UNIVERSAL EDUCATION GROUP LIMITED T/A NEW ZEALAND NATIONAL COLLEGE 2008 v NEW ZEALAND QUALIFICATIONS AUTHORITY [2018] NZHC 1128

UNIVERSAL EDUCATION GROUP LIMITED T/A NEW ZEALAND NATIONAL COLLEGE 2008 vNEW ZEALAND QUALIFICATIONS AUTHORITY [2018] NZHC 1128 [18 May 2018]IN THE HIGH COURT OF NEW ZEALANDWELLINGTON REGISTRYI TE KŌTI MATUA O AOTEAROATE WHANGANUI-Ā-TARA ROHECIV-2017-485-835[2018] NZHC 1128UNDER Judicial Review Procedure Act 2016BETWEEN UNIVERSAL EDUCATION GROUPLIMITED T/A NEW ZEALANDNATIONAL COLLEGE 2008ApplicantAND NEW ZEALAND QUALIFICATIONSAUTHORITYRespondentOn the papers:Counsel: N J Russell for ApplicantR J Scott for RespondentJudgment: 18 May 2018JUDGMENT OF CHURCHMAN JIntroduction[1] In a judgment dated 19 December 2017, the Court declined an application byUniversal Education Group Ltd trading as New Zealand National College 2008 (UEG)for judicial review.1 The Court reserved the issue of costs, inviting the parties to settlethe issue between themselves but, in the absence of agreement, provided for theexchange of memoranda.[2] Counsel have been unable to agree and memoranda have been exchanged.While New Zealand Qualifications Authority (NZQA) submitted that the proceedings1 Universal Education Group Ltd v New Zealand Qualifications Authority [2017] NZHC 3245.should be categorised as standard 2B proceedings and sought costs of $35,830.90against UEG, UEG submitted that:(i) the proceeding concerned a matter of public interest and costs shouldlie where they fall; or(ii) in the alternative, if the Court is minded to award costs, NZQA shouldbe awarded costs generally on a 2B basis but on a band A basis for thepreparation of affidavits and with no allowance made for discovery orthe appearance of second counsel.Public interest[3] Under the High Court Rules, the Court may refuse to make an order for costsor may reduce the costs otherwise payable if the proceeding concerned a matter ofpublic interest and the party opposing costs acted reasonably in the conduct of theproceeding.2[4] UEG relied on the principle as stated in Taylor v District Court at North Shore:3The scope of the "public interest" exception, now contained in rule 14.7(e),has been considered in a number of cases [T]he proceeding must concern amatter of genuine public interest, have merit and be of general importancebeyond the interests of the particular unsuccessful litigant. To obtain thebenefit of the exception in rule 14.7(c), the unsuccessful litigant must alsohave acted reasonably in the conduct of the proceeding.[5] Counsel for UEG submitted that these proceedings raised broader issues inrelation to the robustness, objectivity, and transparency of NZQA's decision-makingprocesses for the registration of private training establishments. These are matters ofgenuine public concern and importance, it was submitted, particularly in light ofNZQA's statutory function to oversee the setting of standards for qualifications intertiary education.[6] I do not accept the submission these were public interest proceedings. Whilethe processes for the registration of private training establishments might arguably beseen as a matter of public interest, this case was concerned rather with narrower privateinterests regarding NZQA's decision in relation to, and UEG's interests in the2 High Court Rules, r 14.7(e).3 Taylor v District Court at North Shore (No 2) HC Auckland CIV-2009-404-2350, 13 October 2010at [9].cancellation of, UEG's registration. The proceedings were pursued by UEG toadvance its interests and, having chosen to bring the matter to Court for its own benefitrather than any wider benefit, UEG should meet the cost consequences.CostsCategorisation[7] These proceedings were not categorised at an interlocutory stage. NZQAsubmitted that category 2 would be appropriate, arguing that the matter was of averagecomplexity requiring counsel of skill and experience considered average in the HighCourt. NZQA also submitted that the allocated time for steps in the proceeding shouldbe category B.[8] In the event that these proceedings were found not to fall into the public interestcategory and costs therefore awarded to the successful party, UEG submitted that costsshould be awarded on a 2A/B basis.[9] Apart from those steps which UEG has suggested should be awarded on a 2Abasis, which are discussed below, all other steps are to be allocated category B.Discovery[10] NZQA sought an allowance for discovery which, on a band 2B basis, wasallocated 2.5 days. UEG submitted that this was an unreasonable amount of time forthis step given that no formal discovery was undertaken in this proceeding. There wasinformal discovery but not of such a nature to merit an award of costs. Of the 18documents discovered by NZQA, none were considered by the Court to be relevant tothe proceeding.4 UEG therefore submitted that, in the circumstances, it wasappropriate that no allowance be made for discovery.[11] NZQA, however, argued that the fact that informal discovery was undertakenshould not be a basis on which costs are precluded as the step was still required. The4 Universal Education Group Ltd v New Zealand Qualifications Authority [2017] NZHC 2988 at[11].parties had agreed to informal discovery given the short timeframe. Nor should thereduced number of discovered documents, it was argued, preclude the award for thisstep as NZQA's solicitors undertook a relatively substantial amount of work over aperiod of two weeks in respect of NZQA's discovery obligations. This work includedNZQA providing its solicitors with all documents relating to UEG's discovery requestand NZQA's solicitors reviewing those documents, providing advice to NZQA andthen responding to UEG's objections relating to some of the material discovered. Thetime spent and costs incurred in complying with its discovery obligations exceededthe claimed scale costs.[12] While I accept UEG's submission that an allowance of 2.5 days in thecircumstances would be excessive, it would also be inappropriate to make noallowance whatsoever for discovery. It is my view that a reasonable amount of timefor this step would be one day. Therefore, NZQA's costs for discovery are reducedfrom $5,575.00 to $2,230.00, a difference of $3,345.00.Preparation of affidavits[13] NZQA also sought an allowance for the preparation of affidavits which, on aband B basis, was allocated 2.5 days. UEG submitted that as NZQA only filed threeaffidavits, two of which were six pages and one of which was only two pages, 2.5 dayswas an unreasonable amount of time for this step and an allowance on a band A basisof 1.5 days would more accurately reflect a reasonable time allocation for this step.[14] NZQA, however, contends that the length and number of affidavits it filedshould not be determinative of the time allowed for the preparation of the affidavits insupport of its opposition. In preparing those affidavits, NZQA had been required toreview, consider and respond to the two affidavits sworn in support of UEG's claim,both of which were voluminous.[15] I accept UEG's submissions on this point. While UEG's affidavits may haveappeared at first sight to be lengthy, given that one was 283 pages and the other 459pages, they consisted mainly of exhibits, the consideration of which would not haverequired a great deal of time. I therefore find that an allowance of 1.5 days isreasonable and NZQA's costs for the preparation of affidavits are, accordingly,reduced from $5,575.00 to $3,345.00, a difference of $2,230.00.Certification for second counsel[16] NZQA submitted that, as the proceeding was factually dense, with complexlegal issues, and moved quickly, second counsel should be certified. NZQA also notedthat UEG had three counsel present at the proceedings.[17] UEG, however, submitted that this was a proceeding of average complexity,with all evidence given by affidavit, and with each side's legal argument known inadvance following the interim relief application. Furthermore, UEG submitted,NZQA had not been able to identify any extenuating circumstances which mightotherwise warrant or justify the appearance of second counsel. Therefore, UEGsubmitted that it was not appropriate for second counsel to be certified and that thisshould be excluded from any award of costs made to NZQA.[18] In the case of Nomoi Holdings Ltd v Elders Pastoral Holdings Ltd, Chambers Jfound that the approach to be taken in determining whether or not second counselshould be certified is "always objective and is focused on the nature of theproceeding".5 In that case, where all evidence-in-chief had been given by way ofeither affidavit or written statement exchanged beforehand, with each side's legalargument known in advance by the other side, second counsel was not certified.[19] This case is analogous to the present case which had the same features. Thefact that UEG had three counsel is of little relevance. If they had been successful, Iwould not have certified for three counsel. The reality is that this was a straightforward judicial review case. I therefore decline to award second counsel costs toNZQA.Defendant's costs[20] The defendant's costs are as follows:5 Nomoi Holdings Ltd v Elders Pastoral Holdings Ltd (2001) 15 PRNZ 155 (HC) at [21].Scale costs: Schedule 2B - daily rate is $2,230Step Description Time Allocation Amount2 Commencement of defence by defendant 2 days $4,460.0023 Filing opposition to interlocutory application (19.10.17) 0.6 day $1,338.0026 Appearance at hearing for principal counsel (20.10.17) 0.5 day $1,115.0011 Filing memorandum (2.11.17) (half rated as jointmemorandum)0.2 day $446.0011 Filing memorandum (22.11.17) (half rated as jointmemorandum)0.2 day $446.009 Pleading in response to amended pleading (29.11.17) 0.6 day $1338.0020 Discovery 1 day $2,230.0030 Defendant's preparation of affidavits 1.5 days $3,345.0033 Preparation for hearing 3 days $6,690.0013 Appearance at conference (1.12.17) 0.2 day(as per NZQA'sschedule)$446.0011 Filing memorandum (1.12.17) 0.4 day $892.0026 Appearance at hearing for principal counsel 1.5 days $3,345.00Total time 11.7 days $26,091.00DisbursementsPhotocopying $1,159.30Taxis $5,750Filing fees $555.60Total disbursements $1,934.90Total costs and disbursements $28,025.90Conclusion[21] Accordingly, judgement is given in favour of the defendant in the sum of$28,025.90.Churchman JSolicitors:Chen Palmer Partners, Wellington for ApplicantMcElroys, Litigation Lawyers, Auckland for Respondent