AUCKLAND COOPERATIVE TAXI SOCIETY LTD V NEW ZEALAND TRANSPORT AGENCY HC AK CIV-2011-404-4797

AUCKLAND COOPERATIVE TAXI SOCIETY LTD V NEW ZEALAND TRANSPORT AGENCY HC AK CIV-2011-404-4797 11 October 2011IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYCIV-2011-404-4797IN THE MATTER OF THE JUDICATURE AMENDMENT ACT1972BETWEEN AUCKLAND COOPERATIVE TAXISOCIETY LIMITEDApplicantAND NEW ZEALAND TRANSPORT AGENCYRespondentHearing: On the papersAppearances: G Judd QC for ApplicantB H Dickey and K C Francis for RespondentJudgment: 11 October 2011 at 4:30 PMJUDGMENT OF LANG J[on costs]This judgment was delivered by me on 11 October 2011 at 4.30 pm, pursuant to Rule 11.5 of the High Court Rules.Registrar/Deputy RegistrarDate[1] As from 1 August 2011 all taxis operating in major towns and cities in New Zealand were required to have a security camera system installed.1 Any taxi driver who failed to comply with the requirement committed an offence.2[2] The applicant, Auckland Cooperative Taxi Society Limited ("the Society"),operates a fleet of approximately 875 taxis in the greater Auckland area. By 31 July 2011 the Society had arranged for cameras to be installed in approximately 800 of its taxis. It was still awaiting the arrival of components from overseas so it could install cameras in the remainder of its vehicles.[3] On 31 July 2011 the Society applied to the respondent, the New ZealandTransport Agency ("the Agency"), for exemptions in respect of the taxis that were yet to be installed with the new systems.3 The Agency granted exemptions for a period of one week. As a result, they were due to expire at midnight on Sunday 7 August 2011. The Agency advised the Society that it could not assume that any further exemptions would be granted.[4] The components had still not arrived by Friday 5 August 2011. The Society therefore applied on the afternoon of 5 August for an extension of the exemption. At 9.30 pm on the same night the Agency advised the Society that it had declined the application for an exemption. This meant that, as from midnight on Sunday 7 August 2011, those taxis without camera systems were required to be off the road until they had been fitted with cameras.[5] On the afternoon of Sunday 7 August 2011, the Society applied for interim orders declaring that the exemptions granted on 31 July 2011 were to continue in force until further order of the Court. The application proceeded on a without notice basis. I granted that application, and directed that the interim orders were to remain in place until 12 noon on Wednesday 10 August 2011. I also directed that the proceeding was to be listed for review in the Duty Judge List on Wednesday 10 August 2011 at 10 am.1 Land Transport Rule: Operator Licensing Amendment (No 2) 2010.2 Land Transport (Offences and Penalties) Regulations 1999, Schedule 1.3 Land Transport Act 1998, s 166.[6] On 8 August 2011, the Society filed a statement of claim seeking judicial review of the Agency's decisions of 31 July 2011 (as to time limit) and 5 August 2011.[7] Cameras had been installed in all of the Society's vehicles by late evening on9 August 2011. As a result, the interim orders were no longer necessary and Wylie J rescinded them when the proceeding was called on 10 August 2011.[8] Counsel for both parties accept that it is now appropriate for the substantive proceeding to be discontinued. The only remaining issue is that of costs. Each party considers that it should be entitled to an award of costs against the other in relation to steps taken prior to and following the Society's application for interim orders. The only step taken in the substantive proceeding is the filing of the statement of claim.The grounds advancedThe Society[9] Counsel for the Society argues that his client was obliged to apply for interim relief urgently because, if it did not, 75 taxis would be prevented from being on the road after midnight on 7 August 2011. This meant that the Society would not be able to fulfil contractual obligations the following day. These included an obligation to transport special needs children to school.[10] The Society points out that nothing had changed since the Agency had granted the initial exemption on 31 July 2011. For that reason the Agency had no valid grounds for declining to grant the further exemption that the Society sought. The Society also points out that it endeavoured to inform the Agency that it proposed to file the application for interim orders, but these efforts were fruitless because it was unable to make contact with Agency personnel over the weekend.[11] Given the fact that the Court granted its application for interim orders, the Society contends that it must be regarded as the successful party in the proceeding.As a result, it submits that it should be entitled to an award of costs.4 It has incurred costs totalling $17,172.10, and seeks an order requiring the Agency to reimburse it in that sum.The Agency[12] The Agency contends that the Society cannot be regarded as having succeeded, because it ultimately withdrew its application for an injunction. The Society also now seeks to discontinue the substantive proceeding. For these reasons the Agency contends that it, and not the Society, must be regarded as having succeeded overall.[13] Furthermore, the Agency points out that the Society did not seek further exemptions until the afternoon of Friday 5 August 2011. That was the last business day before the existing exemptions were due to expire. As a result, the Agency had very little time to determine whether the exemptions should be granted. The application also attached little in the way of supporting material. The Agency was required to have regard to the protection of the public, and to the criteria governing the granting of any further exemption. It contends that, having regard to those factors, it was justified in refusing the application on the basis of the information then available.[14] The Agency says that it did not become aware of the reasons for the delay in installing the remaining cameras until it made its own enquiries after the Court hadgranted the Society's application for interim relief. At that point it concluded that these had been caused principally by the Society's own conduct. Nevertheless, itoffered to grant the Society further exemptions on specified terms, but the Society declined to accept that offer.[15] The Agency submits that it has acted responsibly throughout, and that theSociety's actions have needlessly caused it to incur legal costs. It argues that theSociety should contribute to those costs by paying costs on a Category 2C basis in4 High Court Rules, r 14.2.relation to the documents filed in opposition to the application. It seeks costs on a 2B basis in relation to all other steps.Decision[16] Despite the very lengthy submissions filed in relation to the issue of costs, I consider that both applications can be determined on a relatively straightforward basis.The Society's application for costs[17] The Society contends that the delay in installing the cameras arose from unforeseen circumstances. However, it knew from at least 1 February 2011 that it needed to have security camera systems installed in all of its taxis no later than 31 July 2011. It alone was responsible for ensuring that that was done. It was therefore required to do whatever was necessary to ensure that its vehicles were compliant with the law that was to take effect as from 1 August 2011.[18] The material now before the Court shows that the Agency approved thecamera systems to be installed in the Society's vehicles on 13 May 2011. TheSociety did not place an order for its cameras, however, until 16 June 2011. It has not provided any reason for that delay, yet it is likely to have been one of the principal causes of the Society's vehicles not being compliant as at 1 August 2011. Another major cause is the fact that the Society, or its contracted installer, did not initially order sufficient cameras to enable all of its vehicles to become compliant. This appears to have occurred because the Society, or its installer, did not appreciate that more than one camera might be required in some vehicles.[19] I do not consider that either of these matters can properly be described as unforeseen circumstances. The Society must have been aware that it needed to act promptly, and carefully, in ordering the necessary equipment to enable it vehicles to comply with the new legislation. It must also have known that any application for a second exemption needed to explain why the Society had been unable to complywith the new legislation within the further time allowed by the initial exemption. The Society failed to meet its obligations on both fronts.[20] For that reason, the Society was seeking an indulgence when it sought a further exemption from the Agency. It similarly sought an indulgence when it applied for interim relief. Moreover, I granted the interim orders because I was concerned that innocent parties would be seriously inconvenienced if the Society was required to remove 75 vehicles from the road at midnight on 7 August. The orders gave the Society the extra time that it needed to ensure that security systems were installed in the remainder of its vehicles. It ought to have been in that position no later than 31 July 2011. In those circumstances, I do not consider that the Society should receive an award of costs in its favour.The Agency's application for costs[21] As will already be apparent, I accept that the Agency cannot be held responsible for the fact that the Society had not installed camera systems in all of its vehicles by the time the new regime came into effect. I also accept that the Agency had made extensive efforts to ensure that those involved in the taxi industry were fully aware of the change in the law.[22] Furthermore, I accept that the Agency was placed in a difficult position when the Society filed its application for a further exemption on the last business day before the existing exemption was due to expire. The situation was exacerbated bythe fact that the Society's application did not contain adequate material explainingwhy it had not been able to make its vehicles compliant during the preceding week. I also accept that, once the interim orders had been made, the Agency made genuine efforts to resolve the situation without the need for further intervention by the Court.[23] Finally, I accept that, although the Society succeeded in obtaining interim orders, it did not achieve that outcome because of the Court's assessment that theSociety had a strong case. Rather, as I have already indicated, I made the interim orders principally because I was concerned that innocent parties would suffer if theSociety's vehicles were not permitted to be on the road. For that reason, I consideredthat the status quo should be maintained for a short period until the merits of the underlying dispute could be considered. By that stage of course, events had overtaken the need for that to be done.[24] I therefore conclude that the usual principle should apply, and that the party discontinuing the proceeding ought to contribute to the costs of the other party. I do not consider, however, that the Agency's Notice of Opposition and supporting affidavit justify costs being awarded on a Band C basis. The Agency is to have costs on a Category 2B basis in relation to all steps taken in the proceeding.Result[25] The plaintiff is granted leave to discontinue the proceeding.[26] The respondent is entitled to costs on a category 2B basis in relation to the steps identified at paragraph 61 of the memorandum of counsel for the respondent dated 26 August 2011.Lang JSolicitors:KJ Patterson, TaurangaMeredith Connell, AucklandCounsel:G Judd QC, Auckland