FANG v MINISTRY OF BUSINESS, INNOVATION AND EMPLOYMENT [2017] NZHC 2663

FANG v MINISTRY OF BUSINESS, INNOVATION AND EMPLOYMENT [2017] NZHC 2663 [31 October 2017]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYI TE KŌTI MATUA O AOTEAROATĀMAKI MAKAURAU ROHECIV 2015-404-001971[2017] NZHC 2663BETWEEN MING BO FANGPlaintiffAND MINISTRY OF BUSINESS,INNOVATION AND EMPLOYMENTDefendantHearing: On the papersJudgment: 31 October 2017COSTS JUDGMENT OF DUFFY JThis judgment was delivered by me on 31 October 2017 at 4.00 pm pursuant toRule 11.5 of the High Court Rules.Registrar/ Deputy RegistrarSolicitors/Counsel:Meredith Connell, AucklandDr F C Deliu, Justicia Chambers, AucklandIntroduction[1] On 21 July 2016, I dismissed Mr Fang's application for judicial review.1 He successfully appealed that decision to the Court of Appeal.2 The respondent was ordered to pay Mr Fang costs on the appeal.[2] Mr Fang now seeks costs on a 2B basis in respect of the High Court hearing, for steps taken up to the delivery of my judgment on 21 July 2016. The respondent accepts that Mr Fang is entitled to costs, but seeks a reduction in costs on the grounds that Mr Fang was only successful in the Court of Appeal on one of the six causes of action he brought. The respondent also seeks costs in respect of two decisions granting interim relief to Mr Fang, arguing that interim relief should not have been granted.Background[3] Mr Fang is originally from China. He overstayed his student visa and in August 2015 was served with a deportation order. An immigration officer wrote to him shortly thereafter advising him that she had decided not to cancel his deportation order under s 177 of the Immigration Act 2009. Mr Fang applied for judicial review of that decision.[4] Mr Fang became due for deportation on 26 August 2015. Following an urgent application for interim relief, Fogarty J made orders preventing his deportation pending his application for judicial review.3 He noted that Mr Fang was entitled to costs on a 2B basis in respect of the application for interim relief.[5] I heard Mr Fang's application for judicial review in October 2015. Mr Fangraised six grounds of judicial review. After considering each of those grounds, I dismissed his application in a decision dated 21 July 2016.1 Fang v Ministry of Business, Innovation and Employment [2015] NZHC 1630.2 Fang v Chief Executive of the Ministry of Business, Innovation and Employment [2017] NZCA 190.3 Fang v Ministry of Business, Innovation and Employment [2015] NZHC 2059.[6] On 21 October 2016 I granted interim relief to Mr Fang pending his appeal, ordering that Mr Fang was not to be removed from New Zealand until the expiry of20 working days after the Court of Appeal's decision.4 I awarded costs at category 2B to Mr Fang on the application for interim relief.[7] The Court of Appeal heard Mr Fang's appeal together with the cases ofMessrs Dong and Li. The question on appeal was whether the obligation in s 177(5)(b) to record "the facts about the person's personal circumstances" issatisfied by the completion of a Record of Personal Circumstances (RPC) form, or whether it is necessary for a discrete record to be made of those aspects of theperson's circumstances which are specific to the relevant international obligations.5Mr Fang contended that a discrete record was required. This was the first ground of review that he argued before me. The Court of Appeal agreed that the relevant factswhich prompted the immigration officer to consider New Zealand's internationalobligations should be noted separately.[8] The Court of Appeal accordingly allowed Mr Fang's appeal and remitted thedecision to the Ministry of Business, Innovation and Employment to enable the relevant immigration officer to comply with the obligation under s 177(5).SubmissionsAppellant[9] Given his success in the Court of Appeal, Mr Fang now seeks costs in relation to the High Court hearing up to the delivery of my judgment on 21 July 2016. He seeks costs on a 2B basis, which total $42,680.05.[10] Mr Fang also claims costs in respect of my judgment of 21 October 2016, granting interim relief pending the appeal. He says that costs on a 2B basis come to $8,139.50.4 Fang v Ministry of Business Innovation and Employment [2016] NZHC 2530 [Result Judgment];Fang v Ministry of Business Innovation and Employment [2016] NZHC 2617 [Reasons Judgment].5 Fang, above n 2, at [2].[11] He also seeks disbursements totalling $2,651.55.Respondent[12] Ms Earl for the respondent accepts that the respondent is liable to pay costs toMr Fang in light of the Court of Appeal's judgment, but seeks a reduction in costsgiven that Mr Fang raised six grounds of judicial review in the High Court and was only successful on one of those grounds on appeal.[13] Ms Earl also seeks the reversal of costs orders made in favour of Mr Fang in respect of the two decisions granting him interim relief (that of Fogarty J in August2015 and my own in October 2016). In light of the Court of Appeal's decision, shesubmits that it is now clear interim relief should not have been granted to Mr Fang. In the alternative, she submits that costs should lie where they fall.[14] Ms Earl also takes issue with certain items in Mr Fang's schedule as to costsand disbursements.CostsHigh Court proceeding[15] The Court of Appeal in the present case made no order as to costs in the High Court. However, issues of costs are commonly reconsidered in the High Court following a successful appeal.6 There are no fixed rules as to how costs should beassessed by the lower court when the lower court's ruling is overturned by anappellate court, but generally costs applications are treated as if the party who successfully appealed had also been successful in the lower court.7 It is a"fundamental principle" that the successful party is entitled to recover costs.8 Given that the Court of Appeal allowed his appeal, Mr Fang is therefore prima facie entitled to scale costs in respect of the High Court proceeding.6 EBR Holdings Ltd (in liq) v McLaren Guise Associates Ltd [2017] NZHC 1008 at [4].7 LSG Sky Chefs New Zealand Ltd v Pacific Flight Catering Ltd [2015] NZHC 685 at [30];8 Manukau Golf Club Inc v Shoye Venture Ltd [2012] NZSC 109, [2013] 1 NZLR 305 at [8].[16] Ms Earl says Mr Fang should not be treated as having been entirely successful in the High Court proceedings. He sought judicial review on six grounds, and the appeal was granted in respect of the first of those. The respondent was put to the cost of defending the remaining grounds of review that did not succeed. Whilethe first ground of review occupied most of this Court's decision, she submits thatthe costs award should reflect the fact that the remaining grounds were dismissed.She seeks a reduction of the costs award by one third to reflect Mr Fang's measure ofsuccess and failure in respect of the substantive hearing. Ms Earl relies on Li v Ministry of Business, Innovation and Employment, where Davison J reduced theplaintiff's scale costs by one third to reflect the fact that the plaintiff was onlysuccessful on only one ground of review, and the remaining grounds were held to be without merit.9[17] On the other hand, Ms Finau for Mr Fang submits that a "piecemeal"approach of this nature is inappropriate. She cites my decision in Commissioner of Police v Burgess,10 where I noted that Ms Burgess had achieved partial success on an application for the discharge of restraining orders: some of the restraining orders were discharged, while others were not. I awarded costs to Ms Burgess, and declined to make a reduction in the costs award to reflect the fact that she did not achieve a discharge in respect of all the restrained items.[18] Ms Finau also cites New Zealand Law Society v Deliu, where Asher J concluded:11I determine therefore that Mr Deliu should be awarded costs without any deduction for a lack of success on the protest to jurisdiction aspect of the claim. I also do not accept that there should be a deduction because Mr Deliu made every conceivable argument. He certainly did argue with vigour and at considerable length but I do not consider any of his arguments to have crossed the threshold of irrelevance or inexcusable prolixity.[19] Under r 14.7(d) of the High Court Rules 2016, a costs order may be reducedif, "although the party claiming costs has succeeded overall, that party has failed inrelation to a cause of action or issue which significantly increased the costs of the9 Li v Ministry of Business, Innovation and Employment [2016] NZHC 2196 at [8]–[10].10 Commissioner of Police v Burgess [2016] NZHC 267.11 New Zealand Law Society v Deliu [2015] NZHC 652 at [8].party opposing costs". I note Wylie J's observation in Shotter v Westpac Banking Corp:12While it is not uncommon for a party to succeed on one issue and to fail on several others and in the ordinary course not to suffer in costs for that reason alone I think when one is taking an overall view where a number of competing factors have to be taken into account in order to arrive at a just award, that consideration may be one of those factors.[20] In particular it will be relevant to consider whether, as Asher J phrased it inNew Zealand Law Society v Deliu, some of the successful party's arguments "crossed the threshold of irrelevance or inexcusable prolixity". That was also theapproach taken in Zhao v New Zealand Law Society, where costs were reduced to reflect the fact that "the statement of claim was excessive and ventured causes of action that could not succeed".13 In the present case I do not consider that Mr Fang'sstatement of claim was excessive or ventured entirely irrelevant causes of action of the type that would warrant reducing costs. I decline to reduce the costs award to Mr Fang.[21] I consider that the nature and complexity of the proceeding warrants a 2B categorisation. The respondent does not dispute this, but objects to certain items inMr Fang's costs schedule:(a) First, Ms Earl says that only the usual three days should be allocated to Item 1 (Commencement of proceedings). In her memorandum in reply, Ms Finau accepts that this is appropriate. I adjust the schedule of costs accordingly.(b) Secondly, Ms Earl says that Item 13 (Appearance at case management conference) is more appropriately classed as Item 12 (Appearance at mentions hearing), as it was a telephone conference. Ms Finau accepts that this is the position, so I adjust the schedule accordingly.(c) Finally, Ms Earl objects to the allocation of 2.5 days to Item 30(Plaintiff's preparation of briefs or affidavits) and the allocation of a12 Shotter v Westpac Banking Corp HC Auckland AP995/85, 5 June 1991.13 Zhao v New Zealand Law Society [2015] NZHC 3112 at [10].further 2.5 days to Item 31 (Plaintiff's preparation of list of issues,authorities, and common bundle). She says that in the circumstances this is excessive, and it is appropriate to reduce the time allocation to band A. I accept that the time allocation (i.e. the appropriate band) can be individually assessed for each step in relation to which costs are claimed.14 However, in the absence of any reasoning from the respondent as to why the time allocation should be reduced for being excessive for Items 30 and 31, I consider that band B is appropriate.[22] As for disbursements, Ms Earl submits that the respondent should not have to pay the filing fee for the third statement of claim, which was amended following the substantive hearing. Two claims were removed and one was added. Ms Earl says, and I accept, that Mr Fang could have included the additional issue in his original statement of claim. The respondent should not have to pay the court filing costs for the third statement of claim.[23] Ms Earl also takes issue with Mr Fang's inclusion of a filing fee for aninterlocutory application dated 17 September 2015. She says that application was abandoned at the hearing. I agree that the respondent should not be required to pay the filing fees for this application.[24] Ms Earl also objects to the inclusion of travel and parking costs in Mr Fang'sdisbursements, which come to $76.40. She notes that his counsel was based in Auckland. I agree that travel and parking costs should not be included in those circumstances.Interim relief[25] Ms Earl submits that interim relief pending the appeal should not have been granted to Mr Fang. She relies on the Court of Appeal's decision to set aside the interim order staying Mr Dong's deportation pending the remission back to therelevant immigration officer. At [81] the Court held:1514 High Court Rules 2016, r 14.2(c); Zhao v New Zealand Law Society, above n 13 at [9].15 At [81].The removal of Messrs Fang, Dong and Li from New Zealand can have no bearing on the way in which the respective immigration officers complete their task under s 177(5)(b). Nor will the fact that Messrs Fang, Dong and Li are out of New Zealand affect any entitlement to seek review of the actions of the officers pursuant to the orders for remission.[26] Applying the principles set out by the Court of Appeal, Ms Earl submits that the costs award made in respect of my decision granting interim relief pending the appeal should be reversed, and the costs of defending this application should be granted to the respondent. That costs order should be offset against the costs award made in favour of Mr Fang for the substantive proceedings. Ms Earl makes the same submission in relation to the costs associated with Fogarty J's decision to grantinterim relief in August 2015. The respondent seeks costs for this application, or alternatively an order that costs lie where they fall.[27] Ms Finau submits that this Court has no jurisdiction to vary the costs orders made in respect of the decisions on interim relief, as those decisions were not appealed. She argues that it is an abuse of process and a collateral attack for the respondent to now seek costs in respect of those decisions.[28] Rule 14.8 governs costs on interlocutory applications:14.8 Costs on interlocutory application(1) Costs on an opposed interlocutory application, unless there are special reasons to the contrary,—(a) must be fixed in accordance with these rules when the application is determined; and(b) become payable when they are fixed.(2) Despite subclause (1), the court may reverse, discharge, or vary an order for costs on an interlocutory application if satisfied subsequently that the original order should not have been made.(3) This rule does not apply to an application for summary judgment.[29] As Gordon J recently observed in Lowe v Auckland Family Court, there is little guidance available regarding the application of r 14.8(2).16 In that case16 Lowe v Auckland Family Court [2017] NZHC 1303 at [5].Gordon J drew a parallel to r 7.49 (review of an interlocutory order), and noted that review is generally only appropriate:17(a) When there was not full argument on the first hearing; or(b) If some relevant point of evidence was overlooked at the original hearing; or(c) There has been a material change of circumstances; or(d) Some other special circumstance has arisen.[30] In the present case Ms Earl has not persuaded me that there are sufficiently special circumstances that the discretion to overturn the earlier costs orders on the interlocutory applications should be exercised. As Ms Finau points out, there was no appeal against those decisions. Mr Fang is entitled to costs on a 2B basis in respect of those decisions.[31] Ms Earl then says that Mr Fang is not entitled to claim costs for a case management conference that took place on 17 August 2016, prior to the filing of the interlocutory application in September 2016. She says that any costs awarded should be from the point of making the application for interim relief, because up to that point Mr Fang took the position that the interim order made by Fogarty J continued. When interim relief was granted afresh, that position was shown to be erroneous. However, in my view that case management conference was a necessary precursor to the interlocutory application and there is no reason why Mr Fang should not be entitled to costs in relation to it.Result[32] Mr Fang is entitled to scale costs on a 2B basis in respect of the High Court proceedings. With the adjustments mentioned, costs come to $37,575.50:Item Description Days Amount(Category 2 =$2,230)1 Commencement of proceeding by plaintiff 3 $6,69017 At [6].10 Preparation for first case managementconference0.4 $89211 Filing memorandum for first or subsequent casemanagement conference0.4 $89212 Appearance at mentions hearing or callover 0.2 $44612 Appearance at mentions hearing (telephoneconference)0.2 $44622 Filing interlocutory application dated 25 August20150.6 $1,33824 Preparation of written submissions forinterlocutory application1.5 $3,34525 Preparation by applicant of bundle for hearing 0.6 $1,33826 Appearance at hearing of interlocutoryapplication0.75 $1,672.5030 Plaintiff's preparation of briefs or affidavits 2.5 $5,57531 Plaintiff's preparation of list of issues,authorities and common bundle2.5 $5,57533 Preparation for hearing 3 $6,69034 Appearance at hearing for sole or principalcounsel1 $2,23029 Sealing order or judgment 0.2 $446Total: $37,575.50[33] Mr Fang is also entitled to 2B costs for his subsequent (successful) interlocutory application for interim relief before me. Those costs come to $8,139.50:Item Description Days Amount(Category 2 =$2,230)22 Filing interlocutory application dated 1September 20160.6 $1,33824 Preparation of written submissions 1.5 $3,34525 Preparation of bundle for hearing 0.6 $1,33826 Appearance at hearing of defended application 0.25 $557.5013 Appearance at first case management conference 0.3 $66911 Filing memorandum for first case managementconference0.4 $892Total: $8,139.50[34] Mr Fang is also entitled to disbursements of $2,265.15, itemised as follows:Filing fee for statement of claim dated 25 August 2015 $540Filing fee for amended statement of claim dated 5 October 2015 $110Filing fee for interlocutory application dated 25 August 2015 $200Scheduling fee $640Photocopying and binding $775.15Total: $2,265.15