K v THE COMPLAINTS ASSESSMENT COMMITTEE OF THE TEACHING COUNCIL OF AOTEAROA NEW ZEALAND [2022] NZHC 1065

K v THE COMPLAINTS ASSESSMENT COMMITTEE OF THE TEACHING COUNCIL OF AOTEAROA NEW ZEALAND [2022] NZHC 1065 [16 May 2022]ORDER PROHIBITING PUBLICATION OF NAMES OR IDENTIFYINGPARTICULARS OF THE PARTIES LISTED AT [145(a)] of [2022] NZHC 307 CONTINUES. ORDER THAT THE COURT FILE IS NOT TO BE SEARCHED WITHOUT THE LEAVE OF A JUDGE OF THIS COURT.IN THE HIGH COURT OF NEW ZEALANDWELLINGTON REGISTRYI TE KŌTI MATUA O AOTEAROATE WHANGANUI-A-TARA ROHECIV-2021-485-499[2022] NZHC 1065UNDER the Judicial Review Procedure Act 2016IN THE MATTER OF the Education and Training Act 2020BETWEEN KApplicantAND THE COMPLAINTS ASSESSMENT COMMITTEE OF THE TEACHING COUNCIL OF AOTEAROA NEW ZEALANDRespondentOn the PapersCounsel: S A Barker and O C Gascoigne for the Applicant V E Casey QC and D P Neild for the RespondentJudgment: 16 May 2022COSTS JUDGMENT OF GWYN JIntroduction[1] The Teaching Council of Aotearoa New Zealand (the Teaching Council) received a complaint from the parents of a student at a large secondary college (the complainants), relating to the alleged conduct of the Principal of the college, Mr K(the applicant). The complaint included an allegation that an illegal or improper process had been used to suspend the student from the school.[2] The Teaching Council referred the complaint to the Complaints Assessment Committee of the Teaching Council of Aotearoa New Zealand (CAC) and an investigator was appointed to inquire into the complaint and report to the CAC.[3] Having considered the report of the investigator and correspondence from Mr K, the CAC determined that it would take no further action on the complaint. It issued reasons for its decision on 4 December 2020 (the decision).[4] Subsequently, the CAC received further correspondence from the complainants and decided that its decision in relation to one of the allegations made in the complaint may have been made in error. On 1 April 2021, the CAC invited submissions on whether it should reopen the investigation. Mr K opposed the reopening of the investigation.[5] The CAC decided to reopen the investigation and notified the parties of its decision and reasons on 29 July 2021 (the redetermination decision).[6] The proceeding before me, on 22 November 2021, considered the question whether the CAC could revisit the decision. Mr K argued that the decision had been perfected and could not be revoked; the CAC was subsequently functus officio. The CAC therefore had no lawful basis to make the redetermination decision. Mr K sought an order declaring the redetermination decision and steps taken in furtherance of it unlawful; an order setting aside the redetermination decision and an order prohibiting the CAC from reopening the decision or any aspect of the complaint. The CAC argued that there were exceptional circumstances which allowed it to revisit its resolution to take no further action on the complaint and reopen its investigation, so that the complaints process could be completed lawfully and fairly as contemplated by the Education Act 1989.[7] The applicant also sought permanent orders suppressing the names and identifying details of the students of the school, the complainants, the school and theapplicant, and orders anonymising the names in the judgment and restricting access to the Court file without the leave of the Court. The CAC consented to the suppression and anonymisation of the identity of the student and the complainants and to restrictions on accessing the Court file, but otherwise opposed the application for suppression orders.[8] In my judgment of 28 February 2022, I made the following orders:1(a) Declaring that the CAC redetermination decision and steps taken in furtherance of that decision are unlawful.(b) Setting aside the redetermination decision.(c) Prohibiting the CAC from reopening the decision.[9] On the application for permanent name suppression, I concluded that, although the risk of other students of the college being identified was relatively low, 2 there remained a relatively high risk that, if the school and the principal were identified, the student would also be identifiable and the sensitivity and the gravity of the conduct at issue would become public. I therefore granted permanent suppression orders in relation to the identity of the student, their parents, other students of the school, the applicant and the school, and particulars that might lead to their identification. On that basis alone I would have granted the orders sought by the applicant. In addition, I concluded there would be adverse consequences for the applicant if the orders were not made.3 The names of those involved are anonymised in the judgment and access to the court file is restricted without leave of the Court.[10] In the judgment, I noted that as I had found for the applicant, in the normal course, he would be entitled to costs and that costs on a 2B basis are appropriate.4 I invited the parties to agree costs, but they have not been able to do so.1 K v the Complaints Assessment Committee of the Teaching Council of Aotearoa New Zealand[2022] NZHC 307 (the Judgment).2 At [132].3 At [132]-[144].4 At [146].Costs submissions[11] The parties have filed submissions as to costs in the following terms.Applicant's submissions[12] The applicant seeks costs on an indemnity basis or, in the alternative, on an increased basis. The applicant argues that indemnity or increased costs are justified in the circumstances because the CAC has acted vexatiously and unnecessarily in continuing and defending the proceedings.[13] In particular, the applicant says that the CAC's argument that its steps to reopen its decision were lawful on the basis that they amounted to "exceptional circumstances" was wrong in the light of established appellate authority and had no prospect of success. That point was repeatedly made to the CAC by counsel for the applicant, including correspondence written on an open basis with the intention that it might be relied on in support of an application for indemnity costs.[14] The applicant says also that this was not an issue of law in which there was a public interest in resolution: the legal position on the particular question was clear, following the Court of Appeal's decision in Goulding v Chief Executive of the Ministry of Fisheries where the Court said:5The common law principle applicable to the present case can accordingly be summarised in this way. A valid administrative decision in the exercise of a statutory power, which is the outcome of a complete process, but which has not been formally communicated to interested parties, has not been perfected. It may be revoked and a fresh decision substituted at any time prior to communication of it to affected persons in a manner which indicates intended finality. Once such decision is so communicated to the persons to whom it relates, in a way that makes it clear the decision is not of a preliminary or provisional kind, it is final. A final decision which is made in the exercise of a power which affects legal rights, including those arising from the grant of a licence, is irrevocable. So is any other decision made under a statutory power where the Act explicitly or implicitly provides that once finally exercised the power of decision is spent. That is the position under the common law.5 Goulding v Chief Executive of the Ministry of Fisheries [2004] 3 NZLR 173 (CA) at [43].[15] The applicant says that indemnity or increased costs are a logical consequence of the CAC choosing to run the risk of defending the proceeding, despite being warned of its futility.[16] The applicant also says that several of the specific steps taken by the CAC have unreasonably caused him to incur additional legal costs:(a) In its statement of defence dated 23 September 2021 the CAC, by way of "affirmative pleading", sought orders setting aside its own decision, which the applicant says would have broadened the scope of the proceeding. The CAC did not provide any precedent for this unusual step, despite requests from the applicant's counsel. As a consequence, the applicant necessarily incurred additional legal costs in seeking and attending an urgent telephone conference before Isac J on 7 October 2021 and, as a consequence of the Judge's direction, preparing an application to strike out the affirmative pleading. The application was not filed because the CAC confirmed that it would withdraw the affirmative pleading and it filed an amended statement of defence on 15 October 2021.(b) The CAC filed duplicative evidence, being an affidavit in support of the application for judicial review filed on 30 August 2021 (exhibiting all of the documents relevant to the CAC's Redetermination Decision), and on 27 October 2021 (appending the same documents). This resulted in the applicant incurring unnecessary costs in reviewing the exhibits filed by the CAC.(c) The CAC opposed name suppression for the applicant and the school (but agreed to name suppression in respect of the relevant student and the complainants), despite the obvious risk that this would identify the student. There was no public interest in the CAC opposing name suppression as the judicial review was in respect of a very narrow legal issue and the applicant's identity had previously been confidential by virtue of the CAC process. The CAC required the applicant to seekpermanent suppression by formal application with supporting evidence when it could have been resolved by consent or by memoranda. The CAC then actively contested the application, for no apparent reason, contributing unnecessarily to the applicant's legal costs.[17] All of the above, the applicant says, means that the CAC's conduct qualifies as "very unreasonable" conduct and meets the threshold for indemnity costs (or, it meets the requisite standard of "unreasonable" conduct and merits an award of increased costs).[18] The applicant's actual costs for the proceedings were $82,000.01 (excluding GST).[19] The applicant seeks solicitor-client costs in the amount of $77,425.05, being costs on an indemnity basis.[20] In the alternative, the applicant seeks costs of $48,898.93, being increased costs.Respondent's submissions[21] The CAC opposes the applicant's application for indemnity or increased costs and says that costs on a 2B basis are appropriate. It submits it acted reasonably throughout the proceeding. It had come to the conclusion that its original decision, to take the complaint against Mr K no further, was flawed. In seeking to meet its obligations as a regulatory body, it sought to rectify that error by reopening the investigation.[22] It did not act unreasonably in defending Mr K's judicial review application. This is not a case where the CAC's legal argument hopelessly lacked merit. The parties held different, but not unreasonable views as to the application of the case law to the specific facts of this case. Resolution from the Court was necessary.[23] In relation to the question of name suppression, the respondent notes that the principle of open justice is the relevant starting point; the threshold for a party seekinga non-publication order is high and opposition to the orders sought in relation to the identity of the applicant and the school was a reasonable response.Costs principles[24] Costs are at the discretion of the Court,6 but the discretion must be exercised in both a judicious manner and in a way that is consistent with the rules. The relevant principles include that costs should be resolved as predictably, consistently and expeditiously as possible. Ordinarily the loser must pay the winner's costs according to scale. The scale itself reflects the complexity and significance of the proceeding.[25] But the Court may make an order either increasing scale costs or, departing from the scale, that the costs payable are the actual costs incurred by a party (indemnity costs). Both are provided for by r 14.6 of the High Court Rules (Rules):14.6 Increased costs and indemnity costs(1) Despite rules 14.2 to 14.5, the court may make an order—(a) increasing costs otherwise payable under those rules (increased costs); or(b) that the costs payable are the actual costs, disbursements, and witness expenses reasonably incurred by a party (indemnity costs).(2) The court may make the order at any stage of a proceeding and in relation to any step in it.(3) The court may order a party to pay increased costs if—(a) the nature of the proceeding or the step in it is such that the time required by the party claiming costs would substantially exceed the time allocated under band C; or(b) the party opposing costs has contributed unnecessarily to the time or expense of the proceeding or step in it by—(i) failing to comply with these rules or with a direction of the court; or(ii) taking or pursuing an unnecessary step or an argument that lacks merit; or(iii) failing, without reasonable justification, to admit facts, evidence, documents, or accept a legal argument; or(iv) failing, without reasonable justification, to comply with an order for discovery, a notice for further6 High Court Rules 2016, r 14.1.particulars, a notice for interrogatories, or other similar requirement under these rules; or(v) failing, without reasonable justification, to accept an offer of settlement whether in the form of an offer under rule 14.10 or some other offer to settle or dispose of the proceeding; or(c) the proceeding is of general importance to persons other than just the parties and it was reasonably necessary for the party claiming costs to bring it or participate in it in the interests of those affected; or(d) some other reason exists which justifies the court making an order for increased costs despite the principle that the determination of costs should be predictable and expeditious.(4) The court may order a party to pay indemnity costs if—(a) the party has acted vexatiously, frivolously, improperly, or unnecessarily in commencing, continuing, or defending a proceeding or a step in a proceeding; or(b) the party has ignored or disobeyed an order or direction of the court or breached an undertaking given to the court or another party; or(c) costs are payable from a fund, the party claiming costs is a necessary party to the proceeding affecting the fund, and the party claiming costs has acted reasonably in the proceeding; or(d) the person in whose favour the order of costs is made was not a party to the proceeding and has acted reasonably in relation to it; or(e) the party claiming costs is entitled to indemnity costs under a contract or deed; or(f) 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.[26] The onus is on the applicant to show that an award of indemnity or increased costs is justified.7 There is a high threshold for an award of indemnity or increased costs. Rule 14.6(4)(a) provides that the court may order indemnity costs if a party acted "vexatiously, frivolously, improperly, or unnecessarily" in a proceeding. As the Court of Appeal said in Bradbury v Westpac Banking Corp, indemnity costs are appropriate when a party behaved "badly or very unreasonably".8 In that case the Court contrasted the jurisdiction to grant increased costs, being directed to simple7 Strachan v Denbigh Property Limited HC Palmerston North CIV-2010-454-232, 3 June 2011 at [27].8 Bradbury v Westpac Banking Corp [2009] NZCA 324, [2009] 3 NZLR 400 at [27(c)].unreasonableness, with the jurisdiction to grant indemnity costs, being directed to "distinctly bad behaviour".9 Examples of the latter were:10(a) making allegations of fraud knowing them to be false;(b) particular misconduct causing loss of time to the Court and other parties;(c) commencing or continuing a proceeding for some ulterior motive;(d) doing so in wilful disregard of known facts or clearly established law; and(e) making allegations which ought never to have been made or unduly prolonging a case by groundless contentions – i.e. persisting in what should on proper consideration be seen to be a "hopeless case".[27] As Fitzgerald J observed in AFI Management v Lepionka and Company Investments Limited, the threshold is high and "reserved for egregious conduct".11[28] In Ben Nevis Forestry Ventures Limited v Commissioner of Inland Revenue,12the Court of Appeal explained that to justify indemnity costs the case must have been so "hopeless" that it can be inferred that the case was only pursued for an ulterior motive, such as to pressure the other party to settle. In a subsequent decision, the Court of Appeal indicated that "hopeless" connotes being "totally without merit" or "bound to fail".139 At [26].10 At [29].11 AFI Management Pty Limited v Lepionka and Company Investments Limited [2018] NZHC 1285 at [17].12 Ben Nevis Forestry Ventures Limited v Commissioner of Inland Revenue [2014] NZCA 348, (2014) 22 PRNZ 322 at [17].13 Mawhinney v Auckland Council [2021] NZCA 144 as cited in TheCircle.co.nz Ltd v Trends Publishing International Limited [2021] NZCA 235 at [34]..[29] Increased costs are available under r 14.6 where a party took or pursued an unnecessary step or an argument that lacked merit, or a party failed without reasonable justification to accept a legal argument. 14[30] Generally, increased costs may be ordered where there is a failure by the paying party to act reasonably. As the Court of Appeal said in Bathurst Resources Ltd v L&M Coal Holdings Ltd:15It is not enough that an appeal (and therefore cause of action at first instance) lacks merit. Increased costs will generally not be appropriate where there are "at least available starting points" for the argument — where its pursuit is not "unreasonable" nor "hopeless". The costs regime should be predictable and litigants with "real arguments presented responsibly" to the courts should not fear an adverse increased costs award if their case fails. The standard costs regime recompenses in the case of normal failure.DiscussionIndemnity costs[31] In the Judgment,16 I accepted that, notwithstanding the general principle inGoulding,17 there are some exceptional circumstances where, even in the case of a judicial decision, the interests of finality are outweighed and a public body can revisit a decision made in ignorance of the true facts.[32] However, I did not accept that the factual basis on which the CAC proceeded amounted to a clear, fundamental mistake of fact. I found this case was distinguishable from the authorities on that point relied on by the respondent.[33] I accepted the respondent's submission that an inherent purpose of the complaints process under the Education Act 198918 is that, by providing effective supervision of teacher conduct, it enhances confidence in the education system overall and it is therefore important that the process be seen to be fair and robust. However,14 High Court Rules 2016, r 14.6(3)(b)(ii) and (iii).15 Bathurst Resources Ltd v L&M Coal Holdings Ltd [2021] NZCA 684 at [16].16 Judgment, above n 1, at [96].17 Goulding v Chief Executive of the Ministry of Fisheries, above n 5, at [43].18 The relevant provisions of that Act apply to this case by virtue of the transitional provisions of the Education and Training Act 2020.I did not accept that, on the particular facts of the case, the public interest objectives of the legislation required a reopening of the CAC's decision.[34] Although I did not ultimately accept the respondent's arguments that the particular circumstances of this case required the decision to be reopened I do accept Ms Casey's submission that application of the cases as to what constitutes an "exceptional" case, in the Goulding sense, is not straightforward. There was no directly analogous New Zealand authority before the Court.[35] The respondent's position was an arguable one, not one that was "totally without merit" or "bound to fail".[36] I conclude that indemnity costs are not appropriate.Increased costs[37] Based on the same factors, I do not think an overall award of increased costs is appropriate either. As I have noted, the respondent's position on the issue whether or not it was functus officio was an arguable one – there was "at least available starting points" for the argument, and its pursuit was not unreasonable, nor hopeless.19[38] The applicant has pointed to some particular steps in the proceeding he says unreasonably caused him to incur additional legal costs, for which increased costs are appropriate.20[39] I consider first the applicant's submission that the CAC filed duplicative evidence which unnecessarily contributed to the applicant's legal costs. In response, counsel for the CAC submits that (as advised to the applicant at the time) the duplication was to ensure that there was a single paginated set of all relevant documents, in date order, for the convenience of the Court and to avoid the necessity of filing a further combined bundle of documents for that purpose.19 Bathurst Resources Ltd v L&M Coal Holdings Ltd, above n 15, at [16].20 At [16] above.[40] I agree with the respondent that this process would not have increased legal costs and, if the parties had agreed to use the CAC's affidavit in lieu of a common bundle, might well have reduced the applicant's costs in preparing the bundle. There is no basis for increased costs in relation to this aspect of the proceeding.[41] The other two aspects of the proceeding raised by the applicant are less straightforward. Both of them ultimately turn on what is the proper role to be played by a decision-maker in a proceeding challenging its own decision.[42] First is what is referred to as the CAC's "affirmative pleading", in which it sought to set aside its own decision (thus, the applicant says, broadening the scope of the proceeding). The applicant says that the affirmative pleading amounted to the CAC acting on both sides of the proceeding in relation to its own procedure and decision-making. Despite a number of requests for explanation, the CAC was not at the time able to explain the jurisdictional basis on which it relied in taking that step, beyond referring to r 1.2 of the Rules 21 and the Judicial Review Procedure Act 2016 generally.[43] This was undoubtedly a highly unusual step by the CAC, in light of the general principle that a decision-maker should abide the decision of the court and "ought not become a protagonist" in respect of a challenge to its own decision.22 The CAC's pleading plainly went beyond merely assisting the Court.[44] The respondent has not pointed to any New Zealand authority in which such a step was taken or discussed. In its costs submissions, the respondent relies on r 1.2 of the Rules and a decision of the High Court of England and Wales, R (on the application of Demetrio) v Independent Police Complaints Commission.23 In that case, in response to a submission that there was no power to revise the Independent Police Complaints21 "The objective of these rules is to secure the just, speedy, and inexpensive determination of any proceeding or interlocutory application."22 Fonterra Co-operative Group Ltd v Grate Kiwi Cheese Co Ltd (2009) 19 PRNZ 824 (HC) at [19] as cited in Bleakley (as trustees of New Zealand Association of Credit Unions) v Registrar of Friendly Societies and Credit Unions [2017] NZHC 471 at [20].23 R (on the application of Demetrio) v Independent Police Complaints Commission [2015] EWHC 593.Commission's (IPCC) decision and the only route available was to have its report or parts of it quashed in the High Court, the Court said: 24In the event that there is no claimant to challenge the IPCC's decision the procedures in the High Court are flexible enough to enable the IPCC to seek relief on its own behalf.[45] I agree with the applicant that r 1.2, cast as it is in very general terms, does not provide jurisdiction for such an unusual step. Nor does the Demetrio case provide much assistance. That case relied on "the procedures in the High Court" being sufficiently flexible to enable such a step. The Court's comment is obiter but, in any event, it is not clear whether the Court's observation depended on the particular court rules governing the case, or the legislative framework relevant to the IPCC, or whether there was a broader, more general jurisdictional basis for the statement that the decision-maker – there, the IPCC – could seek relief on its own behalf. In any event, a significant difference between the present case and Demetrio is the roles played by the body whose decision was on appeal. While in Demetrio the IPCC was limited to a filtering or triage role, here the CAC made an adjudicative and final decision on the complaint.25[46] I conclude that it was not reasonable for the CAC to take the step of seeking to set aside its own decision. It was not a situation like that hypothesised in Demetrio – here there was an applicant challenging the CAC's decision; the matter was already before the Court.[47] The third specific aspect of the proceeding raised by the applicant is that there was no public interest in the CAC opposing name suppression for the applicant and the school. The respondent, on the other hand, submitted it was proper for it to take a position on the application: as a body exercising public functions it is appropriately interested in the principle of open justice as the starting point in court proceedings.26[48] The CAC's primary ground of opposition to the application as advanced at the hearing was that the applicant had not satisfied the high threshold in Erceg v Erceg,24 At [36]; and see also [55].25 Judgment at [83] and [84].26 Erceg v Erceg [2016] NZSC 135, [2017] 1 NZLR 310 at [2].which requires demonstrating specific adverse consequences if orders for suppression are not made. That required the CAC to engage with the applicant's evidence, the specifics of his situation and of the school. The CAC submitted that Mr K's evidence about his ability to manage disciplinary issues at the school, potential loss of confidence in the school and potential harm to the school more generally, was speculative and did not warrant an exception to the fundamental principle of open justice.[49] Counsel for the CAC also submitted that suppression of the names of the school and the principal was not necessary to protect the identity of the student and that permanent suppression orders would potentially hinder the Ombudsman's ability to complete his investigation of a complaint made to him by the complainant about the same matter.[50] It may have been appropriate for the respondent to seek to argue that permanent name suppression would adversely impact on the integrity of the complaints process, but that was not where the respondent's submissions were focused. It would also be appropriate for the CAC to put before the Court those matters of principle and or legal authority relevant to the application – certainly if the applicant had not done so, although in fact the applicant here did properly direct the Court to the principal authorities on the question.[51] However, the CAC went further than that, as I have described above. As the decision-maker whose decision was being challenged it had no legitimate interest in the application, except to the extent it might impact on the complaints process more generally. In doing so, it did "enter the fray" in an inappropriate way, and thus risked appearing to be a mere proxy for the complainants who, as counsel for the respondent advised at the hearing, were concerned that the orders sought by the applicant would affect their ability to talk about their experiences with the school and the principal, contrary, in their view, to s 14 of the New Zealand Bill of Rights Act 1990.[52] I conclude that there is a sufficient basis to grant increased costs to the applicant, pursuant to r 14.6(3)(b) of the Rules, in respect of the steps necessary to respond to the CAC's affirmative pleading and in relation to the name suppressionapplication. I allow a 50 per cent uplift on 2B costs in respect of these two matters. I anticipate that the calculation in respect of the first issue will be straightforward, the second less so because, even if the CAC had taken a neutral position on the application for name suppression, the applicant was required to persuade the Court that the threshold in Erceg v Erceg was satisfied. Evidence and some submissions would have been required. For that reason, ultimately it may be difficult for the applicant to identify any additional time incurred because of the respondent's opposition to the application for suppression.2B costs[53] The respondent disputes several aspects of the applicant's table for 2B costs.[54] The first of these is what is clearly a miscalculation at item 11. I agree the figure for this step should be $956, rather than $1,912.[55] Second, the respondent submits that, as the applicant did not file separate submissions in relation to the name suppression application and there was no separate interlocutory hearing of that application (the issue being subsumed into the substantive hearing), the applicant is not entitled to additional costs for a further step. While it is correct that the name suppression application was not considered at a separate hearing, as I have concluded above, the applicant is entitled to increased costs for any additional time incurred in preparing evidence and submissions on the application that would not have been incurred if the respondent had not actively opposed the application (if it is possible to identify any additional time). Step 24 in the applicant's Schedule 3 will provide the basis for that calculation.[56] It appears too that the respondent had discussed with the applicant's counsel that it was not necessary to file a separate common bundle as all necessary documents had been provided, annexed to the CAC's affidavit evidence. I conclude that the applicant is not entitled to costs for preparing the common bundle.Result[57] The applicant is entitled to costs on a 2B basis for the steps set out in the applicant's Schedule 3, except for item 31.[58] The applicant is entitled to a 50 per cent uplift on 2B costs for steps relating to the CAC's affirmative pleading (these are not separately identified in the applicant's Schedule 3) and to any additional time incurred by the CAC's active opposition to the applicant's application for permanent name suppression.Gwyn JSolicitors:Buddle Findlay, WellingtonLuke Cunningham Clere, WellingtonQuigg Partners, Wellington