GREENPEACE OF NEW ZEALAND INC v THE ENVIRONMENTAL PROTECTION AUTHORITY [2014] NZHC 999

GREENPEACE OF NEW ZEALAND INC v THE ENVIRONMENTAL PROTECTION AUTHORITY [2014] NZHC 999 [14 May 2014]IN THE HIGH COURT OF NEW ZEALANDWELLINGTON REGISTRYCIV-2013-485-9572[2014] NZHC 999UNDER the Judicature Amendment Act 1972IN THE MATTER of an application for judicial reviewBETWEEN GREENPEACE OF NEW ZEALANDINCORPORATEDPlaintiffAND THE ENVIRONMENTAL PROTECTIONAUTHORITYFirst RespondentANADARKO NZ TARANAKICOMPANYSecond RespondentHearing: On the papersCounsel: I T F Hikaka and E D Nilsson for PlaintiffP J Radich for First RespondentM G Colson and K J Dobbs for Second RespondentJudgment: 14 May 2014COSTS JUDGMENT OF MACKENZIE JI direct that the delivery time of this judgment is4 pm on the 14th day of May 2014.Solicitors: Lee Salmon Long, Auckland, for plaintiffEnvironmental Protection Authority, Wellington, for first respondentBell Gully, Wellington, for second respondent[1] In my judgment delivered on 19 December 2013 I reserved costs and invited the parties to submit memoranda.[2] The first respondent seeks costs against the plaintiff on a 2B basis. The second respondent seeks costs on a 2B basis, plus increased costs, of an uplift of 50 per cent to the scale costs. It also seeks disbursements, including, in particular, witness costs in respect of Mr Tang a consultant at Environmental Resources Management, a firm engaged by the second respondent to provide services in connection with the impact assessments.[3] The general principle, in r 14.2 of the High Court Rules is that costs follow the event; that is that the party who fails should pay costs to the party who succeeds. Counsel for the plaintiff does not contest that outcome, and agrees that the appropriate costs categorisation is category 2 band B. The plaintiff does not, as therespondents' cost memoranda had anticipated, seek a reduction of costs underr 14.7(e) of the High Court Rules.[4] The only issues in contest between the two parties, and the matters which I must address, are:(a) the second respondent's request for increased costs;(b) the inclusion by the second respondent in its claim for costs, of an allowance for the attendances in preparing its costs memorandum; and(c) the claim, as a disbursement, for Mr Tang's witness expenses.[5] Under r 14.6, the Court may order increased costs if the party opposing costs has contributed unnecessarily to the time or expense of the proceeding in one or more of the ways specified in r 14.6(3)(b). The second respondent notes that it indicated in its written submissions on the substantive proceeding that it would seek increased costs if successful. It submits that an increase is warranted on three bases:(a) the significance of the proceeding and the resource commitment that was required by the second respondent, both internally and by counsel, to prepare for an urgent judicial review hearing.(b) delay by the plaintiff in commencing the proceedings; and(c) the proceedings lacked merit, the plaintiff pursued arguments without merit and did not act reasonably in pursing the proceedings.[6] The significance of the proceeding and the level of resources committed to the proceeding by the party claiming costs are not of themselves relevant factors in determining whether an order for increased costs should be made. They must be considered under r 14.6(3)(a). The relevant question is whether the nature of the proceeding is such that the time required by the party claiming costs would substantially exceed the time allocated under band C. Here, all parties agree that the appropriate allocation is band B. The level of resources which the second respondent committed to the litigation was a matter for it to determine, and the significance of the proceeding to it was a relevant consideration in that assessment. However, I consider that there is nothing in the nature of the proceeding, or in the urgency with which it was heard, which justifies the conclusion that the time involved would substantially exceed the appropriate time allocation.[7] Delay was a factor which might have been relevant to the grant of relief if the plaintiff had otherwise succeeded in its arguments, but is not a factor justifying an award of increased costs against the plaintiff.[8] The merits of the proceeding are relevant under r 14.6(3)(b)(ii), to the extent that the plaintiff has contributed unnecessarily to the time or expense of the proceeding. The question is whether the costs have been unnecessarily increased.The essence of the second respondent's contention on this issue is not that the timeor expense involved was increased unnecessarily; rather, it is that the weakness of the claim should lead to an increased award beyond the normal award to a successful party. The fact that the plaintiff's claim was unsuccessful is reflected in the award ofcosts under r 14.2(a). The assertion that the overall merits of the claim were weakdoes not, in the circumstances of this case, constitute a basis for increased costs under r 14.6(3)(b)(ii) or (d). The principle that the determination of costs should be predictable and expeditious weighs against any proposition that the overall merits of an unsuccessful claim should be further assessed on a costs application.[9] For these reasons, I decline to award increased costs.[10] Counsel for the first respondent has calculated scale costs on a 2B basis at $20,099. Counsel for the second respondent has calculated them at $24,875. There are two components in the difference between those figures:(a) a claim by the second respondent of $3,980 (two days) for"defendant's preparation of list of issues, authorities and commonbundles"; and(b) a claim of $796 (0.4 day) for preparation of the costs memorandum.[11] Counsel for the plaintiff accepts that the first of those claims is appropriate, but not the second. The first is allowable under item 32 of schedule 3 of the High Court Rules. The second is not provided for in schedule 3. In those circumstances, I disallow that claim.[12] In the claim for disbursements, the only item in issue is the claim for fees charged by Environmental Resource Management for the preparation of Mr Tang'saffidavit. The basic rule is that a witness's expenses are recoverable as adisbursement, but, as they are not listed in r 14.12(1)(b), may be disallowed or reduced if they are disproportionate in the circumstances of the proceeding, under r 14.12(3).1 Counsel for the plaintiff submits that, in general, fees payable to a witness will be recoverable only where the witness is an expert witness. It submits that Mr Tang's evidence is not expert evidence, and did not relate to an issue which could properly be the subject of expert evidence.1 Progressive Enterprises v North Short City Council (2005) 17 PRNZ 919 (HC) at [22]-[26].[13] Counsel for the second respondent submits that Mr Tang's evidence washighly technical and in the nature of expert evidence and that he provided valuable assistance to counsel for Anadarko in circumstances where counsel was faced with the need to prepare for an urgent hearing.[14] A litigant will often need to incur significant internal costs in providing the necessary instructions and assistance to its lawyers. These costs are not recoverable under an award of costs. Such costs cannot be made recoverable by externalising them, by engaging consultants. That consideration must be borne in mind in assessing whether the fees paid to a witness meet the requirements of r 14.12(2)(b)- (d), namely that those fees are specific to and reasonably necessary for the conduct of the proceedings, and reasonable in amount.[15] Mr Tang's affidavit gave evidence of the regulatory requirements for the second respondent's operations in New Zealand; the steps taken in the preparation of the impact assessment and the discharge management plan; and interactions with the regulatory authorities over these matters. Mr Tang also provided comments on the statement of claim. His evidence about the preparation of the plan and the interactions with authorities is essentially factual evidence. His evidence about the regulatory requirements and the comments on the statement of claim are in the nature of submissions. His evidence is not on my assessment similar in nature to the type of expert evidence which is routinely accepted by the courts as meeting the requirements of r 14.12(2). Neither the nature of Mr Tang's evidence nor theassistance he provided to counsel bring the fees paid to him within the category of a disbursement which was reasonably necessary to the conduct of the proceeding for the purposes of that rule.[16] The outcome is that I award costs and disbursements against the plaintiff as follows:(a) to the first respondent, costs of $20,099; and(b) to the second respondent, costs of $24,079 plus disbursements of $890.25."A D MacKenzie J"