Ministry for Primary Industries v Hawkes Bay Seafoods [2019] NZDC 12304 (4 July 2019)

Last Updated: 18 February 2020

IN THE DISTRICT COURT AT WELLINGTON I TE KŌTI-Ā-ROHE KI TE WHANGANUI-A-TARA

CIV-2017-085-000882 [2019] NZDC 12304

UNDER	Sections 230(1)(b), 246 and 252(3)(m) of the Fisheries Act 1996
BETWEEN	MINISTRY FOR PRIMARY INDUSTRIES Applicant
AND	HAWKES BAY SEAFOODS & ORS Respondents

Hearing:	September 2017
Appearances:	AWM Britton (by memorandum 18 April 2019) for Applicant M Sullivan and B Squire QC (by memorandum 29 March 2019) for Respondents M Sullivan for First, Second, Third, Fourth and Sixth Respondents B Squire QC for Fifth Respondent
Judgment:	4 July 2019

DECISION OF JUDGE AIM TOMPKINS: [COSTS ON DISCONTINUANCE]

Introduction

[1] During the course of this proceeding, in late September 2017, the applicant Ministry applied, pursuant to the relevant provisions of the Search and Surveillance Act 2011, for directions as to claims of privilege by certain of the respondents relating to identified documents.

[2] The documents to which the disputed claims of privilege related, were also involved in two separate proceedings, namely MPI v Hawkes Bay Seafood & Ors

(known as “Operation Marquise”), which ended by the delivery of a sentencing judgment of His Honour Judge Hastings on 25 February 2019; and MPI v Esplanade (No 3) Limited (known as “Operation River”), which was ended by a sentencing judgment of His Honour Judge Harrop on 11 April 2019.

[3] As a result of the disposition of both “Operation Marquise” and subsequently “Operation River”, this proceeding was discontinued by the applicant Ministry by notice dated 27 February 2019. It was formally struck-out by His Honour Judge Davidson on 5 March 2019, with the consent of the respondents.

[4] The issue of costs on the discontinuance was reserved. As it turns out the parties have been unable to agree on costs. Costs are now dealt with on the papers following the filing of submissions by both parties.

Submissions

[5] In broad summary, the respondents seek an order for schedule costs on a category 2 basis, relying both on the general rule that costs follow the event1 and, implicitly, the default position set out in the District Court Rules at r 15.20:

Unless the defendant otherwise agrees or the Court otherwise orders, a plaintiff who discontinues a proceeding against a defendant must pay costs to the defendant of and incidental to the proceeding up to and including the discontinuance.

[6] The respondents assert that costs should follow the event because the determination by the Court of the issues of privilege was:

... taken out of necessity and in the knowledge that the applicant would not agree to refer items to an independent barrister for determination of the claim for privilege, as provided for in paragraph [27] of [an earlier] Court order dated 17 December 2015 [in the proceeding]. The only alternative available to the respondents, other than [to] proceed to have the question of privilege determined by the Court, was to abandon its claim of privilege in the documents seized by the applicant, with the result that the Fisheries Officer would be able to access and examine the documents.

1. District Court Rules, r 14.2; Manukau Golf Club Inc v Shoye Venture Limited [2012] NZSC 109 at [7]

[7] The applicant Ministry asserts, rather, that the earlier Court order provided the parties with alternatives (namely, for the resolution of disputed claims of privilege by either an independent barrister, if agreed by the parties or in the absence of such agreement, referral back to the Court for determination). Because of the limited number of documents requiring determination as to asserted claims to privilege, and the likely complexities of such determination, the Court became the appropriate forum for that determination, and the applicant submits that the respondents were aware of that for over a year prior to the application by the Ministry, and indeed for over a year after the application, as is, for example, reflected in paragraph [4] of a joint memorandum of counsel dated 17 October 2018:

Both parties wish for the claims in respect of the hard copy documents to be determined by the Court on the papers to ensure all privileged documents are identified and returned to the respondents and to ensure no crossover with “Operation River”.

[8] In those circumstances, the applicant submits that the disputed claims to privilege were a genuine issue, advanced by the respondents who sought the Court’s intervention so as to protect the respondents’ position and/or their defence on the charges faced by them in both “Operation Marquise” and “Operation River”.

[9] In those circumstances, the applicant submits that, once the application itself was rendered moot, it is just and equitable that costs should lie where they fall, rather than be payable by the applicant as the party who discontinued the proceeding.

Decision

[10] Following the much earlier Court Order dated 17 December 2015, and in the absence of an agreement by the parties to have the claims to asserted privilege determined by an independent barrister, it was reasonable, appropriate, and in all parties’ interests that the application to the Court be made to determine the issues of privilege which arose, against the backdrop of both “Operations Marquise” and “River”.

[11] That shared and common interest in the resolution of the asserted claims to privilege is reflected in counsels’ joint memorandum dated 17 October 2018, quoted above.

[12] In the end, costs are discretionary, and where (as in this case) an application is rendered moot by other events, it may be a reasonable exercise of the judicial discretion as to costs, in keeping with both fundamental principle and specific Court rules relating to costs, for a Court to order that costs lie where they fall as neither party can properly and substantively be said to have “failed”, or indeed “succeeded”.

[13] Here, the final disposition of both “Operations Marquise” and “River” has rendered this proceeding, and the application to determine claims to privilege, moot. In those circumstances there was both a proper basis for the applicant discontinuing both the proceeding itself; and the relevant application, which was done promptly following the disposition of “Operations Marquise” and “River”.

[14] In those circumstances, costs will lie where they fall, and there will be no order of costs on the discontinuance.

AIM Tompkins District Court Judge