R v Smith

[2018] NZHC 2188

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV 2016-488-0012

[2018] NZHC 2188

IN THE MATTER

of the Cadastral Survey Act 2002, the Declaratory Judgments Act 1908 and the Judicature Amendment Act 1972

BETWEEN

PETER HOJSGAARD

Plaintiff

AND

THE CHIEF EXECUTIVE OF LAND INFORMATION NEW ZEALAND

First Defendant

ROBIN PATRICK BRILL

Second Defendant

Hearing:

On the papers

Appearances:

P H Thorp and M Singh for Mr Hojsgaard

M Bryant and D Watson for the first defendant M C Harris for Mr Brill

Judgment:

24 August 2018

JUDGMENT OF JAGOSE J

[Costs]

This judgment is delivered by me on 24 August 2018 at 1.00 pm pursuant to r 11.5 of the High Court Rules.

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

Registrar / Deputy Registrar

Solicitors:

P H Thorp, Barrister, Auckland Glaister Ennor, Auckland (M Singh) Crown Law, Wellington (N Anderson)

Gilbert Walker, Auckland (M C Harris) D R Bates QC, Auckland

HOJSGAARD v THE CHIEF EXECUTIVE OF LAND INFORMATION NZ [2018] NZHC 2188 [24 August 2018]

Background

[1]                  Mr Hojsgaard’s substantive claim sought this Court’s quashing, and replacement, of the Chief Executive’s approval of Mr Brill’s survey of a boundary abutting Mr Hojsgaard’s property. Mr Hojsgaard contended the survey failed to take account of Mr Hojsgaard’s boundary allegedly being a right-lined water boundary.

[2]                  My judgment of 20 April 2018 directed the Chief Executive to reconsider and determine whether Mr Brill’s survey complied with the Rules for Cadastral Survey 2010, by reference to whether Mr Hojsgaard’s affected boundary was depicted in its survey by a right-lined water boundary.1 But that was “very much the rump of [Mr Hojsgaard’s] case”. I viewed his primary case “quite misguided”.2

[3]                  Ultimately, Mr Brill was successful in defeating Mr Hojsgaard’s ‘primary case’ for substantive declaratory relief, on which the Chief Executive abided; and Mr Hojsgaard was successful on its judicial review ‘rump’, on which Mr Brill abided.

Costs claims

[4]                  I reserved costs for determination on memoranda,3 but indicated my preliminary view:4

Mr Hojsgaard should be liable to pay 3B scale costs and disbursements to Mr Brill, and the Chief Executive liable for one-third of both 2B scale costs and disbursements to Mr Hojsgaard. The one-third is intended roughly to disqualify Mr Hojsgaard’s recovery from the Chief Executive of costs and disbursements incurred in relation to his primary case. My 3B categorisation for Mr Brill is to recognise the complexity of Mr Hojsgaard’s primary case required counsel with special skill and experience in the High Court. Mr Hojsgaard’s claim for review, however, was only of average complexity. I apprehend the steps reasonably required in the proceeding each took a normal amount of time for their performance.

1      Hojsgaard v Chief Executive of Land Information New Zealand [2018] NZHC 750 at [110].

2 At [112].

3 At [114].

4      At [113] (internal citations omitted).

[5]Instead:

(a)Mr Brill seeks more scrupulously differentiated category 3 scale costs (notably for band C in preparation of evidence and trial preparation) – uplifted by 50 per cent on account of Mr Hojsgaard’s contributions to the proceeding’s unnecessary length and complexity, and failure to accept Mr Brill’s offer – amounting to $162,112, plus $211,177.51 incurred in disbursements (predominantly in expert witness fees);

(b)Mr Hojsgaard also seeks differentiated category 2 scale costs (but again band C in preparation of affidavits and preparation for hearing) amounting to $84,851.50, plus $255,638.36 incurred in disbursements (and again predominantly in expert witness fees), to be recovered in equal proportion from each Mr Brill and the Chief Executive;

(c)Mr Hojsgaard additionally says Mr Brill should not be entitled to costs at all, on grounds he is taking opportunistic advantage of my view of the merits of Mr Hojsgaard’s primary case, but otherwise they should be reduced to reflect Mr Brill’s strategic involvement, and in any event not uplifted;

(d)the Chief Executive accepts my characterisation of the case, and my proposed costs award to Mr Hojsgaard. But he resists paying costs or disbursements attributable to Mr Hojsgaard’s primary case, and says “the vast majority of the plaintiff’s expert evidence would not have been necessary” for determination of that aspect of the proceeding on which Mr Hojsgaard was successful. Of Mr Hojsgaard’s claim, the Chief Executive contends only to be liable for costs amounting to

$22,671.67, and disbursements amounting to $44,787.55; and

(e)Mr Hojsgaard replies all his costs were incurred because of the Chief Executive’s refusal to address the underlying survey dispute on its merits, which decision the Chief Executive “was concerned throughout to obtain” from me, so no segregation of his expenditure is justified.

Costs, in principle

[6]                  I remind myself costs are awarded in accordance with principle – including “the party who fails with respect to a proceeding … should pay costs to the party who succeeds”, in accordance with scale, in reasonable and not disproportionate amount, no greater than was incurred by the successful party – to the end “so far as possible the determination of costs should be predictable and expeditious”.5

[7]                  In particular, HCR 14.2(c) provides “costs should be assessed by applying the appropriate daily recovery rate to the time considered reasonable for each step reasonably required in relation to the proceeding”. HCR 14.5(1) provides, for that purpose, “a reasonable time for a step is … the time specified for it in Schedule 3”. Further, that determination “must be made” by reference to the applicable band. All is, of course, subject to my overall discretion in making an award of costs.6

Mr Brill’s costs claim

[8]                  The complexity and contended significance of Mr Hojsgaard’s primary case – in particular, engaging in factual, scientific, and technical disputes about the state of the subject land in periods predating 1907, including principally by way of concurrent evidence from each surveyors and scientists – required counsel with “special skill and experience in the High Court”.7 Similarly, “a comparatively large amount of time” was reasonable for the steps of preparation of evidence and trial preparation.8

[9] I ordinarily would not allow claims for memoranda not filed for case management conferences or mentions hearings in terms of step 11, or for attendance at expert meetings. I do not know what justification is contended for these other memoranda as allowable ‘steps’ in the proceeding, and the essence of experts’ pre-trial conferencing is they bring their professional discipline to establishing the scope of dispute between them, rather than being ‘assisted’ by the respective parties’ counsel. But I note at [16] below the Chief Executive’s rationalisation of the other memoranda was not materially distinct from Mr Hojsgaard’s universal claim, and therefore allow

5      HCR 14.2.

6      HCR 14.1(2).

7      HCR 14.3(1) (definition of “Category 3 proceedings”).

8      HCR 14.5(2)(c).

Mr Brill also his claimed memoranda. I also note Mr Brill proposed, but Mr Hojsgaard resisted, the experts progress matters without the parties’ counsel in attendance (but assisted by amicus), and accordingly will allow Mr Brill the one day claimed.

[10]              Mr Brill’s engagement on Mr Hojsgaard’s primary case was to hedge against the exercise of my substantive discretion in Mr Hojsgaard’s favour. But that does not disqualify him from costs on his success, or justify reduced costs. On the other hand, Mr Brill cannot be heard both to claim costs incurred in such hedging, but also to claim their increase on grounds Mr Hojsgaard’s arguments lacked merit or otherwise took unnecessary steps.9 While the proceeding may have been disproportionate in its reliance on a multiplicity of experts (ten for Mr Hojsgaard, including four surveyors, and various scientists), Mr Brill’s consequent expenses should largely be addressed by the band C steps, and an allowance for his own expert disbursements. On the latter, Mr Brill’s offer to reduce his claimed experts’ disbursements by $60,000 – from

$210,000 to $150,000 – is accepted.

[11]              Mr Brill’s claim for increased costs also is founded on Mr Hojsgaard’s contended failure “without reasonable justification, to accept an offer … to settle or dispose of the proceeding”.10 Mr Brill proposed a number of ways to be excluded from the proceeding, which commenced as a negligence claim against him. But none would “settle or dispose of the proceeding”; each would instead only have relieved Mr Brill of some portion of his (steadily increasing) expenses, while leaving Mr Hojsgaard to make out his case. In any event, Mr Hojsgaard’s perception Mr Brill should be retained in the proceeding, either to retain his evidence or to secure his indemnity, might perhaps be said to provide ‘reasonable justification’ for refusing to contemplate Mr Brill’s exclusion on the proposed terms. I will not award increased costs.

[12]              I will order Mr Hojsgaard pay to Mr Brill his unincreased costs claim, and his offered reduced disbursements.

[13]              Mr Brill also claims costs on his costs application, and on his successful opposition to Mr Hojsgaard’s application to stay my determination of costs. An award of costs on costs applications is exceptional, given the difficulty in attributing ‘success’

9      HCR 14.6(3)(b)(ii).

10     HCR 14.6(3)(b)(v).

on such an application as justifying costs.11 But the course of the present application

– including Mr Brill’s opposition to Mr Hojsgaard’s costs application against him – justifies that addition, of a half-day (as claimed) at 2B. And Mr Brill’s successful opposition to the stay also grounds an award of 2A costs in that respect.

Mr Hojsgaard’s costs claim

[14]              I am not prepared to contemplate an award of costs (let alone disbursements) to Mr Hojsgaard as if he successfully had prosecuted his primary case, and certainly not including a contribution from Mr Brill. Mr Hojsgaard succeeded instead on the single proposition the Chief Executive failed to take into account a mandatory relevant consideration, on which only the Chief Executive can properly be said liable to contribute in costs.

[15]              Given the Chief Executive, as the decision maker subject to review, has an obligation to explain “how and why they acted or decided as they have”,12 very little of Mr Hojsgaard’s compendious evidence or steps in the proceeding can be said necessary for his success, and none required “a comparatively large amount of time”.13 My preliminary view the Chief Executive should contribute one-third of Mr Hojsgaard’s 2B costs and disbursements was intended to reflect that excess. Perversely, given the Chief Executive’s obligation, Mr Hojsgaard says “the [Chief Executive’s] proper course was to abide and not call any evidence”, which illustrates the fundamental error underlying Mr Hojsgaard’s approach to his overall proceeding.

[16] As noted at [9] above, I ordinarily would not award costs for ‘other’ memoranda. Mr Hojsgaard claims for an additional 23 memoranda, four at band B and the rest at band A, and two days’ attendance at expert meetings as if at trial. The Chief Executive would make a contribution on account of only fourteen of the memoranda, and for attendance at the experts’ meetings as if at trial, but all at band B. In the end, the Chief Executive would pay in these respects marginally more than Mr Hojsgaard is claiming. In that case, against my inclination, I also will allow for these other memoranda and attendance at expert meetings.

11     Strata Title Administration Ltd v Body Corporate Administration Ltd [2014] NZCA 96 at [10]- [14].

12     Bain v Minister of Justice [2013] NZHC 2123. [2014] NZAR 892 at [37].

13     HCR 14.5(2)(c).

[17]              Otherwise, the difference between Mr Hojsgaard’s and the Chief Executive’s costs calculations are Mr Hojsgaard’s claims for band C evidence and trial preparation, and Mr Hojsgaard’s claim for second counsel. But only “a normal amount of time” was reasonable for preparation of evidence and trial on the successful review,14 which is to “be determined in a convenient and expeditious manner”.15 I will not certify for second counsel on the review alone.

[18]              The Chief Executive also claims for exclusion of disbursements not associated with the review – that is, in addition to (one-third of) general disbursements, he should only be liable for (one-third of) Thomson Survey’s fees. Those fees comprised roughly half Mr Hojsgaard’s claimed $240,000 expert disbursements. The Chief Executive says the other expert witness disbursements were not reasonably necessary in relation, or indeed relevant, to Mr Hojsgaard’s successful application for review. I agree the great bulk of Mr Hojsgaard’s sought disbursements relate other than to the application for review, but to contentions as to where the former stream had run, and ought not to be recovered from the Chief Executive.

[19]              Application of the ‘two-thirds’ rule applied to recovery of reasonable legal expenses to approve expert witness fees as disbursements indicates, at the most, only

$80,000 of Thomson Survey’s fee would be recoverable.16 Further, roughly $30,000 of Thomson Survey’s fee appears to have been incurred before the proceeding was issued. Even after issue of the proceeding, much of the fee relates to establishment of the competing survey, and attempts to substitute it for that of Mr Brill. Thomson Survey’s preparation for the proceeding, while doubtless drawing on that earlier work, does not begin until mid-2017. The whole of Thomson Survey’s fee for 2017 amounts to $70,000. If that was the only ‘specific’ and ‘reasonable’ fee,17 the two-thirds rule would only see recovery of some $47,000.

[20]              The Chief Executive accepts some limited survey evidence might be justifiable in review of the Chief Executive’s determination of Mr Brill’s survey’s compliance, but not to the extent of the entirety of Thomson Survey’s $120,000 fee. Particularly given application of the two-thirds rule to specific and reasonable fees, the Chief

14     HCR 14.5(2)(b).

15     Eg, as identified in the Judicial Review Procedure Act 2016, s 13(2)(a).

16     Progressive Enterprises Ltd v North Shore City Council (2005) 17 PRNZ 919 (HC) at [27].

17     HCR 14.12(2).

Executive’s accepted share of one-third of the $120,000 fee is generous. Expenditure of $40,000 on survey evidence – to support a claim the Chief Executive had failed to have regard for a mandatory relevant consideration, wholly identifiable from within the Chief Executive’s own evidence, which he is obliged to adduce – would have been unnecessary in the circumstances.

[21]              I will order the Chief Executive pay to Mr Hojsgaard one-third of the costs and disbursements calculated by the Chief Executive. However, I note Thomson Survey’s

$120,000 fee includes GST, invoiced to Mr Hojsgaard’s solicitors, who presumably are registered for GST, and may have claimed input credits accordingly. Alternatively, so too may Mr Hojsgaard. It is only if Mr Hojsgaard absorbed the full payment he is entitled to recover it from the Chief Executive.18 My order for payment of disbursements at [22](b) below is subject to Mr Hojsgaard’s position as regards his net GST liability.

Orders

[22]I order:

(a)Mr Hojsgaard pay to Mr Brill costs in the amount of $108,075.00 as calculated, and disbursements in the amount of $150,000.00 as offered, plus $1,115 2B costs on the costs application and $2,341.50 2A costs in opposition to the stay application; and

(b)the Chief Executive pay to Mr Hojsgaard costs in the amount of

$22,671.67 (being one-third the $68,015.00 calculated by the Chief Executive), and (subject to my comments on GST at [21] above) disbursements in the amount of $44,787.55 (being one-third the

$134,362.66 calculated by the Chief Executive).

—Jagose J

18     See New Zealand Venue and Event Management Ltd v Worldwide NZ LLC [2016] NZCA 282, (2016) 23 PRNZ 260 at [6] and [12].