Te Whanau O Rangiwhakaahu Hapu Charitable Trust v Department of Conservation HC Whangarei CIV 2008-488-548
[2011] NZHC 828
•1 August 2011
IN THE HIGH COURT OF NEW ZEALAND WHANGAREI REGISTRY
CIV 2008-488-548
BETWEEN TE WHANAU O RANGIWHAKAAHU HAPU CHARITABLE TRUST
First Plaintiff
ANDFRIENDS OF MATAPOURI INC Second Plaintiff
ANDTHE DEPARTMENT OF CONSERVATION
First Defendant
ANDTHE CHIEF EXECUTIVE, LAND INFORMATION NEW ZEALAND Second Defendant
ANDATTORNEY-GENERAL Third Defendant
Hearing: (on the papers)
Counsel: S M Henderson for Plaintiffs
H S Hancock, D Ward and G Gardner for Defendants
Judgment: 1 August 2011
JUDGMENT (NO. 2) OF HEATH J
This judgment was delivered by me on 1 August 2011 at 10.00am pursuant to Rule 11.5 of the High
Court Rules
Registrar/Deputy Registrar
Solicitors:
Henderson Reeves Connell Rishworth, PO Box 11, WhangareiCrown Law, PO Box 2858, Wellington
TE WHANAU O RANGIWHAKAAHU HAPU CHARITABLE TRUST V THE DEPARTMENT OF CONSERVATION HC WHA CIV 2008-488-548 1 August 2011
Introduction
[1] On 22 December 2010, I gave judgment on a claim by Te Whanau o Rangiwhakaahu Hapu Charitable Trust (the Trust) for declarations and/or damages against the three Crown defendants, the Department of Conservation, the Chief Executive, Land Information New Zealand and the Attorney-General. The Trust was unsuccessful on all but one aspect of its claim.1 It succeeded in obtaining declarations that the Chief Surveyor erred in law in applying the wrong test in making decisions to approve DP 199214 (North Auckland Registry) and that the plan ought not to have been approved, for survey purposes.
[2] Costs were reserved.2 Outstanding issues of costs between the Trust and Crown interests involve interlocutory and substantive aspects of this proceeding and on an application for a representation order made to the Maori Land Court, on which Judge Spencer reserved costs to be determined as part of this proceeding.3
[3] Timetabling directions were made to enable questions of costs to be determined. Cross claims are made. The Trust seeks indemnity costs, while the Crown applies for costs for the hearing on a 3C basis and for interlocutory steps on a
2B basis, together with disbursements and a certificate for two additional counsel.
[4] The costs reserved in my substantive judgment also included issues that might arise between the Trust and the former fourth defendants, known as the Morrison interests. No costs are sought by either party in that regard. There is no need to consider that issue further.
General background
[5] The Otito Scenic Reserve (the Reserve) is situated at Matapouri Bay, on the east coast of the North Island, about 40 minutes drive from Whangarei. The Reserve
1 Te Whanau o Rangiwhakaahu Hapu Trust v Department of Conservation & Ors HC Whangarei CIV
2008-488-548, 22 December 2010 at para [146].
2 Ibid, para [147].
3 See para [10] below.
forms part of land previously known as the Otito Block. That land was originally held for the benefit of descendents of Rangiwhakaahu Te Awa Te Rahui. The Trust was incorporated to represent those descendants. The Trust and Friends of Matapouri Inc4 brought the proceeding in an endeavour to restore boundaries of the land that they claimed were wrongfully changed through approval of a new survey plan in 1999, the effect of which was said to have removed about 1.1 hectares from
the title.
[6] The Trust alleged that the Crown had wrongfully taken land from the Reserve and dealt with it for the benefit of the Morrison interests, who originally purchased land adjacent to the Otito Block, in 1912. The three defendants each has a distinct public function. The Department of Conservation has responsibility for
administering the Reserve.5 The Chief Executive of Land Information New Zealand
was sued in respect of functions performed, at various times, by the Chief Surveyor, the District Land Registrar and the Surveyor-General. The Attorney-General was joined to represent the Crown, in its capacity as a Treaty of Waitangi partner.
[7] Four causes of action were pleaded. The Trust
(a) alleged that it was entitled to sue for breach, by the Crown, of contractual obligations to the trustees of the Otito Block when the Block was sold to the Crown, under the authority of a Maori Land Court order made on 5 September 1969;
(b)claimed that the Crown breached the terms of a Maori Land Court order of 5 September 1969 and thereby committed breaches of trust obligations owed by it to the beneficial owners of the Otito Block;
(c) sought judicial review of decisions made by public officials within
Land Information New Zealand. Three particular decisions were in issue:
4 A society incorporated to represent and advance the interests of people concerned with the protection of historical cultural and environmental aspects of Matapouri and its associated coastal areas.
5 Under the Reserves Act 1977.
(i) The Chief Surveyor’s decision in December 1999 to approve
DP 199214.
(ii)The District Land Registrar’s decision to cancel an existing title and to issue a new one, in consequence of approval of DP 199214.
(iii)The Surveyor-General’s refusal to exercise his powers to correct DP 199214;
(d)sought damages against the Crown for “breach of the principles of the Treaty of Waitangi”. This cause of action relies on the “partnership” between Maori and the Crown and the imposition of “fiduciary” obligations which the Trust contends have been recognised by appellate decisions.
[8] Mr Hancock, for the Crown interests, put in issue the Trust’s authority to bring these proceedings on behalf of the descendants of Rangiwhakaahu Te Awa Rahui; or those who, before the 1970 sale to the Crown, were beneficial owners of the land.
[9] After the hearing, I issued a Letter of Request to the Maori Land Court to seek advice on whether the Trust was an appropriate representative of the descendants.6 Both my request and a separate application by the Trust were considered by that Court, at Whangarei, on 3 September 2010. The Trust and the Crown were each represented at that hearing.
[10] After considering evidence adduced on the issue and hearing submissions
from counsel, Judge Spencer made a determination, on the Trust’s application, that:7
Te Whanau o Rangiwhakaahu Hapu Charitable Trust is the appropriate body having the representative capacity and authority to deal with all matters that may concern the previous Maori ownership and the tangata whenua of the Otito Scenic Reserve in proceedings currently before the High Court.
6 Te Ture Whenua Maori Act 1993, s 30(1)(b).
7 Re Te Whanau o Rangiwhakaahu Hapu Charitable Trust (2010) 9 Tai Tokerau MB 248 at 264.
The Maori Land Court reserved the costs of the hearing before it, for determination in this proceeding.8
The claims for costs
[11] Mr Henderson, for the Trust, submits that it was necessary for the proceeding to be brought because of errors that had occurred within Land Information New Zealand. He submits that attempts were made to resolve differences amicably but that the Crown interests declined to co-operate. Furthermore, as the substantive hearing approached, the Crown interests sold a portion of the land in issue to third parties. The claim for indemnity costs is based primarily on the need for litigation brought by community members to expose and challenge a Crown error.
[12] Mr Hancock contends that indemnity costs ought not to be awarded and that, indeed, because of the failure of all but one of the Trust’s claims, costs should be awarded in favour of the Crown. Mr Hancock points out that the Crown interests faced claims for damages of up to $11 million, and indemnity costs (as special damages). One cause of action raised a Treaty of Waitangi issue which, if successful “would have had profound and costly implications for the country”. Further, the proceeding involved, whether expressly or implicitly, serious attacks on the professional conduct of various Crown employees and officers. Given success on only one aspect of the case, the Crown contends that it should receive costs.
Principles as to costs
[13] The primary principle is that a successful party ought to be able to recover costs from an unsuccessful party. The basis on which costs are awarded will differ, depending upon the complexity of the issues and the extent of preparation required. During the case management process, Associate Judge Robinson indicated that the substantive proceeding might well justify a category 3 classification. However, as is recognised in the application of the Crown interests, a lower rate may be appropriate for interlocutory steps.
[14] The circumstances in which indemnity or increased costs can be awarded was discussed by the Court of Appeal in Bradbury v Westpac Banking Corporation.9 In a judgment delivered by Baragwanath J, the Court of Appeal, after discussing the terms of r 14.6(3) and (4) of the High Court Rules, said:
[27] The distinction among our three broad approaches – standard scale costs, increased costs and indemnity costs – may be summarised broadly:
(a) standard scale applies by default where cause is not shown to depart from it;
(b) increased costs may be ordered where there is failure by the paying party to act reasonably; and
(c) indemnity costs may be ordered where that party has behaved either badly or very unreasonably.
[28] We acknowledge Sir Rupert Jackson’s report that in practice New Zealand scale costs have been permitted to fall far short of that (p 603). That is, however, a matter for the Rules Committee. Subject to that, the starting point of our rules, which gives a one-third or thereabouts deduction from a set figure, is comfortably in the modern main stream. It affords recognition of the access to justice factor that prevails in the United States and should not lightly be departed from. Clear cause must be shown to justify an increase. Our three-stage classification, with a discretion in each class as to where the order should be pitched, accords with that approach. Indemnity costs, which depart from the predictability of the Rules Committee’s regime, are exceptional and require exceptionally bad behaviour. That is why to justify an order for such costs the misconduct must be “flagrant” (Prebble v Awatere Huata (No 2) [2005] 2 NZLR 467 (SCNZ) at para [6]).
[29] We therefore endorse Goddard J’s adoption in Hedley v Kiwi Co- operative Dairies Ltd (2002) 16 PRNZ 694 at para [11] of Sheppard J’s summary in Colgate-Palmolive Co v Cussons at pp 232 – 234. While recognising that the categories in respect of which the discretion may be exercised are not closed (see r 14.6(4)(f)), it listed the following circumstances in which indemnity costs have been ordered:
(a) the making of allegations of fraud knowing them to be false and the making of irrelevant allegations of fraud;
(b) particular misconduct that causes loss of time to the court and to other parties;
(c) commencing or continuing proceedings for some ulterior motive;
(d) doing so in wilful disregard of known facts or clearly established law; or
(e) making allegations which ought never to have been made or unduly prolonging a case by groundless contentions, summarised in French J’s “hopeless case” test.
Analysis
[15] Despite the careful and comprehensive submissions on costs received from both counsel, I propose to deal briefly with the issues raised. I do so for two reasons. The first is that it is possible to explain briefly why a particular order for costs is justified. The second is that both appeals and cross appeals have been brought against my judgment. I prefer not to engage in any discussion of the merits that goes beyond what I said in my substantive judgment.
[16] Many of the Trust’s claims were doomed from the outset. The causes of action based on breaches of contract, trust and principles of the Treaty of Waitangi were all resolved in short order.10 Indeed, I said that the causes of action based on breach of contract and trust were “fraught with legal difficulties and, on any view of the facts, cannot succeed”.11 As far as the claim based on the principles of the Treaty of Waitangi was concerned it was clear, based on the Court of Appeal decision in New Zealand Maori Council v Attorney-General,12 that no private law remedy existed to enable Maori to bring a claim against Crown interests for breach of Treaty principles.13
[17] Having said that, I accepted the submission that the boundaries of the land in issue had been incorrectly changed as a result of a decision in 1999 to approve DP 199214, in preference to the existing SO 5117. I held that a “very high standard of proof” was required for such a decision to be made and that the Chief Surveyor had misdirected himself in making the impugned decision. Most of the evidence adduced at trial was relevant, by way of background, to this particular claim, so it cannot be said that the length of the hearing was extended in any significant way as a
result of the other claims being dismissed. To that extent, while the Crown interests
10 Te Whanau o Rangiwhakaahu Hapu Trust v Department of Conservation & Ors HC Whangarei
CIV 2008-488-548, 22 December 2010 at paras [84]-[96] (inclusive).
11 Ibid, at para [87].
12 New Zealand Maori Council v Attorney-General [2008] 1 NZLR 318 (CA) at para [81].13 Te Whanau o Rangiwhakaahu Hapu Trust v Department of Conservation & Ors HC Whangarei
CIV 2008-488-548, 22 December 2010 at paras [95] and [96].
were required to prepare fully to defend the unsuccessful claims, little time would have been saved had the case been focussed solely on the judicial review causes of action.
[18] There is no reason to depart from the principle that costs follow the outcome of a proceeding.14 Nevertheless, I am satisfied that the costs should be reduced from those which would ordinarily be ordered to recognise the hopeless nature of the claims that were dismissed and the importance of those issues to the Crown.
[19] While there was an element of public interest litigation involved, I do not see that as a reason for departing from the principle that costs should be determined expeditiously and on a predictable basis. While Commerce Commission v Southern Cross Medical Care Society15 is authority for the proposition that a public interest role may be a good reason to depart from the usual costs rules, it is not an invariable consequence of involvement in public or quasi public litigation.16
[20] There is nothing in the conduct of the litigation that could give rise to either indemnity or increased costs under the principles set out in Bradbury v Westpac Banking Corporation.17
[21] To give effect to my conclusions, I consider that costs should be awarded in favour of the Trust on a reduced basis, to take account of the costs incurred by the Crown on important but ultimately unsuccessful causes of action. The Trust should also have a global figure for an award of costs for the proceedings in the Maori Land Court which were required as a result of the Crown stance on standing.
[22] Ordinarily, for the hearing, I would have awarded costs on a 3C basis, with a lesser amount being awarded for interlocutory steps. However, I consider the appropriate order is for costs on a 2B basis together with reasonable disbursements,
to reflect both interlocutory proceedings and the substantive trial. An additional
14 See para [13] above.
15 Commerce Commission v Southern Cross Medical Care Society [2004] 1 NZLR 491 (CA).
16 Ibid, at para [21].17 Bradbury v Westpac Banking Corporation [2009] 3 NZLR 400 (CA).
global allowance of $5000 (inclusive of disbursements) will be incorporated to reflect attendances required in the Maori Land Court.
Result
[23] Costs are awarded in favour of the Trust on a 2B basis, together with reasonable disbursements, both to be fixed by the Registrar on the basis set out in para [22] above. A sum of $5000 shall be added to the sum so fixed, to reflect attendances in the Maori Land Court.
[24] I thank counsel for their assistance.
P R Heath J
Delivered at 10.00am on 1 August 2011
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