Wislang v Attorney-General
[2020] NZHC 3172
•2 December 2020
IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY
I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE
CIV-2020-485-006
[2020] NZHC 3172
UNDER the Judicial Review Procedure Act 2016; and the Territorial Sea, Contiguous Zone and
Exclusive Economic Zone Act 1977; and the Exclusive Economic Zone and Continental Shelf (Environmental Effects) Act 2012IN THE MATTER OF
an application for judicial review
BETWEEN
MILES ROGER WISLANG
Applicant
AND
THE ATTORNEY-GENERAL
First Respondent
AND
WHITE ISLAND TOURS LTD
Second Respondent
AND
WORKSAFE NEW ZEALAND
Third Respondent
Hearing: On the papers Judgment:
2 December 2020
JUDGMENT OF GRICE J
(Costs)
[1] Applications for costs in this matter have been made by each of the first, second and third respondents. They have each filed memoranda in support of their applications.
WISLANG v THE ATTORNEY-GENERAL [2020] NZHC 3172 [2 December 2020]
Background
[2] This was an application by Dr Wislang for judicial review based on alleged failures of relevant ministers (the Attorney-General for those ministers was the first respondent), WorkSafe, the regulator of adventure activity operators (the third respondent) and White Island Tours Limited (WITL), the adventure activity operator involved in the expedition to Whakaari/White Island on 9 December 2019. Of the 47 people visiting the island, 221 died and 25 were injured in an eruption of the volcano on the island that day.
[3] Dr Wislang sought judicial review against WorkSafe and the named ministers, claiming that the tragedy would not have occurred had the adventure activity operator been regulated in the manner he suggested in his application. He also sought orders prohibiting visits to the island.2
[4] Dr Wislang abandoned his claim against WITL in the course of his submissions at the hearing on 31 August 2020. I noted the proceedings were discontinued and, to the extent necessary, any obligations by WITL based on its voluntary undertaking to the Court made at the time interim relief was sought, were discharged.3
[5]The application for judicial review was dismissed in its entirety.4
Principles applicable to costs applications
[6] The Court has an overriding discretion in relation to costs. The discretion must be exercised in a principled manner and consistently with the costs regime in the High Court Rules 2016.
[7] The primary purpose of a costs award is to compensate a successful party for the costs they have expended in having their legal rights recognised and enforced by the Court.
1 Since the delivery of the substantive judgment, another victim of the disaster has passed away.
2 Wislang v Attorney-General [2020] NZHC 2588 at [1].
3 At [17].
4 At [129].
[8]The principles are set out at r 14.2 which, as relevant, provides:
14.2 Principles applying to determination of costs
(1)The following general principles apply to the determination of costs:
(a)the party who fails with respect to a proceeding or an interlocutory application should pay costs to the party who succeeds:
…
(g) so far as possible the determination of costs should be predictable and expeditious.
[9] The principle in r 14.2(1)(a) that costs should be paid by the unsuccessful party, is fundamental to the High Court Rules’ costs regime and will apply unless there are reasons to the contrary.5
[10] In some cases, where a claim is brought in circumstances where the public interest is engaged, costs may be reduced. However, in general terms the Crown or public entity should not be treated differently to private parties as a general principle in relation to costs.6
Response on costs
[11] Dr Wislang filed a number of memoranda in response to those applications.7 Dr Wislang accepts the calculations of costs provided by the three respondents and takes no issue with the “separately expressed views of the law on the calculation and awarding of costs” by the respondents.
[12] In relation to quantum of costs he submits that, notwithstanding persistent protests of the respondents about the merits of his claim and pleadings, none of them took steps to strike out the statement of claim. Dr Wislang said if that application had been filed and had been successful the proceedings could have been “stopped in their
5 Manukau Golf Club Inc v Shoye Venture Ltd [2012] NZSC 109, [2013] 1 NZLR 305 at [7]; citing
Body Corporate 97010 v Auckland City Council (2001) 15 PRNZ 372 (CA) at [19].
6 Auckland Gas Co Ltd v Commissioner of Inland Revenue [1999] 2 NZLR 409 (CA) at [487] and [489].
7 These were dated 3 November 2020 and 17 November 2020 and filed after the date for his submissions of 29 October 2020, which had been extended at Dr Wislang’s request: Wislang v Attorney-General HC Wellington CIV-2020-485-6, 28 October 2020.
tracks” or brought to an end without them being substantively heard, thereby vastly reducing the costs of them.
[13] His second submission was that the respondents individually and collectively, and not Dr Wislang, were responsible for the unnecessary complications and protraction of the proceedings making them more costly than necessary.
[14] It is up to the plaintiff to ensure that any claim brought meets the requirements of pleadings in the High Court Rules. There were a number of case management conferences in this matter. The Court commented on the state of the pleadings and gave the opportunity to Dr Wislang to amend them. Dr Wislang criticised the views of the respondents on the state of the pleadings, which had been set out in their various memoranda. He says it was their denials that his case had any merit that caused him to try and shore up his position by attempting to adduce further evidence, which he did by way of interlocutory applications, so incurring further costs.
[15] WITL wrote to Dr Wislang on a without prejudice save as to costs basis pointing out the defects with his claim and offering to walk away without costs.
[16] Dr Wislang had ample opportunity to amend his pleadings. The respondents had no obligation to make an application to strike out his claim. That step may well have just prolonged the proceedings and not been cost effective in any event. He finally abandoned the claim against WITL but only partway through the hearing.
[17] I do not consider that there is any merit in Dr Wislang’s submission that the quantum of any costs award should be adjusted because the respondents should have applied to strike out the proceedings.
[18] In order for the public interest principle to provide grounds to refuse or reduce the order for costs under r 14(7)(e) of the High Court Rules, the proceeding must concern a matter of genuine public interest, have merit and be of general importance beyond the interests of the particular unsuccessful litigant.8
8 Taylor v District Court at North Shore (No 2) HC Auckland CIV-2009-404-2350, 13 October 2010 at [9]; affirmed in New Zealand Climate Science Education Trust v National Institute of Water and Atmosphere Research Ltd [2013] NZCA 555 at [11].
[19] WITL submits that in this case Dr Wislang’s claim, at least as it related to WITL, did not involve any aspect of public interest. It was a wholly private, commercial party and Dr Wislang did not contend that this claim against it was made in the public interest. His abandonment of the claim against WITL, in White Island Tours Ltd’s submission, confirms there was no such public interest.
[20] Dr Wislang did not argue that this was a case brought in the public interest and so costs should be reduced but even if he did, I do not consider there is any public interest element here. First, in my view the claim was misconceived from the outset and warnings on that score were given during the case management phase of these proceedings. Secondly, the proceedings had little merit.
Indemnity/increased costs
[21] WITL seek indemnity or increased costs. The Court has an overarching discretion to reward indemnity costs when a party has acted “vexatiously, frivolously, improperly or unnecessarily in commencing, continuing, or defending a proceeding or a step in a proceeding”,9 or some other reason exists, which “justifies the court making an order for indemnity costs despite the principle that the determination of costs should be predictable and expeditious”.10
[22] Increased costs may be awarded pursuant to r 14.6(3)(b) of the High Court Rules in cases where the respondent (to the costs application) has taken or pursued an argument that lacks merit or that unnecessarily contributes to the time and expense of the proceeding. An uplift should not normally exceed 50 per cent.11 Increased costs may also be awarded if there is some other reason to justify a Court imposing increased costs.12
[23] An award of costs should reflect the complexity and significance of the proceeding;13 “costs should be assessed by applying the appropriate daily recovery rate to the time considered reasonable for each step reasonably required in relation to
9 High Court Rules 2016, r 14.6(4)(a).
10 Rule 14.6(4)(f).
11 Holdfast NZ Ltd v Selleys Pty Ltd (2005) 17 PRNZ 897 (CA) at [37], [40] and [46]–[48].
12 High Court Rules 2016, r 14.6(3)(d).
13 Rule 14.2(1)(b).
the proceeding or interlocutory application”.14 In addition, the “appropriate daily recovery rate and what is a reasonable time should not depend on the skill or experience of the solicitor or counsel involved or on the time actually incurred”.15
[24] In this case WITL points to correspondence suggesting that Dr Wislang withdraw his claim and that the amended claim Dr Wislang had filed was deficient in a number of respects and in particular, no cause of action had been disclosed against it. It pointed out WITL was a private company and its actions were not amenable to judicial review. It proposed that despite its assertion that the application had no legal basis or merit, that Dr Wislang then discontinue the claim without further delay and it would forego any award of costs for the steps it had taken to that point. This correspondence followed the filing and service of a second amended statement of claim dated 12 June 2020, as well as a minute issued by Cooke J on 19 June 2020 warning that Dr Wislang’s claim did not identify a coherent claim for judicial review “although some parts of it might be argued to do so”.16 Counsel in the proposal indicated that WITL reserved its right to bring the letter to the attention of the Court when the issue of costs was addressed and also recommended the Dr Wislang seek independent legal advice in relation to the matter, including on WITL’s offer and the costs proposal.
[25] The specific rule in the High Court Rules which relates to Calderbank offers,17 relied upon by WITL, provides:
14.10Written offers without prejudice except as to costs
(1)A party to a proceeding may make a written offer to another party at any time that—
(a) is expressly stated to be without prejudice except as to costs; and
(b) relates to an issue in the proceeding.
(2)The fact that the offer has been made must not be communicated to the court until the question of costs is to be decided.
14.11Effect on costs
14 High Court Rules 2016, r 14.2(1)(c).
15 Rule 14.2(1)(e).
16 Wislang v Attorney-General HC Wellington CIV-2020-485-6, 19 June 2020 [Minute on 19 June 2020] at [2].
17 Calderbank v Calderbank [1975] 3 All ER 333 (EWCA).
(1)The effect (if any) that the making of an offer under rule 14.10 has on the question of costs is at the discretion of the court.
…
[26] Heath J explained in Aldrie Holdings Ltd v Clover Bay Park Ltd18 that a Calderbank letter is one in which “a party to Court proceedings makes an offer to settle on a without prejudice basis, but reserves the right to produce the letter when questions of costs are addressed. The procedure encourages a realistic apprisal [sic] of the party’s position in litigation. It enables costs to be sought where an offer has been rejected but a less beneficial outcome results for the party declining the offer”.19
[27] As the rule makes clear, the effect of the making of an offer under r 14.10 on the question of costs is at the discretion of the Court.
Application for costs by the Attorney-General
[28] The Attorney-General seeks costs on a categorisation of 2B. He attaches, as a first schedule, a 2B calculation claiming total costs of $25,095 and disbursements for filing fees and courier fees of $196.02, totalling $25,291.02.
[29] The Attorney-General submits the categorisation reflects the complexity and level of skill required of counsel conducting proceedings in the High Court. WorkSafe and WITL support the 2B categorisation in general, although WITL seeks increased or indemnity costs for reasons I have set out above.
[30] I am of the view that categorisation at 2B is appropriate in these proceedings. They were not straightforward but at the same time, they were not complex, nor should they have taken more than average time to attend to.
[31] There is no reason why costs should not follow the event and the Attorney-General be awarded costs on a 2B basis. Accordingly, that award is made in favour of the Attorney-General for a total of $25,291.02 in accordance with the schedule provided.
18 Aldrie Holdings Ltd v Clover Bay Park Ltd [2016] NZHC 1482.
19 At [14].
Claim by WorkSafe
[32] WorkSafe’s submissions also seek an award of costs on a 2B basis. It also seeks certification for second counsel.
[33] I consider certification for second counsel is appropriate. WorkSafe undertook a substantial amount of the argument and also prepared the common bundle, which was a substantial undertaking. That would usually have been done by the plaintiff. WorkSafe’s role in the proceedings justified second counsel.
[34] In addition, WorkSafe submits that the claim was of limited merit, it was fully successful at trial and Dr Wislang’s conduct of the proceedings put the respondent to additional costs, including on interlocutory matters which were, in the main, unsuccessful. In addition, there were belated applications for leave to file documents and other interlocutory applications which were filed shortly before the hearing and put the hearing date in jeopardy. These were all declined.20 I am satisfied it is appropriate to grant costs on a 2B categorisation in favour of WorkSafe, together with certifying for a second counsel.
[35] WorkSafe submits that it was an appropriate case for an increase over scale costs, but it did not seek more than 2B costs. It made the submission only to note its view that Dr Wislang’s conduct of the proceedings contributed unnecessarily to the expense of the proceeding and that increased costs would be justified if sought.
[36] Dr Wislang says that WorkSafe delayed its compliance with an order for initial disclosure made by Cooke J on 3 February 2020. He says compliance took 36 working days rather than the 10 days contemplated by the direction. WorkSafe have not had the opportunity to respond to that submission as Dr Wislang filed further submissions well after the replies to his response to the costs applications.21
20 Wislang v Attorney-General and Ors [2020] NZHC 2181 [Judgment declining leave to appeal interlocutory orders].
21 Dr Wislang’s further submission on costs was dated 17 January 2020, nearly three weeks after the extended date for his memorandum.
[37] In any event, I do not consider that goes to a reduction in costs. If there was a delay, it is not clear how it would have affected costs in any event.
[38] Accordingly, costs are awarded to WorkSafe (for two counsel) on a 2B basis in terms of the schedule of costs and disbursements filed with its submissions dated 9 October 2020 for costs totalling $36,328 (which includes the interlocutory applications) together with disbursements of $220 being the filing fee for the statement of defence and a filing fee for a notice of opposition.
Application for costs by White Island Tours Ltd
[39] The proceedings insofar as they related to claims against WITL were abandoned by Dr Wislang at the hearing on 31 August 2020. Counsel for WITL at the time indicated it would be seeking costs in the matter.
[40] WITL seeks a base category 2B award of costs, together with either indemnity or increased costs (a 50 per cent uplift), to reflect the lack of merits from the outset of the claim and the manner in which Dr Wislang conducted the claim, as well as the fact a Calderbank offer was made by WITL to Dr Wislang in June 2020.
[41] WITL seeks indemnity costs in the sum of $77,123.11 on the basis that Dr Wislang had acted “unnecessarily” in commencing or continuing the proceedings, or any step in the proceeding.22 It points to that conduct including:
(a)commencing proceedings and wilful disregard of known facts or clearly established law; and
(b)making allegations that ought never to have been made, or unduly prolonging a case by groundless contention.23
22 High Court Rules 2016, r 14.6(4)(a).
23 Colgate-Palmolive Co v Cussons Pty Ltd (1993) 118 ALR 248 (FCA), endorsed in Bradbury v Westpac Banking Corp [2009] NZCA 234, [2009] 3 NZLR 400 at [22] and [29].
[42] WITL refers to the decision of Jin v North Shore District Court.24 In that case, the High Court considered eight factors were relevant when asked to award indemnity costs against an unsuccessful applicant in judicial review. These were insofar as relevant here:
(a)The proceeding was misconceived from the outset and there was never any reasonably arguable basis for the claim.
(b)Counsel for the respondent had expressly warned the applicant that judicial review was doomed to fail and that it would cause needless expense and that the respondent would seek full solicitor client costs if the claim failed.
(c)The applicant disregarded the respondent counsel’s recommendation that he seek legal advice from senior counsel.
(d)There were a number of deficiencies in the process followed by the applicant in bringing the claim, leading to the difficulty in getting the matter to the hearing.
(e)There were significant defects in the proceeding even once it was finalised.
(f)The applicant’s submissions were inadequate with no attempt made to marry the facts to the law.
[43]An award of indemnity costs was made in that case.
[44] Counsel for WITL also pointed out that the Court could otherwise award an uplift on scale costs when a party:25
24 Jin v North Shore District Court [2013] NZHC 810 with the observations being summarised and affirmed on appeal in Jin v North Shore District Court [2013] NZCA 475, [2014] NZAR 205 at
[48] and [53].
25 High Court Rules 2016, r 14.6(3).
(a)fails to comply with the directions of the Court;
(b)takes or pursues an unnecessary step or argument that lacks merit;
(c)fails, without reasonable justification, to admit facts, evidence or documents, or accept a legal argument; and/or
(d)fails, without reasonable justification, to accept an offer of settlement.
[45] In relation to the Calderbank offer, WITL points to r 14.10, which recognises the utility of parties seeking to settle proceedings and allows offers to be made on a “without prejudice except as to costs basis”. It points out that for an offer to be effective for costs purposes pursuant to that rule the offer needs to be:26
(a)clearly and unambiguously stated;
(b)capable of contractual acceptance; and
(c)more beneficial or close in benefit, to the other party than the judgment actually obtained.
[46] In this case I am of the view that the Calderbank offer fitted within those requirements. It was a proposal that the proceedings be discontinued at a stage where there had already been steps taken and expenses incurred by WITL in dealing with case management matters and interlocutory applications. By that stage Dr Wislang had been warned by the Court that his claim as pleaded faced difficulties. Dr Wislang filed his original statement of claim on 20 December 2019. WITL as a defendant was required to participate and file a statement of defence, which it did. Dr Wislang filed an amended statement of claim on 29 January 2020 and on three occasions after that this Court advised Dr Wislang that his claim against WITL and the other respondents was materially deficient. In particular: 27
26 Body Corporate S73358 v Otway [2018] NZCA 612, [2019] 3 NZLR 759 at [80].
27 Wislang v Attorney-General HC Wellington CIV-2020-485-6, 4 February 2020 [Minute on 4 February 2020].
(a)Cooke J observed “ … I pointed out to Dr Wislang that on the face of it his claim was deficient, and did not really properly articulate a judicial review claim;28
(b)Following a second amendment to the claim on 12 June 2020 in response to a subsequent memorandum for WITL, and the other respondent, Cooke J noted in a minute dated 19 June 2020:29
A joint memorandum of the respondents was filed … it identified a number of deficiencies with the amended statement of claim. From my consideration of it, those criticisms have some substance. Dr Wislang’s claim does not identify a coherent claim for judicial review, although parts of it might be argued to do so.
(c)The deficiencies in Dr Wislang’s second amended statement of claim were addressed again by the Court on 26 August in a judgment declining leave to appeal certain interlocutory orders Gwyn J noted:30
… I note the overarching difficulty that Dr Wislang faces is one of his own making … The second amended statement of claim … is a narrative rendition of his case. It is a mixture of assertion, opinion, evidence and submission. It is not a statement of claim in any technical sense of that term. That creates difficulties not only for the respondents, in terms of answering the claim, but also for Dr Wislang himself, in being able to show any proper connection between the statement of claim and the necessity for the applications ….
[47] That was not sufficient for Dr Wislang to reflect and act to take any steps to recognise the deficiencies. Instead, he proceeded to the hearing on 31 August 2020 and it was only partway through the hearing that he indicated he proposed to abandon his claim against WITL. He had not advised that company of his intention to withdraw his claim at any point prior to the hearing. On the contrary, he waited until he was into his oral argument before abandoning the claim, giving WITL no opportunity to avoid or mitigate the costs it was incurring.
28 Wislang v Attorney-General HC Wellington CIV-2020-485-6, 4 February 2020 [Minute on 4 February 2020], at [5].
29 Minute on 19 June 2020, above n 16, at [2].
30 Judgment declining leave to appeal interlocutory orders, above n 20, at [17].
[48] WITL also note it was required to attend six case management conferences and respond to a range of applications made by Dr Wislang. It says:
(a)A significant portion of the case management conferences and associated memoranda focussed on Dr Wislang’s repeated and generally unsuccessful requests for discovery and/or additional discovery from WorkSafe and a non-party, GNS Science. In addition, the case management conferences needed to deal with Dr Wislang’s failure to comply with the Court’s timetabling directions.31
(b)Dr Wislang’s deficient proceeding required WITL and other respondents to confer on how the claim would proceed.32
(c)Less than three weeks before the scheduled hearing Dr Wislang sought to stay the proceedings and to appeal a decision by Gwyn J declining him leave to file further documents, seek further discovery and pose interrogatories.33
(d)WITL was obliged to oppose that application in order to ensure the hearing went ahead on 31 August 2020. Gwyn J subsequently declined to grant Dr Wislang leave to appeal or to stay the proceedings.34
[49] In relation to the settlement, WITL say that its offer that the proceedings be discontinued without costs was left open for acceptance until after WITL had filed and served its detailed statement of defence on 3 July 2020 so that Dr Wislang had the opportunity to consider the defence and reflect on the deficiencies in his second amended statement of claim as it related to WITL. Dr Wislang, according to WITL, did not accept the offer, nor even reply to the letter.
31 Wislang v Attorney-General HC Wellington CIV-2020-485-6, 14 August 2020 [Minute on 14 August 2020]; and Wislang v Attorney-General HC Wellington CIV-2020-485-6, 21 August 2020 [Minute on 21 August 2020].
32 Minute on 4 February 2020, above n 27, at [4]; minute of Cooke J, dated 19 June 2020 at [2].
33 Minute on 14 August 2020, above n 31; and Minute on 21 August 2020, above n 31.
34 Judgment declining leave to appeal interlocutory orders, above n 20.
[50]In the circumstances:
(a)I am satisfied that WITL’s proposal on the basis of an offer to settle the proceedings without prejudice save as to costs was a Calderbank offer to be considered under r 14.10 and r 14.11 of the High Court Rules.
(b)I am also satisfied that Dr Wislang unnecessarily prolonged the proceedings. However, I am not prepared to go as far as saying Dr Wislang should be visited with indemnity costs. Costs are at the discretion of the Court.
(c)There is no suggestion of any mala fides by Dr Wislang in these proceedings. Dr Wislang’s failures relate more to the manner he pleaded and the unnecessary prolonging of the proceedings using interlocutory applications and seeking discovery and interrogatories, as well as seeking a stay pending appeal of his unsuccessful interlocutory applications.
[51] I consider that an increased costs of 50 per cent to recognise unnecessarily prolonging the proceedings, as well as recognition of the Calderbank offer, is appropriate to recognise the fact that WITL had to incur significant costs participating in the proceeding and defending itself.
[52] In addition, there is no reason that WITL should not be awarded costs as it seeks on a 2B basis, of $3,585 for the cost of preparing the costs memorandum. It has succeeded on the costs application.35
[53] Accordingly, I consider it appropriate to award costs on a category 2B basis in favour of WITL, together with reasonable disbursements plus a 50 per cent uplift. A quantification of that amount is set out at schedule 2 to the memorandum of WITL as to costs dated 9 October 2020.
35 High Court Rules 2016, sch 3 relating to preparing written submissions on interlocutory application. See also Ace Structural Ltd v Green [2019] NZHC 2094 at [27].
[54] Accordingly, costs as sought in that memorandum, of $58,435, together with disbursements of $220, a total of $58,655.50, together with an additional $3,585 for the cost of preparing the costs submission is awarded to WITL. This award reflects 2B costs plus 50 per cent uplift.
Ability of Dr Wislang to pay costs
[55]In his submissions of 3 November 2020 Dr Wislang comments:
4.I further submit that my being a superannuitant [sic] and having no other source of income and no readily realizable material assets, ought also to be taken into account by the Court in its awarding of costs against me.
[56] This statement is not supported by any substantive evidence nor even a statement of position. Dr Wislang is not legally aided and was prepared to file and conduct the proceedings as described and incur costs in doing so, as well as putting the respondents to considerable costs. I do not give that submission any weight in the circumstances.
Conclusion
[57] Costs are awarded to all three respondents. In relation to the first respondent and the third respondent costs are awarded on the basis of a category 2B award. In the case of WITL, an award is made on the basis of 2B costs categorisation together with a 50 per cent uplift, together with costs for preparation of the costs submissions, is awarded.
Grice J
Solicitors:
Crown Law, Wellington for first respondent
Anthony Harper, Auckland for second respondent Simpson Grierson, Wellington for third respondent
Copy to:
The applicant
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