Ocean Fisheries Limited v Maritime New Zealand [2022] NZHC 3202 (1 December 2022)

Last Updated: 15 December 2022

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CRI-2020-409-000161 [2022] NZHC 3202

BETWEEN	OCEAN FISHERIES LIMITED Appellant
AND	MARITIME NEW ZEALAND Respondent

Hearing:	On the papers
Counsel:	A F Pilditch KC and A L Fraser for the Appellant D R La Hood and M A Heslip for the Respondent
Judgment:	1 December 2022

JUDGMENT OF NATION J AS TO COSTS

• [1] On 18 October 2015, a fishing trawler belonging to the appellant (Ocean Fisheries) sank. Three crew members drowned. Ocean Fisheries pleaded guilty to a charge under the Health and Safety in Employment Act 1992 for failing to take all reasonable steps to ensure the safety of the three men on board the fishing vessel.

• [2] Ocean Fisheries was ordered to pay a total of $230,325.25 in reparation for economic loss and $505,000 in reparation for emotional harm. The company was fined $46,000 and order to pay court costs of $130.

• [3] Ocean Fisheries appealed the award for emotional harm reparation.

OCEAN FISHERIES LTD v MARITIME NEW ZEALAND [2022] NZHC 3202 [1 December 2022]

• [4] The appeal was argued in the High Court on 25 February 2021. In a judgment of 13 August 2021, I dismissed the appeal.¹ In doing so, I held the respondent (Maritime NZ) was entitled to costs on the appeal.² I made directions for the filing of memoranda if agreement could not be reached.

• [5] Ocean Fisheries sought leave to appeal from the Court of Appeal. The parties agreed to defer the matter of costs given they were doing so.

• [6] The Court of Appeal declined leave to appeal in a judgment of 5 May 2022.³

• [7] Subsequent to that, the parties filed memoranda confirming they had been unable to agree on costs and sought a decision from the Court on the issue.

• [8] The scale costs payable to a party under the Costs in Criminal Cases Regulations 1987 (the criminal costs scale) would be $130.⁴ Maritime NZ is seeking costs, equivalent to the scale 2B costs in civil proceedings in the High Court Rules 2016, of $8,365 for fees and $716.34 for expenses, a total of $9,081.34.

The legislation

• [9] Ocean Fisheries was prosecuted for an offence under the Health and Safety in Employment Act but in proceedings pursuant to the Criminal Procedure Act 2011. The law on criminal costs in proceedings under the Criminal Procedure Act is governed by the Costs in Criminal Cases Act 1967 (the Act).

• [10] Section 8 of the Act relevantly provides:

8 Costs on appeals

(1) Where any appeal is made pursuant to any provision of Part 6 of the Criminal Procedure Act 2011 the court which determines the appeal may, subject to any regulations made under this Act, make such order as to costs as it thinks fit.

...

¹ Ocean Fisheries Ltd v Maritime New Zealand [2021] NZHC 2083, [2021] 3 NZLR 443.

² At [173].

³ Ocean Fisheries Ltd v Maritime New Zealand [2022] NZCA 164.

⁴ Costs in Criminal Cases Regulations 1987, sch 1 pt 1 subpt C.

(5) If the court which determines an appeal is of opinion that the appeal includes any frivolous or vexatious matter, it may, if it thinks fit, irrespective of the result of the appeal, order that the whole or any part of the costs of any party to the proceedings in disputing the frivolous or vexatious matter shall be paid by the party who raised the frivolous or vexatious matter.

(6) If the court which determines an appeal is of opinion that the appeal involves a difficult or important point of law it may order that the costs of any party to the proceedings shall be paid by any other party to the proceedings irrespective of the result of the appeal.

• [11] The criminal costs scale sets the maximum amount recoverable for each half day in court for a sentence appeal as $130.

• [12] The section on the regulations made under the Act refers to the court’s ability to impose costs in excess of the criminal costs scale:

13 Regulations

...

(3) Where any maximum scale of costs is prescribed by regulation, the court may nevertheless make an order for the payment of costs in excess of that scale if it is satisfied that, having regard to the special difficulty, complexity, or importance of the case, the payment of greater costs is desirable.

...

Submissions

• [13] Maritime NZ claimed costs equivalent to those on a 2B scale under the High Court Rules.

• [14] Maritime NZ claimed costs on a 2B basis as “fair, just and reasonable” and justified under s 13(3) of the Act because:

(a) the time allocations in a civil appeal fairly reflect the amount of work and complexity of the issues on appeal;

(b) the inadequate nature of the award under the criminal costs scale supports an award, and it is not required that scale costs be imposed;

(c) departure from the regulated costs amount has been done before for cases under the Health and Safety in Employment Act;

(d) this was not a typical criminal appeal where a criminal conviction or the liberty of the appellant is at stake and therefore courts are reluctant to award costs for an appellant exhausting their legal rights –– as such, it is wrong for the Crown entity (and the taxpayer) to pay the costs of an appellant seeking a private benefit; and

(e) section 152 of the new Health and Safety at Work Act 2015 allows for a regulator to be awarded costs without reference to the criminal costs scale on a routine basis.

• [15] Ocean Fisheries submits criminal scale costs should be awarded and there is no basis to depart from them. It submits Maritime NZ is asking the Court to disregard the statutory criteria for allowing costs awards in excess of the maximum. It says the awards under the criminal costs scale are mandatory, and the fact they are inadequate is a matter for legislation but cannot be a justification for departing from them.

• [16] It submits there is no basis in the statute or the case law to suggest prosecutions under health and safety legislation should be treated differently as to costs. It also submits it is inaccurate (and irrelevant) to describe this litigation as being private- interest litigation. It also suggested the litigation was not funded by taxpayers, but primarily through levies on commercial maritime operators. In any event, costs under the Act are paid to a consolidated fund, not Maritime New Zealand.⁵

• [17] Ocean Fisheries submitted courts should be and are conservative in ordering costs against a defendant in a criminal proceeding.⁶ It submitted, to award costs where defendants have responsibly exercised a statutory right of appeal, criminal cases would improperly inhibit that right to do so.

⁵ Costs in Criminal Cases Act 1967, s 7(1)(a).

6. Referring to the judgment of the High Court in Green v Watercare Services Ltd [2012] NZHC 2889.

Analysis

Reflection of work done

• [18] It was accepted in Wallace Corporation Ltd v Waikato Regional Council that, where costs in excess of the criminal scale are awarded, the civil scale can provide some indication as to what a reasonable costs award is.⁷ Other cases have also looked to what costs would have been awarded in civil cases as a comparison.⁸

• [19] Nevertheless, there is no authority for the proposition that, because the civil scale would more appropriately reflect the work done, it could, of itself, be reason for awarding costs in excess of the criminal scale.

Inadequacy of criminal costs

• [20] It has been judicially noted that the maximum awards allowable under the criminal costs scale are low and do not reflect the reality of costs incurred by the parties.⁹

• [21] The Court of Appeal in Solicitor-General v Moore said the inadequate nature of the scale is not a relevant consideration in determining whether to award costs in excess of scale because it does not relate to the test of “special difficulty, complexity, or importance” of the case in s 13(3) of the Act.¹⁰ Tipping J in T v Collector of Customs said “[t]he fact that the scale is miserable, indeed insultingly so, naturally leads a Judge to strain to find sufficient cause to exceed the scale” and “[a]ny such tendency must be resisted, albeit with little enthusiasm”.¹¹ Moore J in Jia v Auckland Council said “the modest rates under the Regulations align with the Courts’ appropriately conservative approach to these cases”.¹²

7. Wallace Corporation Ltd v Waikato Regional Council [2012] NZHC 1420 at [42], citing Tairua Marine Ltd v Waikato Regional Council [2006] NZHC 743; [2006] NZRMA 485 (HC).
8. See Carruthers v Otago Regional Council [2014] NZHC 2212, (2013) 17 ELRNZ 156 at [15]; and Registrar of Companies v Feeney HC Auckland CRI-2011-404-14, 21 June 2011 at [32].
9. See Law Commission Costs in Criminal Cases (NZLC R60, 2000) at [90]; Pawson v Heavylift Cargo Airlines Pty Ltd HC Auckland CRI-2005-404-278, 1 March 2006 at [12]; R v Bublitz [2018] NZHC 373 at [59]; R v Lyttle [2022] NZCA 52 at [19]; Carruthers v Otago Regional Council, above n 8, at [12]; and Page v Page [2008] NZCA 80 at [25].

¹⁰ Solicitor-General v Moore [1999] NZCA 269; [2000] 1 NZLR 533 (CA) at [29].

¹¹ T v Collector of Customs HC Christchurch AP167/94, 28 February 1995 at 4.

¹² Jia v Auckland Council [2020] NZHC 570 at [31].

• [22] Maritime NZ submitted the Court of Appeal’s judgment in Bublitz v R supported the contention that, while criminal scale costs are relevant, they are not a mandatory amount that must be awarded.¹³ I do not accept that submission. In that case, the Court of Appeal found the High Court Judge did not err in setting a costs award of $75,000 under the Act.¹⁴ The High Court Judge had already determined that the threshold, in s 13(3) of the Act for an award in excess of the scale, had been met.¹⁵ Bublitz v R is not authority for the proposition that a Judge can set whatever costs they think just, even if the threshold for an award in excess of scale under the Act has not been met.

Nature of health and safety proceedings

• [23] Maritime NZ argues, as justification for an award in excess of criminal scale costs, health and safety prosecutions are different from general criminal proceedings. In essence, it argues this difference means the court should more readily award costs and costs in excess of the criminal scale.

• [24] Maritime NZ cites cases where costs had been awarded in excess of the criminal scale in prosecutions under the Health and Safety in Employment Act.¹⁶ The fact that costs in excess of scale were awarded in those cases does not, of itself, indicate they should be awarded here. Costs in excess of scale can be granted only where the requirements of s 13(3) are met; the fact those requirements were met in other cases does not mean they must have been met here.

• [25] Maritime NZ refers to s 152 of the Health and Safety at Work Act, the successor to the Health and Safety in Employment Act. This section enables the court to order the offender to pay the regulator a sum that it thinks just and reasonable towards the costs of the prosecution. This section has been applied by the courts to mean that costs are more readily available than under the Costs in Criminal Cases Act.¹⁷

¹³ Bublitz v R [2019] NZCA 379.

¹⁴ At [56].

¹⁵ R v Bublitz, above n 9, at [59].

¹⁶ Department of Labour v The New Zealand King Salmon Company Ltd DC Blenheim CRI-2008- 006-2653, 15 July 2009; and Maritime New Zealand v Rereti DC Chatham Islands CRI-2010-008- 6, 11 May 2011.

¹⁷ Stumpmaster v Worksafe New Zealand [2018] NZHC 2020, [2018] 3 NZLR 881 at [25].

• [26] Maritime NZ cited this section in support of its contention that health and safety prosecutions should be treated differently from general criminal prosecutions. The courts dealing with prosecutions under that legislation however saw s 152 as changing the law, not reflecting the prior position under the Costs in Criminal Cases Act and the Health and Safety in Employment Act, the latter of which did not have a provision equivalent to s 152 of the Health and Safety at Work Act.¹⁸ This case was not brought under the Health and Safety at Work Act, and therefore it cannot directly apply to setting costs.

• [27] Maritime NZ did not cite any cases which demonstrate a different approach would be taken as to costs in health and safety cases. The cases all indicate the threshold in s 13(3) of the Act must be met before there can be a departure from the criminal scale.

• [28] Maritime NZ’s next argument was that this was different to a typical criminal appeal because a criminal conviction was not in issue and neither was the liberty of the appellant. It therefore submitted the court does not need to be concerned about Ocean Fisheries’ entitlement to exercise its legal rights as a reason to be reluctant to order costs. Maritime NZ said, instead, Ocean Fisheries was a body corporate with insurers who wished to minimise their liability to pay compensation. Maritime NZ submitted the appeal was therefore for private benefit.

• [29] Maritime NZ did not provide any case law to support this argument. In Ministry of Business, Innovation and Employment v CentrePort Ltd, where there was reference to rights in the context of regulatory offences, the court pointed towards rights being relevant in the same way rights are relevant in general criminal proceedings.¹⁹ The Court had to be careful not to undermine a right to a fair trial by awarding costs against a defendant which would deter them from defending a charge.²⁰ I also note s 29 of the New Zealand Bill of Rights Act 1990 provides that the rights contained in that Act apply to legal persons as well as natural persons as far as they can.

¹⁸ At [25].

¹⁹ Ministry of Business, Innovation and Employment v CentrePort Ltd [2015] NZDC 10429.

²⁰ At [34].

• [30] I was neither referred to or found authority for the proposition that costs should be more readily awarded against a defendant because they were insured. The District Court Judge in Department of Labour v P F Olsen & Co Ltd held that insurance is “not a free ride” and cannot be used as a reason to refuse a defendant costs.²¹

The basis on which costs in excess of scale can be awarded

• [31] The decision to award costs is discretionary as the Act gives Judges the power, but does not mandate them, to award costs. However, courts have also noted that, while the costs jurisdiction is discretionary, it is not unprincipled. The discretion must be exercised generally in accordance with the principles set out in the costs rules.²² It would not be consistent with those rules to award costs on a novel basis that is not contained within the Act.

• [32] An award of costs in excess of the criminal scale can thus not be justified on the ground that such a costs award would be “fair, just and reasonable” and awards under the criminal costs scale would be derisory. An award in excess of the scale can however be justified if the party seeking costs established there was a “special difficulty, complexity, or importance of the case”.

• [33] In T v Collector of Customs, Tipping J said of the test:²³

The use of the word “special” when applied to the concepts of difficulty, complexity and importance means it is not enough simply to say that the case was difficult, complex or important. The necessary difficult, complexity or importance must be such that it could be said to be significantly greater than is ordinarily encountered.

• [34] The “importance” aspect of the test refers to legal importance, not the importance of the case to the defendant.²⁴

²¹ Department of Labour v P F Olsen & Co Ltd [2003] DCR 196 at [13]–[20]; compare Department of Labour v Crighton Engineering & Manufacturing Ltd DC Auckland CRN-9004034594-5, 7 June 2000.

²² Morris v Police [2013] NZHC 1336 at [16] citing Shirley v Wairarapa District Health Board

[2006] NZSC 63, [2006] 3 NZLR 523 at [16]−[17].

²³ T v Collector of Customs, above n 11, at 2.

²⁴ Purcell v R [2015] NZHC 531 at [60] citing R v Russ [1998] 3 NZLR 159 (CA) and Underwood v Police HC New Plymouth CRI-2010-443-11, 16 September 2010 at [30].

• [35] I accept there was “special difficulty, complexity, and importance” on this appeal. In its submissions on the costs issue, Ocean Fisheries said it:

... and many others in the fishing and maritime transport industries were concerned about the implications of the District Court decision given the significant departure from the amount awarded in other cases and fully supported the appeal.

(footnote omitted)

• [36] It would be apparent from the Court’s substantive judgment of 13 August 2021 that Ocean Fisheries mounted a broadly based challenge to the way the award for emotional harm had been assessed. It sought to have the Court qualify the statutory basis on which reparation could be awarded by requiring the Court to assess awards on a per family, rather than per person, basis. It argued that the awards of reparation should also be related to the Court’s assessment as to the level of culpability and causation. It also argued that awards had to be consistent with the methodology and calculation of emotional harm reparation in other cases, an argument that required Maritime NZ and the Court to carefully consider the basis on which emotional harm reparation awards had been made in numerous other sentencing decisions or judgments, as indicated by the 47 cases tabled in sch A of the High Court decision. It also argued there had been an error in the District Court Judge failing to reduce the level of emotional harm payments to reflect $60,000 that had already been paid by Ocean Fisheries to the families.

• [37] As was confirmed by the Court of Appeal’s decision declining leave to appeal, Ocean Fisheries’ appeal to the High Court generally involved a challenge to established principles and the statutory basis for awards of emotional harm reparation.

• [38] There is accordingly a basis in the Act for the Court to award costs to Maritime NZ as the successful party on the appeal and in excess of the scale. With that having been established, I must determine what would be fair and reasonable costs for Maritime NZ in responding successfully to the appeal.
• [39] In Registrar of Companies v Feeney, Asher J said:²⁵

Once the s 13(3) threshold is crossed the Court is not, in my view, bound solely by the considerations of special difficulty, complexity or importance in assessing quantum, although those factors remain of importance. There is a general discretion given to the Court by s 5(1) to order a payment of such sum as it “thinks just and reasonable” towards the cost of the defence. That sets the general test. The considerations set out in s 5(2) apply specifically to the “amount of any costs granted” as well as whether to apply costs.

• [40] In Carruthers v Otago Regional Council, the Court remarked that a prosecution for a regulatory offence under the Resource Management Act 2021 was more akin to a civil suit when determining the amount of costs to be awarded.²⁶ It was accepted in Wallace Corporation Ltd v Waikato Regional Council that, where costs in excess of the criminal scale are awarded, then the civil scale can provide some indication as to what a reasonable costs award would be.²⁷

• [41] Costs on a 2B basis under the High Court Rules would have been $8,365. Maritime NZ’s actual costs after the hearing in the High Court were $8,804.80. The daily rates allowed for in the High Court are broadly intended to equate to two thirds of the actual costs incurred with counsel in the relevant category or proceedings. Having regard to that and also the conservative approach which is appropriate in awarding costs for a prosecuting authority, Maritime NZ is entitled to costs in the sum of $4,000 and disbursements of $716.34.

Solicitors:

Richmond Chambers, Auckland McElroys, Auckland

LukeCunninghamClere, Wellington.

25. Registrar of Companies v Feeney, above n 8, at [28]; see also T v Collector of Customs, above n 11, at 4.

²⁶ Carruthers v Otago Regional Council, above n 8.

²⁷ Wallace Corporation Ltd v Waikato Regional Council, above n 7, at [42].