New Health New Zealand Incorporated v Minister for Covid-19 Response

[2023] NZHC 3132

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

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

CIV-2022-485-379

[2023] NZHC 3132

UNDER

the Judicial Review Procedure Act 2016

AND

Part 30 of the High Court Rules

IN THE MATTER

of COVID-19 Public Health Response (Protection Framework) Order 2021 and COVID-19 Public Health Response (Masks) Order 2022

BETWEEN

NEW HEALTH NEW ZEALAND INCORPORATED

Applicant

AND

MINISTER FOR COVID-19 RESPONSE

First Respondent

ATTORNEY-GENERAL

Second Respondent

Hearing:	On the papers
Appearances:	L M Hansen and C F J Reid for the Applicant K B Bell and E J Cameron for the Respondents
Judgment:	7 November 2023

JUDGMENT (NO 2) OF COOKE J

(Costs)

[1]                 By judgment dated 21 September I dismissed the applicant’s judicial review challenge, providing a preliminary view that costs should be awarded to the respondents on a 2B basis but allowing memoranda to be filed.1 A memorandum of counsel for the respondents dated 12 October, and from counsel for the applicant dated

1      New Health New Zealand Ltd v Minister for COVID-19 Response [2023] NZHC 2647 at [107].

NEW HEALTH NEW ZEALAND INC v MINISTER FOR COVID-19 RESPONSE [2023] NZHC 3132

[7 November 2023]

27 October have now been received and referred to me. Three main issues are raised in relation to the costs award:

(a)The applicant says that no costs should be awarded, or they ought to be reduced, as the proceedings were advanced in the public interest.

(b)The respondent seeks a 50 per cent uplift for two of the steps given the manner in which the litigation was conducted.

(c)The applicant challenges the level of the disbursements that have been claimed by the respondents in relation to expert evidence.

Public interest

[2]                 Under r 14.7(e) there can be a refusal or reduction in costs if the proceeding concerned a matter of public interest and the party opposing costs acted reasonably in the conduct of the proceedings.2 The applicant says that this principle should apply here, and refers to other unsuccessful Covid-19 challenges where the Court has indicated that this principle was applicable.3

[3]                 In advancing this submission the applicant first contends that the Court erred in finding that there was not a significant transgression of rights or mistake of fact involved in the challenged decisions. The applicant says that it is appealing the whole decision to the Court of Appeal. These arguments are not relevant to the costs award. Costs are awarded on the basis of the judgment as it stands, and the respondents are entitled to have costs assessed on that basis.

[4]                 The applicant next argues that there was significant public interest in ensuring that coercive public measures such as mask mandates are underpinned by the highest quality scientific evidence. It points out that the Court concluded there were differences of view on the effectiveness of face coverings, and it repeats its arguments

2      See Environmental Defence Society Inc v New Zealand King Salmon Co Ltd [2014] NZSC 167, (2014) 25 PRNZ 637.

3      Four Aviation Security Service Employees v Minister of COVID-19 Response [2021] NZHC 3012, [2022] 2 NZLR 26 at [145]; Four Midwives v Minister of COVID-19 Response [2021] NZHC 3420.

about the adverse effects of face coverings. It does not accept the respondents’ criticisms that the case was not conducted reasonably and says that when proceedings are brought solely in the public interest costs should not be awarded against the applicant as this may discourage litigants from bringing claims concerning fundamental rights. Reference is made to Radich J’s recent observation that doing so can result in a weakening of the protections of the New Zealand Bill of Rights Act 1990.4

[5]                 When judicial review proceedings involve challenges to significant measures that affect a section of the wider public I agree that considerations of this kind can be relevant to the costs awards. That has been recognised with other challenges to COVID-19 measures. But as I said in the judgment I do not consider this proceeding to be of the same kind, and I concluded that the challenge was not well founded.5 In particular:

(a)Unlike the unsuccessful COVID-19 challenges where the Court has indicated that costs might not be awarded, or might be reduced, the applicant’s fundamental rights were not affected. Neither was evidence filed from anyone adversely affected by the mask mandate requirements. So any reduction in costs would need to be based on a wider public interest being advanced by the challenge.

(b)By the time of the hearing the mask mandate in effect only related to medical facilities, and by the time of judgment it had been entirely removed. The proceedings cannot be categorised as a challenge to a restrictive measure that affected a category of the public in a significant way in those circumstances. I also note that the applicant sought to adjourn the hearing of the challenge as the trial approached, which further illustrates that the challenge was not directed to matters of

4      Greenhorn v The Speaker of the House of Representatives [2023] NZHC 2865 at [61]–[63] referring to Attorney-General v Udompun [2005] 3 NZLR 204 (CA) at [185]–[187].

5      New Health New Zealand Ltd v Minister for COVID-19 Response, above n 1, at [105]–[106].

significant restriction, but rather to issues that the applicant wished to litigate as a matter of principle.6

(c)The challenged measures were not held to restrict rights under the New Zealand Bill of Rights Act with the exception of freedom of expression, and then only in a limited way. In substance the challenge involved the applicant’s criticisms of the view that had been formed by the Ministers and those advising them on the efficacy and appropriateness of a measure taken to respond to the pandemic. The applicant is entitled to bring such a challenge to the Court, but it will only be relieved of the normal cost consequences when the challenge fails if a significant public interest can be shown to have been advanced. I held in the judgment that no such public interest was involved, and remain of that view notwithstanding the applicant’s reiteration of its points in its costs submissions.

(d)I consider there is substance to the respondents’ criticism of the nature of the challenge. A challenge based on a difference of expert opinion was artificially characterised as engaging the mistake of fact ground of judicial review. The artificiality of that characterisation was illustrated by the fact that the applicant did not refer to any authority for the proposition that such a difference of opinion could found such a judicial review challenge. Neither was there consistency in the oral submissions of counsel for the applicant where the essential nature of the applicant’s challenge changed on this point depending on which counsel was addressing the Court.7

(e)Extensive expert opinion was relied on in support of the arguments raising a broad range of technical issues, although the evidence of one of the experts was disallowed as inadmissible. The challenge can fairly be characterised as a comprehensive attack on the merits of the

6      New Health New Zealand Ltd v Minister for COVID-19 Response HC Wellington CIV-2022-485- 379, 26 May 2023.

7      New Health New Zealand Ltd v Minister for COVID-19 Response, above n 1, at [59]–[63].

decisions on a wide range of issues. It was not a judicial review challenge to the legality of the decisions clearly based on established grounds of judicial review.

[6]                 For these reasons I see no basis upon which to disallow or reduce the normal award of costs under r 14.7(e) or otherwise.

Uplift

[7]                 The respondents seek an uplift for steps 30 (preparing affidavits, list of issues or authorities; and agreeing common bundle)  and 32 (preparing  for hearing) under  r 14.6. On a band B basis three days are allowed for each step. The respondents seek a 50 per cent uplift for each step under r 14.6(3)(b)(i). The applicant resists this claim and says that it did not make unnecessary arguments, or pursue arguments without merit.

[8]                 Claims for uplifts are usually directed to a percentage uplift of the entire costs award, although applying it to only some steps is an available approach.8 I see some merit in a more refined approach where a percentage increase is allowed only for particular steps rather than the whole award. Having said that it is important that costs assessments be relatively simple and predictable.

[9]                 I see force in the respondents’ submission that the applicant’s arguments had little merit, and ultimately involved an invitation to the Court to address the substance of the decisions made by the Ministers rather than focusing on the legality of the decisions on established grounds of judicial review. But I do not consider it is necessary to reach a conclusion on the respondents’ application to increase costs on this basis. The conventional approach to assessing costs involves determining the appropriate time band assessment prior to deciding whether an uplift should be allowed.9 Time band C is contemplated when “a comparatively large amount of time for the particular step is considered reasonable” under r 14.5(2)(c). Step 30 covers the preparation of evidence and other associated steps for an affidavit hearing. Band C

8      Holdfast NZ Ltd v Selleys Pty Ltd (2005) 17 PRNZ 897 (CA) at [46]–[48].

9 At [44].

involves four days for the first day of hearing, and then two days per day for the second to fifth days of the hearing. It seems to me that this is the appropriate allowance here

— the expert evidence relied upon by the applicant involved a need to prepare substantial evidence in response from the respondent, including instructing experts to give expert evidence on the large number of issues raised in addition to the evidence from the two Ministers, the two Director-Generals of Health and other deponents. When evidence from a new expert (Dr Jefferson) was filed in reply it was necessary for the respondents to obtain further expert evidence responding to it. I consider that a comparatively large amount of time was accordingly reasonably required for this step. That assessment arises irrespective of any arguments concerning the merit of the applicant’s challenge.

[10]             This involves six days for step 30 as well as the three days for step 32, involving a total of nine days. This results in an award of $21,510 which is the same as the amount of the respondents claim on the 50 per cent uplift basis.

[11]             For these reasons I allow the days claimed for these steps, but for different reasons.

Expert costs

[12]             Finally the applicant disputes some of the disbursements claimed by the respondents, in particular a claim for the fees of the experts instructed to give evidence in this proceeding. These were fees rendered by the University of Otago for the work of Professor Baker and Associate Professor Kvalsvig involving the total amount of

$74,750.

[13]             The applicant argues that the expertise of these experts was inferior to the expertise of those relied upon by the applicant, that Professors Baker and Kvalsvig have been “dedicated advocates of face coverings since June 2020”, and that it was surprising that they needed to undertake the analysis described in their evidence because their analysis was the sort of assessment that the Crown ought to have obtained in any event. The applicant refers to a statement from the Chief Justice to the profession on 12 September 2022 indicating that independent advice was being relied upon by her at that time. The applicant also points out that the invoices were

rendered to the Department of Prime Minister and Cabinet showing an existing relationship for the provision of such services.

[14]             Disbursements are allowable under r 14.12 in relation to expenses incurred for the purposes of the proceeding. This includes expert fees under r 14.12(2) if they are reasonable in amount. The applicant says that its own expenses for its expert evidence were $36,318, less than half the fees charged by the respondents’ experts.

[15]             The Court has previously disallowed expert fees that are very large, particularly for very expensive overseas experts.10 But this will not occur unless the fees are disproportionate, or otherwise unreasonable.11 That cannot be said here. I do not accept the proposition that the respondents’ experts had inferior expertise. Indeed the evidence of the person who appears to have charged the most for giving expert evidence for the applicant was found to be inadmissible as he was not qualified to give expert evidence.12 The proposition that Professors Baker and Kvalsvig have been dedicated advocates of face coverings is also not well-founded given that, as I noted in the judgment, Professor Baker had changed his mind about the efficacy of face masks during the period of the pandemic.13 So I see no basis to disallow the costs of the respondents’ experts based on the applicants criticism of them.

[16]             I also see no substance to the applicant’s complaint that this expert evidence should already have been available to the Crown at some earlier point. Whether expert advice had been provided by these experts previously is irrelevant. Expert evidence needs to be directed to the issues before the Court. Here the expert evidence obtained and filed by the respondents was specifically directed to the issues that had been raised by the applicant’s expert evidence. The applicant’s case involved a very wide-ranging challenge to the merits of face mask mandates. A large number of issues were raised, some of a highly technical nature. The respondents cannot be criticised for instructing independent experts to address the matters raised by the applicant’s expert evidence in those circumstances. Indeed it is difficult to see how they could be expected to do otherwise. It would be quite unfair for a claimant to advance a case based on expert

10     Houghton v Saunders [2021] NZHC 3590 at [65]–[68].

11     Cridge v Studcorp [2022] NZHC 2024 at [146]–[150].

12     New Health New Zealand Ltd v Minister for COVID-19 Response, above n 1, at [7]–[10].

13 At [43].

evidence, and then contend that it is unreasonable for the respondent to instruct its own expert evidence to address those matters.

[17]For these reasons I allow the disbursements as claimed.

Conclusion

[18]             Costs are accordingly awarded to the respondents as claimed for the reasons set out above.

Cooke J

Solicitors:

G L Reeves, Wellington for the Applicant Crown Law, Wellington for the Respondents