Vector Limited v Electricity Authority

[2019] NZHC 3079

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

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

CIV-2016-485-702

[2019] NZHC 3079

BETWEEN

VECTOR LIMITED

First Plaintiff

AND

PAUL HUTCHISON, WILLIAM CAIRNS, JAMES CARMICHAEL, KAREN SHERRY AND MICHAEL BUCZKOSKI

Second Plaintiffs

AND

THE ELECTRICITY AUTHORITY

Defendant

On the papers

Counsel:

J A Farmer QC and S M Hunter for First Plaintiff M C Harris for Second Plaintiffs

L A O’Gorman for Defendant

Judgment:

25 November 2019

JUDGMENT OF SIMON FRANCE J (COSTS)

Background to a costs ruling

[1]    The plaintiffs sought declarations, the purpose of which was to stop proposals by the Authority to impose standard use-of-system agreements on distributors. The plaintiffs argued the Authority was exceeding its powers. I declined the declarations.1

[2]Costs were reserved in the sense that I made no order as to costs and stated:

Costs memoranda may be filed if necessary.

1 [2017] NZHC 1774.

VECTOR LIMITED AND PAUL HUTCHISON AND OTHERS v ELECTRICITY AUTHORITY [2019] NZHC

3079 [25 November 2019]

I am satisfied counsel and the parties understood that to mean that costs were reserved and would be determined on the basis of memoranda filed if the parties could not themselves agree. No memoranda were filed at the time.

[3]    The plaintiffs appealed and the appeal was “allowed in part”. The Court of Appeal issued two judgments. The first judgment made declarations narrower in scope than that sought. My encapsulation of the appeal findings is that the plaintiffs’ declarations went too far in seeking to circumscribe the Authority’s powers, but as regards the particular proposal in issue, they were correct. Certain proposed clauses of the Authority’s draft agreement were declared unlawful.

[4]    A second issue concerned the relationship between the role of the Commerce Commission and that of the Electricity Authority. The argument before me was that the Authority, by prescribing quality standards, was acting in an area that was the sole domain of the Commerce Commission. The Court of Appeal requested further evidence and submissions. During the period allocated for this, it is apparent the parties each moved in their position such that by the time of the hearing the Court of Appeal recorded the disagreement had narrowed considerably. It was accepted the Authority could mandate some quality standards, and the Authority cut back on what it had initially been proposing.

[5]Various declarations were made by the Court of Appeal.

Costs on original hearing

[6]    The Court of Appeal did not address the costs situation in the High Court. The plaintiffs now seek costs in this Court. They also seek repayment of a costs payment they made to the Authority subsequent to the High Court judgment and prior to the successful appeal. The Authority resists.

Issue one – the payment made by the plaintiffs

[7]    The Authority in its submissions talks of there being “no basis for revisiting the costs outcome of the High Court decision”. I am unsure what is meant by that but

make the obvious point if it refers to anything done by the Court, there was no costs decision.

[8]    There is no evidence concerning the basis on which the plaintiffs paid money to the Authority. I accept it was in the context of discussions between the parties, but it was not pursuant to a Court order. Without evidence, it is a matter between the parties. However, the balance of this ruling will no doubt considerably clarify the situation.

Issue two – can the plaintiffs now seeks costs?

[9]    There is no present costs order in this Court. The fact that the Court of Appeal did not expressly refer that issue back to the Court does not deprive me of the jurisdiction to settle costs in this Court, in light of the Court of Appeal decision.2

Issue three – should there be an award of costs to the plaintiffs?

[10]   The obvious answer being “Yes”, I turn to the basis on which the Authority resists this:

(a)the declarations made in the Court of Appeal were not the ones sought in the High Court;

(b)one of the declarations “simply restates the bare nature of the legislative provisions”, and represents common ground;

(c)the other declaration focuses on the invalidity of individual clauses which had not been the focus of the pleadings; and

(d)where a High Court judgment is adjusted rather than overturned, there will not necessarily be a change in the costs situation.

[11]   As appealing as much of this may be to the Judge who has been reversed, I do not agree with it. On any reading, the plaintiff succeeded. Clauses proposed by the

2      Americhip, Inc v Dean [2015] NZHC 1871, (2015) 22 FRNZ 703.

Authority were declared unlawful because they exceeded the powers of the Authority. That was the plaintiffs’ case. That they overstated the Authority’s lack of power does not affect their entitlement to an award. Nor does the fact that the ground shifted at the appellate level affect the position. It is not an unusual situation; indeed, the ability to refine positions is one of the advantages of having an appellate system.

[12]   It can be observed there is nothing in the Court of Appeal judgments that would point to an outcome other than costs follow the event. Further, the plaintiffs obtained a standard award of costs in the Court of Appeal. That would suggest the appellants won, and the Court saw no reason to deviate from the standard position.

Conclusion

[13]   I have not seen it necessary to refer to the various authorities cited. My assessment is that the defendant’s position in essence is based on the untenable proposition that it did not lose the proceedings, or alternatively that the proceedings would have been unnecessary if the position finally reached had been the position initially advanced. However, there was never any indication in the High Court that the Authority recognised some of what it was proposing was beyond its powers. That is, however, the outcome of the case. The Authority’s opposition to costs lacks merit.

[14]   There is no challenge to the amount sought by the plaintiffs, who together seek a single award.

[15]   I make an award of costs to the plaintiffs in the sum of $62,917.13. This is inclusive of disbursements. For the avoidance of doubt given the other dispute between the parties, the defendant is not entitled to costs on the High Court hearing. Although it initially succeeded, the High Court judgment was found to be in error.

[16]   I, finally, express regret at the delay in addressing this matter. Counsel’s memoranda were only recently referred to me.

Simon France J

Solicitors:

Gilbert/Walker, Auckland for Plaintiffs Buddle Findlay, Wellington for Defendant