LAGOLAGO v JUDICIAL CONDUCT COMMISSIONER [2023] NZCA 423

LAGOLAGO v JUDICIAL CONDUCT COMMISSIONER [2023] NZCA 423 [5 September 2023]IN THE COURT OF APPEAL OF NEW ZEALANDI TE KŌTI PĪRA O AOTEAROACA251/2021[2023] NZCA 423BETWEEN PAPALI'I TOTI LAGOLAGOAppellantAND JUDICIAL CONDUCT COMMISSIONERRespondentHearing: 28 April 2022 (further submissions received on 6 and 23 June, and8 July)Court: Cooper P, Courtney and Collins JJCounsel: A C Beck for AppellantN M H Whittington and K S Rouch for RespondentJudgment: 5 September 2023 at 11.00 amJUDGMENT OF THE COURTA The appeal is allowed.B The costs judgment is set aside.C The Commissioner is to pay Ms Lagolago's costs in the High Court calculatedon a 2B basis, but reduced by one half. Ms Lagolago is also to be paid thedisbursements she incurred.D The Commissioner must also pay Ms Lagolago's costs in this Court for astandard appeal on a band A basis and usual disbursements.____________________________________________________________________REASONS OF THE COURT(Given by Cooper P)Introduction[1] This is an appeal from a judgment of the High Court declining an applicationfor costs against the respondent in the context of an application for judicial review(the costs judgment).1[2] The appellant, Papali'i Toti Lagolago, is a solicitor. She made two complaintsto the Judicial Conduct Commissioner against Churchman J under theJudicial Conduct Commissioner and Judicial Conduct Panel Act 2004 (the JCC Act).The complaints arose in the context of a judgment in which Churchman J dealt withan application for leave to appeal to this Court from a costs judgment delivered byClifford J in the High Court.[3] Both complaints were dismissed, and it is not necessary to explain the detail ofthem. It is sufficient for present purposes to record that the Commissioner consideredthere was no jurisdiction for him to consider the first complaint, because he saw it asa challenge to the correctness of a judicial decision, which he was prevented fromconsidering by ss 8(2) and 16(1)(a) and (f) of the JCC Act. In the Commissioner'sview the subject matter of the second complaint had been previously considered indealing with the first complaint, and was therefore outside his jurisdiction unders 16(1)(i).2[4] Ms Lagolago then applied for judicial review under the Judicial ReviewProcedure Act 2016. She alleged that the Commissioner was wrong to determine therewas no jurisdiction to consider the complaints. She was partially successful.3Edwards J held that the Commissioner was right to dismiss the first complaint onjurisdictional grounds under ss 8 and 16(1)(a) and (f) of the JCC Act, save in respectof one aspect of the complaint. The exception related to an alleged failure byChurchman J to disclose a previous involvement he had in relation to an applicationMs Lagolago made in respect of legal aid in other litigation. Edwards J held thealleged failure to disclose was not excluded from consideration by either ss 8(2)1 Lagolago v Judicial Conduct Commissioner [2021] NZHC 832 [Costs judgment].2 Section 16(1)(i) of the JCC Act provides that the Commissioner must dismiss complaints if thesubject matter of the complaint has previously been considered, and the complaint fails to raiseany issue of significance that that has not been previously considered.3 Lagolago v Judicial Conduct Commissioner [2020] NZHC 3413, (2020) 25 PRNZ 610.or 16(1)(f) of the JCC Act.4 The Judge reached the same conclusion in respect of thesecond complaint, since the failure to disclose issue had not previously beenconsidered for the purposes of s 16(1)(i).5[5] The complaint about the alleged failure to disclose was remitted back to theCommissioner for further investigation, but the remaining aspects of the applicationfor judicial review were dismissed.6The costs judgment[6] In the costs judgment, Edwards J determined that costs should lie where theyfell, applying what she described as orthodox costs principles set out in the High CourtRules 2016 (the Rules). She noted she had not found it necessary for her costsdetermination to engage with the arguments of the parties about the nature of theCommissioner's role.7[7] She gave two reasons. First, although Ms Lagolago was the successful party,her success had to be seen in the context of the proceeding as a whole. She had onlysucceeded on one aspect of the complaint, which related to the failure to disclose.Most of the challenges on jurisdictional grounds had been unsuccessful.8[8] Second, the proceeding was an application for review. The Commissioner hadnot filed a statement of defence, limiting his involvement to filing a notice ofappearance in order to assist the Court on questions about the Commissioner'sjurisdiction and reserving rights in respect of costs. The matter had been heard by wayof formal proof, although the Commissioner had, without objection, filed submissionson the jurisdiction issues and made oral submissions at the formal hearing.Those submissions had been of assistance to the Court. The Judge thought an awardof costs in these circumstances might "provide a disincentive to that assistance beingprovided in the future".94 At [45], [48] and [51]–[52].5 At [54].6 At [67]–[68].7 Costs judgment, above n 1, at [6].8 At [7].9 At [8].The appeal[9] Mr Beck, for Ms Lagolago, argued that the Judge had failed to apply thefundamental principle that Ms Lagolago was entitled to costs as the successful party.In doing so she had failed to apply this Court's decision in Roberts v A ProfessionalConduct Committee of the Nursing Council of New Zealand and had wrongly held theCommissioner was entitled to a form of special dispensation in order to encourage himto provide assistance to the Court.10[10] Mr Beck said the Judge mischaracterised Ms Lagolago's success as partialwhen in fact she had achieved exactly what she set out to do — by showing that theCommissioner was not entitled to dismiss her complaints for want of jurisdiction.Success even on limited terms, Mr Beck argued, is still success.11 It could not be saidthat Ms Lagolago advanced any issues which significantly increased the costs of theCommissioner. She was therefore entitled to costs in full.[11] Further, Mr Beck submitted there was no reason to deprive Ms Lagolago of anaward of disbursements. It was she who had incurred the disbursements. The Judgehad in addition wrongly concluded that there was no public interest component in theproceeding and had failed to take the public interest into account.[12] In submissions filed after the hearing in this Court, Mr Beck referred to thedecision of the United Kingdom Supreme Court in Competition and Markets Authorityv Flynn Pharma Ltd in which the Competition Appeal Tribunal had made a costs orderagainst the Competition and Markets Authority following unsuccessful proceedings.12The Tribunal's decision was reversed by the Court of Appeal, applying a principlebased on the "chilling effect" doctrine that orders for costs should not be made againsta public body that has been unsuccessful in bringing or defending proceedings in theexercise of statutory functions.1310 Roberts v A Professional Conduct Committee of the Nursing Council of New Zealand [2014]NZCA 141, (2014) 21 PRNZ 753.11 Relying on Weaver v Auckland Council [2017] NZCA 330, (2017) 24 PRNZ 379.12 Competition and Markets Authority v Flynn Pharma Ltd [2022] UKSC 14, [2022] 1 WLR 2972[Flynn Pharma (UKSC)].13 Competition and Markets Authority v Flynn Pharma Ltd [2020] EWCA Civ 617, [2020] Costs LR695 [Flynn Pharma (UKCA)], relying on a line of authority beginning with Bradford MetropolitanDistrict Council v Booth (2000) 164 JP 485 (QB).[13] The Supreme Court reversed the decision of the Court of Appeal, holding thatthere was no generally applicable principle that public bodies should have a protectedstatus insofar as litigation costs are concerned.14[14] Mr Whittington, for the Commissioner, submitted that the Judge hadconsidered Ms Lagolago to be the successful party, but found that the fact she hadsucceeded on one only of the issues raised warranted a reduction in costs. Further, theCommissioner had acted appropriately by making submissions on jurisdiction incircumstances where an issue had arisen about the proper scope of the JCC Act andthere was no other party to put the relevant arguments to the Court.Analysis[15] Rule 14.2 of the Rules sets out principles which apply to the determination ofcosts. The first principle, stated in r 14.2(1)(a) is that "the party who fails with respectto a proceeding or an interlocutory application should pay costs to the party whosucceeds".[16] Rule 14.6 of the Rules sets out the basis upon which the court may orderincreased costs and indemnity costs. Following that, r 14.7 deals with the refusal of,or reduction in, costs. It provides that despite r 14.2, the court may refuse to make anorder for costs or may reduce the costs otherwise payable if:(a) the nature of the proceeding or the step in a proceeding is such thatthe time required by the party claiming costs would be substantiallyless than the time allocated under band A; or(b) the property or interests at stake in the proceeding were ofexceptionally low value; or(c) the issues at stake were of little significance; or(d) although the party claiming costs has succeeded overall, that party hasfailed in relation to a cause of action or issue which significantlyincreased the costs of the party opposing costs; or(e) the proceeding concerned a matter of public interest, and the partyopposing costs acted reasonably in the conduct of the proceeding; or14 Flynn Pharma (UKSC), above n 12, at [97]–[98].(f) the party claiming costs has contributed unnecessarily to the time orexpense of the proceeding or step in it by—(i) failing to comply with these rules or a direction of the court;or(ii) taking or pursuing an unnecessary step or an argument thatlacks merit; or(iii) failing, without reasonable justification, to admit facts,evidence, or documents, or accept a legal argument; or(iv) failing, without reasonable justification, to comply with anorder for discovery, a notice for further particulars, a noticefor interrogatories, or other similar requirement under theserules; or(v) failing, without reasonable justification, to accept an offer ofsettlement whether in the form of an offer under rule 14.10 orsome other offer to settle or dispose of the proceeding; or(g) some other reason exists which justifies the court refusing costs orreducing costs despite the principle that the determination of costsshould be predictable and expeditious.[17] Where a party has raised a number of issues and only succeeded on one, it is alegitimate exercise of the costs discretion for the judge to take that into account and toreduce costs which might otherwise be payable in application of the general rule thatcosts should follow the event. That is clearly contemplated by r 14.7(d) and in somecases might fall within r 14.7(f)(ii), or within the general words of r 14.7(g).[18] The argument in the present case has focused more on the second ground thatthe Judge gave for declining costs, set out in the following passage of the costsjudgment. The Judge said:15[8] Second, regard must be had to the nature of the hearing.The proceeding was an application for judicial review. The Commissionerdid not file a statement of defence but filed a notice of appearance in order toassist the Court on questions of jurisdiction and as to costs. Although theproceeding was heard by way of formal proof, there was no objection to theCommissioner filing written submissions and making further oral submissionsat the formal proof hearing in accordance with the Commissioner's notice ofappearance. Those submissions were taken into account in determining thesubstantive application and were of assistance to the Court. An award of costsin those circumstances may provide a disincentive to that assistance beingprovided in the future.15 Costs judgment, above n 1.[19] Mr Beck was critical of that passage, submitting that it was contrary to thisCourt's decision in Roberts and contrary to the approach taken by the UK SupremeCourt in Flynn Pharma.16[20] In Roberts, this Court held that the fact a professional conduct committee wasperforming a public function, and had an immunity for costs when proceedings werebefore the New Zealand Health Practitioners Disciplinary Tribunal | TaraipuinaraWhakatika Kaimahi Hauora, might properly be taken into account in determiningwhether costs should be awarded and if so in what amount.17 Nevertheless, the Courtrejected a suggestion that r 14.7(g) would justify an approach to costs in theHigh Court which would require some "compelling reason" to order the payment ofcosts by a conduct committee which had acted reasonably in opposing an appeal.This Court said, with reference to r 14.7(g), that:18[24] The "other reason" exception has been invoked to support the creationof other categories of cases exempt from the general rule, for example casesinvolving indulgences. However, in our view, the number of such exemptcategories should be kept limited, having regard to the policy of the costsregime and the emphasis it places on costs following the event. Otherwise theexception will swallow the rule. In our view, the fact that professional conductcommittees perform a public function is not of sufficient weight to justify thewholesale creation of a new exempt category and the displacement of the usualpresumption with another higher threshold.[21] The correct approach was simply that the usual presumption about costsfollowing the event would apply but, at the discretion of the Judge, the presumptioncould more easily be displaced than usual, on account of the public function ofprofessional conduct committees. But a successful appellant was not required tosatisfy a "compelling reason" threshold.19[22] Mr Beck argued that the second reason given by the Judge in this case wastantamount to determining that a "compelling reason" would be necessary to ordercosts against the Commissioner, contrary to the approach required by Roberts.Insofar as the reasoning was based on the possibility that an award of costs mightprovide a disincentive to the Commissioner to the provision of assistance such as had16 Roberts, above n 10; and Flynn Pharma (UKSC), above n 12.17 Roberts, above n 10, at [27].18 Footnote omitted.19 At [29].been provided here in the future, this was contrary to the approach of theUnited Kingdom Supreme Court in Flynn Pharma.20[23] Mr Beck relied on the following passages in the judgment of Lady Rose in thatcase, writing for a unanimous Court:97 In my judgment, there is no generally applicable principle that allpublic bodies should enjoy a protected status as parties to litigation where theylose a case which they have brought or defended in the exercise of their publicfunctions in the public interest. The principle supported by the Booth line ofcases is, rather, that where a public body is unsuccessful in proceedings, animportant factor that a court or tribunal exercising an apparently unfettereddiscretion should take into account is the risk that there will be a chilling effecton the conduct of the public body, if costs orders are routinely made against itin those kinds of proceedings, even where the body has acted reasonably inbringing or defending the application. 98 Where I depart from the [Competition and Markets Authority's]argument and from the decision of the Court of Appeal in this case is in makingthe jump from a conclusion that in some circumstances the potential chillingeffect on the public body indicates that a no order as to costs starting point isappropriate, to a principle that in every situation and for every public body itmust be assumed that there might be such a chilling effect and hence that thebody should be shielded from the costs consequences of the decisions it takes.[24] Mr Beck also referred to another passage in which the Supreme Courtacknowledged High Court authorities that referred to the prospect of an adverse costsaward as encouraging better decision-making by government agencies, more realisticappraisal of the merits of defending any particular applications and the efficient andproportionate conduct of proceedings. It was acknowledged that persons wronged bythe actions of public bodies should be reimbursed for their costs.21[25] We are not persuaded of the relevance of these passages to the present case.As Mr Whittington pointed out, Flynn Pharma was decided under rules of procedurethat were specific to the jurisdiction of the Competition Appeal Tribunal.The principal aspects of that Tribunal's jurisdiction comprised appeals from decisionstaken by competition enforcement authorities under the Competition Act 1998 (UK),appeals from decisions of sectoral regulators, judicial review of decisions made by theCMA in respect of merger and market investigations and claims for damages by20 Flynn Pharma (UKSC), above n 12.21 At [133].private parties harmed by infringement of competition rules by other private parties.22He submitted the passages relied on by Mr Beck were not purporting to lay down ageneral rule about the appropriate approach to be taken by a court under rulesgoverning civil procedure. We agree. The Court in Flynn Pharma was concernedwith jurisdictions in which a tribunal or court's power to make a costs order did notinclude an express general rule or default position — that is, the tribunal or court wasexercising an "apparently unfettered discretion".23 That is to be contrasted with thestarting point under the Rules that costs should follow the event.24[26] The Supreme Court's decision in Flynn Pharma, then, neither detracts fromnor supports Mr Beck's proposition that the Rules do not contemplate a starting pointthat a person or body performing public functions should not be subject to an awardof costs.[27] In the present case, Ms Lagolago was only partially successful, and it waslegitimate for the Judge to take into account under r 14.7 the fact that she had notsucceeded on most of the issues pursued.25 The Judge did not proceed on the basisthat the Commissioner should be generally protected from awards of costs.Rather, she was concerned to avoid creating a disincentive for the Commissioner toadopt the helpful position he had in the present case. The issue is whether the Judgeerred in concluding in these circumstances that it was inappropriate for there to be anyaward of costs in Ms Lagolago's favour.[28] We have concluded that the reasons identified by the Judge justified a reducedcosts order, but not a complete denial of costs. Our reasons are that:(a) A reduction in the costs otherwise payable would be the proper way toreflect the fact that Ms Lagolago had succeeded, but only in part,22 At [17]–[20].23 At [2], [94]–[95] and [97].24 High Court Rules 2016, r 14.2(1)(a).25 The Judge relied on r 14.7(d) and (g) but in our view the proper justification for reducing costs isin r 14.7(f)(ii).thereby giving proper effect to the general principle that costs shouldfollow the event.(b) It is clear that in terms of r 14.7(f)(ii) Ms Lagolago pursued a numberof arguments that were clearly lacking in merit and put theCommissioner, as well as the Court, to unnecessary time and expense.(c) Although the Commissioner properly abided the decision of theHigh Court, he made submissions supporting the basis on whichMs Lagolago's complaint had been dismissed on jurisdictionalgrounds. At issue was the proper scope of important statutoryprovisions going to the Commissioner's jurisdiction. We consider thatMs Lagolago's partial success on issues concerning the extent of theCommissioner's jurisdiction ought to have received some recognitionin the form of a costs order. That would reflect the public interest thatexists in the proper definition of the extent of the Commissioner'sjurisdiction.(d) While we accept, as Mr Whittington submitted, that the Judge did notproceed on the basis that the Commissioner should not be the subjectof awards of costs because of the "chilling effect" of such an order onthe carrying put of the Commissioner's functions, the Judge did referto the possibility that an award of costs might make the Commissionerreluctant in future to assist the court with submissions in the helpfulway that occurred in the present case. For our part we are not preparedto assume that might be the effect of a moderate award of costs whenthe issue concerns the proper scope of the Commissioner's jurisdiction.[29] In the result we are satisfied that it is appropriate to allow the appeal. Althoughthe Commissioner submitted that if we reached that conclusion we should remit thematter to the High Court to fix the costs, we think it is more expedient to resolve theissue by the orders now set out.Result[30] For the reasons we have given we allow the appeal.[31] The costs judgment is set aside.[32] We order that the Commissioner is to pay Ms Lagolago's costs in theHigh Court calculated on a 2B basis, but reduced by one half. Ms Lagolago is also tobe paid the disbursements she incurred.[33] The Commissioner must also pay Ms Lagolago's costs in this Court for astandard appeal on a band A basis and usual disbursements.