Universal Education Group Limited t/a New Zealand National College 2008 v New Zealand Qualifications Authority

[2018] NZHC 1128

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

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

CIV-2017-485-835

[2018] NZHC 1128

UNDER

Judicial Review Procedure Act 2016

BETWEEN

UNIVERSAL EDUCATION GROUP LIMITED T/A NEW ZEALAND NATIONAL COLLEGE 2008

Applicant

AND

NEW ZEALAND QUALIFICATIONS AUTHORITY

Respondent

On the papers:
Counsel:	N J Russell for Applicant R J Scott for Respondent
Judgment:	18 May 2018

JUDGMENT OF CHURCHMAN J

Introduction

[1]                  In a judgment dated 19 December 2017, the Court declined an application by Universal Education Group Ltd trading as New Zealand National College 2008 (UEG) for judicial review.1 The Court reserved the issue of costs, inviting the parties to settle the issue between themselves but, in the absence of agreement, provided for the exchange of memoranda.

[2]                  Counsel have been unable to agree and memoranda have been exchanged. While New Zealand Qualifications Authority (NZQA) submitted that the proceedings

1      Universal Education Group Ltd v New Zealand Qualifications Authority [2017] NZHC 3245.

UNIVERSAL EDUCATION GROUP LIMITED T/A NEW ZEALAND NATIONAL COLLEGE 2008 v NEW ZEALAND QUALIFICATIONS AUTHORITY [2018] NZHC 1128 [18 May 2018]

should be categorised as standard 2B proceedings and sought costs of $35,830.90 against UEG, UEG submitted that:

(i)the proceeding concerned a matter of public interest and costs should lie where they fall; or

(ii)in the alternative, if the Court is minded to award costs, NZQA should be awarded costs generally on a 2B basis but on a band A basis for the preparation of affidavits and with no allowance made for discovery or the appearance of second counsel.

Public interest

[3]                  Under the High Court Rules, the Court may refuse to make an order for costs or may reduce the costs otherwise payable if the proceeding concerned a matter of public interest and the party opposing costs acted reasonably in the conduct of the proceeding.2

[4]UEG relied on the principle as stated in Taylor v District Court at North Shore:3

The scope of the “public interest” exception, now contained in rule 14.7(e), has been considered in a number of cases… [T]he proceeding must concern a matter of genuine public interest, have merit and be of general importance beyond the interests of the particular unsuccessful litigant. To obtain the benefit of the exception in rule 14.7(c), the unsuccessful litigant must also have acted reasonably in the conduct of the proceeding.

[5]                  Counsel for UEG submitted that these proceedings raised broader issues in relation to the robustness, objectivity, and transparency of NZQA’s decision-making processes for the registration of private training establishments. These are matters of genuine public concern and importance, it was submitted, particularly in light of NZQA’s statutory function to oversee the setting of standards for qualifications in tertiary education.

[6]                  I do not accept the submission these were public interest proceedings. While the processes for the registration of private training establishments might arguably be seen as a matter of public interest, this case was concerned rather with narrower private interests regarding NZQA’s decision in relation to, and UEG’s  interests in the

2      High Court Rules, r 14.7(e).

3      Taylor v District Court at North Shore (No 2) HC Auckland CIV-2009-404-2350, 13 October 2010 at [9].

cancellation of, UEG’s registration. The proceedings were pursued by UEG to advance its interests and, having chosen to bring the matter to Court for its own benefit rather than any wider benefit, UEG should meet the cost consequences.

Costs

Categorisation

[7]                  These proceedings were not categorised at an interlocutory stage. NZQA submitted that category 2 would be appropriate, arguing that the matter was of average complexity requiring counsel of skill and experience considered average in the High Court. NZQA also submitted that the allocated time for steps in the proceeding should be category B.

[8]                  In the event that these proceedings were found not to fall into the public interest category and costs therefore awarded to the successful party, UEG submitted that costs should be awarded on a 2A/B basis.

[9]                  Apart from those steps which UEG has suggested should be awarded on a 2A basis, which are discussed below, all other steps are to be allocated category B.

Discovery

[10]              NZQA sought an allowance for discovery which, on a band 2B basis, was allocated 2.5 days. UEG submitted that this was an unreasonable amount of time for this step given that no formal discovery was undertaken in this proceeding. There was informal discovery but not of such a nature to merit an award of costs. Of the 18 documents discovered by NZQA, none were considered by the Court to be relevant to the proceeding.4 UEG therefore submitted that, in the circumstances, it was appropriate that no allowance be made for discovery.

[11]              NZQA, however, argued that the fact that informal discovery was undertaken should not be a basis on which costs are precluded as the step was still required. The

4      Universal Education Group Ltd v New Zealand Qualifications Authority [2017] NZHC 2988 at [11].

parties had agreed to informal discovery given the short timeframe. Nor should the reduced number of discovered documents, it was argued, preclude the award for this step as NZQA’s solicitors undertook a relatively substantial amount of work over a period of two weeks in respect of NZQA’s discovery obligations. This work included NZQA providing its solicitors with all documents relating to UEG’s discovery request and NZQA’s solicitors reviewing those documents, providing advice to NZQA and then responding to UEG’s objections relating to some of the material discovered. The time spent and costs incurred in complying with its discovery obligations exceeded the claimed scale costs.

[12]              While I accept UEG’s submission that an allowance of 2.5 days in the circumstances would be excessive, it would also be inappropriate to make no allowance whatsoever for discovery. It is my view that a reasonable amount of time for this step would be one day. Therefore, NZQA’s costs for discovery are reduced from $5,575.00 to $2,230.00, a difference of $3,345.00.

Preparation of affidavits

[13]              NZQA also sought an allowance for the preparation of affidavits which, on a band B basis, was allocated 2.5 days. UEG submitted that as NZQA only filed three affidavits, two of which were six pages and one of which was only two pages, 2.5 days was an unreasonable amount of time for this step and an allowance on a band A basis of 1.5 days would more accurately reflect a reasonable time allocation for this step.

[14]              NZQA, however, contends that the length and number of affidavits it filed should not be determinative of the time allowed for the preparation of the affidavits in support of its opposition. In preparing those affidavits, NZQA had been required to review, consider and respond to the two affidavits sworn in support of UEG’s claim, both of which were voluminous.

[15]              I accept UEG’s submissions on this point. While UEG’s affidavits may have appeared at first sight to be lengthy, given that one was 283 pages and the other 459 pages, they consisted mainly of exhibits, the consideration of which would not have required a great deal of time. I therefore find that an allowance of 1.5 days is

reasonable and NZQA’s costs for the preparation of affidavits are, accordingly, reduced from $5,575.00 to $3,345.00, a difference of $2,230.00.

Certification for second counsel

[16]              NZQA submitted that, as the proceeding was factually dense, with complex legal issues, and moved quickly, second counsel should be certified. NZQA also noted that UEG had three counsel present at the proceedings.

[17]              UEG, however, submitted that this was a proceeding of average complexity, with all evidence given by affidavit, and with each side’s legal argument known in advance following the interim relief application. Furthermore, UEG submitted, NZQA had not been able to identify any extenuating circumstances which might otherwise warrant or justify the appearance of second counsel. Therefore, UEG submitted that it was not appropriate for second counsel to be certified and that this should be excluded from any award of costs made to NZQA.

[18]              In the case of Nomoi Holdings Ltd v Elders Pastoral Holdings Ltd, Chambers J found that the approach to be taken in determining whether or not second counsel should be certified is “always objective and is focused on the nature of the proceeding”.5 In that case, where all evidence-in-chief had been given by way of either affidavit or written statement exchanged beforehand, with each side’s legal argument known in advance by the other side, second counsel was not certified.

[19]              This case is analogous to the present case which had the same features. The fact that UEG had three counsel is of little relevance. If they had been successful, I would not have certified for three counsel. The reality is that this was a straight forward judicial review case. I therefore decline to award second counsel costs to NZQA.

Defendant’s costs

[20]The defendant’s costs are as follows:

5      Nomoi Holdings Ltd v Elders Pastoral Holdings Ltd (2001) 15 PRNZ 155 (HC) at [21].

Scale costs: Schedule 2B - daily rate is $2,230

Step	Description	Time Allocation	Amount
2	Commencement of defence by defendant	2 days	$4,460.00
23	Filing opposition to interlocutory application (19.10.17)	0.6 day	$1,338.00
26	Appearance at hearing for principal counsel (20.10.17)	0.5 day	$1,115.00
11	Filing memorandum (2.11.17) (half rated as joint memorandum)	0.2 day	$446.00
11	Filing memorandum (22.11.17) (half rated as joint memorandum)	0.2 day	$446.00
9	Pleading in response to amended pleading (29.11.17)	0.6 day	$1338.00
20	Discovery	1 day	$2,230.00
30	Defendant’s preparation of affidavits	1.5 days	$3,345.00
33	Preparation for hearing	3 days	$6,690.00
13	Appearance at conference (1.12.17)	0.2 day (as per NZQA’s schedule)	$446.00
11	Filing memorandum (1.12.17)	0.4 day	$892.00
26	Appearance at hearing for principal counsel	1.5 days	$3,345.00
Total time	11.7 days	$26,091.00
Disbursements
Photocopying	$1,159.30
Taxis	$5,750
Filing fees	$555.60
Total disbursements	$1,934.90
Total costs and disbursements	$28,025.90

Conclusion

[21]Accordingly, judgement is given in favour of the defendant in the sum of

$28,025.90.

Churchman J

Solicitors:

Chen Palmer Partners, Wellington for Applicant

McElroys, Litigation Lawyers, Auckland for Respondent