Clubs New Zealand Incorporated v Minister of Internal Affairs [2015] NZHC 287 (26 February 2015)

Last Updated: 9 March 2015

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

CIV 2013-485-664 [2015] NZHC 287

UNDER	an application for review under the Judicature Amendment Act 1972
IN THE MATTER	of the responsible Ministers' recommendation of the Problem Gambling Levy under the Gambling Act 2003 and reliance on the 2012 Gambling Commission report
BETWEEN	CLUBS NEW ZEALAND INCORPORATED Applicant
AND	THE MINISTER OF INTERNAL AFFAIRS AND THE MINISTER OF HEALTH First Respondents
AND	GAMBLING COMMISSION Second Respondent
AND	THE MINISTRY OF HEALTH Third Respondent

Hearing:	On Papers
Counsel:	H A Cull QC and J W True for Applicant K M Muller and N C Anderson for First and Third Respondents C P Browne and S E Kuper for Second Respondent
Judgment:	26 February 2015

JUDGMENT OF SIMON FRANCE J (Costs Ruling)

CLUBS NZ INC v THE MINISTER OF INTERNAL AFFAIRS AND THE MINISTER OF HEALTH [2015] NZHC 287 [26 February 2015]

[1] On 8 April 2014 I issued a judgment declining the applicant’s judicial review application.¹ The context was the setting of a three yearly problem gambling levy. The required method is to set a problem gambling strategy (Ministry of Health) and cost it (Gambling Commission). The strategy is then funded by a levy payable by gaming operators – gaming machines, casinos, and Racing Board. The proportion each sector contributes is recommended by the Gambling Commission having regard

to market share, and to the extent to which problem gamblers are linked to a particular sector.

[2] The plaintiff is part of the gaming machine sector. The other part is the pubs. For some years the clubs have argued the gaming machine sector levy should be itself split to recognise the greater contribution pubs make to the number of problem gamblers. The levy under challenge maintained a single levy for the gaming machine sector, and the plaintiff brought proceedings challenging it.

[3] The proceedings claimed improper consultation and sought to have the levy quashed. The stakes were therefore quite significant for the respondents who would both have to start again and would be deprived of funding in the interim.

[4] Three primary issues arise on costs:

(a) whether the public interest nature of the proceedings means costs should lie where they fall;

(b) whether for some steps, the first and third respondents should receive

2C costs rather than the 2B costs applicable otherwise; (c) second counsel.

[5] In advancing a public interest claim, the plaintiff relies on Wong v Registrar

_{of the Auckland High Court and Transport Ministry v Alexander.}²

1. Clubs NZ Inc v The Minister of Internal Affairs and the Minister of Health & Ors [2014] NZHC 679.

² Wong v Registrar of the Auckland High Court HC Auckland CIV-2007-404-5292, 3 March 2008;

Transport Ministry v Alexander [1978] 1 NZLR 306 (CA).

[6] The plaintiff submits its proceedings brought to light two aspects of the levy setting process that were unknown, and have resulted in important clarification for the future. The situation is said to be the same as Mathews v Hunter where an unsuccessful claimant avoided costs because the proceedings had nevertheless brought out flaws.³

[7] I do not accept these issues arise here. Generally there was no public interest to the proceeding. The overall size of the levy would be unchanged. There is little public interest in the relative proportions paid by clubs and pubs. The clubs brought the proceedings because the net proceeds of gaming machine spending in their facilities are available to fund their operations. Accordingly a reduced levy would mean greater access to funds. The theoretical flip side of that would be the lessening of the amount of money pubs would be able to return to the community because their levy share is greater.

[8] Nor do I accept the plaintiff highlighted problems. I found no process breach and considered the key argument untenable.⁴ I accepted that there was a tenable argument that an apparent spike in problem gambler numbers attributable to the clubs was due to different data collection methodology, but also endorsed the Gambling Commission view that the proper response was to wait and see if it was an aberration. The point is also made that, aberrant spike or not, the figures are the figures and had to be taken into account.

[9] Concerning 2C for some steps, I accept the first and third respondents’ argument as regards responding to Dr Townshend’s work. It properly went beyond what is normally required, and falls comfortably within band C. Relevant to this I accept the submissions advanced in relation to the Lane Neave bill, and Dr Sullivan’s costs. They flow from the same issue. The Lane Neave bill was a necessary incidental imposed by a non-party from whom discovery was being sought. That discovery process was directly attributable to Dr Townshend’s approach. I disagree with the plaintiff concerning Dr Sullivan’s account; so long as

_{it is reasonable, it is proper to claim the whole sum as a disbursement.}

³ _{Mathews v Hunter [1993] 2 NZLR 683.}

⁴ Paras [31] and [34] of judgment.

[10] I do not accept the 2C claim as regards preparation of the bundle and preparation for the hearing. I consider 2B for judicial review is a standard allocation that inevitably covers a broad spectrum of complexity. There are swings and roundabouts. In this case I consider 2B is appropriate because the basic issue was consultation and that is essentially a matter of fact and judicial assessment. I acknowledge the data issue increased the scope, but not to an extent meriting a different band.

[11] That said, I accept the claim by the first and third respondents for second counsel. I consider the breadth of the material, which flows as much from the plaintiff’s approach as the proceedings themselves, is more accurately reflected by certification for second counsel.

[12] As regards the second respondent its role was much more limited, and I do not accept the claim for second counsel.

Conclusion

[13] The respondents are entitled to costs on a 2B basis.

[14] The first and third respondents may claim for second counsel.

[15] The first and third respondents may claim on a 2C basis for the preparation of affidavits.

[16] The first and third respondents may recover as disbursements the Lane Neave costs, and the full costs of Dr Sullivan.

[17] The second respondent may claim only for one counsel. Its disbursements

_{(for one counsel) are actual and reasonable and may be claimed.}

_{Simon France J}

Solicitors:

H A Cull QC, Wellington

Crown Law, Wellington

Wilson Harle, Auckland