Slater v APN New Zealand Limited [2014] NZHC 2842 (14 November 2014)

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BETWEEN	CAMERON JOHN SLATER Plaintiff
AND	APN NEW ZEALAND LIMITED First Defendant FAIRFAX NEW ZEALAND LIMITED Second Defendant MEDIAWORKS TV LIMITED Third Defendant

Hearing:	(On the papers)
Counsel:	John Billington QC and Jacque Lethbridge for the Plaintiff Alan Ringwood for the First Defendant Tony Stevens for the Second Defendant Clare Bradley for the Third Defendant
_Judgment:	_{14 November 2014}

This judgment was delivered by on 14 November 2014 at 4:00pm pursuant to Rule 11.5 of the High Court Rules.

[1] On Friday, 5 September 2014 an urgent application for an interim injunction was heard in this Court before Fogarty J.

[2] The background is that before the 2014 election, Nicky Hager published a book “Dirty Politics”. The contents of the book were widely published in the media. Information contained in the book was sourced from emails hacked from Mr Slater’s computer.

[3] On 4 September 2014 Mr Slater issued proceedings against the three mainstream media defendants. He pleaded causes of action in breach of confidence and breach of privacy. He sought an injunction to restrain them from publishing, copying, disseminating or otherwise making use of any material obtained from his electronic storage media.

[4] On the day he issued the proceedings Mr Slater sought an urgent “interim interim” injunction. A hearing was arranged at short notice the same day.

[5] The application was unsuccessful. Mr Slater continued to pursue the interim injunction, filing an amended application on 9 September 2014 and seeking an urgent order. He discontinued the proceedings on 29 September 2014.

[6] Peters J ordered that any application for costs were to be filed and dealt with on the papers.

(a) costs on a 2B basis, namely $3,079.51 and scale costs for the second defendant and $2,582.01 scale costs for the first and second defendants, plus a 30 per cent uplift; and

(b) costs on a 3B basis, namely $1,960 and scale costs for each of the first, second and third defendants, plus an uplift of 30 per cent; and

[8] The plaintiff does not accept the defendants are entitled to costs given the undertakings given. However, if the Court finds that costs are appropriate Mr Slater accepts the categorisation leading to the consequence of $5,039.51 on the basis of 2B and 3B calculations for the first and third defendants but submits that no additional sum should be payable to the second defendant. Thus the costs of $5,039.51 should be shared between the three defendants.

[9] Under r 14.3 the Court is required to categorise proceedings based on the complexity and the level of skill required. It is submitted by the defendants that the appropriate categorisation for all steps, except the preparation of written submissions and the appearance on the interim interim injunction, is 2; that being proceedings of average complexity. For the steps relating to the interim interim injunction it is submitted that the proceedings required counsel to have special skill and experience and therefore the appropriate categorisation is 3.

[10] Although it is unusual to have different categorisations under r 14.3 for different parts of the same proceedings it is appropriate in this case due to the unique circumstances and the extremely tight timeframes around the interim injunction application.¹Mr Slater does not argue the contrary.

[11] Under r 14.5 the determination of reasonable time for each step in a proceeding must be made by reference one of the bands set out in r 14.5(2). It is accepted by both parties that the appropriate band in this case is Band B.

[12] Mr Slater raises the issue of the second defendant claiming an additional sum. However, this appears to be a misinterpretation of the defendants’ submissions. The cost schedule divides the total of each step by three, representing the proportionate cost for each defendant. The reason the second defendant has a slightly different figure is that they are not claiming for the appearance of the second and subsequent counsel at the defended hearing. The figure of $5,039.51 attributed to the first and third defendants reflects the total amount owed to each of the first and third

_{defendants. Together with the slightly reduced amount of $4,542.01
owed to the}

second defendant, this results in a total of $14,621.03 claimed in costs for all three defendants.

[13] This total is consistent with the schedule of time allocations and the appropriate daily recovery rates.

[14] However, the defendants also seek a 30 per cent increase on the costs under both the 2B and 3B categorisations.

[15] Increased costs are dealt with by r 14.6(3). The provisions relied on are as follows:

(b) the party opposing costs has contributed unnecessarily to the time or expense of the proceeding or step in it by—

(c) the proceeding is of general importance other than just the parties and it was reasonably necessary for the party claiming costs to bring it or participate in it in the interest of those affected; or

(d) some other reason exists which justifies the Court making an order for increased costs despite the principle that the determination of costs should be predictable and expeditious.

[16] The steps that the Court is required to take when considering whether to order increased costs are set out in the Court of Appeal’s decision in Holdfast New Zealand Limited v Selleys Pty Limited². Sargisson AJ in Karam v Parker summarised these

²_{Holdfast New Zealand Limited v Selleys Pty Limited
(2005) 17 PRNZ 879 at [43]-[48].}

(a) The first step is to categorise the proceeding in terms of r 14.3 and specifically whether it is a category 1, 2 or 3 proceeding.

(b) The second step is to determine a reasonable time for each step in the proceeding, applying the appropriate time band under r 14.5. Band C is considered appropriate where a “comparatively large amount of time is considered reasonable” for the particular step. It is possible to exceed the time allowed by Band C for a particular step where the claimant can show that a step in the proceeding was such that the time required would substantially exceed the time allowed under that band (r 14.3(a)).

(c) The third step is to consider whether there are additional grounds for increasing costs as set out in r 14.6(3)(b) all of which depend on a finding that the opposing party has “contributed unreasonably to the time or expense of the proceeding or step” in the proceeding.

(d) The final step requires the Court to step back and look at the costs award that a claimant would be entitled to at this point. The Court of Appeal said that any increase above 50 per cent on scale costs produced in the above steps was unlikely. The reason is that the daily recovery rate is two thirds of the daily rate considered reasonable under the statutory costs regime.

[17] The defendants submit that increased costs are appropriate having regard to the proceedings as a whole; the defendants had clear defences available and the proceedings engaged principles of very significant public interest in the context of the general election campaign.

[18] In relation to the initial urgent hearing the proceedings involved matters of legitimate public interest and considerable public importance. Further, Mr Slater contributed to unnecessary time and expense by maintaining his action at three call over hearings before discontinuing and changing the relief he was seeking which necessitated the further meeting.

[19] However, I am not satisfied that this is a case which warrants an award of increased costs. The legal principles governing the publication of hacked material is not well established. As Fogarty J stated:

There is ... a distinction between illegal conduct to obtain information which is released into the community, and subsequent orders by the Courts as to the use of that information once it is in wider circulation. In the latter case, the Courts balance the breach of law in the acquisition of the information against the public interest in examining the information once it is in the public sphere.

The difficulties with this case are to address what, if any, remedies the plaintiff has in respect of information now in the public sphere. But there is no difficulty in making an interim order restraining the hacker from committing further wrongs by releasing information which very likely was obtained illegally, further into the community.

[20] Clearly, by refusing the interim injunction against the defendants his Honour concluded that the public interest prevailed. However, he also noted the difficulties of what remedies the plaintiff had once the information was released into the public arena. Given these tensions I am not of the view that increased costs are appropriate.

[21] It is, however, a case which requires separate categorisations for different aspects of the proceeding; namely the category 3 categorisation for the preparation and attendance at the urgent injunction and category 2 categorisation for all remaining steps.

[22] The first and third defendants are entitled to costs in the sum of $5,039.51 and the second defendant to costs in the sum of $4,542.01 with disbursements in the

High Court of New Zealand Decisions

Slater v APN New Zealand Limited [2014] NZHC 2842 (14 November 2014)