Northland Environmental Protection Society Incorporated v Chief Executive of the Ministry of Primary Industries

[2017] NZHC 2435

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2015-404-2128 [2017] NZHC 2435

UNDER

the Judicature Amendment Act 1972 and

the Declaratory Judgments Act 1908

IN THE MATTER

of an application for Judicial Review of decisions under the Forests Act 1949, Customs and Excise Act 1996 and the Protected Objects Act 1975

BETWEEN

NORTHLAND ENVIRONMENTAL PROTECTION SOCIETY INCORPORATED

Plaintiff

AND

THE CHIEF EXECUTIVE OF THE MINISTRY OF PRIMARY INDUSTRIES First Defendant

AND

COMPTROLLER OF CUSTOMS Second Defendant

AND

THE CHIEF EXECUTIVE OF THE MINISTRY FOR CULTURE AND HERITAGE

Third Defendant

On the papers
Appearances:	D Salmon and D Bullock for Plaintiff J Gorman and B Charmley for First and Second Defendants B Arapere for Third Defendant
Judgment:	5 October 2017

COSTS JUDGMENT OF TOOGOOD J

This judgment was delivered by me on 5 October 2017 at 11.00 am

Pursuant to Rule 11.5 High Court Rules

Registrar/Deputy Registrar

NORTHLAND ENVIRONMENTAL PROTECTION SOCIETY INCORPORATED v THE CHIEF EXECUTIVE OF THE MINISTRY OF PRIMARY INDUSTRIES [2017] NZHC 2435 [5 October 2017]

Introduction

[1]      On 1 March 2017 I gave judgment in this proceeding, declining to grant any of  the  relief  sought  by  the  plaintiff.1    I  reserved  costs  for  the  exchange  of memoranda. At [87] of the judgment I said:

[87]     That is not to say, however, that the issuing of the proceeding by NEPS was not justifiable.  Plainly, there had been historical concern about the  increase  in  exports  of  ancient  swamp  kauri  products  giving  rise  to genuine questions about whether the regulatory regime was being managed appropriately.   It is not my intention to pre-empt any application by the defendants for costs, but I do not consider it could reasonably be suggested that the plaintiff was not motivated to bring this proceeding by what might be regarded as legitimate public interest.  And it seems clear that the change in MPIs approach to the approval scheme has been informed by the proceeding and the evidence adduced in it.

[2]      The defendants apply for costs, arguing that they were wholly successful in the proceeding.  They seek costs (according to scale on a category 2B basis less 25 per cent):

(a)      in favour of the Ministry of Primary Industries (MPI) in the sum of

$36,083.80,   comprising   $26,801.81   in   costs   and   $9,281.99   in disbursements.

(b)      in favour of the Comptroller of Customs (Customs) in the sum of

$9,027.62,    comprising     $8,362.50    in    costs    and    $665.12    in disbursements.

(c)      in favour of the Ministry for Culture and heritage (MCH) in the sum of $18,343.62, comprising $16,725.00 in costs and $1,618.62 in disbursements.

[3]      The defendants have made adjustments to the scale costs in recognition of the fact that all three defendants are Crown agencies and that there was commonality of representation by counsel for the first and second defendants.  MPI has reduced the

disbursements  claimed  in  relation  to  the  outsourcing  of  electronic  services  for

1      Northland Environmental Protection Society Inc v Chief Executive of the Ministry of Primary

Industries [2017] NZHC 308.

discovery, saying it recognises that the High Court has held that only partial recovery of such a disbursement may be appropriate where not all of the work was in the nature of "highly specialised IT work".2   The defendants suggest that the 25 per cent discounts on 2B scale costs are appropriate because the proceeding involved an element of public interest.

[4]      The defendants, however, question my observation at [87] that "the change in MPI's approach to the approval scheme has been informed by the proceeding and the evidence adduced in it".   They submit  that the observation is inconsistent with comments at [15] and [16] to the effect that MPI has progressively improved its procedures for monitoring the export of ancient swamp kauri products since late

2011, and that it implemented revised operational measures in July 2015, prior to the issuing of the proceeding in September of that year.

[5]      The plaintiff (NEPS or the Society) argues that costs should lie where they fall because, applying r 14.7(e) of the High Court Rules, the case concerned matters of genuine public interest and the Society acted reasonably in the conduct of the proceeding.  The Society submits that whether or not it was successful in the proceeding should not limit the weight the Court should give to the r 14.7(e) factors, on the basis that whether an unsuccessful party has had a measure of success in the proceeding is a separate ground for reducing costs under r 14.7(d).

[6]      The Society also argues that success in the proceeding is not to be measured solely by reference to the outcome.  Although the Society may not have obtained the relief it sought, it argues that it was justified in bringing before the Court evidence which it genuinely considered justified its challenge to “systemic failures or legal errors” in the approach taken by MPI, particularly, to its responsibilities under the Forests  Act 1949.     NEPS  also  submits  that,  during  the  hearing,  its  counsel responsibly refined the declarations sought in response to the way in which the argument developed during the hearing.   Relying on the approach of the Court in

Action for the Environment Inc v Wellington City Council,3  it is argued that NEPS

2      Auckland Waterfront Development Agency Ltd v Mobil Oil New Zealand Ltd [2015] NZHC 470, (2015) 23 PRNZ 200.

3      Action for the Environment Inc v Wellington City Council [2012] NZHC 2615 at [6].

focused its oral submissions on decisions to permit exports which best illustrated its case, thereby reducing the hearing time.

Discussion

[7]      The authorities recognise that there is genuine public interest in the proper scrutiny by the Court  of the  exercise  of  statutory functions  by public officials. I accept that awards of costs should not be such as to act as a deterrent to public interest groups for the bringing of cases for which there is a reasonable basis, even though they may be ultimately unsuccessful. Against that, I recognise that it is also a matter of public interest that the resources of the courts and responsible government agencies should not be taken up by defending cases which, although they might be genuinely motivated, have no merit or are conducted unreasonably.   A balancing exercise is called for.

[8]      On reflection, I accept that the observations at [87] of the judgment may have overreached in concluding that it was "clear that the change in MPI's approach to the approval scheme had been informed by the proceeding and the evidence adduced in it".  I do not understand it to be argued by the defendants, however, that the issuing of the proceeding was unjustified.  There is no doubt that there had been historical concern about the increase in exports of ancient swamp kauri products giving rise to genuine  questions  about  whether  the  regulatory  regime  was  being  managed

appropriately.4    MPI conceded in its evidence that it had altered its approach from

late 2011 after becoming aware that exporters may have been intending to push the boundaries of the Forests Act 1949 by submitting a greater number of marginal cases for approval on the voluntary process.5     As  I have noted, MPI also revised its operations by requiring a more robust appraisal of whether examples of ancient swamp kauri intended for export met the definition of finished or manufactured indigenous timber products (FMITP).

[9]      Against that, the change in MPI's approach was explained in the evidence and ought  to  have  been  obvious  to  NEPS  as  the  proceeding  approached  a  hearing.

4      Northland Environmental Protection Society Inc v Chief Executive of the Ministry of Primary

Industries [2017] NZHC 308 at [15].

Moreover, as I pointed out in the judgment, the evidence upon which NEPS relied to establish breaches of the Act and a failure by the government agencies to enforce it were largely historical and uncertain as to the time and circumstances in which the products left New Zealand.6

[10]     The case for the declaration sought in the claim against MPI failed because the narrow redefinition of FMITP for which NEPS argued was not founded on the statutory purpose.  I held the legislative intention was to discourage, if not prohibit, the felling of indigenous forests and the milling of green indigenous timber for export except as part of a New Zealand-based industry involving the production of

furniture and other finished products.7     The Society's case that the Court should

declare MPI's actions to be unreasonable failed principally because the impugned exports occurred well in the past.  While the evidence was sufficient to illustrate the basis for NEPS's concerns, it fell well short of that which would be required to support declarations that MPI or its agent, AssureQuality, acted unreasonably in the way they processed the approval applications, and there was inadequate proof that

the particular exports had occurred in breach of the Act.8

[11]     So far as the claim against Customs is concerned, I was satisfied that there was no proper basis for alleging that Customs had exercised any statutory function susceptible to review.9   The claim against MCH failed because it was founded on an untenable argument that the Protected Objects Act 1975 could be applied to the entire species of ancient swamp kauri.10

[12]     Nevertheless, I accept that the proceeding at least had the benefit of airing the genuine concerns of the Society's members and others about the loss of a national taonga to export on a significant scale.   I also consider the proceeding served the purpose of enabling the Court, so far as it can, to assist those responsible for the enforcement of the legislative provisions by identifying the statutory meanings and

the approach to be taken to making enforcement decisions under the Forests Act.

6 At [26].

7      At [38]-[42] and [53].

8 At [65].

9 At [69].

[13]     Weighing all of the circumstances in the light of r 14.7(e), I assess that a contribution to the defendants’ costs should be made by the Society, calculated on the basis of 25 per cent of the scale costs that would otherwise be payable.

[14]     I accept that the three defendants should be allowed costs in respect of two principal counsel only.  Finally, I agree with Mr Salmon that, because of the extent of the overlap of interests between the three Crown agencies, and the relatively minor role played by the second and third defendants in the proceeding, the costs to be paid to Customs and MCH for preparation should be calculated on a Category 2A basis.

[15]     I order accordingly that the Society shall pay costs and disbursements:

(a)       to the Ministry of Primary Industries (MPI) in the sum of $17,867.49, being $8,585.50 in costs and $9,281.99 in disbursements;

(b)to the Comptroller of Customs (Customs) in the sum of $2,337.62, being $1,672.50 in costs and $665.12 in disbursements; and

(c)       to  the  Ministry  for  Culture  and  Heritage  (MCH)  in  the  sum  of

$5,521.12, being $3,902.50 in costs and $1,618.62 in disbursements.

...............................................

Toogood J