COMMISSIONER OF NEW ZEALAND POLICE v RAE (COSTS) [2022] NZHC 253

COMMISSIONER OF NEW ZEALAND POLICE v RAE (COSTS) [2022] NZHC 253 [22 February 2022]ORDER PROHIBITING PUBLICATION OF NAMES, ADDRESSES ORIDENTIFYING PARTICULARS OF CONNECTED PERSONSIN THE HIGH COURT OF NEW ZEALANDWELLINGTON REGISTRYI TE KŌTI MATUA O AOTEAROATE WHANGANUI-A-TARA ROHECIV-2020-485-43[2022] NZHC 253BETWEEN COMMISSIONER OF NEW ZEALANDPOLICEApplicantAND DAVID CHARLES RAERespondentSARAH LOUISE RAEFirst Interested PartyS LTDSecond Interested PartyR LPThird Interested PartyAVA CONSULTING LTDFourth Interested PartyOn the papers:Counsel: A W M Britton and S B McCusker for ApplicantJudgment: 22 February 2022JUDGMENT OF CHURCHMAN J(COSTS)Background[1] The respondent applied for orders under s 28 of the Criminal Proceeds(Recovery) Act 2009 (CPRA).[2] On 15 October 2021, I issued a judgment dismissing the application andinviting the parties to agree costs.[3] The respondent, through his counsel, promptly entered into negotiations withcounsel for the applicant as to costs.[4] Counsel for the respondent offered to pay the applicant $28,972.78 in costs,and $699.81 in disbursements (the Agreed Costs).[5] One matter not agreed between the parties was the date upon which thepayment was to be made.[6] Requests for payment came and went, and no payment was made. On3 December 2021, the Court granted the respondent's counsel and solicitor leave towithdraw.[7] Subsequent communication between counsel for the applicant and therespondent has not been replied to.The issue[8] The applicant asks the Court to fix costs and disbursements at the Agreed Costsfigure. Although the parties agreed as to the quantum of cots that was appropriatebecause the parties did not agree on the date for payment, it cannot be said that theyreached a concluded and enforceable contract.[9] A similar matter was dealt with by the Court in White v Allen. In that case, theCourt said:1However, whether there is a binding contract depends on whether the parties'communications lead objectively to a conclusion that they intended to createlegal relations and had agreed upon all the terms which they regarded or thelaw requires as essential for the formation of legally binding relations. Thereis no dispute that the parties intended to create legal relations. I consider thereal question is whether the absence of agreement as to when payment wouldbe made precludes a binding agreement. Unless there has been express orimplied agreement on all the essential terms, there is insufficient certainty to1 White v Allen [2020] NZHC 819 at [19].create a binding agreement. Terms of payment are essential and therefore thequestion is whether, in the absence of express agreement, there was not animplied term that payment would be made within a reasonable timeframe.[footnote omitted][10] The Commissioner accepts that the approach taken by the Court in White vAllen is applicable in the present case.[11] I therefore approach the question of costs afresh and determine what the orderof costs should be.Approach to costs[12] The rules relating to costs in civil proceedings are found in the High CourtRules 2016 (HCR). Rules 14.2–14.22 apply generally to every civil proceeding andto each "step" in the proceeding. All matters as to costs are at the direction of theCourt. The overall objective is to achieve an outcome that best meets the interests ofjustice.[13] The discretion is not unfettered but is qualified by the applicable costs' rules,and the Court's approach should be consistent with established principles.[14] Where the Court is departing from established principles, it would generallybe expected to give reasons for such a departure.[15] Rule 14.2(1) HCR sets out the principles applying to the determination of costs.Generally, the party who fails with respect to a proceeding or an interlocutoryapplication, should pay costs to the party who succeeds. An award of costs shouldreflect the complexity and significance of the proceeding. Costs are assessed byapplying the appropriate daily recovery rate to the time considered reasonable for eachstep. An appropriate daily recovery rate should normally be two-thirds of the dailyrate considered reasonable in relation to the proceeding.The parties' positions[16] The applicant submits that costs should be fixed in accordance with the AgreedCosts. This represents a 30 per cent uplift from 2B scale costs. There are twomodifications to the standard 2B costs scale:(a) three days are sought for Item 38 ("filing application and supportingaffidavits) to reflect the volume of affidavit evidence filed by theCommissioner in support of the application; and(b) deductions of 50 per cent have been made to Item 11 ("filing amemorandum for first or subsequent case management conference) andItem 12 ("appearance at a mentions hearing or callover") where thoseattendances were dealt with in relation to the Commissioner'ssubstantive application for forfeiture orders.[17] The Commissioner submits that, in accordance with White v Allen, it would beappropriate for there to be an uplift. It is submitted that, in accordance with the cases,the uplift upon which the Agreed Costs was based (30 per cent) was less than upliftsof 50 per cent applied in similarly unsuccessful applications under s 28 of the CriminalProceeds (Recovery) Act 2009 and refers to decisions such as Commissioner of Policev Zhang.2[18] In support of the proposed uplift, counsel refer to the case falling within theline of authority that supports an uplift where a party has pursued an unnecessary stepor steps, or advanced arguments that lacked a merit.3[19] Counsel refers to the applicant's claims of not being in effective control overunrestrained assets as being clearly contrary to the documentary evidence.[20] Reference is also made to the lack of evidence supporting the number ofcontentions advanced by Mr Rae including his assertions that he had made payments2 Commissioner of Police v Zhang [2021] NZHC 1752 at [17]-[21]; and Commissioner of Police vGong [2018] NZHC 1686 at [25] and [27].3 HCR 14.6(3)(b)(ii).to his former wife and his parents. Note was also made of the fact that Mr Rae hadmade serious allegations against the Commissioner with such allegations having beenfound by the Court to be "entirely baseless"4 and "far-fetched"5[21] Counsel also referred to the evidence which demonstrated that the applicationwas not for the release of funds to fund current living expenses but related to furtherunspecified business activities in other countries.Analysis[22] The various factors referred to by counsel confirm that this case is one wherean uplift is justified. In accordance with other similar cases an uplift of 50 per centcould have been successfully contended for.[23] Implicit in the agreement of counsel for Mr Rae to the Agreed Costs is aconcession that some uplift was justified. Counsel does not seek anything more thanthe amount of Agreed Costs. In the circumstances, an award of costs anddisbursements as set out in the Agreed Costs is consistent with the applicableprinciples.Conclusion[24] An order for costs is made for the respondent to pay the applicant's costs in thesum of $28,972.78, together with disbursements of $699.81.Churchman JSolicitors:Crown Solicitor, Wellington for Applicant4 Commissioner of New Zealand Police v Rae [2021] NZHC 2766 at [71].5 At [74].