Te R�nanga o Ng�i Tahu v Te Ohu Kaimoana Trustee Ltd

[2023] NZHC 2763

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE

CIV-2022-485-650

[2023] NZHC 2763

UNDER

the Judicial Review Procedure Act 2016 and the Declaratory Judgments Act 1908

BETWEEN

TE RŪNANGA O NGĀI TAHU

Plaintiff

AND

TE OHU KAI MOANA TRUSTEE LTD

First Defendant

MINISTER FOR OCEANS AND FISHERIES

Second Defendant

AND

TE WHAKAKITENGA O WAIKATO INCORPORATED

Interested Party

On the Papers

Counsel:

J D Every-Palmer KC, J W J Graham and X Y Lau for the Plaintiff

N C Anderson and J B Watson for the Second Defendant

Judgment:

3 October 2023

JUDGMENT OF GWYN J

(Costs on stay of proceeding)

Background

[1]    On 1 November 2022 the plaintiff, Te Rūnanga o Ngāi Tahu, filed a judicial review application concerning a resolution passed by a close majority of Mandated Iwi Organisations at a Special General Meeting (SGM) of Te Ohu Kaimoana Trustee Ltd (Te Ohu Kaimoana) in August 2016. The resolution proposed that if Te Ohu

TE RŪNANGA O NGĀI TAHU v TE OHU KAI MOANA TRUSTEE LTD [2023] NZHC 2763 [3 October 2023]

Kaimoana was to distribute surplus funds to iwi beneficiaries, it should do so on an equal basis between iwi, rather than on a notional iwi population basis.

[2]    Giving effect to the resolution would require amendments to the Maori Fisheries Act 2004 (Act). The Ministry for Primary Industries released for consultation an “exposure draft” of proposed amendments to the Act, including this “equal sharing” proposal, in August 2022.

[3]    In the proceeding the plaintiff alleged against Te Ohu Kaimoana, as the first defendant, that the August 2016 SGM was conducted in breach of natural justice and/or that Te Ohu Kaimoana should have declined to advise the Minister for Oceans and Fisheries (Minister) of the “equal sharing” resolution passed at the meeting.

[4]    The plaintiff’s claim against the second defendant (the Minister) sought declarations challenging any proposals to enact such amendments.

[5]    The plaintiff also sought against both defendants’ substantive declarations that the “equal sharing” resolution, if enacted into amendments to the Act, would be contrary to the principles of the Treaty of Waitangi (te Tiriti), the 1992 Fisheries Settlement, the Treaty of Waitangi (Fisheries Claims) Settlement Act 1992, the purpose and scheme of the Act and the plaintiff’s legitimate expectation that any surplus funds would be distributed on a population basis.

[6]    Before the proceeding was filed on 26 October 2022, the Minister advised the plaintiff that he did not intend to implement the equal distribution proposal. By letter of 16 November 2022, to the plaintiff, the Minister formally confirmed his position that, following consultation, he did not intend to proceed with the “equal sharing” proposal and would recommend to Cabinet (likely in mid-December) that the amending legislation provide that surplus funds be distributed on a population basis.

[7]    The Māori Fisheries Amendment Bill 2022 (Amendment Bill) was introduced in the House of Representatives (House) on 20 December 2022 and, as signalled by the Minister, provides for surplus funds to be distributed on a population basis.

[8]    A fixture was set down for 6–8 March 2023, and a timetable for steps up to the hearing was made by consent on 24 November 2023. The timetable required the defendants to file evidence on 3 February 2023.

[9]    On 22 December 2022 counsel for the Minister wrote to counsel for the plaintiff inviting it to withdraw its claim and noting that if it did so by 18 January 2023 the Crown would not seek costs, but that in the event the claim against the Crown was not withdrawn and was ultimately dismissed, it would seek increased costs.

[10]   Also on 22 December 2022, counsel for the plaintiff proposed that the parties jointly agree to stay the proceeding, revoke the timetable, vacate the fixture and reserve leave to the plaintiff to bring on the proceedings, including its application for urgency, on 48 hours’ notice. Both defendants declined to agree to the directions sought.

[11]   The plaintiff then sought directions from the Court on 23 December 2022. The Duty Judge, Isac J, recorded that the parties’ disagreement was “limited to the appropriate procedural pathway and the conditions on which to call a halt on the proceedings.”1 The Judge declined to make the directions sought by the plaintiff at that time and deferred the matter to the next call, then scheduled for 27 January 2023. In fact, no call occurred on 27 January 2023.

[12]   The matter came before me as Duty Judge on 27 January 2023, by which time both the first and second defendants had filed memoranda opposing the plaintiff’s proposal to vacate the fixture and stay the proceeding. Both defendants submitted that the proper course was for the proceeding to be withdrawn. Accordingly, they sought an urgent direction that the plaintiff promptly decide and advise the parties and the Court whether it would continue the proceeding in accordance with the then-current timetable or discontinue its claim.

[13]   On the basis of the comprehensive written submissions then before me (and given the urgency the defendants said attached to their application), I determined the

1      Te Rūnanga o Ngāi Tahu v Te Ohu Kaimoana Trustee Ltd HC Wellington CIV-2022-485-650,  23 December 2022 (Minute of Isac J).

defendants’ application for an urgent direction, and the plaintiff’s application for a stay order, on the papers. I concluded that it was appropriate to stay the proceedings.2

[14]   As I noted in the minute issued on 27 January 2023,3 it was “tolerably plain”, from the plaintiff’s advice to the parties in the Court on 23 December 2022 that it no longer sought an expedited fixture and that the timetable could be revoked, together with the terms of Isac J’s minute of that date, that the hearing on 6 March 2023 would not be proceeding. I further noted that the application by the first defendant for an urgent order which I was then considering, was unnecessary.

[15]   Subsequently  Te   Ohu  Kaimoana  filed  an  interlocutory  application,  on   1 February 2023, to rescind the stay orders of 27 January 2023. The application was made on the basis that the first defendant had anticipated an oral hearing would be held before orders were made.

[16]   As I noted in a minute of 7 February 2023,4 I had not been aware at the time of dealing with the application on the papers that the first defendant wished to be heard orally.

[17]   Accordingly an oral hearing was convened on 21 February 2023. The stay orders were rescinded.5

[18]   On 1 March 2023, the plaintiff filed a notice discontinuing the proceeding against both defendants.

Costs

[19]   The plaintiff and second defendant have been unable to agree costs. Costs are not sought by the first defendant.

2      Te Rūnanga o Ngāi Tahu v Te Ohu Kai Moana Trustee Ltd HC Wellington CIV-2022-485-650, 27 January 2023 (Minute of Gwyn J) at [31] and [33]–[34].

3 At [32].

4      Te Rūnanga o Ngāi Tahu v Te  Ohu Kai Moana Trustee Ltd HC Wellington CIV-2022-485-650, 7 February 2023 (Minute of Gwyn J) at [5].

5      Te Rūnanga o Ngāi Tahu v Te Ohu Kai Moana Trustee Ltd [2023] NZHC 302.

[20]   The second defendant seeks costs totalling $18,355.30, which includes costs up to and including the hearing on 21 February 2023. Both the plaintiff and the second defendant agree that r 15.23 of the High Court Rules 2016 (Rules) applies. Rule 15.23 provides:

Unless the defendant otherwise agrees or the court otherwise orders, a plaintiff who discontinues a proceeding against a defendant must pay costs to the defendant of and incidental to the proceeding up to and including the discontinuance.

Second defendant’s submissions

[21]   The second defendant says there is no reason in this case to depart from the default position, that the discontinuing party will pay costs. The onus is on the plaintiff to rebut that presumption.6

[22]   It relies on Earthquake Commission v Whiting, where the Court of Appeal observed that in deciding whether it is just and equitable to exercise the Court’s overall discretion7 in r 15.23, the Court may consider the parties’ conduct and the reasonableness of the parties’ respective stances, including the reasons why the plaintiff brought and continued the proceeding and the defendant opposed it.8

[23]   The second defendant says that, in light of the assurances the plaintiff received from the Minister before the proceeding was commenced, there was no need for the plaintiff to commence the proceedings.

[24]   In any event the claim was “misguided” in that it was an attempt to use the Court’s procedures to influence the legislative process, in breach of established principles regarding parliamentary privilege.

[25]   In Earthquake Commission v Whiting, the Court set out several examples when the courts have been persuaded to exercise the discretion:9

(a)the defendant’s acts or omissions have caused the litigation and then rendered it unnecessary; and

6      Earthquake Commission v Whiting [2015] NZCA 144 at [68].

7      High Court Rules 2016, r 14.1.

8      Earthquake Commission v Whiting, above n 6, at [68].

9      At [69] (footnotes omitted).

(b)an intervening governmental or third party decision has rendered the proceeding redundant.

[26]   Counsel for the second defendant says this is not such a case where the Court should exercise its discretion. It says the plaintiff cannot rely on the introduction of the Amendment Bill as a supervening factor which obviated the necessity for the proceeding and thus vindicated the plaintiff’s position. It says that the Amendment Bill reflected assurances given by the Minister to the plaintiff before the proceedings were commenced and the plaintiff cannot show it had reasonable grounds for believing it would have succeeded had the circumstances not changed.10

[27]   The second defendant says it continued to be necessary for the Minister to address issues arising in the proceeding after 23 December 2022, as to the appropriateness of the stay. Those costs would not have been incurred had the plaintiff discontinued the proceedings after the Amendment Bill had been introduced. For that reason, it says it is entitled to claim costs after 23 December 2022.

Plaintiff ’s submissions

[28]The plaintiff says it should not be liable to costs to the second defendant.

[29]   The plaintiff submits it brought the proceedings on 1 November 2022 because of its concern that the method for distributing surplus funds by Te Ohu Kaimoana might be changed from a population basis to a one-iwi-one-share basis. It was concerned that such a change would be inconsistent with the Fisheries Settlement, the principles of the Treaty and the rights of Ngāi Tahu. It had fiduciary obligations to protect settlements for future generations of Ngāi Tahu.

[30]   The plaintiff met with the Minister on 26 October 2022 to discuss its concerns. Although the Minister said he did not support the one-iwi-one-share distribution model, he was not willing to provide a definitive or sufficient written assurance to that effect.

[31]The plaintiff filed the proceeding on 1 November 2022.

10     Hitchcock v Murphy [2022] NZHC 3542 at [23].

[32]   The Minister’s letter to the plaintiff of 16 November 2022 did not suggest that the Minister might change his position in the future. However, the plaintiff was aware of letters of the same date to Te Ohu Kaimoana and all mandated iwi organisations. Those letters recorded that the Minister did not have a firm position on surplus funds distribution and said:

(a)The Minister did not “consider it appropriate to support this amendment at this time”.

(b)Encouraged Te Ohu Kaimoana to lead further dialogue on the matter and noted he would be “willing to consider this in the future” if there was widespread support among iwi for a change to the distribution model.

[33]   The plaintiff submits that the presumption in r 15.23 of the Rules may be displaced if it is just and equitable to do so. In particular, it may be displaced if “[s]ome event beyond the direct control of the parties obviates the continued necessity for proceedings, again vindicating the issue of the proceeding” or “some other special reason exists why it is just and equitable that the plaintiff not pay costs to the defendant.”11

[34]   The plaintiff says there are a number of factors in this case that make it just and equitable for costs to lie where they fall. First, the proceedings were commenced in good faith in attempt to protect the Fisheries Settlement. The plaintiff has a fiduciary obligation to protect Ngāi Tahu settlements for future generations, which includes the Fisheries Settlement. In addition, there was a genuine public interest in bringing the proceeding given that it concerned other beneficiaries, not just Ngāi Tahu. This was evidenced by support for the plaintiff’s position from Te Whakakitenga O Waikato Incorporated.

[35]   Given the plaintiff’s perception that the Minister had not committed to the existing distribution methodology, it was appropriate to proceed to file the claim.

11     Hitchcock v Murphy, above n 10, at [21], quoting Moodie v Strachan [2015] NZHC 327, (2015) 22 PRNZ 419 at [15].

[36]   The plaintiff also says that it was forced to spend settlement pūtea to defend a Treaty Settlement. The Minister did not take a firm and consistent position until after the proceedings were filed; that demonstrates that initiating the proceedings was necessary to defend a Treaty settlement.

[37]   Given the plaintiff acted promptly, reasonably and in good faith, it would not be equitable for it to have to spend further settlement pūtea to cover the Crown’s costs.

[38]   In addition, the plaintiff says it was not unreasonable for it to request the stay, rather than hastily discontinue the proceedings the day before the Christmas shutdown period. It had first attempted to reach agreement with the defendants on how to halt the proceedings, before seeking the stay. I agree that my initial decision to order the stay demonstrated that this was not a clear-cut decision.

[39]   Finally, the plaintiff says the correct position regarding parliamentary privilege is not relevant to the issue of costs and no weight should be placed on it.12

[40]   In the alternative, the plaintiff submits that it should be exempt from a costs award for any costs incurred by the second defendant after 23 December 2022.13 It was clear from that date that the plaintiff intended to halt the proceedings. The plaintiff says it acted promptly and reasonably in alerting the defendants that it no longer required an urgent hearing and in doing so avoided the costs threat in the Crown’s letter. It gave notice to the other parties on 22/23 December 2022, well in advance of the Crown’s 18 January 2023 deadline, in order to reduce the costs that would be incurred by the defendants — in particular so that the defendants did not need to prepare evidence to meet the 3 February 2023 deadline or take further steps in the proceeding.

[41]   Finally, it says it would be unjust for the plaintiff to be liable for Crown costs relating to the application to rescind the stay order which was prompted by events outside the direct control of the parties — that is, that the Court had not appreciated that the parties expected the application to be heard by way of oral submissions.

12 At [22].

13 At [21].

Discussion

[42]   Is the presumption that a discontinuing plaintiff should be liable for costs displaced in this case? Examples of when the presumption may be displaced by reason of subsequent events obviating the need for the proceeding are summarised in Moodie v Strachan:14

(a)Some action on the part of the defendant obviates the necessity for proceeding, thus vindicating the plaintiff’s action.

(b)Some event beyond the direct control of the parties obviates the continued necessity for proceedings, again obviating the issue of the proceeding.

(c)Some other special reason exists why it is just and equitable that the plaintiff not pay costs to the defendant.

[43]   In Moodie, the High Court noted Court of Appeal authority that the Court will not consider the merits of the parties’ respective cases unless so obvious on summary inspection that they should influence the costs outcomes.15 The High Court framed the questions relevant to the discretion as including:16 was it reasonable to bring the proceeding? Was it reasonable for the defendant to defend it? Why was the proceeding discontinued? Are the merits so obvious that they should influence the costs outcome? Does the outcome represent vindication of the plaintiff’s commencement of proceeding? Has the plaintiff displaced the r 15.23 presumption?

[44]I adopt that framework to analyse the present case.

Was it reasonable for the plaintiff to bring the proceeding?

[45]   The plaintiff commenced the proceeding on 1 November 2022. It had previously met with the Minister, on 26 October 2022, to discuss its concerns. The

14     Moodie v Strachan, above n 11, at [15].

15     Kroma Colour Prints Ltd v Tridonicatco NZ Ltd [2008] NZCA 150, (2008) 18 PRNZ 973, cited in Moodie v Strachan, above n 11, at [14].

16 At [17].

Minister told the plaintiff at the meeting that he did not support the one-iwi-one-share distribution model. However, I accept the plaintiff’s submission that, as at that date, the Minister was not able to provide a definitive or written assurance to that effect. The plaintiff therefore concluded that it needed to file the proceeding to protect its position.

[46]   In light of the 26 October meeting and the 16 November letters to Te Ohu Kaimoana and mandated iwi organisations being couched in slightly different terms to the letter of the same date to Ngāi Tahu, the plaintiff might reasonably have been left with a degree of uncertainty as to the future position regarding the distribution model. I accept that, as at 1 November 2022, there was a sufficient degree of uncertainty to justify the filing of the proceeding. I also accept the plaintiff filed in good faith.

[47]   I also accept that it was not until the Cabinet Legislation Committee’s paper of 20 December 2022 and the introduction of the Amendment Bill into Parliament on 21 December 2022 that the plaintiff had sufficient reassurance that the proposal to distribute surplus funds would not be changed from a population basis to a one-iwi- one-share basis.

Was it reasonable for the defendant to defend the proceeding?

[48]   I also accept that it was reasonable for the Minister to defend the proceeding. As the decision-maker, there was no doubt greater certainty in his mind as to what steps were likely to ensue following his meeting with the plaintiff.

Why was the proceeding discontinued?

[49]   The Amendment Bill was introduced into the House on 21 December 2022. The Amendment Bill contained a provision for distribution of surplus funds on a population basis. The plaintiff says this gave it sufficient assurance to halt the proceedings.

[50]   I accept that the introduction of the Amendment Bill, maintaining the status quo, was a supervening factor that obviated the need for the plaintiff to continue with the proceeding.

Are the merits so obvious they should influence the costs outcome?

[51]   The second defendant says the plaintiff’s claim was an attempt to use the Court’s procedures to influence the legislative process, in breach of established principles. While that argument may have merit in the post-introduction context, I do not think the argument holds as at the point the plaintiff filed its proceeding before the introduction of the Amendment Bill. The merits at that point are not so obvious that they should influence costs.

Does the outcome represent vindication of the plaintiff ’s commencement of proceeding?

[52]   The plaintiff had sought  to  maintain the status quo for the distribution  by  Te Ohu Kaimoana of surplus funds. The Amendment Bill had this effect. In that sense, it obviated the need for the plaintiff’s proceeding, although in the particular circumstances it cannot be characterised as a “vindication” of the plaintiff’s position.

Has the plaintiff displaced the r 15.23 presumption?

[53]   If the plaintiff had immediately discontinued the proceeding following the introduction of the Amendment Bill, I would have found it had displaced the r 15.23 presumption in respect of all costs. However, the complicating factor here is that the plaintiff did not immediately move to discontinue the proceedings.

[54]   The plaintiff did advise the defendants that it was bringing the proceeding to a halt and it was, or should have been, clear to the defendants as at 22 December 2022 when the plaintiff sought their agreement to halt the proceeding by way of a stay, together with its memorandum filed on 23 December 2022, that they did not need to proceed with any further steps in preparation for a hearing commencing on 6 March 2023. However, the defendants were entitled to be heard on the plaintiff’s proposal to stay, rather than discontinue, the proceeding (although I find there was no need for

urgency in the first defendant’s application for that question to be heard, given the plaintiff’s assurance and Isac J’s minute of 23 December 2022).

[55]   Having regard to those factors, I conclude that the second defendant is entitled to costs, on a 2B basis, against the plaintiff for the period from 22 December 2022 until the plaintiff discontinued the proceeding on 1 March 2023. I would have disallowed any claim by the second defendant for preparation of evidence on that basis, but the second defendant does not advance that claim.

Outcome

[56]The plaintiff is to pay the second defendant’s costs in the sum of $6,453.00.

Delay

[57]   Finally, I apologise for the delay in issuing this judgment. Counsel’s memoranda were not referred to me until 1 September 2023.

Gwyn J

Solicitors

Chapman Tripp, Auckland Crown Law Office, Wellington