Paul v Durie
[2017] NZHC 2248
•18 September 2017
IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY
I TE KŌTI MATUA O AOTEAROA
TE WHANGANUI-Ā-TARA ROHE
CIV 2016-485-744 [2017] NZHC 2248
BETWEEN CLETUS MAANU PAUL
Plaintiff
AND
SIR EDWARD TAIHAKUREI DURIE First Defendant
AND
THE NEW ZEALAND MĀORI COUNCIL Second Defendant
On the Papers Counsel:
A N Isac for Plaintiff
F E Geiringer for First Defendant
P Cornegè for Second DefendantJudgment:
18 September 2017
COSTS JUDGMENT OF DOBSON J
[1] On 22 May 2017, the plaintiff, (Mr Paul) discontinued these proceedings against the first and second defendants. The second defendant, the New Zealand Māori Council (NZMC), has applied for scale costs against Mr Paul. Sir Edward Taikurei Durie, the first defendant and chair of the NZMC (Sir Edward), seeks a similar discrete order, with the addition of indemnity costs for a specific period.
Mr Paul’s claims
[2] Mr Paul and Sir Edward were co-chairs of the NZMC. Mr Paul issued the proceedings seeking judicial review of several decisions of the NZMC taken in 2015
and 2016. He alleged various procedural improprieties, including improperly
PAUL v DURIE [2017] NZHC 2248 [18 September 2017]
convened meetings, improperly advanced resolutions, and undeclared conflicts of interest between Sir Edward as co-chair of the NZMC and the NZMC’s retention of a law firm associated with Sir Edward’s wife.
[3] A strike-out application on behalf of Sir Edward in early April 2017 was unsuccessful.1 However, Mr Paul was required to file an amended statement of claim on 26 April 2017. The defendants were required to file their evidence by 11
May 2017.
[4] Mr Paul filed his amended statement of claim as required. The following day, he wrote to both defendants seeking an “in-house” solution.
[5] On 29 April 2017 the NZMC passed several resolutions. These included:
(a) reaffirming the resolutions Mr Paul called into question with his proceeding;
(b) calling for this proceeding to be withdrawn;
(c) calling for the parties to resolve the dispute “in house” via hohou i te rongo (a tikanga dispute resolution process that Mr Paul translates as “bringing peace and harmony in a time of dissention”); and
(d)appointing a working party to address the issues raised in the proceeding with respect to the NZMC.
[6] Sir Edward wrote to Mr Paul on 1 May 2017, noting that the resolutions rendered Mr Paul’s claims moot, stating that his claims nonetheless lacked merit and requesting he discontinue proceedings.
[7] In an email to the working party on 3 May 2017, Sir Edward made clear he could not engage with the hohou i te rongo process while the proceedings were still on foot.
[8] On 4 May, Mr Paul advised the defendants that he supported the NZMC’s resolution on hohou i te rongo. He also requested minutes of the 29 April meeting. Those were supplied in draft on 12 May 2017. Final copies of the minutes and resolutions were provided as appendices to the affidavit of the secretary on 16 May
2017.
[9] On 17 May 2017, Mr Paul wrote to both defendants to express his willingness to engage with the hohou i te rongo process and discontinue his proceeding. He sought an assurance that costs would be left to lie where they fell. The following day, Sir Edward responded, refusing to agree to Mr Paul’s suggestion regarding costs and again requesting a discontinuance.
[10] The proceeding was discontinued on 22 May 2017 (two business days later), without an agreement between the parties as to costs.
The costs claims
[11] Sir Edward claims costs as follows:
SCALE COSTS Days Total 2: Commencement of defence by defendant 2 4,460.00 9: Pleading in response to amended pleading 0.6 1,338.00 10: Preparation for first case management conference 0.4 892.00 12: Appearance at mentions hearing or callover 0.2 446.00 30: Preparation of briefs or affidavits 2.5 5,575.00 SUBTOTAL 5.7 $12,711.00 INDEMNITY COSTS For period 1–22 May 2017 15,295.00 Less half of item 30 above to avoid double counting (2,787.50) SUBTOTAL $12,507.50 DISBURSEMENTS Printing etc 2,669.25 Filing fees 220.00 SUBTOTAL $2,889.25 GRAND TOTAL $28,107.75
[12] Sir Edward claims that indemnity costs are appropriate for the period following the 1 May letter until discontinuance. Arguably, from that point Mr Paul was on notice that his proceeding was not only entirely without merit, but was also entirely moot. From Sir Edward’s perspective, Mr Paul knew significant costs would be incurred leading up to filing, and nonetheless delayed for three weeks the decision to discontinue proceedings after the filing date.
[13] The NZMC also takes the position that Mr Paul ought to be liable for costs. It seeks a discrete award in its favour on a 2B basis. Mr Cornegé, for the NZMC, notes the NZMC originally intended to abide by the Court’s decision and took an active role only following France J’s observation in the strike out judgment that such a position was “unusual and unfortunate”.2 The NZMC ultimately filed submissions and five affidavits regarding constitutional matters of the NZMC, and evidence regarding the relevant meetings. Mr Paul was aware of and did not oppose that approach. Mr Cornegé submitted that Mr Paul cannot be described as having any
measure of success, neither defendant had made any relevant concessions, and the invitation of resolving the dispute by a hohou i te rongo process could not justify costs lying where they fall.
[14] The NZMC claims costs for item 30 alone (preparation of briefs or affidavits), totalling $5,575.
[15] Mr Isac, for Mr Paul, responded by submitting first that costs ought to lie where they fall on the basis that he enjoyed a measure of success. Secondly, and in the alternative, he submitted only one award ought to be made on a 2B basis because there was significant overlap in the interests and evidence of the first and second defendants, and separate representation was unnecessary. He submits the costs claimed by Sir Edward appear appropriately calculated, and item 30 of that award should be split between both defendants.
[16] As to indemnity costs, Mr Isac submitted Mr Paul’s delay in discontinuance could not be described as unnecessary so as to justify such an award. He suggested, in particular, that the decision to call a meeting of the NZMC so close to filing was a
decision of the defendants, not Mr Paul, and that decision resulted in tight timeframes that adversely affected all parties.
Analysis
[17] Rule 15.23 of the High Court Rules 2016 provides that a plaintiff who discontinues proceedings without agreement as to costs is liable for the defendant’s costs, on the basis that discontinuance is tantamount to judgment for the defendant. The rule elevates to a presumption the principle that costs follow the event.3 The presumption may be displaced where the Court considers it “just and equitable”.4
The plaintiff has the onus of rebutting the presumption, but it is not lightly displaced.5 The Court of Appeal in Powell v Hally Labels Ltd stated:6
[21] First, the Court does permit a plaintiff to show that its discontinuance should not be interpreted as failure; the proceeding having ended unilaterally rather than by judgment, the Court is prepared, in a clear case, to recognise that the plaintiff may have achieved its end by other means or otherwise discontinued for reasons not connected to the merits. That is consistent with the principle that costs follow the result.
[22] Second, the Court may consider, in a clear case, why the parties brought and defended the proceeding, and whether steps taken in it were reasonable. For example, a governmental or third party decision may have intervened, rendering the proceeding redundant. But this is merely to recognise that the interests of justice occasionally may require that such matters be taken into account. It is not to invite a general inquiry into the reasonableness of the parties’ conduct.
[23] Third, and consistent with what we have just said, a plaintiff may not displace the presumption merely by showing that it had some merit on its side. Indeed, the Court need not consider the merits and ordinarily refuses to do so unless they are immediately apparent.
[19] More is required that mere unreasonableness to justify an award of indemnity costs; a party must have behaved badly or very unreasonably.7
[20] I am not persuaded that costs should lie where they fall. There is nothing distinguishing the present circumstances from those where the presumption in r
15.23 applies. Mr Paul has not discharged the onus of rebutting that presumption. The avenues he now seeks to traverse to settle his claims have always been open to him, are not binding on this Court, and were not agreed to on the basis that costs in the current proceedings would in any way be affected.
[21] I am also not persuaded that only one set of costs ought to be ordered. In circumstances where there were quite discrete and specific allegations against the two defendants, where a pre-trial decision had encouraged the NZMC to actively engage with the proceedings, where the engagement was itself not excessive, and where Mr Paul offered no objection to NZMC’s proposed engagement, the NZMC is justified in seeking modest recognition of the costs it incurred. Some overlap in affidavits is expected where significant allegations are made of more than one party, and neither Sir Edward nor the NZMC ought to be penalised for their meticulous responses in the circumstances.
[22] The threshold for indemnity costs is set relatively high. That threshold requires more than mere tardiness on the part of a discontinuing party before a Court will entertain indemnity costs; it requires bad or very unreasonable behaviour. In submissions for Sir Edward, Mr Geiringer implicitly invited the Court to place weight on the lack of merit and mootness of Mr Paul’s claims following the NZMC resolutions and the 1 May letter. Merits are not determined by mootness alone, however. I am not prepared to determine costs on the basis that there was no merit to Mr Paul’s claims at the time they were made. Merits are, in those circumstances, not the purview of this costs decision and I accordingly leave them aside.
[23] I note that one of Sir Edward’s specific complaints has since been dealt with
by way of a declaration that he is the sole chair of the NZMC.8 Mr Paul did not
7 Bradbury v Westpac Banking Corp [2009] NZCA 234, [2009] 3 NZLR 400 at [27].
8 Durie v Paul [2017] NZHC 1845.
oppose the application for the declaration, which points away from behaviour that could be characterised as obdurate or very unreasonable. The delay of three weeks in discontinuing proceedings was not ideal, but nor was the delay in providing minutes of the relevant meeting. Mr Paul’s delays cannot be described as being the result of bad or very unreasonable behaviour. The implication for Mr Paul in his delay, irrespective of whether it was justified or not, is that he now is liable for costs on a scale basis for more steps in the proceeding than if he had discontinued sooner. That, rather than indemnity costs, is the appropriate response.
Outcome
[24] Accordingly, I order costs against the plaintiff:
(a) in favour of the first defendant in the sum of $12,711 plus GST
together with disbursements of $2,889.25; and
(b) in favour of the second defendant in the sum of $5,575.
Dobson J
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