Rerekura v Prison Director, Auckland South Corrections Facility (Serco)

[2022] NZHC 208

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2020-404-002559

[2022] NZHC 208

BETWEEN

PETER REREKURA

Plaintiff

AND

PRISON DIRECTOR, AUCKLAND SOUTH CORRECTIONS FACILITY (SERCO)

First Respondent

AND

ATTORNEY-GENERAL

Second Respondent

Hearing:

(On the papers)

Counsel:

Applicant in Person

Thomas Cheng (as Applicant on interlocutory applications) in Person

Jonathan Scragg and Edward Greig for the First Respondent Sean Kinsler for the Second Respondent

Sarah Jerebine as counsel assisting the Court

Judgment:

17 February 2022

[COSTS] JUDGMENT OF MOORE J

This judgment was delivered by me on 17 February 2022 at 3:00 pm pursuant to Rule 11.5 of the High Court Rules.

Registrar / Deputy Registrar Date:

REREKURA v PRISON DIRECTOR, AUCKLAND SOUTH CORRECTIONS FACILITY (SERCO) & ANOR [2022] NZHC 208 [17 February 2022]

Introduction

[1]    Mr Rerekura has brought judicial review proceedings against the Prison Manager of Auckland South Corrections Facility (“ASCF”), which is operated by Serco. He alleges that as a serving prisoner under directed supervision in Serco’s ASCF facility he was subjected to inhumane and degrading treatment.

[2]    Thomas Cheng is a serving prisoner who was incarcerated for some time at the ASCF facility with Mr Rerekura. He assisted Mr Rerekura in the drafting of his claim.

[3]    Mr Cheng then brought two applications in these proceedings. The first to be joined as a party to the substantive proceeding, and the second to be appointed as a McKenzie friend. On 28 June 2021, I issued my decision declining both applications.1

[4]    Serco now applies for non-party costs against Mr Cheng. In brief, Serco’s position is that Mr Cheng’s interlocutory applications failed and that costs follow the event, there being no reason to reduce or refuse costs.

[5]    Mr Cheng opposes an order of costs on the basis that there was public interest in the proceedings and that Serco’s conduct was unreasonable.

Legal principles

[6]    Part 14 of the High Court Rules 2016 (“the Rules”) governs the award of costs. Such awards are a matter of discretion but are governed by the principles under rr 14.2 to 14.10. The long accepted starting point in any costs award is that “costs follow the event”2 and “the loser, and only loser pays”.3

1      Rerekura v Prison Director, Auckland South Corrections Facility (Serco) [2021] NZHC 1555.

2      Crawford v Phillips [2018] NZCA 351 at [5]; and Baker v Hodder [2019] NZCA 270 at [12].

3      Shirley v Wairarapa District Health Board [2006] NZSC 63, [2006] 3 NZLR 523 at [19].

[7]    Although the Rules do not specifically provide for such an award,4 the Court has the discretion to award costs against non-parties.5 In Dymocks Franchise Systems (NSW) Pty Ltd v Todd (No 2), the Privy Council delineated the following principles relevant to the exercise of that discretion:6

(a)Although  costs  orders  against   non-parties   are   to   be   regarded as “exceptional”, exceptional in this context means no more than outside the ordinary run of cases where parties pursue or defend claims for their own benefit and at their own expense. The ultimate question in any such “exceptional” case is whether in all the circumstances it is just to make the order. It must be recognised that this is inevitably to some extent a fact-specific jurisdiction and that there will often be a number of different considerations in play, some militating in favour of an order, some against.

(b)Generally speaking, the discretion will not be exercised against “pure funders”, being “those with no personal interest in the litigation, who do not stand to benefit from it, are not funding it as a matter of business, and in no way seek to control its course”.

(c)Where, however, the non-party not merely funds the proceedings but substantially also controls or at any rate is to benefit from them, justice will ordinarily require that, if the proceedings fail, they pay the successful party’s costs. In those circumstances the non-party is “the real party” to the litigation.

4      With the exception of r 14.6(4)(d), which contemplates that a person may be the recipient of indemnity costs if they were “not a party to the proceeding and has acted reasonably in relation to it”.

5      Dymocks Franchise Systems (NSW) Pty Ltd v Todd (No 2) [2004] UKPC 39, [2005] 1 NZLR 145 at [7] approving Carborundum Abrasives Ltd v Bank of New Zealand (No 2) [1992] 3 NZLR 757 (HC) at 763–764. See also Erwood v Maxted [2010] NZCA 93, (2010) 20 PRNZ 466 at [18].

6 At [25].

[8]    Rule 14.7 provides for the refusal of or reduction in costs. Relevantly, the Court may refuse to make an order for costs or may reduce the costs otherwise payable if:

“(e)the proceeding concerned a matter of public interest, and the party opposing costs acted reasonably in the conduct of the proceeding; or

…

(g) some other reason exists which justifies the court refusing costs or reducing costs despite the principle that the determination of costs should be predictable and expeditious.”

Parties’ positions as to costs

Serco

[9]    Serco submits the Court has  jurisdiction  to  make  a  costs  order  against  Mr Cheng. Despite not being a party to the substantive proceeding, Mr Cheng was a “losing” party, with both of the applications he filed being declined. Although costs against a non-party are “exceptional” this is only in the sense they are outside the ordinary run of cases. Mr Greig, for Serco, submits the important question is whether it is just in all the circumstances to make the order.

[10]   Mr Greig submits there is no reason to refuse or reduce costs. The applications did not involve a matter of genuine public interest, they were not of general importance beyond the interests of the litigants, the applications lacked merit and Mr Cheng did not act reasonably.7 Counsel assisting also argued against the applications.

[11]   It is also submitted that costs should be fixed now, as costs on an opposed interlocutory application must be fixed when it is determined unless there are special reasons to the contrary. It is expeditious to fix costs now as Mr Cheng will have no further involvement in the proceedings.

7      See New Zealand Climate Science Education Trust v National Institute of Water and Atmosphere Research Ltd [2013] NZCA 555 at [11].

[12]   Mr Greig’s submission is that 2B scale costs and disbursements are appropriate. The following tables were attached to the submissions:

Costs
Sch 3 number	Step	Time Allocation
13	Appearance at telephone conference before Duffy J on 22 April 2021 at which the applications were set down for hearing on 17 and 18 May 2021.	0.3
11	Filing memorandum dated 7 May 2021 objecting to elements of Mr Cheng’s evidence as directed by Duffy J, responding to memorandum filed by Mr Cheng on 28 April 2021, and seeking confidentiality orders.	0.4
11	Filing memorandum dated 13 May 2021 responding to memorandum filed by Mr Cheng on 11 May 2021.	0.4
23	Filing opposition dated 9 April 2021 to joinder application.	0.6
23	Filing opposition dated 7 May 2021 to McKenzie friend application.	0.6
24	Preparation of written submissions opposing McKenzie friend and joinder applications.	1.5
25	Preparation of bundle of authorities.	0.6
26	Appearance at hearing on 17 and 18 May 2021 (costs sought for one counsel only).	1.5
Total time		5.9
Category 2 recovery rate		$2,390
Total costs sought		$14,101

Disbursements
Description	Total fee
Filing a notice of opposition to joinder application	$110
Filing a notice of opposition to McKenzie friend application	$110
Total disbursements	$220

Mr Cheng

[13]   Mr Cheng opposes any cost award. He submits the Court is permitted to refuse to make an order for costs under r 14.7.

[14]   Mr Cheng submits that since the judicial review proceedings involve allegations of torture and degrading treatment there is significant public interest in them. There has been recent media attention surrounding the treatment of prisoners, as well as their ability to properly litigate.

[15]   Further, Mr Cheng submits Serco’s conduct has been dubious and prejudicial. One of the original issues for the substantive proceeding concerned CCTV footage requested by Mr Cheng under urgency. The footage was “‘regrettably’ lost, without providing the court any reasons why”.   Mr Cheng was transferred from ASCF on   15 April 2021 to Tongariro Prison despite notice of a hearing on 17 and 18 May 2021. Mr Cheng was not given notice of the transfer. Mr Cheng submits the transfer made it impossible for him to file submissions in relation to the interlocutory applications because his preparatory digital files from ASCF were not and have not been made accessible to him.

[16]   Finally, Mr Cheng submits his conduct was reasonable and responsible during the proceeding, with a willingness to compromise on key issues during the hearing.

Ms Jerebine

[17]   Ms Jerebine, counsel to assist, submits that it is likely that there is no reasonable prospect of Mr Cheng paying a costs order. She notes that much of his assets are subject to restraining orders under the Criminal Proceeds (Recovery) Act 2009. She submits that this, in conjunction with his status as a serving prisoner and the possibility of him being convicted on further charges for dealing methamphetamine, reduce the likelihood of any costs order being paid.

[18]   Ms Jerebine then submits that while holding public authorities to account is in the public interest, Mr Cheng’s interlocutory applications have “no apparent public interest” when the substantive proceeding has already been filed by another party. She

submits, however, that Mr Cheng acted reasonably in bringing the applications, noting the difficulty he faces conducting litigation from prison.

Should costs be awarded against Mr Cheng?

[19]   In my substantive judgment I indicated that it may be appropriate for costs to lie where they fall.8 I have been persuaded otherwise, for the reasons that follow.

[20]   I previously noted that I was attracted  to  Venning  J’s  approach  in Rerekura v Prison Director at Auckland South Corrections Facility that costs lie where they fall.9 Unfortunately for Mr Cheng, that case materially differs from the present. That proceeding concerned Mr Rerekura’s application for judicial review in which he claimed ASCF miscalculated his sentence and on more than one occasion gave him incorrect information about his release date.10 The present case, however, involved interlocutory applications that are related to another judicial review application of Mr Rerekura, but obviously are not determinative of the substantive issues. Two points can be made about this.

[21]   First, Mr Cheng was the unsuccessful applicant in these proceedings. He filed two interlocutory applications to be joined to the proceeding and to be a McKenzie friend (somewhat unusually in the case of the McKenzie friend application). Those applications failed. Costs follow the event.

[22]   I further note that Mr Cheng filed the applications for the purpose of becoming involved in the substantive judicial review proceeding. In fact, in his submissions on costs Mr Cheng described himself as the “putative applicant” in that proceeding and his interlocutory applications. In particular, his application to be joined as a party is a strong indicator of the level of control he wished to have over the substantive proceeding. It can hardly be said that despite being a non-party to that proceeding, Mr Cheng was not “the real party”. The interlocutory applications were directed at him substantially controlling the proceeding for his own benefit, given that he is also

8      Rerekura v Prison Director, Auckland South Corrections Facility (Serco) [2021] NZHC 1555 at [71].

9      Rerekura v Prison Director at Auckland South Corrections Facility [2021] NZHC 651.

10 At [1].

an applicant with another prisoner in closely related litigation involving all but identical allegations and seeking similar relief. For that reason I found his joinder application to be an abuse of process. It is difficult to see how costs cannot follow such an application.

[23]   Secondly, while costs may be reduced if the proceeding concerned a matter of public interest and the party opposing costs acted reasonably in the conduct of the proceeding, I accept Ms Jerebine’s submission that there is limited public interest in Mr Cheng’s applications. There is also some force in Mr Cheng’s submission that there is public interest in proceedings against the unlawful treatment of prisoners. But Mr  Cheng’s  interlocutory  applications  were  not  determinative  of  that  issue.   Mr Rerekura has already filed an application concerning his treatment in prison (to which Mr Cheng sought to be joined). Mr Cheng has filed a similar claim. There was no public interest in Mr Cheng’s interlocutory applications when the substantive allegations will be heard in any event (there is accordingly no need to consider the reasonableness of each party’s conduct,11 but I nevertheless acknowledge the difficulties Mr Cheng faces conducting litigation in prison).

[24]   Given that, it is my view that there is no basis to reduce costs under r 14.7(e). Mr Cheng’s public interest argument may find more favour with the judge deciding costs for the substantive proceeding, albeit a matter for that judge.

[25]   Mr Cheng submitted that he is currently serving a long-term prison sentence and is practically unable to meet any adverse costs orders. Ms Jerebine echoed this in submitting that it is unlikely Mr Cheng would be able to meet any costs orders.

[26]   In Smith v Attorney-General, the Court of Appeal made no order for costs where Mr Smith, a “long-term serving prisoner”, “enjoyed some, albeit slight, success in a matter of the law relating to Crown obligations to prisoners” and there was “no practical prospect of securing payment.”12 The Court’s decision is concise, running only three paragraphs, and does not define a “long-term serving prisoner”. On further research, it is apparent that Mr Smith appears to have consistently been imprisoned

11     A reduction in costs under r 14.7(e) requires both public interest and reasonable conduct.

12     Smith v Attorney-General [2010] NZCA 336 at [3].

since 1996,13 having been convicted for “a horrific murder, aggravated burglary, various sexual offences, and kidnapping.”14 For eight years he was a maximum security prisoner.15

[27]   Mr Cheng was 37 years old at the time he was sentenced.16 He was sentenced to 10 years and nine months with a minimum period of imprisonment of four years and three months.17 Mr Cheng should  be  eligible  for  parole  in  approximately May 2022. But having recently been charged with further drug offending, his time in prison may well be extended. Even so, it appears unlikely that Mr Cheng will serve a prison sentence close to that of Mr Smith. Smith therefore has limited application to the present case beyond the general principle that long-serving prisoners may practically be unable to meet costs orders, giving the Court scope to refrain from making a costs order that is otiose.

[28]   In any event, there is no fixed rule that costs not be awarded against serving prisoners. There are numerous examples of cases where this has occurred.18 For example, in Genge v Visiting Justice at Christchurch Men’s Prison Gendall J noted that Mr Genge “in light of his status as a long-serving prisoner, is likely to have limited funds to meet any costs orders”, but that “aspect is generally relevant to enforcement of any costs award” and it “cannot dissuade a court, in appropriate circumstances, from making a costs order.”19 More generally, in Te Whare O Te Kaitiaki Ngahere Inc v West Coast Regional Council Dunningham J commented that “a costs award should be made at a meaningful level, even against an impecunious party, when that party has advanced a case which is … lacking in merit”.20

[29]   It may be that Mr Cheng has limited funds to meet a costs order. Much of his property is subject to restraining orders under the Criminal Proceeds (Recovery) Act.

13     Smith v Attorney-General [2020] NZHC 1848 at [6]–[9].

14     Smith v Attorney-General [2010] NZCA 258 at [1].

15 At [1].

16     Cheng v R [2021] NZCA 68 at [25].

17 At [14].

18 For example, costs have been awarded against prisoners in Tomar v Attorney-General [2020] NZHC 3502; Reekie v Attorney-General [2020] NZSC 29; Genge v Chief Executive, Department of Corrections [2018] NZHC 70; Taylor v Davis [2016] NZHC 2390; and Taylor v Key [2016] NZHC 2391.

19     Genge v The Visiting Justice at Christchurch Men’s Prison [2018] NZHC 70 at [13].

20     Te Whare O Te Kaitiaki Ngahere Inc v West Coast Regional Council [2014] NZHC 2969 at [16].

His affidavit about his financial means is unsworn. But  as  Downs  J  noted  in Cheng v Prison Director, Auckland South Corrections Facility (Serco), “[t]he mix does not militate costs”.21 He brought applications that were without merit, one being an abuse of process, and it is just in the circumstances for costs to follow the event.

[30]   For those reasons, I am satisfied that Serco should be awarded costs on a 2B scale basis, together with reasonable disbursements.

Result

[31]I order Mr Cheng to pay costs of $14,101 and disbursements of $220 to Serco.

Moore J

Solicitors:

Duncan Cotterill, Auckland Meredith Connell, Auckland Ms Jerebine, Auckland

Copy to:
The Applicant

21     Cheng v Prison Director, Auckland South Corrections Facility (Serco) [2021] NZHC 3466 at [13].