Van Essen v Attorney-General [2016] NZHC 555 (4 April 2016)

Last Updated: 14 April 2016

IN THE HIGH COURT OF NEW ZEALAND DUNEDIN REGISTRY

CIV-2010-412-802 [2016] NZHC 555

IN THE MATTER	of the New Zealand Bill of Rights Act 1990
BETWEEN	BRUCE BRENDON VAN ESSEN Plaintiff
AND	THE ATTORNEY-GENERAL OF NEW ZEALAND AND OTHERS Defendants

_{CIV-2010-412-803}

BETWEEN JASON PATTERSON Plaintiff

AND THE ATTORNEY-GENERAL OF NEW ZEALAND AND OTHERS

_Defendants

Hearing:	On the Papers
Appearances:	B C Nevell for Plaintiff D P Robinson for Defendants
Judgment:	4 April 2016

_{COSTS JUDGMENT OF WHATA J}

This judgment was delivered by Justice Whata on 4 April 2016 at 4.30 p.m., pursuant to

r 11.5 of the High Court Rules

Registrar/Deputy Registrar

Date:

Solicitors:

Gallaway Cook Allan, Dunedin

VAN ESSEN v THE ATTORNEY-GENERAL OF NEW ZEALAND AND OTHERS [2016] NZHC 555 [4 April

2016]

[1] Some years ago I heard the plaintiffs’ claim of, among other things, bad faith against the fifth defendants in terms of obtaining and then executing an unlawful warrant to search their homes. I dismissed that claim and that result was affirmed on appeal. The Court of Appeal found, however, that my costs award was incorrect. The Court of Appeal therefore remitted that issue back to me namely, to determine whether having regard to the legally aided status of the plaintiffs, there were exceptional circumstances for the purposes of ss 45 and 46 of the Legal Services Act

2011 (the LSA).

[2] The fifth defendants’ memorandum on costs seeks:¹

...an order under section 45(5) Legal Services Act specifying what order for costs would have been made against the Plaintiffs with respect to the proceedings if section 45 had not affected that [sic] their liability to the Fifth Defendants for costs.

[3] The fifth defendants also seek what appears to be a finding as to “exceptional circumstances” that would be relevant, they say, to the Commissioner’s discretion under s 46(3) of the Act.

[4] I reject that second request for two reasons:

(a) First, there is no application before me for costs against the plaintiffs triggering the requirement to assess whether there were exceptional circumstances; and

(b) Second, the Supreme Court, in declining to the plaintiffs leave to appeal, had cause to consider a costs application against the plaintiffs. The Court stated that, had the legal aid regime not applied, the “exceptional circumstances” criteria at s 45(3) would not need to be made out prior to a certificate under s 45(5) being made in terms of an

_{award of costs.}

¹ At [4] of the Submissions of Counsel for the Fifth Defendants on Costs.

[5] The plaintiffs also object to judgment on costs on the basis that it will serve no useful purpose as the fifth defendants have not sought any order for costs against the plaintiffs personally under s 45(2) of the LSA. I see that as no bar to me exercising my usual discretion to assess whether costs should have been granted but for the legal aid regime.

The defendants’ claim

[6] The defendants claim increased or indemnity costs on the following bases:

21. By reference to Rule 14.6 the Plaintiffs (increased or indemnity costs):

(a) failing to comply with these rules or with a direction of the

Court;

(i) Numerous timetable breaches;

(b) taking or pursuing an unnecessary step or an argument that lacks merit;

(i) Spoliation;

(ii) The entire proceeding

(c) failing, without reasonable justification, to admit facts, evidence, documents, or accept a legal argument;

(i) The plaintiffs persisted with the view that it was not necessary to establish bad faith through much of the trial, a view which no doubt lead [sic] to the initiation of the proceedings in the first place;

(ii) The argument that s 27 Crimes Act 1961 had no application;

(iii) The argument that the unsigned search warrant was invalid.

(d) failing, without reasonable justification, to comply with an order for discovery, a notice for further particulars, a notice for interrogatories, or other similar requirement under these rules;

(i) failure to give proper particulars when sought; (ii) failure to confine discovery to relevant material.

(e) the party has acted vexatiously, frivolously, improperly, or unnecessarily commencing, continuing, or defending a proceeding or a step in a proceeding;

(i) The attitude displayed by Mr Van Essen in various internet posts and articles evidence this.

(f) the party has ignored or disobeyed an order or direction of the Court or breached an undertaking given to the Court or another party;

(i) Timetable breaches.

[7] I turn to address each claim.

Numerous timetable breaches

[8] The plaintiffs failed to meet a number of timetabling orders in material respects.² Balanced against this, I accept the basic submission on behalf of the plaintiffs that there were aspects to the preparation beyond the control of the plaintiffs, including a third party discovery process. Overall this is a factor in support of a small uplift in scale costs.

Taking or pursuing an unnecessary step or an argument that lacks merit

[9] I accept that the belated acknowledgement by the plaintiffs that bad faith had to be established put the fifth defendants to substantial unnecessary expense and indeed, if properly analysed, should have suggested to Counsel that the prospect of success against the fifth defendants was always low. This must be factored into the costs award. But there are two aspects which militate against the egregiousness of this failure:

(a) The fifth defendants first applied for strike out/summary judgment after the full exchange of evidence and shortly before trial. Leave had to be granted to bring the application given the lateness. It appears that the fifth defendants were not in a position to bring the application

_{until after the evidence was exchanged. That being the case it can}

² The plaintiffs breached requirements for Amended Statements of Claim to be filed and served by

29 November 2011. They also failed to incorporate the further particulars identified by the defendants, which were to be filed by 26 July 2011. Mr Van Essen only satisfactorily addressed pleadings matters on 17 August 2012 and Mr Patterson on 18 September 2012. The Plaintiffs breached their timetable obligation to file and serve a List of Documents by 14 April 2011. It was not filed until 14 June 2011. They failed to complete inspection by 18 July 2011. Inspection was ultimately completed on 26 August 2011. The Plaintiffs’ briefs of evidence for trial were filed well outside the timetable originally set (they were due 8 February 2012 but do not appear to have been filed until late August 2012).

hardly be said that the bad faith point was so obvious that the proceedings should never have been pursued.³

(b) The fifth defendants rely significantly on hindsight reasoning in making this point. The warrants were unlawfully obtained and the fifth defendants had a key role in assembling the information in support of the warrants. The fifth defendants say that the findings of the Independent Police Conduct Authority should have weighed heavily against the commencement of proceedings against the fifth defendants. The Court of Appeal, I accept, also placed significant store in the outcomes of the Independent Police Conduct Authority as providing support for the defendants’ positions. But that approach to

extra-judicial findings is not one of universal application,⁴ and the

plaintiffs were prima facie entitled to have the evidence fully tested in a Court of law, particularly in relation to a claim based on the unlawful search of a home. Nevertheless, the failure to properly acknowledge the requirement for bad faith at the outset is a factor in support of an increased costs award.

Failing, without reasonable justification, to admit facts, evidence, documents, or accept a legal argument

[10] The plaintiffs’ proceedings were unfocused and, as the approach taken to bad faith illustrates, evolved as the proceedings unfolded, including into the hearing itself. I include within this the complaint made about the late raising of the spoliation

_{issue. This added unnecessarily to the costs incurred.}

³ _{Van Essen v Attorney General [2012] NZHC 3358 at [6].}

⁴ In Te Runanga o Muriwhenua Inc v Attorney-General [1990] NZCA 7; [1990] 2 NZLR 641 (CA) at 651 the Court observed that the Waitangi Tribunal is not a Court and has no jurisdiction to determine issues of law or fact conclusively. By parity of reasoning the IPCA is not a Court and had no jurisdiction to determine issues of law or fact in issue before this Court conclusively. The principle is

captured by Brewer J in Dorbu v The Lawyers and Conveyancers Disciplinary Tribunal HC

Auckland CIV-2009-404-7381, 11 May 2011 at [21]: “Put simply, if a court or tribunal has an independent obligation to determine whether alleged facts are proved or not, it cannot discharge that obligation by accepting without inquiry the findings of another court or tribunal as to the existence of those facts. To do that would abdicate its responsibility to determine the facts for itself.”

Failing, without reasonable justification, to comply with an order or orders of the

Court

[11] I am unable to make definitive findings on the issues regarding particulars or discovery but I recall from the hearing that the discovery was large and that the plaintiffs were at a disadvantage in that the control of the key documentation was in the hands of ACC and other parties. The files also appeared to be incomplete. In those circumstances, I am not satisfied there should be an uplift on the basis of the difficulties associated with, and the delayed attendances caused by the discovery process.

The parties acted vexatiously, frivolously, improperly, or unnecessarily

[12] The fifth defendants place much emphasis on internet posts and articles referring to comments and allegations made by Mr Van Essen as concerns the fifth defendants. That would be a highly unusual basis upon which to make an order of increased costs. Those actions occurred outside of the confines of the proceedings. In any event, I do not consider that the plaintiffs acted vexatiously. While the Court of Appeal has disagreed with my findings as to the significance of the breach of the plaintiffs’ rights, and while I did not find a claim against the fifth defendants to be properly made out, the searches were unlawful and the connection between the fifth defendants and the police raised a prima facie issue of conflict and lack of independence. While the fifth defendants were fully vindicated in the result, that does not mean that the plaintiffs were acting improperly in having the issue ventilated.

Ignoring directions

[13] This refers back to the timetabling breaches with which I have already dealt at [8].

Outcome

[14] Given the foregoing, and with the benefit of the very detailed submissions provided by the fifth defendants as to various complaints made about the plaintiffs’ conduct, I do not consider that an award on an indemnity basis is appropriate.

However, I am satisfied that the plaintiffs’ conduct of the litigation caused unnecessary expense, particularly the failure to properly appreciate the requirements for, and the weaknesses of, the bad faith claim. Multiple non-compliances with timetabling orders, together with an unfocussed approach to the litigation, also added unnecessarily to the costs incurred by the fifth defendants. I find therefore that an order for increased costs pursuant to r 14.6(a) and (b) would have been appropriate, but for the fact that the legal aid regime applied.

[15] On the foregoing basis, if it were not for s 45(2), an order for costs on a 2B basis would have been made together with an uplift of 35 per cent to take into account the matters I have identified.⁵

[16] However, r 14.2(f) provides that “an award of costs should not exceed the costs incurred by the party claiming costs”. An uplift of 35 per cent on a 2B scale ($74,411.00) would result in a costs award of $100,454.85. But as actual costs ($80,053.36) are less than this total, a grant of actual costs would have been the final award but for s 45(2) of the Act.

[17] There shall be an order accordingly pursuant to s 45(5) of the Act. Had s 45

of the Legal Services Act 2011 not affected the plaintiffs’ liability, I would have

_{made an order of costs against the plaintiffs in the amount of $80,053.36.}

⁵ I acknowledge that the fifth defendants have sought costs on a 2C scale in relation to the inspection steps taken with regard to the CIV-2010-412-802 proceeding. But the 35 per cent uplift on top of scale 2B costs adequately compensates for the extra legal costs incurred as a result of the volume of material disclosed by Mr Van Essen that had to be reviewed.