Mt Wellington Race Park Club Incorporated v Auckland Council

[2020] NZHC 1799

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2019-404-001373

[2020] NZHC 1799

UNDER

the Judicial Review Procedure Act 2016

BETWEEN

MT WELLINGTON RACE PARK CLUB INCORPORATED

Applicant

AND

AUCKLAND COUNCIL

First Respondent

AUCKLAND TRANSPORT
Second Respondent

INDEPENDENT TRAFFIC CONTROL LIMITED

Third Respondent

Hearing:	On the papers
Judgment:	23 July 2020

JUDGMENT OF WYLIE J

[Costs]

This judgment was delivered by Justice Wylie On 23 July 2020 at 4.00pm

Pursuant to r 11.5 of the High Court Rules Registrar/Deputy Registrar

Date:…………………………

Solicitors/counsel:

Kidd Black Law/S Ryan and W D McKenzie Meredith Connell, Auckland

M D Lloyd, Auckland

MT WELLINGTON RACE PARK CLUB INCORPORATED v AUCKLAND COUNCIL [2020] NZHC 1799 [23 July 2020]

Introduction

[1]    I refer to my judgment delivered on 5 June 2020. I declined Mt Wellington Race Park Club Incorporated’s application for judicial review and held that the respondents – Auckland Council, Auckland Transport and Independent Traffic Control Ltd – were entitled to their reasonable costs and disbursements. I invited the parties to file memoranda in this regard. I have now received those memoranda.

[2]    Auckland Council and Auckland Transport seek scale costs calculated on a 2B basis. Costs are sought in the sum of $41,825, together with disbursements of $110 – in total $41,935. Notwithstanding that both were respondents, the Council and Auckland Transport seek only one costs order. They do not seek an uplift to scale costs. They do, however, seek costs for two counsel.

[3]    Independent Traffic Control Ltd also seeks costs on a 2B basis. It seeks costs in the sum of $34,177, together with disbursements of $270 – in total, $34,447.

[4]    The respondents attached to their respective memoranda schedules detailing how the costs claimed by them have been calculated.

[5]    Mt Wellington Race Park Club Incorporated does not dispute the costs calculations made by the respondents. Rather, it argues that the Court should exercise its discretion either to decline to make orders for costs or to reduce any order that might otherwise be made, both pursuant to r 14.7(e) of the High Court Rules, on the basis that the proceeding concerned a matter of public interest and that it acted reasonably in its conduct of the proceeding. It argues that the proceeding was a test case, of potentially wide import.

Analysis

[6]    Costs are of course in the discretion of the Court – r 14.1. That discretion is not however unfettered. It is qualified by the specific costs rules – rr 14.2 to 14.10 – and it is exercisable only in situations not contemplated by the rules or which are not fairly recognised by them. The costs regime is regulatory in character; it is important,

and in the interests of all actual and potential litigants, that its integrity is maintained. The Courts should apply the regime in the absence of good reason to the contrary.1

[7]    One of the underlying principles applicable to the determination of any costs award is that the party who fails with respect to a proceeding should pay costs to the party who succeeds – r 14(2)(1)(a). Here, the respondents succeeded and prima facie each is entitled to an award of costs in its favour.

[8]    By joint memorandum dated 4 September 2019, all parties agreed that the proceeding should be categorised as 2B for the purposes of rr 14.2(1)(b) and 14.3. Mt Wellington Race Park Club Incorporated does not seek to resile from this agreement. Nor does it challenge the various steps claimed by the respondents.

[9]    Insofar as I can glean from the file, each of the steps claimed by the respondents was taken. They have correctly calculated the applicable rates. I agree with the stance taken by Auckland Council and Auckland Transport – it is appropriate to treat them as one party for costs purposes, notwithstanding that each was a named respondent. They were not separately represented and, although there were double ups in some of the documents filed, both had the same interest in the outcome. I also agree with Auckland Council and Auckland Transport that it is appropriate to certify for two counsel. There were very many documents produced and their successful management, and the management of the accompanying digital database, required second counsel. It follows that I accept that the schedules filed by Auckland Council and Auckland Transport on the one hand and by Independent Traffic Control Ltd on the other, are accurate and properly reflect the costs that would normally be awarded.

[10]   The sole issue is whether or not the proceeding was a test case, or whether it concerned a matter of public interest.

[11]   The essence of a test case is that it raises a novel point or principle of law with ramifications going beyond the particular facts of the case.2 Generally an award of

1      Manukau Golf Club Inc v Shoye Venture Ltd [2012] NZSC 109, [2013] 1 NZLR 305 at [7] and [16]; Glaister v Amalgamated Dairies Ltd [2004] 2 NZLR 606 (CA) at [21]-[24] and [28]; Mansfield Drycleaners Ltd v Quinny’s Drycleaning (Dentice Drycleaning Upper Hutt) Ltd [2002] 16 PRNZ 662 (CA) at [27].

2      Birkdale Service Station Ltd v Commissioner of Inland Revenue [2001] 1 NZLR 293 (CA) at [81] and [85].

costs is not made in test cases.3 The rationale is that the judgment has value extending beyond the case itself.

[12]Rule 14.7(e) is also in point. It provides as follows:

14.7     Refusal of, or reduction in, costs

Despite rules 14.2 to 14.5, the court may refuse to make an order for costs or may reduce the costs otherwise payable under those rules if –

…

(e)the proceeding concerned a matter of public interest, and the party opposing costs acted reasonably in the conduct of the proceeding; …

[13]   In considering this issue, it is, in my view, appropriate to distinguish between Auckland Council and Auckland Transport on the one hand and Independent Traffic Control Ltd on the other.

[14]   The case did involve a novel point, with ramifications going beyond its specific facts, from the perspective of Auckland Council and Auckland Transport. There had been little prior consideration given by the courts to the ambit of s 138 of the Local Government Act 2002 and there was no settled law in relation to its operation. The resolution of the s 138 issue has implications for local authorities throughout New Zealand; it also has implications for individuals and entities who lease and/or use local authority land for one or more of the purposes specified in s 138. It can properly be said that the s 138 issue concerned a matter of public interest. There can be no suggestion that Mt Wellington Race Park Club Incorporated acted unreasonably in the conduct of the proceeding. In my view, r 14.7(e) applies to the proceeding insofar as it related to the s 138 issue, and in relation to the costs claimed by Auckland Council and Auckland Transport.

[15]   By my guestimate, the time taken in dealing with the s 138 issue occupied approximately half of the hearing time. I reduce the award of costs in favour of Auckland Council and Auckland Transport by 50 per cent to recognise that the s 138 part of the argument raised a novel point of law with ramifications going beyond the particular facts of the case. No deduction is appropriate in relation to the application

3      At [81]; Securities Commission v Kiwi Co-op Dairy Ltd [1995] 3 NZLR 26 (CA) at p 36.

of the general principles on consultation under s 82 of the Local Government Act, nor in relation to the availability of relief where the relief claimed affects third parties. Both of those aspects were covered by settled authority but they were nevertheless contested by Mt Wellington Race Park Club Incorporated.

[16]   Turning to Independent Traffic Control Ltd, as noted in my substantive judgment, it abided the decision of the Court in relation to the s 138 issue and on the related issue of whether or not Auckland Council and Auckland Transport had consulted. It confined its submissions to the issue of relief. Substantial prejudice to an innocent third party is an established basis for declining relief on a judicial review application, even where legal error has occurred. My decision recorded that I would have declined relief, even if I had been persuaded that legal error had occurred. This involved the application of well-settled law to the particular facts of this case. There is no justification to reduce the costs payable to Independent Traffic Control Ltd.

[17]   Accordingly, I give judgment in favour of the respondents for costs and disbursements against Mt Wellington Race Park Club Incorporated, as follows:

(a)in favour of Auckland Council and Auckland Transport, costs in the sum of $20,912.50 and disbursements in the sum of $110 – in total,

$21,022.50; and

(b)in favour of Independent Traffic Control Ltd, costs of $34,177 and disbursements of $270 – in total, $34,447.

[18]   In its initial memorandum, Mt Wellington Race Park Club Incorporated requested that compliance with any costs award should be delayed to await the final determination of any appeal filed. I do not have to consider this issue (or whether such request was appropriate), because a further memorandum has since been filed advising that Mt Wellington Race Park Club Incorporated is not seeking to appeal my substantive judgment.

Wylie J