New Health New Zealand Inc v Wellington Water Ltd

[2022] NZHC 2783

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

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

CIV-2022-485-556

[2022] NZHC 2783

UNDER

the Judicial Review Procedure Act 2016

IN THE MATTER

of an application for judicial review and an application for a declaration

BETWEEN

NEW HEALTH NEW ZEALAND INC

Applicant

AND

WELLINGTON WATER LTD

First Respondent

WELLINGTON CITY COUNCIL

Second Respondent

HUTT CITY COUNCIL

Third Respondent

Hearing:	On the papers
Appearances:	T Mijatov and J S Trevella for the Applicant A S Butler for the Respondents
Judgment:	27 October 2022

JUDGMENT (NO 2) OF COOKE J

(Costs)

[1]    By judgment dated 16 September 2022 I declined an application for interim orders.1 I indicated that the respondents would be entitled to costs, and if not agreed this could be addressed by memoranda. Memoranda have now been filed. The respondents seek costs on a 3B basis with certain uplifts, and the applicant submits

1      New Health New Zealand Inc v Wellington Water Ltd [2022] NZHC 2389.

NEW HEALTH NEW ZEALAND INC v WELLINGTON WATER LTD [2022] NZHC 2783 [27 October 2022]

that the respondents should only be entitled to a nominal award of costs. So the parties are a considerable distance apart.

[2]I address the differences between the parties arising from their memoranda.

Public interest

[3]    The applicant argues that the interim relief application was brought in the public interest justifying no more than a nominal costs award.

[4]    Rule 14.7(e) of the High Court Rules 2016 contemplates that costs can be refused or reduced when the proceeding concerned a matter of public interest and the party acted reasonably in the conduct of the proceedings. The applicant argues that the fluoridation of water supplies involves a limitation of the right to refuse to undergo medical treatment under the New Zealand Bill of Rights Act 1990, and that the international materials indicate that there are genuine issues about the benefits and detriments of the fluoridation of drinking water supplies. It emphasises that it has nothing personally to gain by the proceedings. It also refers to previous decisions which have recognised the importance of public interest litigation, including when parties act as effective watchdogs of the public interest, including when fundamental rights have been limited.2

[5]    I do not accept, however, that such principles mean that costs should not be awarded here. As I indicated in the judgment, the applicant has already challenged the fluoridation of drinking water supplies all the way through to the Supreme Court in the earlier proceeding. I am told that in this first challenge costs were awarded against the applicant in the High Court, Court of Appeal and Supreme Court. In any event, the applicant must have appreciated that its chances of success second time around were slim, particularly given the enactment of the Health (Fluoridation of Drinking Water) Amendment Act 2021 which amounted to a legislative response to the issues raised by it in the first challenge. I held the application for interim relief was “… at

2      Environmental Defence Society Inc v The New Zealand King Salmon Company Ltd [2014] NZSC 167, (2014) 25 PRNZ 637; New Zealand Animal Law Association v Attorney-General [2022] NZHC 2192 at [21]; Te Whare O Te Kaitiaka Ngahere Inc Society v West Coast Regional Council [2015] NZCA 356 at [27]; Yardley v Minister of Workplace Relatons and Safety [2022] NZHC 975 at [8].

best opportunistic, and also somewhat artificial …”.3 The applicant cannot avoid the normal cost consequences of litigation it has initiated in those circumstances.

Categorisation

[6]    The respondents say that this proceeding should be categorised as category 3, but the applicant says it should be categorised as category 2.

[7]Under r 14.3 of the High Court Rules 2016 category 2 proceedings are:

Proceedings of average complexity requiring counsel of skill and experience considered average in the High Court.

[8]Category 3 proceedings are:

Proceedings that because of their complexity or significance require counsel to have special skill and experience in the High Court.

[9]    It is important to note that the categorisation does not flow from counsel actually instructed. Rather it is an assessment by the Court of the character of the proceedings themselves. The applicant argues that whilst the proceeding raised issues of administrative law it did not meet the required standard of “specialist” expertise, referring to a number of recent judicial review proceedings where costs were awarded on a category 2 basis.4

[10]   The fact that this is a judicial review proceeding does not of itself mean that it moves into category 3, although judicial review does in itself involve a degree of specialisation. Each case will depend on its characteristics. This particular challenge, and the interim relief application, was one of some complexity. There had already been an extensive challenge that had been argued in the High Court, Court of Appeal, and Supreme Court. The new challenge was based on issues concerning the health benefits (or otherwise) of fluoridation and reasonably extensive scientific evidence was filed in support of the application. There was new legislation now regulating the field, and the applicant was seeking interim relief pending the hearing of its new

3      New Health New Zealand Inc v Wellington Water Ltd, above n 1, at [28].

4      Wellington International Airport Ltd v Waka Kotahi New Zealand Transport Agency [2022] NZHC 954 at [235]; Moveme Health Ltd v New Zealand Artificial Limb Service [2022] NZHC 1629; New Zealand Animal Law Association v Attorney-General, above n 2; Yardley v Minister for Workplace Relations and Safety, above n 2 (noting, however the Court’s reservation in paragraph [11]).

challenge. These factors seem to me to demonstrate that these were proceedings that because of their complexity and special significance required counsel of special skill and experience, rather counsel of skill and experience considered average in the High Court. I agree that the proceedings are to be categorised as category 3.

Uplifts

[11]The respondents seek an uplift of the costs award for two reasons:

(a)that each of the respondents was required to respond to the interim relief application, and incurred its own costs in delivering material, affidavits, and providing instructions; and

(b)the respondents offered the applicant an opportunity to withdraw the application for interim relief with costs to lie where they fall which was declined.

[12]   The respondents seek an uplift of either 50 to 100 per cent in relation to the steps of taking instructions and filing papers in opposition. The uplift is not sought for the costs incurred for the hearing itself. The respondents note that they appeared by a single counsel and seeks an award of costs on that basis. It is also relevant that when the application was first fielded by me as Duty Judge I indicated at the telephone conference that there may be costs consequences if the application was pursued and was unsuccessful.

[13]   The applicant says that these claims are extraordinary, and that even a 50 per cent uplift would amount to more than the notional two third award that the schedule is directed to. It also argues that the ground for an uplift under r 14.6 has not been set out, that the costs incurred by the respondents were not unusual with the coordination demonstrated by them instructing single counsel. It also says that the “walk away” offer is not a good reason to uplift costs.

[14]   I accept the applicant’s submission that there is no basis to increase costs because of the respondents’ settlement offer. Rule 14.6(3)(b)(v) includes a failure to accept a settlement offer as a reason to increase costs. But the respondents incurred

no additional legal expenditure because the applicant declined this offer, and the lack of merit in the application does not of itself meet the level warranting an increase.

[15]   I also accept the applicant’s point that the respondents have not articulated a basis for an uplift under r 14.6. But it seems to me that the respondents are making a slightly different point which is properly addressed in another way. This was an urgent application for interim relief brought against three separate entities that needed to respond to it. They would each have incurred legal expenditure to organise that response, yet they jointly seek a single costs award. The appropriate way for the costs regime to respond to the additional legal expenditure arising from those circumstances is in the time allocations. In particular under r 14.5(2) this is not a situation where “a normal amount of time is considered reasonable” for the initial response, but rather where “a comparatively large amount of time for the particular step is considered reasonable”. So rather than awarding the respondents a percentage uplift I direct that steps 23 and 24 (filing opposition to the interlocutory application, and preparing written submissions) should be awarded on a time band C basis rather than a time band B basis. In particular I accept that there would have been more work required by the three bodies to consider the papers, assess the position, instruct single counsel, provide material to counsel and to review the argument advanced in response than would have been the case if there was a single respondent. That approach also takes into account that higher legal costs are likely to be involved to respond to an application brought on an urgent basis. So a higher time allowance is reasonable in the circumstances.

Conclusion

[16]   For the above reasons I conclude that public interest factors do not mean that costs should not be awarded to the respondents, that the proceedings are appropriately categorised as category 3 because of their particular complexity, and that some of the steps should be assessed under time band C rather than B as the three respondents had to coordinate a single response to an application brought on a urgent basis.

[17]Costs are to be calculated on the above basis.

Cooke J