TE RŪNANGA O NGĀI TAHU v TE OHU KAI MOANA TRUSTEE LTD [2023] NZHC 2763

TE RŪNANGA O NGĀI TAHU v TE OHU KAI MOANA TRUSTEE LTD [2023] NZHC 2763 [3 October2023]IN THE HIGH COURT OF NEW ZEALANDWELLINGTON REGISTRYI TE KŌTI MATUA O AOTEAROATE WHANGANUI-A-TARA ROHECIV-2022-485-650[2023] NZHC 2763UNDER the Judicial Review Procedure Act 2016 andthe Declaratory Judgments Act 1908BETWEEN TE RŪNANGA O NGĀI TAHUPlaintiffAND TE OHU KAI MOANA TRUSTEE LTDFirst DefendantMINISTER FOR OCEANS ANDFISHERIESSecond DefendantAND TE WHAKAKITENGA O WAIKATOINCORPORATEDInterested PartyOn the PapersCounsel: J D Every-Palmer KC, J W J Graham and X Y Lau for thePlaintiffN C Anderson and J B Watson for the Second DefendantJudgment: 3 October 2023JUDGMENT OF GWYN J(Costs on stay of proceeding)Background[1] On 1 November 2022 the plaintiff, Te Rūnanga o Ngāi Tahu, filed a judicialreview application concerning a resolution passed by a close majority of MandatedIwi Organisations at a Special General Meeting (SGM) of Te Ohu Kaimoana TrusteeLtd (Te Ohu Kaimoana) in August 2016. The resolution proposed that if Te OhuKaimoana was to distribute surplus funds to iwi beneficiaries, it should do so on anequal basis between iwi, rather than on a notional iwi population basis.[2] Giving effect to the resolution would require amendments to the MaoriFisheries Act 2004 (Act). The Ministry for Primary Industries released forconsultation an "exposure draft" of proposed amendments to the Act, including this"equal sharing" proposal, in August 2022.[3] In the proceeding the plaintiff alleged against Te Ohu Kaimoana, as the firstdefendant, that the August 2016 SGM was conducted in breach of natural justiceand/or that Te Ohu Kaimoana should have declined to advise the Minister for Oceansand Fisheries (Minister) of the "equal sharing" resolution passed at the meeting.[4] The plaintiff's claim against the second defendant (the Minister) soughtdeclarations challenging any proposals to enact such amendments.[5] The plaintiff also sought against both defendants' substantive declarations thatthe "equal sharing" resolution, if enacted into amendments to the Act, would becontrary to the principles of the Treaty of Waitangi (te Tiriti), the 1992 FisheriesSettlement, the Treaty of Waitangi (Fisheries Claims) Settlement Act 1992, thepurpose and scheme of the Act and the plaintiff's legitimate expectation that anysurplus funds would be distributed on a population basis.[6] Before the proceeding was filed on 26 October 2022, the Minister advised theplaintiff that he did not intend to implement the equal distribution proposal. By letterof 16 November 2022, to the plaintiff, the Minister formally confirmed his positionthat, following consultation, he did not intend to proceed with the "equal sharing"proposal and would recommend to Cabinet (likely in mid-December) that theamending legislation provide that surplus funds be distributed on a population basis.[7] The Māori Fisheries Amendment Bill 2022 (Amendment Bill) was introducedin the House of Representatives (House) on 20 December 2022 and, as signalled bythe Minister, provides for surplus funds to be distributed on a population basis.[8] A fixture was set down for 6–8 March 2023, and a timetable for steps up to thehearing was made by consent on 24 November 2023. The timetable required thedefendants to file evidence on 3 February 2023.[9] On 22 December 2022 counsel for the Minister wrote to counsel for theplaintiff inviting it to withdraw its claim and noting that if it did so by 18 January 2023the Crown would not seek costs, but that in the event the claim against the Crown wasnot withdrawn and was ultimately dismissed, it would seek increased costs.[10] Also on 22 December 2022, counsel for the plaintiff proposed that the partiesjointly agree to stay the proceeding, revoke the timetable, vacate the fixture andreserve leave to the plaintiff to bring on the proceedings, including its application forurgency, on 48 hours' notice. Both defendants declined to agree to the directionssought.[11] The plaintiff then sought directions from the Court on 23 December 2022. TheDuty Judge, Isac J, recorded that the parties' disagreement was "limited to theappropriate procedural pathway and the conditions on which to call a halt on theproceedings."1 The Judge declined to make the directions sought by the plaintiff atthat time and deferred the matter to the next call, then scheduled for 27 January 2023.In fact, no call occurred on 27 January 2023.[12] The matter came before me as Duty Judge on 27 January 2023, by which timeboth the first and second defendants had filed memoranda opposing the plaintiff'sproposal to vacate the fixture and stay the proceeding. Both defendants submitted thatthe proper course was for the proceeding to be withdrawn. Accordingly, they soughtan urgent direction that the plaintiff promptly decide and advise the parties and theCourt whether it would continue the proceeding in accordance with the then-currenttimetable or discontinue its claim.[13] On the basis of the comprehensive written submissions then before me (andgiven the urgency the defendants said attached to their application), I determined the1 Te Rūnanga o Ngāi Tahu v Te Ohu Kaimoana Trustee Ltd HC Wellington CIV-2022-485-650,23 December 2022 (Minute of Isac J).defendants' application for an urgent direction, and the plaintiff's application for a stayorder, on the papers. I concluded that it was appropriate to stay the proceedings.2[14] As I noted in the minute issued on 27 January 2023,3 it was "tolerably plain",from the plaintiff's advice to the parties in the Court on 23 December 2022 that it nolonger sought an expedited fixture and that the timetable could be revoked, togetherwith the terms of Isac J's minute of that date, that the hearing on 6 March 2023 wouldnot be proceeding. I further noted that the application by the first defendant for anurgent order which I was then considering, was unnecessary.[15] Subsequently Te Ohu Kaimoana filed an interlocutory application, on1 February 2023, to rescind the stay orders of 27 January 2023. The application wasmade on the basis that the first defendant had anticipated an oral hearing would beheld before orders were made.[16] As I noted in a minute of 7 February 2023,4 I had not been aware at the time ofdealing with the application on the papers that the first defendant wished to be heardorally.[17] Accordingly an oral hearing was convened on 21 February 2023. The stayorders were rescinded.5[18] On 1 March 2023, the plaintiff filed a notice discontinuing the proceedingagainst both defendants.Costs[19] The plaintiff and second defendant have been unable to agree costs. Costs arenot sought by the first defendant.2 Te Rūnanga o Ngāi Tahu v Te Ohu Kai Moana Trustee Ltd HC Wellington CIV-2022-485-650,27 January 2023 (Minute of Gwyn J) at [31] and [33]–[34].3 At [32].4 Te Rūnanga o Ngāi Tahu v Te Ohu Kai Moana Trustee Ltd HC Wellington CIV-2022-485-650,7 February 2023 (Minute of Gwyn J) at [5].5 Te Rūnanga o Ngāi Tahu v Te Ohu Kai Moana Trustee Ltd [2023] NZHC 302.[20] The second defendant seeks costs totalling $18,355.30, which includes costsup to and including the hearing on 21 February 2023. Both the plaintiff and the seconddefendant agree that r 15.23 of the High Court Rules 2016 (Rules) applies. Rule 15.23provides:Unless the defendant otherwise agrees or the court otherwise orders, a plaintiffwho discontinues a proceeding against a defendant must pay costs to thedefendant of and incidental to the proceeding up to and including thediscontinuance.Second defendant's submissions[21] The second defendant says there is no reason in this case to depart from thedefault position, that the discontinuing party will pay costs. The onus is on the plaintiffto rebut that presumption.6[22] It relies on Earthquake Commission v Whiting, where the Court of Appealobserved that in deciding whether it is just and equitable to exercise the Court's overalldiscretion7 in r 15.23, the Court may consider the parties' conduct and thereasonableness of the parties' respective stances, including the reasons why theplaintiff brought and continued the proceeding and the defendant opposed it.8[23] The second defendant says that, in light of the assurances the plaintiff receivedfrom the Minister before the proceeding was commenced, there was no need for theplaintiff to commence the proceedings.[24] In any event the claim was "misguided" in that it was an attempt to use theCourt's procedures to influence the legislative process, in breach of establishedprinciples regarding parliamentary privilege.[25] In Earthquake Commission v Whiting, the Court set out several examples whenthe courts have been persuaded to exercise the discretion:9(a) the defendant's acts or omissions have caused the litigation and thenrendered it unnecessary; and6 Earthquake Commission v Whiting [2015] NZCA 144 at [68].7 High Court Rules 2016, r 14.1.8 Earthquake Commission v Whiting, above n 6, at [68].9 At [69] (footnotes omitted).(b) an intervening governmental or third party decision has rendered theproceeding redundant.[26] Counsel for the second defendant says this is not such a case where the Courtshould exercise its discretion. It says the plaintiff cannot rely on the introduction ofthe Amendment Bill as a supervening factor which obviated the necessity for theproceeding and thus vindicated the plaintiff's position. It says that the AmendmentBill reflected assurances given by the Minister to the plaintiff before the proceedingswere commenced and the plaintiff cannot show it had reasonable grounds for believingit would have succeeded had the circumstances not changed.10[27] The second defendant says it continued to be necessary for the Minister toaddress issues arising in the proceeding after 23 December 2022, as to theappropriateness of the stay. Those costs would not have been incurred had the plaintiffdiscontinued the proceedings after the Amendment Bill had been introduced. For thatreason, it says it is entitled to claim costs after 23 December 2022.Plaintiff's submissions[28] The plaintiff says it should not be liable to costs to the second defendant.[29] The plaintiff submits it brought the proceedings on 1 November 2022 becauseof its concern that the method for distributing surplus funds by Te Ohu Kaimoanamight be changed from a population basis to a one-iwi-one-share basis. It wasconcerned that such a change would be inconsistent with the Fisheries Settlement, theprinciples of the Treaty and the rights of Ngāi Tahu. It had fiduciary obligations toprotect settlements for future generations of Ngāi Tahu.[30] The plaintiff met with the Minister on 26 October 2022 to discuss its concerns.Although the Minister said he did not support the one-iwi-one-share distributionmodel, he was not willing to provide a definitive or sufficient written assurance to thateffect.[31] The plaintiff filed the proceeding on 1 November 2022.10 Hitchcock v Murphy [2022] NZHC 3542 at [23].[32] The Minister's letter to the plaintiff of 16 November 2022 did not suggest thatthe Minister might change his position in the future. However, the plaintiff was awareof letters of the same date to Te Ohu Kaimoana and all mandated iwi organisations.Those letters recorded that the Minister did not have a firm position on surplus fundsdistribution and said:(a) The Minister did not "consider it appropriate to support this amendmentat this time".(b) Encouraged Te Ohu Kaimoana to lead further dialogue on the matterand noted he would be "willing to consider this in the future" if therewas widespread support among iwi for a change to the distributionmodel.[33] The plaintiff submits that the presumption in r 15.23 of the Rules may bedisplaced if it is just and equitable to do so. In particular, it may be displaced if"[s]ome event beyond the direct control of the parties obviates the continued necessityfor proceedings, again vindicating the issue of the proceeding" or "some other specialreason exists why it is just and equitable that the plaintiff not pay costs to thedefendant."11[34] The plaintiff says there are a number of factors in this case that make it justand equitable for costs to lie where they fall. First, the proceedings were commencedin good faith in attempt to protect the Fisheries Settlement. The plaintiff has afiduciary obligation to protect Ngāi Tahu settlements for future generations, whichincludes the Fisheries Settlement. In addition, there was a genuine public interest inbringing the proceeding given that it concerned other beneficiaries, not just Ngāi Tahu.This was evidenced by support for the plaintiff's position from Te Whakakitenga OWaikato Incorporated.[35] Given the plaintiff's perception that the Minister had not committed to theexisting distribution methodology, it was appropriate to proceed to file the claim.11 Hitchcock v Murphy, above n 10, at [21], quoting Moodie v Strachan [2015] NZHC 327, (2015)22 PRNZ 419 at [15].[36] The plaintiff also says that it was forced to spend settlement pūtea to defend aTreaty Settlement. The Minister did not take a firm and consistent position until afterthe proceedings were filed; that demonstrates that initiating the proceedings wasnecessary to defend a Treaty settlement.[37] Given the plaintiff acted promptly, reasonably and in good faith, it would notbe equitable for it to have to spend further settlement pūtea to cover the Crown's costs.[38] In addition, the plaintiff says it was not unreasonable for it to request the stay,rather than hastily discontinue the proceedings the day before the Christmas shutdownperiod. It had first attempted to reach agreement with the defendants on how to haltthe proceedings, before seeking the stay. I agree that my initial decision to order thestay demonstrated that this was not a clear-cut decision.[39] Finally, the plaintiff says the correct position regarding parliamentary privilegeis not relevant to the issue of costs and no weight should be placed on it.12[40] In the alternative, the plaintiff submits that it should be exempt from a costsaward for any costs incurred by the second defendant after 23 December 2022.13 Itwas clear from that date that the plaintiff intended to halt the proceedings. The plaintiffsays it acted promptly and reasonably in alerting the defendants that it no longerrequired an urgent hearing and in doing so avoided the costs threat in the Crown'sletter. It gave notice to the other parties on 22/23 December 2022, well in advance ofthe Crown's 18 January 2023 deadline, in order to reduce the costs that would beincurred by the defendants — in particular so that the defendants did not need toprepare evidence to meet the 3 February 2023 deadline or take further steps in theproceeding.[41] Finally, it says it would be unjust for the plaintiff to be liable for Crown costsrelating to the application to rescind the stay order which was prompted by eventsoutside the direct control of the parties — that is, that the Court had not appreciatedthat the parties expected the application to be heard by way of oral submissions.12 At [22].13 At [21].Discussion[42] Is the presumption that a discontinuing plaintiff should be liable for costsdisplaced in this case? Examples of when the presumption may be displaced by reasonof subsequent events obviating the need for the proceeding are summarised in Moodiev Strachan:14(a) Some action on the part of the defendant obviates the necessity forproceeding, thus vindicating the plaintiff's action.(b) Some event beyond the direct control of the parties obviates thecontinued necessity for proceedings, again obviating the issue of theproceeding.(c) Some other special reason exists why it is just and equitable that theplaintiff not pay costs to the defendant.[43] In Moodie, the High Court noted Court of Appeal authority that the Court willnot consider the merits of the parties' respective cases unless so obvious on summaryinspection that they should influence the costs outcomes.15 The High Court framedthe questions relevant to the discretion as including:16 was it reasonable to bring theproceeding? Was it reasonable for the defendant to defend it? Why was the proceedingdiscontinued? Are the merits so obvious that they should influence the costs outcome?Does the outcome represent vindication of the plaintiff's commencement ofproceeding? Has the plaintiff displaced the r 15.23 presumption?[44] I adopt that framework to analyse the present case.Was it reasonable for the plaintiff to bring the proceeding?[45] The plaintiff commenced the proceeding on 1 November 2022. It hadpreviously met with the Minister, on 26 October 2022, to discuss its concerns. The14 Moodie v Strachan, above n 11, at [15].15 Kroma Colour Prints Ltd v Tridonicatco NZ Ltd [2008] NZCA 150, (2008) 18 PRNZ 973, citedin Moodie v Strachan, above n 11, at [14].16 At [17].Minister told the plaintiff at the meeting that he did not support the one-iwi-one-sharedistribution model. However, I accept the plaintiff's submission that, as at that date,the Minister was not able to provide a definitive or written assurance to that effect.The plaintiff therefore concluded that it needed to file the proceeding to protect itsposition.[46] In light of the 26 October meeting and the 16 November letters to Te OhuKaimoana and mandated iwi organisations being couched in slightly different termsto the letter of the same date to Ngāi Tahu, the plaintiff might reasonably have beenleft with a degree of uncertainty as to the future position regarding the distributionmodel. I accept that, as at 1 November 2022, there was a sufficient degree ofuncertainty to justify the filing of the proceeding. I also accept the plaintiff filed ingood faith.[47] I also accept that it was not until the Cabinet Legislation Committee's paper of20 December 2022 and the introduction of the Amendment Bill into Parliament on21 December 2022 that the plaintiff had sufficient reassurance that the proposal todistribute surplus funds would not be changed from a population basis to a one-iwi-one-share basis.Was it reasonable for the defendant to defend the proceeding?[48] I also accept that it was reasonable for the Minister to defend the proceeding.As the decision-maker, there was no doubt greater certainty in his mind as to whatsteps were likely to ensue following his meeting with the plaintiff.Why was the proceeding discontinued?[49] The Amendment Bill was introduced into the House on 21 December 2022.The Amendment Bill contained a provision for distribution of surplus funds on apopulation basis. The plaintiff says this gave it sufficient assurance to halt theproceedings.[50] I accept that the introduction of the Amendment Bill, maintaining the statusquo, was a supervening factor that obviated the need for the plaintiff to continue withthe proceeding.Are the merits so obvious they should influence the costs outcome?[51] The second defendant says the plaintiff's claim was an attempt to use theCourt's procedures to influence the legislative process, in breach of establishedprinciples. While that argument may have merit in the post-introduction context, I donot think the argument holds as at the point the plaintiff filed its proceeding before theintroduction of the Amendment Bill. The merits at that point are not so obvious thatthey should influence costs.Does the outcome represent vindication of the plaintiff's commencement ofproceeding?[52] The plaintiff had sought to maintain the status quo for the distribution byTe Ohu Kaimoana of surplus funds. The Amendment Bill had this effect. In thatsense, it obviated the need for the plaintiff's proceeding, although in the particularcircumstances it cannot be characterised as a "vindication" of the plaintiff's position.Has the plaintiff displaced the r 15.23 presumption?[53] If the plaintiff had immediately discontinued the proceeding following theintroduction of the Amendment Bill, I would have found it had displaced the r 15.23presumption in respect of all costs. However, the complicating factor here is that theplaintiff did not immediately move to discontinue the proceedings.[54] The plaintiff did advise the defendants that it was bringing the proceeding toa halt and it was, or should have been, clear to the defendants as at 22 December 2022when the plaintiff sought their agreement to halt the proceeding by way of a stay,together with its memorandum filed on 23 December 2022, that they did not need toproceed with any further steps in preparation for a hearing commencing on 6 March2023. However, the defendants were entitled to be heard on the plaintiff's proposal tostay, rather than discontinue, the proceeding (although I find there was no need forurgency in the first defendant's application for that question to be heard, given theplaintiff's assurance and Isac J's minute of 23 December 2022).[55] Having regard to those factors, I conclude that the second defendant is entitledto costs, on a 2B basis, against the plaintiff for the period from 22 December 2022until the plaintiff discontinued the proceeding on 1 March 2023. I would havedisallowed any claim by the second defendant for preparation of evidence on thatbasis, but the second defendant does not advance that claim.Outcome[56] The plaintiff is to pay the second defendant's costs in the sum of $6,453.00.Delay[57] Finally, I apologise for the delay in issuing this judgment. Counsel'smemoranda were not referred to me until 1 September 2023.Gwyn JSolicitorsChapman Tripp, AucklandCrown Law Office, Wellington