New Zealand Independent Community Pharmacy Group v Te Whatu Ora Health New Zealand (formerly Hutt Valley District Health Board)
[2023] NZHC 3314
•22 November 2023
IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY
I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE
CIV-2022-485-11
[2023] NZHC 3314
UNDER the Judicial Review Procedure Act 2016, the Declaratory Judgments Act 1908 and Parts 18 and 30 of the High Court Rules 2016 IN THE MATTER OF
an application for judicial review and an application for declaratory relief under the Declaratory Judgments Act 1908
BETWEEN
NEW ZEALAND INDEPENDENT COMMUNITY PHARMACY GROUP
Applicant
AND
TE WHATU ORA – HEALTH NEW
ZEALAND (formerly HUTT VALLEY DISTRICT HEALTH BOARD)
First Respondent
Continued…
On the Papers Counsel:
R Kirkness, N Coates, M D N Harris and H Yáng for the Applicant
S M Bisley and J Maltby for the First and Second Respondents
Judgment:
22 November 2023
COSTS JUDGMENT OF GWYN J
NEW ZEALAND INDEPENDENT COMMUNITY PHARMACY GROUP v TE WHATU ORA [2023] NZHC
3314 [22 November 2023]
… Continued
HAUORA TAIRĀWHITI
Second Respondent
THE MINISTRY OF HEALTH
Third respondent
COUNTDOWN PHARMACY (GDL RX NO8 LTD)
Fourth respondent
THE PHARMACY GUILD OF NEW ZEALAND
Intervener
Overview
[1]The first and second respondents seek costs against the applicant.
[2] The applicant agrees they should be awarded scale 2B costs for the causes of action against each of them up until 1 July 2022. The parties have been unable to agree on the categorisation of costs incurred after that date.
[3]In addition, the parties disagree about:
(a)whether costs orders should be deferred pending appeal; and
(b)some specific steps for which costs are sought.
[4] The parties agree that the first and second respondents should recover disbursements totalling $2,005.22 (excluding GST).
Background
[5] The substantive proceeding involved a judicial review application brought by the applicant, the New Zealand Independent Community Pharmacy Group (ICPG) of a decision by the Ministry of Health (Ministry) to issue licences under s 55D of the Medicines Act 1981 to RX No 8 Ltd (RX8), a company associated with Countdown Supermarkets, to operate pharmacies in supermarkets.
[6] The ICPG also sought judicial review of decisions by two District Health Boards (DHBs), Hutt Valley District Health Board and Hauora Tairāwhiti, to enter into integrated community pharmacy services agreements (ICPSAs) with RX8. The ICPG pleaded five grounds of review against the DHBs, including three grounds relating to the DHBs’ assessment of the equity effects of RX8’s proposal to waive the prescription co-payment at the Countdown pharmacies, and breach of their obligations under te Tiriti o Waitangi/the Treaty of Waitangi.
[7] Te Whatu Ora is the successor to the DHBs under the Pae Ora (Healthy Futures) Act 2022, as of 1 July 2022.1
[8] In my Judgment,2 delivered on 15 June 2023, I held that the DHBs’ decisions to enter into the ICPSAs were commercial decisions and not reviewable except on the narrow grounds of fraud, corruption and bad faith,3 none of which was alleged. I further found that even if the decisions were reviewable, all grounds of review against the DHBs would fail on the merits.
[9] The only successful ground of review was that pleaded against the Ministry. I held that the Ministry’s decisions to grant RX8 licences to operate pharmacies were invalid and unlawful because in each case the pharmacist shareholders did not have “effective control” of the company as required by s 55D(2)(a) of the Medicines Act. I ordered the licences be set aside.
[10] RX8 filed a notice of appeal to the Court of Appeal on 13 July 2023. RX8 argues the High Court erred in the interpretation of “effective control” and therefore in finding that the licences granted by the Ministry to RX8 to operate the pharmacies in Countdown pharmacies were unlawful and invalid. I granted a stay of enforcement pending the determination of the appeal.4
[11] The ICPG filed a notice of cross-appeal in relation to the first to fourth grounds of review against the DHBs and my decision regarding admissibility of its expert evidence.5
Costs sought
[12]Mr Bisley, for Te Whatu Ora, seeks orders for the following:
1 Pae Ora (Healthy Futures) Act 2022, s 11.
2 New Zealand Independent Community Pharmacy Group v Te Whatu Ora [2023] NZHC 1486 [Judgment].
3 Mercury Energy Ltd v Electricity Corporation of New Zealand Ltd [1994] 2 NZLR 385 (PC).
4 New Zealand Independent Community Pharmacy Group v Te Whatu Ora [2023] NZHC 1929.
5 Judgment, above n 2, at [116]–[126].
(a)Costs of $115,423. This figure is calculated on a scale 2B basis for Hutt Valley DHB and Hauora Tairāwhiti up until 1 July 2022 and a scale 3C basis for Te Whatu Ora thereafter.
(b)Disbursements of $2,005.22.
(c)Costs and disbursements for the costs memorandum of $1,477.48. This comprises the cost of filing the costs memorandum and sealing the costs orders (if made) on a 2B basis, totalling $1,434, and the sealing fee of
$43.48 (excluding GST).
[13] Mr Kirkness, for the ICPG, submits that the determination of costs should be deferred pending appeal. If the Court is to fix costs now, it disputes the quantum and basis of costs sought by Te Whatu Ora. Counsel submits that the size of the costs orders sought has rights and constitutional implications. It says Te Whatu Ora’s arguments in support of the costs application lack restraint, proportionality and grounding in the substantive proceeding.
Timing of costs determination
Te Whatu Ora submissions
[14] Te Whatu Ora makes four main arguments in support of its overall submission that the determination of costs should not be delayed6 when the parties have filed costs memoranda, unless the parties agree (which here they have not) or there are unusual circumstances, such as a narrow point of appeal.7
[15] First, the successful party is entitled to enjoy the fruits of the judgment in its favour, having incurred the costs of the litigation in the High Court which is now completed. In support, counsel refers to Taueki v Horowhenua District Council8 and Strathboss Kiwifruit Ltd v Attorney-General.9
6 He v Earthquake Commission [2018] NZHC 67 at [71].
7 Tairua Marine Ltd v Waikato Regional Council [2006] NZRMA 485 (HC) at [14].
8 Taueki v Horowhenua District Council [2017] NZHC 1742 at [6].
9 Strathboss Kiwifruit Ltd v Attorney-General [2019] NZHC 62 at [5]–[9].
[16] Second, r 12 of the Court of Appeal (Civil) Rules 2005 provides that an appeal does not operate as a stay.
[17] Third, it is more efficient and convenient for this Court to determine costs now, instead of waiting for the outcome of the appeal. Counsel notes the delay until the determination of the appeal could be 12 months, but there is no definite date.
[18] While the ICPG and the Ministry have agreed to defer the determination of costs as between them, that is separate to Te Whatu Ora’s claim.
[19] Fourth, counsel submits the ICPG was created, as an incorporated society, for the purpose of the litigation which resulted in the Judgment. The ICPG has no assets and is reliant on funding from members. Te Whatu Ora should not have to take the risk that it would be unable to recover costs in relation to the Judgment if the ICPG becomes insolvent and/or places itself into liquidation.
ICPG submissions
[20] There are unusual circumstances in this case, justifying deferral. The parties are waiting for the determination of the appeal. The ICPG and the Ministry have agreed that costs between them as regards the effective control issue should be deferred until the determination of the appeal. Counsel submits it would be sensible and efficient for the Court to deal with costs in a single decision when it has the full context.
[21] The ICPG submits there is no basis for Te Whatu Ora’s argument that the ICPG might place itself into liquidation. The ICPG has paid $20,000 by way of security for costs into the Court and is willing to pay an additional $20,000 if the determination of costs is deferred.
Quantum
Te Whatu Ora submissions
[22] As regards costs for steps taken before 1 July 2022, the parties agree that Te Whatu Ora should be awarded scale 2B costs for each DHB up until 1 July 2022.
Te Whatu Ora seeks 2B costs of $14,818. Counsel notes the ICPG accepts these costs except for the filing of memorandum of counsel dated 17 June 2022 (referred to at [44(a)] below).
[23] Counsel submits scale 3C costs are appropriate for steps taken after 1 July 2022, to reflect the additional complexity of the proceeding and the time reasonably required for each step from that date. The factors that added this complexity and time required are:
(a)The newly established Te Whatu Ora had to respond to claims against two former DHBs. By way of context, the ICPG had four counsel appear at the hearing.
(b)The ICPG filed an amended statement of claim on 11 July 2022. This statement of claim added a novel fifth ground of review alleging that Hauora Tairāwhiti failed to monitor the delivery of pharmaceutical services by RX8 and re-pleaded declarations sought in respect of one repealed statute and one in-force statute. These amendments increased the issues to be addressed.
(c)The ICPG filed 23 affidavits. Although only some of the ICPG’s evidence was relevant and the Court excluded the ICPG’s expert evidence, Te Whatu Ora had to review and consider this evidence.
(d)In written and oral submissions, the ICPG re-cast its second ground of review. In the pleadings, the ICPG said that the Hutt Valley DHB and Hauora Tairāwhiti asked themselves the wrong question, and the correct question was “whether there was sufficient evidence that zero co-payments and longer hours... would have a material effect in reducing health disparities by improving health outcomes for the [DHB’s] resident population ...” At the hearing, the ICPG recast the question as “whether Countdown’s zero co-payment approach as a commercial marketing strategy would improve access to medicines and
health outcomes for disadvantaged population groups, including Māori.”
[24] Te Whatu Ora disagrees with the ICPG’s characterisation of costs sought as involving a punitive element. Counsel submits the ICPG brought the substantive proceeding to advance private interests and then failed to act reasonably. Accordingly, there is no basis to reduce costs on the basis of the public interest.
[25] In Diagnostic Medlab Ltd v Auckland District Health Board,10 the High Court awarded the intervener scale 3C costs for some steps in a complex judicial review proceeding. Counsel submits that, similarly, there is no reason why costs incurred after 1 July 2022 should not be awarded on a 3C basis. Scale 3C costs are appropriate after that date because if the two former DHBs took the same steps as Te Whatu Ora did after 1 July 2022, and recovered 2B costs in respect of those, the total costs would be similar to the award sought by Te Whatu Ora under 3C. Two sets of 2B costs from after 1 July 2022 would total $82,216.
[26] Te Whatu Ora incurred costs in respect of the preparation for and attendance at the three-day substantive hearing. The costs award should not be reduced on account of the hearing time because some of the argument concerned the sixth ground of review which was against the Ministry.
ICPG submissions
[27] Counsel for the ICPG notes that costs on a 3C scale in a judicial review is unusual. In light of the approach that 2B scale costs are generally appropriate for judicial review proceedings,11 there must be a very good reason before the Court will award 3C costs. The ICPG invites the Court to distinguish Diagnostic Medlab Ltd v Auckland District Health Board because it involved 10 hearing days — three times the length of this substantive proceeding — and was more complex. Counsel also notes that both DHBs signed a joint memorandum of counsel dated 20 April 2022
10 Diagnostic Medlab Ltd v Auckland District Health Board HC Auckland CIV-2006-404-4724, 13 June 2007.
11 Wong v Registrar of the Auckland High Court (2008) 19 PRNZ 32 (HC) at [12].
indicating a view that 2B costs were appropriate, and nothing after that date suggests 3C scale costs are justified.
[28] The ICPG says the substantive proceeding was not of high legal complexity, did not involve significant factual detail or a large quantity of material. Actual time spent and costs incurred are not dispositive because complexity and significance are assessed objectively. Counsel submits the claim was not complex enough to necessitate Te Whatu Ora retaining two law firms.
[29] The ICPG disputes Te Whatu Ora’s entitlement to some specific steps claimed. It also says Te Whatu Ora should not be able to claim costs for preparing for the full three days of the hearing when it knew the claims against it would only comprise part of the three-day hearing. These specific issues are discussed at [44] and [56]-[58] below.
[30] Finally, in the applicant’s view, Te Whatu Ora’s costs claim raises issues of general public importance. A costs award of the size sought by Te Whatu Ora (over
$115,000) for a judicial review proceeding of this nature risks opening the floodgates to similar claims by other decision-makers. This could have a chilling effect on parties using the mechanism of judicial review to hold public bodies accountable.12
Relevant law
[31]The overarching principle is that costs are at the discretion of the Court.13
[32] Costs should follow the event; reflect the complexity and significance of the proceeding; and the usual starting point is scale costs.14
12 Citing the New Zealand Bill of Rights Act 1990, s 27.
13 High Court Rules 2016 [Rules], r 14.1.
14 Rule 14.2(1).
Analysis
Timing of costs determination
[33] At the outset, I accept Te Whatu Ora’s submission that deferring costs pending appeal, absent the parties agreeing to this, would not be appropriate in the circumstances of this case. There is no presumption that a costs determination should be deferred until an appeal is heard.15 The parties have already incurred the time and cost of putting forward their respective submissions on costs and disbursements. While there will be some inefficiency in my determining costs now if any part of that determination requires reconsideration following the appeal, I conclude that inefficiency, if it arises, is outweighed by the benefit to Te Whatu Ora, as the successful party, in receiving some payment towards the costs it has incurred to date.
[34] Given my conclusion that costs should be fixed and paid now, I do not need to consider the suggested risk the ICPG will put itself into liquidation. In any event, there is no evidence before the Court on which I could have concluded there was such a risk.
[35] As counsel for the ICPG notes, it has paid security into the Court and offers to pay more if the Court were minded to defer the determination of costs.
Quantum
[36] I agree that the case is appropriately categorised as category two, although I observe that the memoranda of counsel agreeing to that predated the establishment of Te Whatu Ora.16 The substantive proceeding was a judicial review comprising six causes of action, against four respondents. The authors of The Law of Costs in New Zealand note that complex cases are those which are lengthy, factually intricate or that which require the determination of novel points of law.17 I accept the ICPG’s submission that Diagnostic Medlab can be distinguished because that case was longer
15 Strathboss Kiwifruit Ltd v Attorney-General [2019] NZHC 62 at [5]–[9].
16 See [27] above.
17 David Bullock and Tim Mullins The Law of Costs in New Zealand (looseleaf ed, LexisNexis, Wellington, 2022) at [2.8].
and the issues inherently more complex and novel than the matters determined in the Judgment.
[37] However I accept that there was a significant shift in the applicant’s case against Te Whatu Ora at trial. I also accept the disestablishment of the DHBs and their replacement with Te Whatu Ora during the course of the proceeding is a unique factor and is relevant to the calculation of costs. Until 1 July 2022 each DHB had separate representation. There is no suggestion that that was not a proper position. While the ICPG’s claims against each DHB were broadly similar, there were some differences. For example, the policies against which the applicant says the ICPSAs should have been assessed differed as between DHBs and the alleged failure to monitor the ICPSA was pleaded only against Hauora Tairāwhiti. The decision-making process for each DHB was somewhat different and made in a different context. Inevitably, counsel for each DHB would have had greater familiarity with the particular factual circumstances of their client.
[38] For those reasons, I accept that it would not be appropriate to confine Te Whatu Ora to 2B costs (for two counsel) after 1 July 2022. In NR v MR18 the Court of Appeal accepted that it was appropriate to use the 3C scale as a benchmark for some steps, although the proceeding overall was correctly characterised as 2B. In New Health New Zealand Inc v Minister for Covid-19 Response, Cooke J said “I see some merit in a more refined approach where a percentage increase is allowed only for particular steps rather than the whole award.”19 The Court then applied Band C for certain steps.20
[39] I adopt a similar approach here and direct that 2C costs should apply for the period after 1 July 2022.
[40] Given the specific and unusual basis on which I have concluded that additional costs are appropriate for the period after 1 July 2022, the risk of a chilling effect on future applicants bringing judicial review proceedings is low.
18 NR v MR [2016] NZCA 430 at [30].
19 New Health New Zealand Inc v Minister for Covid-19 Response [2023] NZHC 3132 at [8].
20 At [9].
[41] Nor do I consider a general reduction to the costs award on the basis of the public interest would be appropriate in these circumstances. I acknowledge that r 14.7(e) of the High Court Rules 2016 (Rules) empowers the Court to depart from the usual rule that costs follow the event if the proceeding concerned is a matter of public interest. However, as in Wong v Registrar of the Auckland High Court:21
It appears, therefore, that while there is an exception to costs in judicial review proceedings for cases of public interest, that exception should only apply to something that is truly in the public interest and not merely to the public’s benefit, such as the correct interpretation of a piece of legislation. It should also not arise out of a private interest.
[42] Similarly, in Ngāti Te Awa v Minister for Treaty Negotiations, the High Court said a “claim raising public law issues per se will not justify the departure. Usually it will require clarification of an area of law of general public interest”.22
[43] While the questions raised by the applicant concerned public law issues, and, I expect, were of interest to the public, I do not think the claim can be accurately categorised as a matter of general public interest. Further, as I recorded in the Judgment, the applicant had a clear commercial interest in the proceeding.23
Disputed items
[44]The ICPG disputes some steps claimed by Te Whatu Ora. These are:
(a)Before 1 July 2022, step 11 (by analogy):24 Filing a joint memorandum dated 17 June 2022 regarding timetabling. The ICPG says the costs regime should not permit any party to claim $956 for a two-sentence memorandum.
(b)After 1 July 2022, step 22: Filing an interlocutory application dated 14 September 2022 for orders excluding expert evidence. The ICPG
21 Wong v Registrar of the Auckland High Court, above n 11, at [18].
22 Ngāti Te Awa v Minister for Treaty of Waitangi Negotiations [2018] NZHC 915 at [2].
23 Judgment, above n 2, at [185]–[188].
24 Step 11 in sch 3 of the Rules is “Filing memorandum for first or subsequent case management conference or mentions hearing”.
objected to the exclusion of the evidence and has now appealed the Court’s finding on this issue.
(c)Step 11 (by analogy): Filing a memorandum dated 30 September 2022 regarding the timing of the hearing of Te Whatu Ora’s application to exclude ICPG’s expert evidence. The ICPG says this step would not have been necessary if Te Whatu Ora had not itself raised the issue of admissibility.
(d)Step 24, preparation of written submissions. The ICPG opposes Te Whatu Ora’s claim for costs for submissions in support of its application to exclude expert evidence. The ICPG say Te Whatu Ora failed to obtain a separate interlocutory hearing for the application and the issue was dealt with at the substantive hearing. No separate allowance should be made for submissions relating to the evidential question.
(e)Step 11 (by analogy): Filing a memorandum dated 18 November 2022 regarding a Commerce Commission “warning” letter that Te Whatu Ora considered might be relevant to the Court’s consideration of the applicant’s third ground of review; the Pharmacy Guild’s application to make oral submissions; and correcting and updating an affidavit where the deponent was unavailable through illness to swear an amended affidavit. The ICPG says this was an ordinary memorandum of counsel which is not provided for in sch 3 of the Rules and the ICPG should not be required to pay for a memorandum in which Te Whatu Ora set out its views which it could have included in evidence at an earlier stage.
(f)Step 11 (by analogy): Filing a memorandum dated 31 January 2023 regarding the number of service agreements entered into by the first and second respondents pursuant to s 25 of the New Zealand Public Health and Disability Act 2000. The ICPG says this memorandum is not analogous to step 11 and the memorandum would not have been
necessary if Te Whatu Ora included the factual matters it addressed earlier in its evidence.
(g)Step 11 (by analogy): Filing a memorandum dated 14 March 2023 regarding the closure of Countdown Pharmacy Gisborne and relief. The ICPG says this memorandum was not prepared for a case management conference and it not analogous to step 11.
(h)Preparation time for, and appearance at, three full hearing days. The ICPG says approximately 0.75 days of the hearing were taken up with the “effective control” issue which affected only the Ministry and RX8. Te Whatu Ora is entitled to costs for only 2.25 hearing days.
[45]I set out my assessment of each of these disputed items below.
[46] The steps at [44](a), (c), (e), (f) and (g) above are all sought “by analogy” with step 11 of sch 3 of the Rules. Rule 14.5(1) provides:
14.5 Determination of reasonable time
(1)For the purposes of rule 14.2(1)(c), a reasonable time for a step is—
(a)the time specified for it in Schedule 3; or
(b)a time determined by analogy with that schedule, if Schedule 3 does not apply; or
(c)the time assessed as likely to be required for the particular step, if no analogy can usefully be made.
[47] The Rules thus recognise that in some cases steps will be taken in the proceeding that are not included in sch 3. As the authors of the The Law of Costs in New Zealand note:25
Justice Fogarty has fittingly observed: ‘Schedule 3 has the noble goal of trying to achieve certainty, but r 14.5 reveals that the ultimate goal is a just order of costs’.26 To that end, the Rules recognise that in some cases steps will be taken in the proceeding that are not included in Schedule 3. In those cases, r 14.5(1)(b) provides that the reasonable time for a step is ‘the time determined by analogy with that schedule.’
25 Bullock and Mullins, above n 17, at [2.15].
26 Langston v Mount Hutt Helicopters Ltd (No 2) [2013] NZHC 2226 at [27].
[48] As that commentary also notes, there is little guidance on how the analogy rule is to be exercised, citing Body Corporate Administration Ltd v Mehta.27 Application of the analogy rule necessarily involves “a heavily circumstantial judgment made by the court in the exercise of its discretion.”28 In a number of cases, costs have been awarded in respect of memoranda, not filed for case management conferences, by analogy.29 In Norrie (as liquidator of Pakiri Investments Ltd (in liq)) v Time3 Global Ltd,30 costs were awarded on a costs memorandum, by analogy to preparation of a memorandum in sch 3, and a similar approach was adopted in AFI Management Pty Ltd v Lepionka & Co Investments Ltd.31
[49] Having regard to those authorities, I accept that a memorandum responding to a proposal for detailed timetabling directions up to trial ([44](a) above) is analogous to step 11. However, I acknowledge the ICPG’s submission that $956 is excessive, given the two-sentence content of the memorandum. I consider that scale 1A, being
$318, is an appropriate recovery rate in respect of this memorandum.
[50] The steps at [44](b) and (c) above concern the respondents’ application for excluding expert evidence from the ICPG. The ICPG resists costs for the application itself and for the first and second respondents’ memorandum as to timing for hearing of the application. The application was dated 14 September 2022. The respondents sought a one hour hearing, prior to the substantive trial. Subsequent memoranda from the third and fourth respondents and the intervener indicated a preference for the application to be determined at trial. The first and second respondents filed a memorandum on 30 September 2022 agreeing, on the basis that it did not want to jeopardise the hearing date, and proposing that submissions on admissibility form part of the substantive submissions for hearing. By memorandum of 3 October 2022 the ICPG requested that the application be dealt with at the substantive hearing and by minute of 4 October 2022 I directed that the application be dealt with at the substantive hearing and submissions be included in the substantive submissions. I ultimately
27 Body Corporate Administration Ltd v Mehta [2015] NZHC 316 at [37].
28 Bullock and Mullins, above n 17, at [2.15].
29 See for example Greenpeace of New Zealand Inc v Minister of Energy and Resources [2013] NZHC 1110 at [8]; and Xiao v Sun [2018] NZHC 1334 at [16]–[17].
30 Norrie (as liquidator of Pakiri Investments Ltd (in liq)) v Time3 Global Ltd [2016] NZHC 2712 at [24].
31 AFI Management Pty Ltd v Lepionka & Co Investments Ltd [2018] NZHC 892.
determined the question of admissibility in Te Whatu Ora’s favour. Although that aspect of the judgment is subject to appeal, there is no reason why costs for the application should not be recoverable. Similarly, there is no reason why Te Whatu Ora should not recover costs for its memorandum of 30 September 2022. It is analogous to a memorandum filed under step 11.
[51] The step at [44](d) above concerns Te Whatu Ora’s claim for costs for preparation of submissions supporting its application to exclude the ICPG’s expert evidence. As noted above, by agreement that application was heard during the course of the substantive hearing, rather than by way of a separate, pre-trial hearing. While Te Whatu Ora’s submissions covered some nine pages, I agree with the ICPG that it is incorporated in preparation time for the substantive submissions as a whole and no further costs allowance is appropriate.
[52] I consider the step referred to at [44](e) above is not analogous to step 11 in relation to the preparation of the memorandum dated 18 November. The “warning” letter by the Commerce Commission that the memorandum brings to the Court’s attention is dated 13 February 2014. Te Whatu Ora could have addressed the information in that memorandum in its evidence filed earlier in the proceeding. Costs are therefore not recoverable in respect of this memorandum.
[53] As to [44](f) above, while Te Whatu Ora’s memorandum of 31 January 2023 responded to a specific indication from the Court that it would be useful to have the number of service agreements entered into by the first and second respondents pursuant to s 25 of the New Zealand Public Health and Disability Act, I agree that the memorandum providing that information is not “analogous” to step 11 in sch 3 and could have been addressed by Te Whatu Ora earlier, in its evidence. No costs allowance is appropriate.
[54] As to step [44](g) above, Te Whatu Ora’s memorandum of 14 March 2023 updated the Court on the position of the Countdown Pharmacy in Gisborne and the consequent suspension of the ICPSA between Te Whatu Ora and RX8 in relation to that pharmacy. The memorandum provided relevant information for the Court and, as Te Whatu Ora indicated in its memorandum, potentially impacted on the relief sought
by the applicant. I accept that the memorandum was analogous to step 11 in sch 3 and costs are recoverable in respect of it.
[55] Finally, in relation to step [44](h) above, the ICPG says Te Whatu Ora should be entitled to costs for only 2.25 hearing days.
[56] By agreement, submissions at the hearing were presented in the following order:
(a)ICPG
(b)Pharmacy Guild of New Zealand
(c)Ministry
(d)Te Whatu Ora
(e)RX8
(f)ICPG (in reply).
[57] The submissions were wide ranging. For example, the submissions for RX8 did address issues relevant to the first and second respondents in addition to the claims directly affecting RX8 (for example, the reviewability of commercial decisions).
[58] I conclude that, having regard to the sequence and breadth of the submissions, the attention and understanding of counsel for Te Whatu Ora was required for the whole trial.32 Costs are therefore recoverable in relation to the full three day hearing.
[59] Finally, Te Whatu Ora also seeks costs for its costs memorandum. As Associate Judge Christiansen observed in Norrie there is no specific step in sch 3 of the Rules providing for the recovery of costs for filing costs memoranda.33
32 Diagnostic Medlab, above n 10, at [32].
33 Norrie (as liquidator of Pakiri Investments Ltd (in liq)) v Time3 Global Ltd, above n 30, at [24].
However, this step can be recoverable by analogy under r 14.5 of the Rules.34 Courts generally allow 0.4 days for filing costs memoranda.35 In these circumstances, I consider 0.4 days ($956 plus disbursements) is appropriate. The disbursements associated with the costs memorandum are already included in the parties’ agreed disbursements quantum.
Result
[60] I direct that costs be fixed and paid now, rather than deferred until the determination of the appeal.
[61] I direct that the ICPG is to pay costs to Te Whatu Ora calculated in accordance with this judgment in the amount of $71,301, together with disbursements of
$2,005.22 (excluding GST).
Gwyn J
34 At [24].
35 At [35], citing Tukuafu v Glenfield Investments Ltd HC Auckland CIV-2010-404-6628, 29 November 2010 at [37]; Official Assignee v Black Bag Ltd [2015] NZHC 1642; and Auckland Regional Council v Arrigato Investments (2002) 16 PRNZ 217 (HC) at [21].
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