Morrison v Financial Markets Authority - [2023] NZHC 3215

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 3215

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

JUDGMENT OF McQUEEN J

[Costs]

[1] 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).1 I dismissed the plaintiffs’ claims in their first and second causes of action (against the FMA and the Attorney-General respectively).

1 Morrison v Financial Markets Authority [2023] NZHC 1654.

MORRISON v FINANCIAL MARKETS AUTHORITY [2023] NZHC 3215 [15 November 2023]

[2] 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.2 Memoranda were filed by counsel on 21 July 2023, 24 July 2023, and 26 July 2023. Regrettably, owing to an administrative oversight, those memoranda were not referred to me until recently.

The plaintiffs’ position

[3] 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:3
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.

[4] Hammond J, dissenting from the majority on the issue of whether costs should be remitted back to the High Court, but agreeing that indemnity costs were appropriate, discussed generally the costs involved in bringing proceedings for damages pursuant to the NZBORA, and took the view that “when a citizen – or for that matter a non- citizen – establishes (as here) a distinct and serious breach of BORA by a relevant agency of the state, that agency should be expected to stand fully behind the claim, in costs”.4

[5] Mr Cartwright submits that the Attorney-General should pay the plaintiffs indemnity costs…

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 3215
Decision Date: 15 November 2023

CaseChat Overview and Summary

In Morrison v Financial Markets Authority, the plaintiffs sought costs against the defendants, the Financial Markets Authority and the Attorney-General. The plaintiffs were successful on their third cause of action against the Attorney-General, which was a claim under the New Zealand Bill of Rights Act 1990 (NZBORA), but were unsuccessful on their first and second causes of action against the FMA and Attorney-General respectively. The plaintiffs sought indemnity or increased costs against the Attorney-General, and argued that they should not be required to pay costs to the FMA, or alternatively, that any costs awarded to the FMA should be met by the Attorney-General. The defendants opposed the plaintiffs' application for indemnity costs, and argued that the plaintiffs should pay costs to the FMA. The court found that there was no reason to depart from ordinary costs principles, and that the FMA was entitled to costs from the plaintiffs. The court awarded the plaintiffs 50% of their costs on a 2B basis against the Attorney-General, and ordered that the plaintiffs pay costs to the FMA. The court also found that the FMA was entitled to claim its discovery costs on a 2C basis, but that it was not appropriate to award costs for second counsel.

In summary, the court awarded the plaintiffs 50% of their costs on a 2B basis against the Attorney-General, and ordered that the plaintiffs pay costs to the FMA. The court rejected the plaintiffs' application for indemnity costs, and found that the FMA was entitled to claim its discovery costs on a 2C basis. The court also found that it was not appropriate to award costs for second counsel. The plaintiffs were ultimately liable for costs to the FMA, and received less in costs from the Attorney-General than they were required to pay to the FMA.

Orders