New Health New Zealand Inc v South Taranaki District Council

[2014] NZHC 993

IN THE HIGH COURT OF NEW ZEALAND NEW PLYMOUTH REGISTRY

CIV 2013-443-107 [2014] NZHC 993

BETWEEN

NEW HEALTH NEW ZEALAND INC

Plaintiff

AND

SOUTH TARANAKI DISTRICT COUNCIL

Defendant

Hearing:	(on the papers)
Counsel:	L M Hansen for Plaintiff D J S Laing and H P Harwood for Defendant
Judgment:	14 May 2014

JUDGMENT OF HEATH J

This judgment was delivered by me on 14 May 2014 at 4.00pm pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar

Solicitors:

Wynn Williams Lawyers, Wellington Simpson Grierson, Wellington Counsel:

L M Hansen, Auckland

NEW HEALTH NEW ZEALAND INC v SOUTH TARANAKI DISTRICT COUNCIL [2014] NZHC 993 [14

May 2014]

A question of costs

[1]      New Health New Zealand Inc (New Health) is an incorporated society that has a stated aim of advancing and protecting the ability of consumers to exercise freedom of choice in relation to health products.  It challenged a decision made by the  South  Taranaki  District  Council  (the  Council)  to  add  fluoride  to  the  water supplies of two towns within its catchment area, Patea and Waverley.

[2]      New Health contended that the Council did not have legal power to add fluoride to the water supply for therapeutic purposes, and had breached the right of all New Zealanders to refuse to undergo medical treatment.   The latter right is affirmed by s 11 of the New Zealand Bill of Rights Act 1990 (the Bill of Rights). New Health also alleged that the Council had failed to take into account relevant factors in reaching its decision.

[3]      Following a hearing over two days in November 2013, Rodney Hansen J

dismissed New Health’s proceeding, for reasons given in a judgment delivered on 7

March 2014.1   The reasons for judgment contain an erudite discussion of the various issues.   To my mind, they confirm that the proceeding raised important questions about the legal power to fluoridate and the ambit of the right to refuse to undergo medical treatment conferred by s 11 of the Bill of Rights.   The importance of the latter  was  underscored  by  a  decision  of  the Attorney-General  to  seek  leave  to intervene at the hearing and to be heard on the s 11 issue. An order granting leave to

intervene was made without opposition.2

[4]      The Council seeks costs on dismissal of the proceeding.  New Health opposes an award of costs being made.   Primarily, New Health bases its opposition on the “public interest” exception set out in r 14.7(e) of the High Court Rules.

[5]      Rodney Hansen J said nothing about the question of costs in his judgment.  It appears that it was not a topic on which he had heard submissions.   The Judge’s

silence might be seen either as an indication that he thought costs should lie where

1      New Health New Zealand Inc v Taranaki District Council [2014] NZHC 395.

2      New Health New Zealand Inc v Taranaki District Council HC New Plymouth CIV 2013-043-

107 (Minute No 2), 3 July 2013.

they fall, or as an oversight.   Since the substantive judgment was delivered, the Judge has retired from office, so his view cannot be ascertained.  His retirement is also the reason why I am dealing with the costs application.3

Legal principles

[6]      Costs are in the discretion of the Court.4   Guidance as to the way in which the discretion might be exercised are set out in the High Court Rules.5    The rules are designed  to  create  a  framework  for  the  determination  of  costs  that  is  both “predictable and expeditious”.6

[7]      Rule 14.7(e) of the High Court Rules provides:

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; or

….

[8]      There are many examples of cases in which the public interest exception has been applied.  The basis for its operation was discussed by the Court of Appeal in Commerce Commission v Southern Cross Medical Care Society.7   That was a case in which an order for costs had been made in the High Court against the Commerce Commission on the basis that it had taken an active part in defending one of its determinations on appeal to the High Court.  Fisher J, delivering the judgment of the Court, said:

[18]      We agree with Williams J that the new High Court Rules take a more prescriptive approach to costs than previously: L v W [2003] NZFLR 961 at para [27]; Glaister v Amalgamated Dairies Ltd (2003) 16 PRNZ 536 at pp

541 – 543, particularly para [21]] at p 543; Mansfield Drycleaners Ltd v

Quinny’s  Drycleaning  (Dentice  Drycleaning  Upper  Hutt)  Ltd  (Court  of

3      See also r 14.9 of the High Court Rules.

4      High Court Rules, r 14.1.

5      Ibid, rr 14.2–14.5.

6      Ibid, r 14.2(g).

7      Commerce Commission v Southern Cross Medical Care Society [2004] 1 NZLR 491 (CA).

Appeal, CA 296/01, 23 September 2002) at para [27]; and Body Corporate

97010 v Auckland City Council (Court of Appeal, CA 234/00, 30 August

2001). In the interests of predictability and expedition, Courts will be less inclined to depart from the prescribed approach. The prescribed approach includes the presumption that costs follow the event. However, we do not think that the Court should hesitate to depart from that approach where clear reason for it is shown. The public interest role of the Commission is capable of satisfying that requirement.

…

[21]      As a general principle we think that the Commerce Commission ought  not  to  be  exposed  to  an  adverse  costs  order  for  unsuccessfully opposing an appeal against one of its own determinations under Part V of the Commerce Act 1986 if all the commission has done is to assist the High Court by presenting necessary evidence and argument in opposition to the appeal in the public interest. Although we think that that is the right starting point, it is important not to overlook the inherently broad nature of a Court’s discretion over costs. Some flexibility must therefore be preserved to meet the requirements of each individual case. And  we do  not think that the starting point we have mentioned has any application to further appeals by the Commission to the Court of Appeal.

(emphasis added)

[9]      Another case on which New Health relied was New Zealand Maori Council v Attorney-General.8    That was a case involving litigation about the principles of the Treaty of Waitangi, to which reference had been made in s 9 of the State-Owned Enterprises Act 1986.  It concerned the risk that te reo Maori might not survive as a living language, and its status as a taonga.   While the Privy Council resolved the appeal in favour of the Crown,  Lord Woolf, delivering the advice of the Privy Council, dealt with the question of costs in this way:9

There remains the question of costs. Although the appeal is to be dismissed, the appellants were not bringing the proceedings out of any motive of personal gain. They were pursuing the proceedings in the interest of taonga which is an important part of the heritage of New Zealand. Because of the different views expressed by the members of the Court of Appeal on the issues raised on this appeal, an undesirable lack of clarity inevitably existed in an important area of the law which it was important that Their Lordships examine and in the circumstances Their Lordships regard it as just that there should be no order as to the costs on this appeal.

[10]     Counsel for the Council have referred to other cases in which the public interest exception has not been applied.  They have identified the dual need for the

8      New Zealand Maori Council v Attorney-General [1994] 1 NZLR 513 (PC).

9      Ibid, at 525.

Court  to  be  satisfied  that  the  unsuccessful  litigant  has  acted  reasonably  in  the conduct of the proceeding and that a private interest is not being dressed up as a public one.10   In Taylor v District Court at North Shore, White J observed:11

[9]       The scope of the “public interest” exception, now contained in rule

14.7(e), has been considered in a number of cases: New Zealand Mäori Council v Attorney- General, Commerce Commission v Southern Cross Medical Care Society, Gibbs v New Plymouth District Council, and Titahi Bay Residents Association Inc v Porirua City Council. As these cases show, the proceeding must concern a matter of genuine public interest, have merit and be of general importance beyond the interests of the particular unsuccessful litigant. To obtain the benefit of the exception in rule [14.7(e)], the unsuccessful litigant must also have acted reasonably in the conduct of the proceeding.

…

(footnotes omitted)

Analysis

[11]     I do not consider that much is to be gained by considering the specific facts of cases in which the public interest exception has been applied or rejected.   My approach has been to consider the issues raised by New Health’s proceeding and to determine whether this  is  a case in  which  r 14.7(e) should  be applied.    I have concluded that it should, for the reasons that follow.  In those circumstances, I need not discuss alternative arguments advanced by the parties.

[12]     The legality of fluoridation is an important issue, both from a public health and freedom of choice perspective.  This was the first occasion on which litigation had come before the High Court since an earlier challenge to the process had been rejected by the Privy Council in 1965, well before the Bill of Rights came into

force.12    Section 11 of the Bill of Rights brought a new dimension to the legality

inquiry. The issues were settled with clarity at an early stage of the proceeding.13

10     Gibbs v New Plymouth District Council (No. 2)  HC New Plymouth CIV 2004-443-115, 5

October 2006 (Heath J) at paras [16]–[18].

11     Taylor v District Court at North Shore HC Auckland CIV 2009-404-2350, 13 October 2010 (White J) at para [9].

12     See Attorney-General ex relatione Lewis v Lower Hutt City [1965] NZLR 116 (PC).

13     New Health New Zealand Inc v South Taranaki District Council HC New Plymouth CIV 2013-

443-107 (Minute 1) 17 June 2013 at para [3].

[13]     The majority of Rodney Hansen J’s judgment is concerned with the legality question.  The point was treated seriously, as is demonstrated both by the Attorney- General’s intervention and the Judge’s review of the relevant Bill of Rights jurisprudence, including consideration of authorities from other jurisdictions with similar provisions to those found in s 11.  There was also a detailed discussion on whether fluoridation was a justifiable limitation to rights conferred by the Bill of

Rights.14

[14]     While there is some suggestion in the Council’s submissions that New Health acted unreasonably, I do not consider that any material costs were thrown onto the Council as a result of improper or unreasonable conduct, in the sense that those terms are used for costs purposes.  To the contrary, counsel co-operated in refining issues so that they could be dealt with in a compact hearing that took place over two days.   It would have been easy for litigation of this type to have extended over a greater period. The focus brought to the proceeding by counsel for all parties is to be commended.

[15]     In those circumstances, I consider that the public interest exception should be invoked and no order for costs should be made.  The parties will each bear their own costs.

[16]     Having  decided  not  to  award  costs  in  this  case,  I  make  one  further observation.  New Health should be aware that the public interest exception is rarely applied to appeals or to attempts to re-litigate the same issue in other proceedings. This decision should not be taken as a precedent in relation to any questions of costs that might arise later, either on any appeal from Rodney Hansen J’s decision or in other  proceedings  of  a  similar  type  that  New  Health  has  brought  against  other parties.

Result

[17]     The Council’s application for costs is dismissed.

14     New Zealand Bill of Rights Act 1990, s 5.

[18]     I thank counsel for their assistance.

P R Heath J

Delivered at 4.00pm on 14 May 2014