McLellan v Attorney-General [2016] NZHC 812 (27 April 2016)

Last Updated: 2 May 2016

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

CIV-2010-485-1762 [2016] NZHC 812

UNDER THE	Judicature Amendment Act 1972
BETWEEN	NOEL EDWARD MCLELLAN Plaintiff
AND	THE ATTORNEY-GENERAL Defendant

CIV-2010-485-2575

BETWEEN PRANFIELD HOLDINGS LIMITED First Plaintiff

UNITED FISHERIES LIMITED Second Plaintiff

AND THE ATTORNEY-GENERAL Defendant

In Chambers:	On the papers
Judgment:	27 April 2016

JUDGMENT OF THE HON JUSTICE KÓS (Costs)

[1] My judgment of 15 December 2015 declined applications for judicial review by the plaintiffs in these two proceedings heard together.¹ In a nutshell, the plaintiffs had suffered loss as a result of mismanagement by Fisheries officials in the 1990/91 fishery year. A Parliamentary select committee recommended ex gratia payments of up to $400,000 to the plaintiffs Mr McLellan and United, and $900,000 to the

_{plaintiff Pranfield. Negotiations took place but failed to reach resolution. Each}

¹ _{McLellan v The Attorney-General [2015] NZHC 3218.}

MCLELLAN v THE ATTORNEY-GENERAL [2016] NZHC 812 [27 April 2016]

wanted more than was offered to them. The offers lapsed. United and Pranfield litigated, but ultimately were unsuccessful. Mr McLellan did not litigate, but watched events from the sideline. The Crown spent over $1 million in fighting that litigation. After the litigation failed the plaintiffs sought renewal of the ex gratia negotiations that had previously lapsed. Both Cabinet and subsequently the Minister of Fisheries decided not to renew negotiations. It was these decisions that were the subject of the judicial review applications.

[2] In my judgment I concluded that:

(a) the challenged decisions of Cabinet and the Minister were not justiciable; and

(b) neither in any event were they unlawful on the pleaded bases of breach of legitimate expectation or irrationality.

[3] At the conclusion of my judgment I said:

Costs must follow the event. Memoranda may be filed if costs cannot be agreed.

[4] Now, five months later, I have received those memoranda. The Crown seeks costs on a category 2 band B basis overall. For the Crown Ms Dixon submits:

8 Initially these were separate proceedings but since June 2012 the two proceedings were managed together by consent. They were heard together. Therefore in calculating costs there are attendances relevant to the proceedings when they were separate and others following them being managed together. Costs calculated on a 2B scale of costs basis are summarised below with a full breakdown attached to this memorandum.

8.1 $7,962.80 (steps taken only in regard to McLellan proceeding)

8.2 $7,118.80 (steps taken only in regard to Pranfield proceeding)

8.3 $22,089.00 (steps taken in regard to both proceedings)

9. The defendant seeks costs of $37,170.60, which includes disbursements of $2,417.60, as itemised in the attached schedule.

[5] Mr Upton QC for the plaintiffs submits the particular and peculiar circumstances of this case means his clients should be relieved of costs altogether:

It would be grossly unfair to the plaintiffs, having secured no compensation at all from the Crown for the unlawfulness and injustice, for them now to be saddled with costs in the case.

Reference is made to the misfortunes of the litigants (Pranfield having succeeded in the High Court but lost in the Court of Appeal, and adverse health suffered by some of the key participants including Mr McLellan). Reference is also made to the different position of Mr McLellan, who had not litigated his claim. There was, as I noted in my judgment, an egregious delay by the Crown advising the plaintiffs of Cabinet’s decision.² By September 2008, however, Cabinet had resolved not to make any further settlement offer to any one of the three plaintiffs. In doing so it expressly noted that Mr McLellan had rejected a previous settlement offer of

$400,000 but had not commenced litigation.

[6] Sensibly, Mr Upton acknowledges that if costs are to be granted, a category 2 band B award could not be resisted. No issue is taken by the plaintiffs with the Crown’s computation of costs and disbursements. Mr Upton suggests that if costs are awarded, a single set of costs should be awarded, with the three plaintiffs jointly responsible for them.

Decision

[7] The ultimate outcome for the plaintiffs has been most unfortunate. But it is a direct consequence of their tactical decision to attempt to improve the Crown’s compensation offers by additional negotiation (unsuccessfully, with the offers lapsing) and by commencing litigation (also unsuccessfully).³ That course has its consequences. One of those must be costs in this further failed litigation. Nothing submitted to me by Mr Upton in his thoughtful submissions can possibly justify

_{varying the ordinary outcome that costs must follow the event.}

² _{See [41]–[43] of my substantive judgment.}

³ I am not unaware of course that Mr McLellan did not issue proceedings prior to the present case.

He has not had to pay costs hitherto. But he hedged his bets, waiting to see if the earlier litigation succeeded.

[8] Bearing in mind that I am dealing with two separate proceedings, not consolidated, the just outcome is as follows:

(a) Mr McLellan is to be liable for the whole of the costs identified in paragraph 8.1 of the Crown memorandum, one-third of the costs identified in paragraph 8.3 thereof and one-third of the disbursements identified in paragraph 9 thereof.

(b) Pranfield Holdings Limited and United Fisheries Limited are each liable for half the costs identified in paragraph 8.2, one-third of the costs identified in paragraph 8.3, and one-third of the disbursements identified in paragraph 9.

[9] So ordered.

Stephen Kós J

Solicitors:

Crown Law, Wellington for Defendant