Van Essen v Attorney-General
[2013] NZHC 2016
•9 August 2013
IN THE HIGH COURT OF NEW ZEALAND DUNEDIN REGISTRY
CIV 2010-412-000802 [2013] NZHC 2016
BETWEEN BRUCE BRENDON VAN ESSEN Plaintiff
ANDTHE ATTORNEY-GENERAL OF NEW ZEALAND
First Defendant
PETER GIBBONS Fifth Defendant
CIV2010-412-000803
BETWEEN JASON PATTERSON Plaintiff
ANDTHE ATTORNEY-GENERAL OF NEW ZEALAND
First Defendant
GRAHAM SCOTT Fifth Defendant
Hearing: (On Papers)
Counsel: M Starling and K J McCoy for Plaintiffs
FRJ Sinclair and P D Marshall for First Defendant
D P Robinson for Fifth Defendants
Judgment: 9 August 2013
COSTS JUDGMENT OF WHATA J
[1] In my judgment of 30 April 20131 I granted declarations of breach of the right to be free from unreasonable search and seizure under s 21 of the New Zealand
Bill of Rights Act 1990 (NZBORA). I also made an award of $10,000 damages
1 Van Essen v The Attorney-General of New Zealand [2013] NZHC 917.
VAN ESSEN v THE ATTORNEY-GENERAL OF NEW ZEALAND [2013] NZHC 2016 [9 August 2013]
payable to Mr Van Essen for the breach. The background to this was that warrants obtained to search the properties of Mr Van Essen and Mr Patterson were unlawful and unreasonable. I considered that the circumstances of the breach in relation to Mr Van Essen were particularly aggravating involving an actual and ostensible conflict of interest as between the Police Officer who obtained the warrant and the person seeking the warrant, his father-in-law.
[2] In my judgment I recorded that:
[128] On the question of costs I am minded to grant indemnity costs in favour of the plaintiffs against the first defendant for the following reasons:
(a) The police appeared to act without the requisite independence;
(b) The police acted unlawfully and unreasonably in breach of a fundamental right;
(c) The plaintiffs were entitled to come to this Court to vindicate their rights and to examine whether the police acted in breach of every constable’s duty to act “without favour or affection, malice or ill- will”.
[129] I temper this analysis however because the first defendant has throughout taken a careful approach to the conduct of its case, making appropriate concessions, including that declarations could properly be made. It also responsibly and in a moderate way successfully defended the allegations of bad faith.
[130] As to the fifth defendants, they have successfully defended the claims against them. Any costs claimed by them also remain to be resolved. As I foreshadowed above at [119], I want full submissions on indemnification from the first defendant if that is sought and opposed.
[3] The fifth defendants now seek indemnification from the Attorney-General and/or from the plaintiffs. The plaintiffs seek indemnification from the first defendant. The first defendant denies that it is liable to indemnify any of the parties.
The Claims
Fifth Defendants
[4] The fifth defendants claim actual costs of $80,053.36 or scale costs of
$85,259 plus disbursements. They say they are entitled to:
(a) Indemnification from the Attorney-General based on the operation of s 38 of the Police Act 1958 or because they at all times acted as agents for the police;
(b) Indemnification from the plaintiffs under s 39(2) of the Police Act –
because at the time they were acting as a member of the police; and
(c) Indemnification on the basis that exceptional circumstances exist such that an award of costs is justified against the plaintiffs.
[5] They highlight a number of allegedly aggravating factors including (in summary):
(a) The allegations of bad faith made were meritless;
(b)The plaintiffs failed to recognise that in the absence of bad faith, the fifth defendants were protected by the statutory immunities;
(c) The pleadings were poorly drafted;
(d)There were numerous non-compliances with procedural requirements causing inordinate delay;
(e) The plaintiffs were in effect pursuing a vendetta against the fifth defendants;
(f) In relation to Mr Van Essen, there was (in addition to the above) a lack of candour;
(g)In relation to Mr Patterson, the argument about the flawed unsigned warrant was meritless in light of leading authority, including R v Rodgers.2
The plaintiffs
[6] The plaintiffs seek confirmation of indemnity costs. They say that the Attorney-General should also indemnify the fifth defendants. In relation to the claim by the fifth defendants they submit:
(a) Any delay was related to legitimate steps taken by the plaintiffs, including discovery, to ensure that the issues were properly ventilated;
(b) The scale of discovery was commensurate with the nature of the
plaintiffs’ claims;
(c) The fifth defendants should have sought indemnification from the Attorney-General, noting that the plaintiff withdrew all proceedings against individual police as soon as it had obtained confirmation of indemnity;
(d) The allegations of the vendetta were not raised in evidence.
First defendant (Attorney-General)
[7] Mr Sinclair for the Attorney-General submits that costs should lie where they fall. Concerns are expressed about the conduct of the litigation and that it took an excessive amount of time because of the irresponsible conduct of the plaintiffs, including for example the failure to properly articulate the bad faith claim. In contrast, counsel refers to my observations about the care taken in the preparation and presentation of the Attorney-General’s case. Counsel also highlights the steps
taken by the Attorney-General to responsibly bring the weaknesses of the plaintiffs’
2 R v Rodgers HC Auckland CRI 2006-044-004426, 6 August 2008.
case to their attention, as well as making the concession about the validity of the search warrants.3
[8] Mr Sinclair also submits that much of the delay associated with both preparation of the proceedings and argument at trial was caused by the unsuccessful attempt to establish bad faith.
[9] Turning to the individual claims, Mr Sinclair submits that costs in relation to Mr Patterson should lie where they fall and there should be a note that but for legal aid there would have been an award of costs. It is noted that the offer of a declaration was made some months prior to trial and that the issue concerning the unsigned warrant was meritless. It is also submitted that an award of indemnity costs would remove incentive to other plaintiffs to act responsibly.
[10] In relation to Mr Van Essen, it is repeated that the allegation of bad faith was bound to fail and that this should reflect in costs, and that matters on which the plaintiff did succeed could have been dealt with on an agreed fact basis.
[11] As to the fifth defendants, the Attorney-General maintains that there is no general indemnity available to the fifth defendants. It is submitted that costs should lie where they fall as between the fifth and first defendants. It is also emphasised that the Attorney-General is not responsible for the actions of the Accident Compensation Corporation, contrary to the view expressed by me where I said:
[125] ... ACC should have retained the full files knowing full well that both plaintiffs had serious claims against the police for misconduct. This should resonate in costs against the first defendant who assumes responsibility for the conduct of governmental agencies that employ the assistance of the police.
[12] In this regard, Mr Sinclair makes the following points:
(a) ACC is not subject to day to day direction by executive government; (b) ACC was not a party and is an autonomous legal entity;
3 Referring to memoranda dated 14 October 2011 and 10 September 2012.
(c) The Attorney-General is properly answerable for the actions of the executive government and the Police but not other agencies.
[13] It is then said that it would be invidious if the Police, by responding to a complaint of alleged criminal wrongdoing, are subject to costs liability over actions of the complainant.
Fifth defendants’ reply
[14] The fifth defendants then responded to both the submissions of the plaintiffs and the Attorney-General.
[15] First, the fifth defendants say they did seek an indemnity from the Crown in respect of costs but the Crown refused to give that indemnity. Counsel says the plaintiffs joined the fifth defendants as parties and they must bear the consequences of doing so. There is then reference to:
(a) Various requests for particulars made including the correspondence dated 18 February 2011 and a memorandum of counsel dated
11 March 2011;
(b)Strike out applications that were filed six weeks before trial (noting that that was the earliest opportunity to file the strike out after final pleadings were themselves filed on 18 September 2012).
[16] As to the Attorney-General, the fifth defendants say that they were relying on the Police to make valid applications for search warrants; that it is not correct to say that the fifth defendants induced the Police to obtain the warrants; and that had the fifth defendants not been joined the first defendant would have required their assistance given their knowledge of matters which would have resulted in a discussion and agreement as to their remuneration for doing so.
Assessment
Fifth defendants’ claim
[17] I award indemnity costs in favour of the fifth defendants against the first defendant for the following reasons.
[18] While the issue of agency received, relatively speaking, only cursory attention in submissions, I remain of the view that the fifth defendants were acting as agents for the Police at the time of the searches. The evidence is quite clear that they attended the searches at the specific request of the Police. As I said in my judgment their entire authority for being on the site derived from the instructions to assist the Police in the execution of the warrants. On that basis, s 38 of the Police Act must apply. It states:
38 Execution of processes
...
(2) Any warrant, order, or other process of any Court or of any Judge, District Court Judge, Justice, or Community Magistrate directed to any non- commissioned officer or constable may be executed and enforced by any other member of the Police or his assistants; and every member and his assistants shall have the same rights, powers, and authorities for and in the execution of any such process, as if the same had been originally directed to him or them expressly by name.
..
(Emphasis added)
[19] Given this statutory investiture, Messrs Gibbons and Scott enjoyed the same legal status as a member of the Police for the purposes of the execution of the warrant. This then logically imbues them with the statutory immunity afforded by s
39 to “any member of the Police” from civil claims based on the flawed warrants.
[20] Conversely, if Mr Sinclair is correct, persons assisting the Police in the execution of a warrant would find themselves fully exposed to adverse claims based on flawed warrants, while the Police who obtained the flawed warrants, and sought their assistance, are immune from them. In my view that would be an altogether unpalatable result and not one envisaged by Parliament.
[21] Furthermore I do not think there is a principled basis for the Attorney- General’s objection to indemnification of Messrs Gibbons and Scott. My position might be different if the flaws in the warrants could be substantially attributed to the fifth defendants. But as I observed in my judgment, the fifth defendants acted with appropriate professionalism and had a proper basis for requesting the warrants sought by the ACC. I have also found the fifth defendants did not seek to use their connections to the Police (familial or otherwise) to influence the warrant process.
[22] I also see nothing in s 65ZC of the Public Finance Act 1989 to persuade me that the claim by the fifth defendants to indemnity ought not to be affirmed. Section
65ZC states:
65ZC Guarantee or indemnity by the Crown must not be given except under statute
Except as expressly authorised by any Act, it is not lawful for any person to give a guarantee or indemnity on behalf of or in the name of the Crown.
[23] Reliance on this section by Mr Sinclair misunderstands, in my view, the nature of the claim made by the fifth defendants. They seek indemnity as “assistants” conferred by s 38 with the same rights, powers and authorities as a member of the Police for and in the execution of a warrant. Their entitlement therefore arises, not from the grant of a guarantee or indemnity on behalf of the Crown, but by operation of statute; that is, it arises from the fact that when they assisted the Police, they assumed the rights of a member of the Police in all respects in respect of execution of the warrant. I can see no reason to exclude from that bundle of rights, the right to indemnification.
[24] Accordingly, I am satisfied that the claim for indemnification made by the fifth defendants against the Attorney-General in respect of their actions as assistants to the Police is properly made out. On that basis, the fifth defendants are entitled to indemnification of their costs by the Attorney-General, including in that respect the time that Messrs Gibbons and Scott have reasonably incurred for the purposes of their attendances relating to the proceedings. In this regard I accept the submissions made on behalf of the fifth defendants that those costs would have been incurred
inevitably by agreement in order to fully defend the Police case. I will leave it to the parties to agree quantum.
[25] For completeness, I decline to make an order of indemnity costs against the plaintiffs in favour of the fifth defendants. First, the Attorney-General should have treated Messrs Gibbons and Scott in the same way they treated the Police Officers executing the warrants. This would have avoided the need to join them separately. Second, the plaintiffs were successful in establishing a substantive breach of the NZBORA, and the fifth defendants actively participated in that breach. This in my view offsets the claim to indemnity costs based on the operation of s 39. Third, given the balance of considerations (including those that I will come to below), costs should lie where they fall as between the plaintiffs and the fifth defendants.
Plaintiffs’ claim
[26] I commence my analysis of the plaintiffs’ claim to costs by reference to the
legal framework.
[27] Rule 14.1 of the High Court Rules confers a general discretion on the Court to award costs. The discretion should be exercised in accordance with the general scheme of Part 14, particularly rr 14.2-14.10.4 When the discretion is exercised outside the general scheme of those rules, then it must be undertaken in a considered and particularised way.
[28] Two specific rules appear to have particular relevance given the respective claims of the parties, namely r 14.6 dealing with increased costs awards and r 14.7 dealing with refusal of or reduction in costs. Rule 14.6 contemplates an increased costs award in a range of circumstances normally dealing with the conduct of the party opposing costs. Rule 14.6(4) then provides for indemnity costs when a party has acted vexatiously, frivolously, and improperly or unnecessarily or where a party
has ignored or disobeyed an order, or for some other reason which justifies the Court
4 Refer Glaister v Amalgamated Dairies Limited [2004] 2 NZLR 606 (CA) at [24].
making an order for indemnity costs despite the principle that the determination of the costs should be predictable and expeditious.5
[29] Conversely, r 14.7 states that the Court may refuse or reduce an order if
(relevantly):
...
(d) although the party claiming costs has succeeded overall, that party has failed in relation to a cause of action or issue which significantly increased the costs of the party opposing costs; or
(e) the proceeding concerned a matter of public interest, and the party opposing costs acted reasonably in the conduct of the proceeding; or
(f) the party claiming costs has contributed unnecessarily to the time or expense of the proceeding or step in it by—
(i) failing to comply with these rules or a direction of the court;
or
(ii) taking or pursuing an unnecessary step or an argument that lacks merit; or
(iii) failing, without reasonable justification, to admit facts, evidence, or documents, or accept a legal argument; or
(iv) failing, without reasonable justification, to comply with an order for discovery, a notice for further particulars, a notice for interrogatories, or other similar requirement under these rules; or
(v) failing, without reasonable justification, to accept an offer of settlement whether in the form of an offer under rule 14.10 or some other offer to settle or dispose 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.
[30] The specific frame however for a plaintiff’s application for costs in the context of a NZBORA claim is provided by the following passage taken from the majority decision of the Court of Appeal in Attorney-General v Udompun:6
[186] In our view, the Judge was not wrong in principle to award indemnity costs, even though not all of Mrs Udompun’s claims succeeded before him. In this area it may not always be appropriate to allow costs to
5 Bradbury v Westpac Banking Corporation [2009] 3 NZLR 400 (CA) at [29].
6 Attorney-General v Udompun [2005] 3 NZLR 204 (CA).
follow the event. It is important to remember that Baigent damages are awarded only where other remedies are not sufficient and awards are, in any event, modest. Applying the normal costs rules in such circumstances may discourage litigants from bringing BORA claims. This would clearly have the result of weakening BORA protections. Indemnity costs could also, in suitable cases, be seen as necessary for a proper vindication of the right. This does not mean, however, that indemnity costs are to be awarded as a matter of course in BORA cases.
[187] In this case, if we had upheld the view of the Judge as to the extent of the breaches, we would have considered indemnity costs to have been appropriately awarded. The breaches found were sufficiently comprehensive to justify the award, touching as they did on all aspects of Mrs Udompun’s involvement with the New Zealand Immigration Service and the Police. We have not, however, taken the same view of the extent of the breaches as the Judge did. It is inappropriate in our view for the Police to bear the costs of Mrs Udompun’s unsuccessful claims against the Immigration Service. The extent to which the Police should bear the costs of the claims against them is remitted back to the High Court to be considered in the light of this judgment.
[31] Hammond J (in the minority) took a stronger line on costs observing:
[223] In principle, BORA should not be watered down by leaving persons with no incentive or an inability to bring proceedings. This is because BORA places an affirmative obligation on the “judicial branches of the government of New Zealand” (s 3(a)) to “affirm, protect and promote” (preamble to BORA) the provisions of that enactment. An obligation of that strength is not discharged by the application of “usual” costs rules.
[32] Tipping J in Taunoa v Attorney-General also linked the issue of costs to the remedy for breach of the NZBORA. He said:7
[334] I mention finally that when appropriate in cases of this kind, the court may award solicitor and client costs to a successful plaintiff as an ingredient of its provision of an effective remedy. Whether that should be done will depend on the overall circumstances of the case and the elements of the remedial package otherwise provided. I mention this dimension only lest it be overlooked.
[33] Against this backdrop, I turn to examine the claims of each plaintiff.
Mr Van Essen
[34] Mr Van Essen was successful in obtaining a declaration and an award of damages for violation of his right to be free from unreasonable search and seizure.
7 Taunoa v Attorney-General [2008] 1 NZLR 429 (SC).
The search of his property was plainly unlawful and unreasonable and highly invasive of his right to privacy. The failure to manage Constable Henderson’s conflict of interest was a seriously aggravating feature and undermined the integrity of the warrant process. In light of the observations of the Court of Appeal in Udompun, the starting point is appropriately the grant of indemnity costs. An award of indemnity costs is, in short, necessary for the purpose of fully vindicating Mr Van Essen’s rights. By contrast, a more modest award would dilute the remedy for the breach.
[35] I accept, however, that the conduct of a party must be taken into account. In this regard, the submissions concerning bad faith had a mobile quality and were in the end very weak. Initially Mr Starling argued that it was not necessary to show bad faith. He then accepted at the end of the first week of trial that bad faith needed to be established.8 Then the plaintiffs’ position on the bad faith did not become clear until the latter stages of the trial. Indeed, the test for bad faith relied upon by the plaintiffs only really emerged with sufficient clarity in the closing stages of the trial. The Attorney-General also makes the fair point that the weaknesses of the claims based on bad faith were highlighted to the plaintiffs as early as November 2011.9 In that letter the Attorney-General noted:
7.1 The evidence so far reviewed suggests that, in applying for the search warrants, Police acted in good faith on the basis of information supplied from an apparently reliable source. The searches themselves appear to have been conducted in a reasonable manner and in accordance with the terms of the warrants issued.
7.2 There is nothing in the documents seen thus far that confirms the allegations of bad faith. In the Van Essen search, the fact that constable Henderson was the son-in-law of Mr Gibbons (Mainland Consulting) does not, without more, establish that the process of applying for a warrant was tainted by bad faith.
7.3 The IPCA report on Mr Van Essen’s complaint made several criticisms of Police procedures, but found no evidence of bad faith. It concluded:
7.3.1 That Constable Henderson’s relationship to Mr Gibbons was
known to, and sanctioned by, his superiors. (Para 12)
8 Refer Van Essen v The Attorney-General of New Zealand [2012] NZHC 3358 (Judgment No. 1 on fifth defendants’ application to strike out) and Van Essen v The Attorney-General of New Zealand [2012] NZHC 3368 (Judgment No. 2 on fifth defendants’ application to strike out).
9 Refer letter from Crown Law to Michael Starling dated 23 November 2011.
7.3.2“... there is no evidence of an actual conflict of interest or that Constable Henderson had any financial interest in the outcome of the search warrant applications. Nor is there any evidence of impropriety.” (Para 112)
7.4In the absence of bad faith or malice, the torts of misfeasance and malicious procurement of a search warrant cannot be made out. It is also unlikely that exemplary damages would be available against the first defendant or the Police defendants.
7.5 The Police Act 1958, s 39, is an answer to the allegations of trespass.
In Mr Patterson’s case, the complaint is made that the judicial officer neglected to sign one of the search warrants. This deficiency is likely to be cured under the Summary Proceedings Act, s 204 (see R v Rodgers HC Auckland, CRI-2006-044-4426, 6 August 2008, Stevens J).
7.6If errors or omissions in the warrant affidavits are more than trivial, the searches may have been unlawful. (R v Williams [2007] 3 NZLR
207). In the absence of bad faith in applying for the warrants, or evidence that the searches were unreasonably conducted, an unlawful search is unlikely to result in an award of compensation
under the NZBORA 1990, s 21. (Taunoa v AG [2008] 1 NZLR 429 (SC); Rochford v A-G [2008] NZAR 404.)
7.7Unless some credible evidence of bad faith emerges, both plaintiffs face formidable obstacles to the recovery of damages in tort or compensation under NZBORA 1990.
[36] Putting aside the observations at paragraphs 7.6 and 7.7, the Attorney- General’s position was largely vindicated. The plaintiffs were wholly unsuccessful in establishing bad faith or liability in tort. Furthermore, the conduct of the case on behalf of the Attorney-General was exemplary. Only key points were taken and cross-examination strictly limited to the theory of the Crown case.
[37] Having said all of that, the careless failure to manage Constable Henderson’s obvious conflict of interest left an unfortunate odour. The warrant application process enabling the use of coercive powers was ex parte. The integrity of that process depends on (among other things) providing surety to the public that personal interests or bias had no influence on the decision to engage those powers. While the report of the Independent Police Authority provided a proper basis for excluding personal bias, it remained the function of this Court to provide the full opportunity to persons affected by coercive powers to ventilate their concerns about decisions affecting their fundamental rights. Furthermore, the transparent testing of the issue
of bad faith in circumstances where the conflict of interest was so obvious, served a genuine public interest in transparency and fairness.
[38] When I then balance these competing interests, I consider that the indemnity costs in favour of Mr Van Essen remain appropriate reduced, however, by 20% to reflect the lack of focus in relation to bad faith and the consequences of that for the claims based in tort. In this regard, I also accept the submission made by the Attorney-General that the allegation based on bad faith, as finally framed by the
plaintiffs10 could have been ventilated via agreed facts and without the need for
extensive cross-examination. Any greater discount, however, would be disproportionate and dilute the remedy afforded via an award of damages.
Mr Patterson
[39] Mr Patterson was not successful in obtaining relief by way of damages. But as with Mr Van Essen the odour of bias coloured the decision made by the Police to use coercive powers of the State. While the conflict of interest in his case was not so great and more in the nature of apparent cronyism, it remained valid for Mr Patterson to thoroughly test the integrity of the ex parte warrant process. This, as I have said, served the wider public interest in transparency and fairness.
[40] In those circumstances I consider that Mr Patterson is also entitled to indemnity costs, discounted by 20% to account again for the lack of focus in relation to the bad faith and related tort based claims.
Other matters
[41] There are two other matters I wish to address for the purposes of this costs judgment. First, in the letter from Crown counsel to Mr Starling of November 2011,
10 Plaintiffs’ closing submissions:
23. The actions of the Police went beyond mere negligence, where mistakes are made inadvertently. The Police involved in the Van Essen search considered the risks and then choose (sic) not to do those things that they were obligated to do to responsibly undertake their roles as Police Officers.
...
31. The actions of the Police went beyond mere negligence, where mistakes are made inadvertently. The Police involved in the Patterson search failed to learn from the problems with the Van Essen search considered the risks and then choose (sic) not to do those things that they were obligated to do to responsibly undertake their roles as Police Officers.
it is asserted that it was necessary for the plaintiffs to show bad faith in order to obtain an award of compensation under the NZBORA. As will be evident from my judgment, I do not accept that that was a correct proposition and the plaintiffs were justified in proceeding to trial on the breach of the NZBORA for the purposes of a claim to damages.
[42] Second, Mr Sinclair has raised a concern about my observations relating to liability for costs in association with the conduct of the ACC. It transpires that that particular reasoning has not influenced my decision on costs and could be said to be an unfortunate distraction. Be that as it may, given the concern raised I respond briefly as follows (conscious that I should not provide rearguard justification for the observations in my judgment). It must be recalled that the Police made the warrant applications at the request of and on the basis of information supplied by the ACC. By doing so, the Police became inextricably linked to ACC for the purposes of defending the validity of the warrants. Thus, in my view, the Police assumed responsibility for the integrity of the ACC investigation, and of the supporting information, against the prospect that the legality and propriety of the warrants might later be tested. It is no excuse then for the Police to say that the mismanagement of the underlying information lay with the ACC. All of this highlights the concerns expressed by Constable Preece (now Detective) with seeking warrants in respect of an investigation outside the control of the Police.
Result
[43] There shall be orders:
(a) Granting indemnity costs (including reasonable disbursements) in favour of the fifth defendants against the Attorney-General, including for the executive time reasonably spent by them in preparing for and attending the hearing;
(b)Granting indemnity costs (including reasonable disbursements) in favour of the plaintiffs against the Attorney-General, less 20%.
[44] The parties are to agree quantum.
Solicitors:
Christopher B Morrall, Christchurch, for Plaintiffs
Crown Law, Wellington, for First Defendant
Gallaway Cook Allan, Dunedin, for Fifth Defendants
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