Ng�ti Paoa Trust Board v Auckland Council
[2022] NZHC 1377
•10 June 2022
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2021-404-1749 [2022] NZHC 1377
UNDER The Judicial Review Procedure Act 2016 and the Declaratory Judgments Act 1908 IN THE MATTER OF
An application for judicial review and/or declarations
BETWEEN
NGĀTI PAOA TRUST BOARD
Applicant
AND
AUCKLAND COUNCIL
First Respondent
ENVIRONMENT COURT
Second Respondent
KENNEDY POINT BOATHARBOUR LIMITED
Third Respondent
NGĀTI PAOA IWI TRUST
Intervenor
Hearing: On the papers Judgment:
10 June 2022
COSTS JUDGMENT OF HINTON J
This judgment was delivered by me on Friday 10 June 2022 at4.30 pm. pursuant to Rule 11.5 of the High Court Rules.
Registrar/Deputy Registrar Date:…………………………
Counsel/Solicitors:
K Feint QC, Barrister, Wellington Insight Legal Limited, WarkworthBrookfields Lawyers, Auckland Crown Law, Wellington
V Morrison-Shaw, Auckland Atkins Holm Majurey, Auckland Kāhui Legal,Wellington
NGĀTI PAOA TRUST BOARD v AUCKLAND COUNCIL [2022] NZHC 1377 [10 June 2022]
[1] On 29 April I delivered judgment on this matter dismissing the judicial review application brought by the Ngāti Paoa Trust Board (the Trust Board). Parties have now filed for costs.
[2] Auckland Council, the first respondent, seeks costs against the Trust Board on a 2B basis, totalling $35,611, plus disbursements of $110. This includes the cost of second counsel.
[3] Kennedy Point Boatharbour Ltd (KPBL), the third respondent, seeks 50 per cent of indemnity costs against the Trust Board, which amounts to $64,814.03, plus $110 for disbursements.
[4] The Trust Board contends that the Court should decline to make a costs order in favour of the Council and costs in that regard should lie where they fall. It further says no indemnity or increased costs should be ordered in favour of KPBL and the appropriate costs award is 50 per cent scale costs.
[5] For completeness, the Ngāti Pāoa Iwi Trust does not seek costs because a condition of the Court granting intervener status was that it would not do so.
Auckland Council
[6] The Trust Board points to r 14.7(e) of the High Court Rules 2016 under which costs may be refused or reduced where the proceeding concerned a matter of public interest and the party opposing costs acted reasonably in the course of the proceeding. The Trust Board submits that the Court usually exercises significant discretion in the context of costs awards on judicial review proceedings because of the role of judicial review in upholding the rule of law. It says there is a public interest in the marina generally throughout the Ngāti Paoa iwi and Waiheke community. There is also a public interest in ensuring the Council adheres to its duties in relation to the Treaty of Waitangi. There should not be a chilling factor on mana whenua scrutinising the way the Council discharges these duties.
[7] The Council does not accept that there is sufficient public interest to justify a reduction in or refusal of costs. The first, and effectively the second, ground of review
turned on facts specific to the parties.1 The third ground had already been thoroughly canvassed in the Courts.2 The dispute was in essence internal as to representative capacity.
[8] Further, the Council’s position is that the Trust Board did not act reasonably in the proceedings. In particular, the Council emphasises that the proceeding failed on all grounds, including discretion. There was no reasonable basis to support the second ground of review. The third ground of review was arguably an abuse of process and amounted to an issue estoppel, and there was unreasonable delay in bringing the proceeding.
[9] Although there was arguably some flavour or element of public interest, I agree with the Council’s submission that at the heart of the review was an intra-iwi dispute specific to the parties. I consider the requisite public interest threshold is not met. Even if it was, the Trust Board did not act reasonably, especially in relation to its third ground of review which as I noted at the time was arguably an abuse of process. Because I am satisfied that the criteria in r 14.7(e) are not met I do not need to address the Council’s argument that in the alternative there are occasions where the Court has considered it would be unfair to a successful Council’s ratepayers to bear the burden of a reduction of costs, even when the case is in the public interest.3 However I take the Council’s point that it has already been subject to substantial and expensive litigation in relation to the Kennedy Point marina to which, as I found, the Trust Board was a privy.
[10] The Trust Board points to r 14.15 which provides that the Court must not allow more than one set of costs, unless it appears there is a good reason to do so, if several defendants defended a proceeding separately and it appears to the Court that all or some of them could have joined in their defence. The Trust Board says if costs are to be granted, they are more appropriately granted in favour of KPBL. The Council’s
1 The first ground was that the Council erred in removing the Trust Board from the mana whenua register and in confirming that decision. The second ground was that the Trust Board had a legitimate expectation of specific notification of KPBL’s application.
2 The third ground of review was that the Environment Court erred in fact/law due to not having the Trust Board before it.
3 See Te Rangatirantanga O Ngatai Rangitihi Inc v Bay of Plenty Regional Council HC Tauranga CIV-2010-470-936, 17 February 2011; and Evans v Clutha District Council [2019] NZHC 549.
actions brought about the proceedings. The Court acknowledged the Council could have been more prudent.
[11] The Council is the first respondent. The main thrust of the case is against the Council. It was clearly important it conduct its defence. Although some parts of the Council’s and KPBL’s defence overlapped, it was important for KPBL to bring a distinct defence. This was particularly so in relation to the exercise of discretion for relief. If the Court quashed KPBL’s resource consent, as sought by the Trust Board, KPBL’s commercial interests would have been significantly affected. The Council would not have been in a position to make submissions in that regard. For these reasons I do not consider that Auckland Council and KPBL could have joined in their defence, and r 14.15 does not apply.
[12] Although I commented in the substantive judgment that the Council could have been more prudent, ultimately it acted reasonably. I do not consider the Council’s behaviour justifies a reduction in or removal of costs.
[13] The Council has claimed costs for second counsel. The Trust Board does not specifically oppose this. I consider it appropriate for costs of second counsel to be allowed given the complexity and detailed facts of this case.
[14] I award costs to the Council on a 2B basis against the Trust Board on the basis claimed.
KPBL
Basis
[15] KPBL claims indemnity costs at a quantum of 50 per cent of actual costs. It says it has taken a conservative approach to calculating costs. In particular:
(a)only 50 per cent of indemnity costs are sought;
(b)no costs are sought for the fees of the external witness for KPBL, Mr Blakey, who provided an affidavit for the proceeding;
(c)no costs are sought for the attendances in April 2022 associated with the post-hearing judicial teleconference and subsequent Court correspondence; and
(d)the costs application also excludes costs associated with a legal review of the decision, the correspondence with the Trust Board regarding costs and the preparation of this application.
[16] The Trust Board opposes indemnity costs and submits that KPBL’s costs should be reduced because the Council primarily shouldered the burden of the defence.
[17] KPBL relies on r 14.6, which provides that the Court may order a party to pay indemnity costs if:
(a) the party has acted vexatiously, frivolously, improperly, or unnecessarily in commencing, continuing, or defending a proceeding or a step in a proceeding; or
(b) the party has ignored or disobeyed an order or direction of the court or breached an undertaking given to the court or another party; or
…
(f) some other reason exists which justifies the court making an order for indemnity costs despite the principle that the determination of costs should be predictable and expeditious.
[18] KPBL also points to the Court of Appeal’s decision in Bradbury v Westpac Banking Corp where it was held that indemnity costs may be ordered where a party has behaved very badly or unreasonably, which includes bringing proceedings with an ulterior motive, doing so in wilful disregard of known facts or clearly established law, or bringing a “hopeless case”.4
[19] KPBL says that the Trust Board failed on all grounds. There was no reasonable basis to support the second ground. The third ground was an abuse of process. There was unreasonable delay in bringing the claim. The Trust Board made allegations unsupported by evidence and that were in part demonstrably untrue or at least containing a degree of exaggeration. It sought to amend the scope of its first review
4 Bradbury v Westpac Banking Corp [2009] 3 NZLR 400 at [29].
ground in reply submissions necessitating a post-hearing response and it failed to comply with almost all of the Court’s timetabling directions.
[20] The Trust Board submits none of the matters put forward constitute “exceptionally bad behaviour” or “flagrant misconduct” as per Bradbury v Westpac. Although it failed on all three grounds, the test is whether the party knew its claim was untenable and hopeless but pursued it nonetheless; careless or misguided pursuit of a claim does not qualify.5 The Trust Board says it reasonably relied on the Māori Appellate Court’s view that the Council’s conduct was “as a matter of law” wrong (despite this Court taking a different view). The second ground added limited, if any, additional time and expense to the proceeding.
[21] In relation to its third ground of review, the Trust Board says there was no finding of abuse of process, only an obiter comment that it was arguable. In any case it says abuse of process does not prima facie justify indemnity costs.6 Further it says failures to comply with timetabling directions were not material in the circumstances and there was no prejudice or additional cost suffered by KPBL.
[22] I consider that the points made by KPBL in relation to the three grounds of review do not rise to the threshold required for indemnity costs. What I do consider justifies indemnity costs is that the Trust Board was bound to fail as to the relief it sought against KPBL, for the reasons set out in the substantive judgment. It was only because the Trust Board sought to quash the resource consent granted to KPBL that KPBL was brought into the proceedings and forced to defend. Therefore I consider that as against KPBL, the Trust Board’s case was a “hopeless case”. The Trust Board had no chance of recovering the relief it sought. On that basis I consider KPBL is entitled to costs assessed on an indemnity basis.
[23] Before moving to consider quantum, I note finally that KPBL says it put the Trust Board on notice on 28 September 2021 on a “without prejudice save as to costs” basis that if it did not withdraw parts of its claim relating to the marina, KPBL would seek indemnity costs. The Trust Board contends such a “walk away” resolution has
5 Body Corporate 166208 v York Trustees Ltd [2021] NZHC 1974 at [38].
6 Minister of Education v James Hardie [2018] NZHC 2960 at [21].
no relevance to the issue of indemnity costs.7 I agree that by itself the notice would not justify the granting of indemnity costs and in this case I have not taken it into account.
Quantum
[24] I turn now to consider the quantum of reasonable actual costs. I have reviewed KPBL’s schedule of actual costs and attached invoices. It is somewhat difficult to ascertain whether these costs are reasonable because, for example, the degree of overlap (if any) between the work of the two counsel is not identified. Nor is Mr Majurey’s hourly rate identified. However the Trust Board does not challenge the reasonableness of the quantum, so I proceed on the basis the costs are prima facie reasonable.
[25] I need to consider what actual costs are reasonable in the context of this case where, as the Trust Board submits, the Council has primarily defended the claim. KPBL has claimed only 50 per cent of actual costs. The Trust Board submit that 50 per cent of scale costs is appropriate. Having decided indemnity costs are appropriate in principle, I conclude that 50 per cent of indemnity costs accurately reflects the reasonable costs claimable by KPBL.
[26] The Trust Board raises the issue that the invoices provided by KPBL are GST inclusive. KPBL has not specifically notified me that it is unable to recover GST so I proceed on the basis it can do so.8 GST is also unrecoverable on disbursements.9 The ultimate sums in terms of both costs and disbursements need to be adjusted to exclude GST.
Result
[27] I award costs and disbursements in favour of Auckland Council on a 2B basis, certifying for second counsel, in the sums of $35,611 and $110 respectively
7 Hira Bhana v PCF Wrightson Ltd [2007] NZCA 342.
8 See New Zealand Venue and Event Management Ltd v Worldwide NZ LLC [2016] NZCA 282, (2016) 27 NZTC 22-058 at [13]–[16].
9 At [17].
[28] I award 50 per cent of indemnity costs, and disbursements in full, in favour of KPBL, on the basis sought but GST exclusive. The parties should be able to agree the quantum.
Hinton J
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