery costs on a 2C basis and for second counsel were allowed. Ultimately, the court ordered the Attorney-General to pay the plaintiffs' costs on a 2B scale, while the plaintiffs were jointly liable to pay the FMA's costs on a 2B scale.

Orders