New Zealand Institute of Forestry Te Pūtahi Ngāherehere o Aotearoa Incorporated
[2025] NZHC 14
•17 January 2025
IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY
I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE
CIV-2023-485-624
[2025] NZHC 14
UNDER the Judicial Review Procedure Act 2016 r 4.24 of the High Court Rules IN THE MATTER
of an application for judicial review
BETWEEN
THE NEW ZEALAND INSTITUTE OF FORESTRY (NZIF) TE PŪTAHI NGĀHEREHERE O AOTEAROA INCORPORATED
First Applicant
THE CLIMATE FORESTRY ASSOCIATION INCORPORATED
Second Applicant
THE NEW ZEALAND FOREST OWNERS ASSOCIATION INCORPORATED
Third ApplicantNGĀ POU A TĀNE INCORPORATED
Fourth ApplicantAND
THE ATTORNEY-GENERAL
Respondent
Hearing: 3 July 2024 Appearances:
N D Chapman and A H Eng for Applicants D J Watson, E M Jamieson for Respondent
Judgment:
17 January 2025
JUDGMENT OF McQUEEN J
THE NEW ZEALAND INSTITUTE OF FORESTRY (NZIF) TE PŪTAHI NGĀHEREHERE O AOTEAROA INCORPORATED v THE ATTORNEY-GENERAL [2025] NZHC 14 [17 January 2025]
[1] The applicants are representative organisations that act on behalf of various parties with significant forestry holdings. They bring an application for judicial review against the Crown in relation to cost recovery levies imposed in the forestry industry under secondary legislation.
[2] The applicants have applied for interlocutory orders requiring the Crown to provide discovery and to withdraw all commercial sensitivity and/or “counsel to counsel” restrictions on documents that have been provided to date.
[3] The Attorney-General opposes the orders sought and instead proposes certain timetable orders.
Background
[4] The Emissions Trading Scheme (ETS) is one of the Crown’s key policy tools in relation to climate change mitigation, for managing and reducing emissions. The ETS is established under the Climate Change Response Act 2002 (the CCRA). The ETS also assists the Crown in meeting domestic and international climate change targets set by the CCRA.
[5] On 18 September 2023, pursuant to s 167 of the CCRA, the Crown issued the Climate Change (Forestry) Amendment Regulations 2023 (the Regulations). They came into force on 19 October 2023.
[6] The CCRA and the Regulations are administered by the Ministry for the Environment. Those enactments confer functions, powers and duties on the Environmental Protection Authority (EPA). However, it is the business unit Te Uru Rākau in the Ministry for Primary Industries (MPI) that, on behalf of the EPA, administers the forestry components of the ETS under the CCRA.
[7] The Regulations create new fixed fees for specific services and a new annual charge for participants registered in the forestry ETS. 45 per cent of the revenue generated by the annual charge is intended to cover the costs of MPI’s new ETS-related Information Technology (IT) system, Tupu-ake.
[8] On 6 October 2023, the applicants filed a statement of claim with 14 grounds of judicial review. The matter had its first call in December 2023 before Cooke J. His Honour expressed some concern about the number of grounds for review and the apparent intention of the applicants to file expert evidence. There was disagreement between counsel as to the likely hearing length and the category of the proceeding. In the circumstances, Cooke J restricted his directions to the provision of documents and, if required, the filing of any application for discovery. His Honour indicated that a more comprehensive description of the issues arising in the judicial review challenge should be provided by the applicants before the next call of the matter so that the Court could consider further directions, including as to an appropriate timetable for dealing with any discovery application and the provision of evidence.
[9] The applicants requested documents from the Crown. In February 2024, the Crown provided informal disclosure of some documents, while placing counsel-only restrictions on some of the documents and removing embedded information from others because of confidentiality concerns. The Crown’s position was that the majority of the documents requested by the applicants were not relevant to the proceeding and did not need to be provided, and in any event the request was not proportionate.
[10] Following further discussions between counsel, the Crown removed some restrictions on documents, but others were maintained, and agreement could not be reached as to the provision of further material.
[11] Accordingly, the applicants filed an application for discovery orders on 15 May 2024. On the same date counsel filed a joint memorandum requesting a fixture for that application. Counsel also sought further directions as to the timetable to trial, proposing alternatives depending on whether the application for discovery was successful (both including the filing of amended pleadings at the same time as the provision of evidence). The Registrar set down the discovery application for hearing and made the other directions as sought.
[12] The discovery orders sought by the applicants relate to a particular issue arising on the pleadings under the first, second and ninth grounds of review. As pleaded, the
issue relates to whether the charges made under the Regulations are unlawful in seeking to recover costs that:
(a)were unreasonably and unjustifiably incurred in procuring, implementing and operating Tupu-ake and are thus excessive, unreasonable and disproportionate (and the charges are therefore ultra vires);
(b)are more than the reasonable cost of administering forestry in the ETS as they exceed cost recovery including because Tupu-ake is an excessive IT system (and the charges are therefore ultra vires); and
(c)fail to take account of MPI’s cost recovery principles (and the charges therefore failed to take account of mandatory considerations).
[13] The Crown denies that the charges are unlawful in any of the respects pleaded by the applicants.
The application for discovery orders
[14]The applicants have applied to the Court for orders that the Crown:
(a)withdraw the commercial sensitivity and/or counsel-only restrictions on the documents that have been provided to date;
(b)provide discovery of all relevant documents relating to the pleaded issue of the costs associated with procuring, implementing and operating Tupu-ake;
(c)comply with the listing and exchange protocol in pt 2 of sch 9 of the High Court Rules 2016 in providing discovery; and
(d)file and serve an affidavit of documents.
[15] The applicants allege that the Crown has adopted an unduly narrow approach to the documents it is making available and has failed to properly discharge its duty of candour by providing documents on a counsel-only or redacted basis without proper grounds for doing so. The applicants say that this failure has unduly interfered with their ability to properly understand, prepare and advance their case. They also say that a more thorough approach to discovery is proportionate, noting the level of fees earned by MPI from forestry participants in the ETS under the Regulations.
[16] The applicants do not accept that the application for discovery is premature, noting that it has been made in compliance with the Court’s directions. They say determining the application now will be helpful to repleading their claim (which they accept is required to refine the scope of their challenge) and providing evidence (the obligation of which will fall first on the applicants).
[17] The applicants also submit that the way documents have been provided by the Crown to date has been inconsistent and unnecessarily confused. They therefore seek an order that discovery should be made in accordance with the listing and exchange protocol in pt 2 of sch 9 of the High Court Rules and in an affidavit of documents.
[18] The applicants rely on timetable orders made by consent on 15 May 2024, and says the Crown cannot now seek to revisit the appropriateness of those orders.
The Crown’s opposition
[19] The Crown opposes the application for discovery. The Crown challenges both the relevance of documents sought and the proportionality of the proposed order.
[20] The Crown says that relevance is assessed by issues arising on the pleadings and as the applicants say they intend to file an amended statement of claim, the application for discovery is premature. The Crown says that, in any event, on the pleadings as they presently stand, the three grounds of review at issue in the application for discovery all raise questions of law that fall to be determined by reference to the statutory scheme, supplemented (at most) by the record of the process leading to the creation of the Regulations which are the subject of review. The Crown says that there is no direct challenge to any decisions that were taken as part of the
multi-year ETS forestry transformation programme of which the procurement and development of Tupu-ake was just one part.
[21] The Crown says that the discovery sought must be necessary for disposing fairly of the proceeding and that the categories of documents sought are overly broad. The Crown says it has already provided, by way of informal discovery, material establishing the components of the IT costs (both actual and anticipated) that comprise the proportion of the annual charge relating to Tupu-ake (being 45 per cent), even though the Crown’s view is the material is not relevant to the issues in the proceeding. The Crown says it is entitled to provide such material in redacted form and/or on a counsel-only basis for reasons of commercial sensitivity. It says that until the Court determines the relevance of the documents the applicants cannot complain that these documents have been withheld or that redactions are unnecessary.
[22] The Crown also says that it has satisfied the duty of candour by providing initial disclosure and informal discovery that is materially relevant to the decision under review. As noted, the Crown says it has provided the applicants with material beyond the decision-making documents themselves, to assist the applicants to refine their claim and to resolve discovery issues without troubling the Court, even though its position is that this material is not relevant. The Crown says that the provision of its evidence in due course will further fulfil its duty of candour.
[23] The Crown proposes timetable orders for amended pleadings, the provision of evidence, and reserving leave for any application for discovery to then be made. It says that timetabling further steps (including reply evidence from the applicants) can be addressed at a later stage.
Principles relating to discovery in judicial review
[24] Applications for discovery in judicial review proceedings are dealt with under s 14(2)(h) of the Judicial Review Procedure Act 2016 (the Act). Discovery is not available as of right in judicial review, rather the power to order it is discretionary.1
1 Chatfield & Co Ltd v Commissioner of Inland Revenue [2016] NZCA 614 at [20].
[25] The fact-dependent nature of judicial review means that those whose decisions are challenged have a duty to explain the decision-making process, the relevant factual and other circumstances, and the reasons for the decision.2 This is a responsibility of public decision-making, rather than a legally enforceable duty.3 Where such evidence is not provided, a court may well draw adverse inferences.4
[26] The “duty of candour” ensures that the decision-maker’s disclosures and evidence are full and frank and that the relevant decision and the reasons for it are transparent.5 Compliance with that duty also means that applications for discovery, interrogatories and cross-examination should be minimised.6
[27] As is often said, judicial review is intended to be a short and simple means by which to test the legality of public sector decision-making affecting ordinary citizens. Ultimately, in ensuring that material sought by way of discovery is both relevant to the proceeding and proportionate, the Court is required to:7
… make an assessment of what discovery is required to enable the applicant to fairly argue its case, whilst at the same time ensuring that the materials remain relevant, and the requirements are consistent with the objective of judicial review being a simple, untechnical and prompt procedure.
Discussion
[28] The lack of precision in the pleadings has led to difficulty in assessing what documents might be necessary to fairly and effectively adjudicate on the issues in this proceeding subject to the present application.8 In part this is due to the failure to timetable the filing and serving of amended pleadings before this application came before the Court. Initial disclosure has been provided by the Crown which includes the documents referred to in the statement of claim and other documents the Crown considers completes the package of decision-making documents. As noted, further
2 Ririnui v Landcorp Farming Ltd [2016] NZSC 62 at [105].
3 At [105].
4 At [105].
5 Wallace v Chief Executive of the Department of Corrections [2023] NZHC 2248 at [9].
6 At [9].
7 Ferguson v Chief Executive of the Department of Corrections [2022] NZHC 1430 at [22] citing Gama Foundation v Chief Executive of the Ministry of Social Development [2021] NZHC 3146 at [10].
8 Wellington International Airport Ltd v Commerce Commission HC Wellington CP151/02, 25 July 2002 at [45].
informal discovery has also been given by the Crown, but it does not accept the relevance of much of that material. This creates the danger of opening up decision making not directly relevant to the issues in the proceeding.
[29] While the application seeks several orders, the fundamental question is whether the documents sought in relation to the costs of Tupu-ake are relevant to the issues in the proceeding.
[30] I have already set out the three relevant grounds of review advanced by the applicants. In essence, the grounds assert that the costs relating to Tupu-ake are unreasonable, and thus the charges made under the Regulations are unlawful.
[31] The parties agree that s 167 of the CCRA provides a power to recover costs through regulations. The applicants say this power is subject to a requirement that the costs are reasonable. Under the first and second grounds for review, this leads to a question as to the scope of s 167 and will require the Court to consider whether the Regulations are within that scope. The ninth ground of review will require the Court to assess whether MPI’s cost recovery principles are mandatory considerations and if so, whether they were taken into account in setting the charges.
[32] While, for the applicants, Mr Chapman accepts that those will be matters for the Court to consider, he says there is another question for the Court, and that is whether the costs relating to Tupu-ake are unreasonable, in fact. He says that the applicants will have to prove that is the case at the substantive hearing and says the discovery sought is directed to that question rather than the statutory interpretation exercise. Mr Chapman says that this issue arises on the pleadings as they are presently cast.
[33] To support his argument, Mr Chapman referred me to two of the documents provided by the Crown in informal discovery. He says they show that following the selection of delivery vendors for Tupu-ake in 2020, there was a reset in 2022, and there were still problems with cost and delivery in 2023, just when the Regulations came into force. Mr Chapman says these matters go to the issue of whether the costs of Tupu-ake are reasonable and support the applicants’ claim that the costs for Tupu-ake
spiralled out of control, and the applicants are bearing the consequences because the charges seek to recover those costs.
[34] Overall, Mr Chapman contends that the applicants and the Court need to understand the factual context of the creation of Tupu-ake, as the Court must be fully informed of the facts as presented to the decision maker.9 He says the Court should be concerned about attempts, as here, to limit the information available to parties and the Court. Mr Chapman says that the orders sought here are analogous to those sought in Northland Environmental Protection Society Inc v Chief Executive of the Ministry for Primary Industries where this Court concluded that it was appropriate to order discovery in the context of judicial review.10 Mr Chapman denies the applicants are on a fishing expedition, as the documents referred to show there are real concerns and other relevant documents are likely to be located, if discovery is ordered. He says the documents provide a basis to suggest that unreasonable costs were incurred and carried through to each stage of MPI’s thinking in relation to implementing and operating Tupu-ake and thus this would have been carried through to the material before the decision makers and ultimately the decisions as to charges.
[35]I consider that there are several problems with the applicants’ position.
[36] As the parties agree, the first two grounds of review involve issues of statutory interpretation. The Court’s primary task in judicial review of secondary legislation is to analyse it against the empowering legislation.11 Beyond the legislation, this may require the Court to consider documents forming the record of the decision resulting in the making of the secondary legislation and possibly information relied on by those preparing the decision-making documents. I understand that these documents have been provided through initial disclosure. Further, there is a presumption of validity, and the Court will only interfere in a clear case.12
9 Fiordland Venison Ltd v Minister of Agriculture and Fisheries [1978] 2 NZLR 341 (CA) at 346.
10 Northland Environmental Protection Society Inc v Chief Executive of the Ministry for Primary Industries [2016] NZHC 406 at [30]–[31].
11 Harness Racing New Zealand v Kotzikas [2005] NZAR 268 (CA) at [56]–[61].
12 At [62].
[37] Thus, the first point is that the Court is able to consider the validity of the Regulations against the empowering legislation without having the material sought by the applicants.
[38] A further issue is that the statement of claim, as presently framed, does not challenge any specific decision in relation to the procurement and implementation of Tupu-ake, rather it makes bare assertions as to excessive and unreasonable costs incurred. The applicants’ pursuit of discovery that relates to details of the costs incurred in creating and operating Tupu-ake appears on its face to seek a review of the merits of that process rather than to address whether the Regulations are within the scope of the CCRA as a matter of law.
[39] I suggested to Mr Chapman that the applicants would need to show that the costs relating to Tupu-ake are plainly unreasonable. He properly accepted that there is a “buffer” before a Court would reach such a conclusion. As Mr Chapman conceded, the applicants do not know that the costs are plainly unreasonable and that is why they want the discovery they are seeking.
[40] For the Crown, Ms Watson says that the documents already disclosed by the Crown do not establish that all past costs of the procurement and implementation of Tupu-ake are sought to be recovered from charges imposed under the Regulations. She says this is supported by the Crown’s pleading in the statement of defence at [50] where the Crown says:
… 45% of the annual charge ($13.61 per ha) is associated with the Tupu-ake IT system, comprising: maintenance, operating costs (including software licensing); ongoing system enhancement costs (although any significant development costs considered in the future would be considered separately in terms of funding and relevance for cost recovery); staff costs, capital charge; depreciation and overheads…
[41] The Crown’s position is that apart from the capital charge and depreciation, which relate to past costs, the remainder of the contributions to the 45 per cent component are all ongoing or future costs. This position will presumably be confirmed in the evidence provided for the Crown.
[42] As to the ninth ground of review, whether the cost recovery principles were a mandatory consideration is a matter to be determined by reference to the relevant legislation.13 If the cost principles are a mandatory consideration, whether they have been considered will be assessed against the record of the relevant decision. It is not for the Court to assess the weight given to a mandatory consideration in judicial review.14
[43] The Court will not assess unreasonableness by undertaking a forensic analysis of every component of the work undertaken to procure and implement Tupu-ake. This is especially so when the decisions made in that work are not explicitly challenged in the claim before the Court.
[44] At present, the applicants’ application for discovery orders can fairly be classified as a fishing expedition. The applicants are seeking to explore the costs of procuring, implementing and operating Tupu-ake in anticipation that what they learn will support their bare assertions. I conclude that permitting them to do this would be inconsistent with the well-established approach that discovery in judicial review should be a simple, untechnical and prompt procedure.
[45] The Court must assess relevance and proportionality in the particular circumstances of the case. I consider that in this case, whether or not further material is required in discovery will be informed by the decision-making process described by the Crown in its evidence. In Fiordland Venison Ltd v Minister of Agriculture and Fisheries, the Court of Appeal was faced with a situation where the evidence provided by the Crown was described as short and “distinctly uninformative”.15 The Court was required to infer the Minister’s reasons for declining an application for the relevant licence because no reasoned decision was given. This is the context in which the Court reiterated that:16
… it is vital for the Court to be as fully informed as reasonably possible of the facts and issues as they presented themselves at the time to the authority whose decision is under review.
13 Attorney-General v New Zealand Māori Council [1991] 2 NZLR 129 (CA) at 140; and
Secretary for Justice v Simes [2012] NZCA 459, [2012] NZAR 1044 at [50].
14 Te Rangi v Jackson [2015] NZCA 490, [2015] NZAR 1946 at [28].
15 Fiordland Venison Ltd v Minister of Agriculture and Fisheries, above n 9, at 345.
16 At 346.
[46] That is a very different situation to the present, where the parties are arguing over discovery and no Crown evidence has yet been filed. In addition, as the applicants acknowledge, the statement of claim is to be amended. I therefore decline to order the discovery sought by the applicants. The application is premature.
[47] In view of that position, I do not need to address the question of whether the discovery sought is proportionate.
[48] The Crown has also provided material to the applicants (or their counsel) on an informal basis and without accepting its relevance to issues in the proceeding. Although the Crown sought to assist by informally providing what it says are largely irrelevant documents, this has ultimately led to further difficulties. The applicants say that the documents provided are relevant and should be provided without any redactions or access limits to counsel only and apply for an order to this effect. While these documents were provided to the Court, counsel did not address at the hearing the documents’ relevance or irrelevance (other than at a broad level described earlier). Accordingly, a more formal approach to discovery is required.
[49] I decline to make the order sought by the applicants that the documents provided informally by the Crown be disclosed without restrictions. I consider the preferable course is to direct that the Crown review the documents provided informally and make formal discovery of all documents it considers relevant and proportionate in light of amended pleadings. This also provides an opportunity for the Crown to consider the criticisms made by the applicants of its approach to discovery to date. Any redactions to documents provided in that discovery (or other restrictions as to access to the documents) should be accompanied by a detailed explanation for the restrictions. If there remains a dispute between the parties at that point, it may be necessary for the Court to determine whether the restrictions are justified.
[50] The Crown has sought an order that the Court file containing any documents provided on a counsel-only basis not be searched without an order of a Judge, to preserve the Crown’s position in respect of those documents. I consider this is appropriate at this stage and make such a direction below.
Timetable orders
[51] The applicants says that timetable orders towards trial of this matter have been ordered by the Court following the filing of the joint memorandum of counsel dated 15 May 2024. The applicants object to the Crown now proposing a different timetable.
[52] I am satisfied that different timetable orders from those agreed in the May memorandum are appropriate in the circumstances. I have declined the application for discovery orders in part because it has come before the Court prematurely. I agree with the Crown that, following the filing of revised pleadings and the evidence, the applicants should have an opportunity to apply for targeted discovery in relation to the costs relating to Tupu-ake, should they consider it necessary.
Result
[53]The application for discovery orders is dismissed.
[54]I make the following directions:
(a)the applicants are to file and serve an amended statement of claim within four weeks;
(b)the Crown is to file any amended statement of defence within a further three weeks;
(c)the Crown is to provide discovery of the decision documents and any other material necessary for the Court to fairly and effectively adjudicate on the issues on the proceeding within a further three weeks. In providing discovery the Crown is to comply with the listing and exchange protocol in pt 2 of sch 9 of the High Court Rules 2016 (including in relation to the initial discovery provided) and file and serve an affidavit of documents. If the Crown redacts any content in documents provided in discovery or provides it subject to other restrictions, the Crown is to provide the applicants with a detailed explanation of the basis for its approach;
(d)the applicants are to complete inspection no later than two weeks after discovery is provided as directed above;
(e)the applicants are to file and serve evidence within a further five weeks;
(f)the Crown is to file and serve evidence within a further four weeks;
(g)leave is reserved for any applications to be filed and served following the provision of the Crown’s evidence. For the avoidance of doubt, this includes any application by the applicants for further discovery and the resolution of issues arising from any redactions or other restrictions on the provision of discovery by the Crown;
(h)this proceeding is to be called in the Judge’s Chambers List on the first convenient date after 27 June 2025 with leave reserved to the parties to bring the call forward to an earlier date if required; and
(i)the Court file containing any documents provided by the Crown on a counsel-only basis is not to be searched without an order of a Judge, until further order of the Court.
McQueen J
Solicitors:
Simpson Grierson, Wellington for Applicants Crown Law Office, Wellington for Respondent
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