Earthquake Commission v Insurance Council of New Zealand Incorporated

• Jurisdiction: New Zealand
• Judge: Heath,,Kós,Gilbert JJ
• Judgment Date: 12 March 2015
• Neutral Citation: [2015] NZHC 457
• Docket Number: CIV 2014-485-005698
• Court: High Court
• Date: 12 March 2015

Under the Declaratory Judgments Act 1908

Between

Earthquake Commission

Plaintiff

and

Insurance Council Of New Zealand Incorporated

First Defendant

Christchurch City Council

Second Defendant

Southern Response Earthquake Services Limited

Third Defendant

[2015] NZHC 457

Court:

Heath, Kós and Gilbert JJ

CIV 2014-485-005698

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

Application for costs by interveners under s99A Judicature Act 1908 (Costs where intervener or counsel assisting court appears) — substantive decision involved issues concerning the scope of statutory cover available under the Earthquake Commission Act 1993 and the validity of a policy developed by the Earthquake Commission — interveners were private homeowners in Christchurch — Court had already appointed amici curiae to represent home owners — Commission was largely successful in the proceedings — all other parties agreed to costs lying where they fell — whether the presence of the interveners was essential to the proceedings — whether the presence of the interveners was necessary to give the proceeding legitimacy — whether the interveners had given the Court material assistance on matters not covered by other parties.

Counsel:

J E Hodder QC, B A Scott and T D Smith for the Plaintiff

D J Goddard QC and J D Every-Palmer for the First Defendant

J Shackleton for the Second Defendant

D J Friar for the Third Defendant

T C Weston QC and K L Clark QC, amici curiae

D A Webb and S E Goodwin for the Flockton Cluster Group (Intervener)

G D R Shand for D M Culf (Intervener)

JUDGMENT OF THE COURT

[Costs]

This judgment was delivered by me on 12 March 2015 at 4.00pm pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar

Introduction

1 In a judgment delivered on 10 December 2014, we determined various issues concerning the scope of statutory cover available under the Earthquake Commission Act 1993 and the validity of a policy developed by the Earthquake Commission (“the Commission”) for dealing with claims arising out of increased flooding vulnerability. 1 We reserved the question of costs.

2 All parties agree that costs should lie where they fall. The interveners take a different position. They seek an order requiring the Commission to pay costs to them.

Legal Principles

3 The interveners' application is made pursuant to s 99A of the Judicature Act 1908 which relevantly provides:

• (1) Where the Attorney-General or Solicitor-General or any other person appears in any civil proceedings or in any proceedings on any appeal and argues any question of law or of fact arising in the proceedings, the Court may, subject to the provisions of any other Act, make such order as it thinks just –

  • (a) As to the payment by any party to the proceedings of the costs incurred by the Attorney-General or the Solicitor-General in so doing; or

  • (b) As to the payment by any party to the proceedings or out of public funds of the costs incurred by any other person in doing so; or

  • (c) As to the payment by the Attorney-General or the Solicitor-General or that other person of any costs incurred by any of those parties by reason of his so doing.

4 Section 99A(1)(b), on which the interveners rely, distinguishes between a “party to the proceedings” and “any other person” who appears in the proceeding to argue any question of law or fact arising in the proceeding. The section does not deal with party and party costs which are determined in accordance with Part 14 of

the High Court Rules. Section 99A is solely concerned with the costs payable to or by the Attorney-General or the Solicitor-General or any other person who appears for the purpose of arguing a question of law or fact in the proceeding but who is not a party

5 Section 99A confers a broad discretion on the Court in relation to such costs. The discretion must be exercised on a principled basis but it is not possible to define the circumstances in which an award will be appropriate. The enquiry will always depend on the particular circumstances of the given case.

6 The authorities indicate that the following factors are likely to be relevant to whether an order under s 99A is appropriate: 2

• (a) Whether the case involves a matter of substantial public importance. This will be critical if costs are sought to be paid from public funds.

• (b) Whether the applicant represents a field of interest relevant to the proceeding beyond their private or personal viewpoint.

• (c) Whether the applicant has provided material assistance to the Court by presenting evidence or submissions on an issue or issues not adequately covered by other parties or at all.

• (d) Whether any of the principles guiding an award of costs under Part 14 of the High Court Rules may be applicable by analogy. This may be particularly relevant in cases where an order is sought against a party rather than from public funds.

7 Most of the cases decided under s 99A have involved applications for the payment of costs from public funds. Cases in which costs have been awarded against a party in favour of an intervener are comparatively rare. The leading case is

Diagnostic Medlab v Auckland District Health Board which concerned the validity of a long-term contract entered into by three District Health Boards for the provision of regional laboratory testing services. 3 Harbour Primary Health Organisation was given leave to intervene in the proceeding on the basis that it had the confidence and support of the majority of general medical practitioners in the Auckland region and was able to present a unique perspective on the issue of whether the District Health Boards should have consulted before signing the agreement

8 The Court accepted that the intervener's submissions were effectively made on behalf of all primary health organisations in the region. Its participation was confined to whether the District Health Boards had a duty to consult and if so whether they discharged this duty. The intervener was successful on these issues. Asher J concluded that it was appropriate to award costs to the intervener against the District Health Boards because it had a “unique position to present” on an issue that could not be covered adequately by any other party and that it was therefore a “necessary party” to the proceedings. The judge described the intervener's contribution to the proceeding as “significant and unique”.

9 More recently, in Hall v Wellington Standards Committee (No 2), Woodhouse J ordered the appellant to pay costs to an intervener in circumstances where the appellant had unsuccessfully sought to overturn the decision of the New Zealand Lawyers and Conveyancers Disciplinary Tribunal on an important point of principle directly affecting the intervener's rights. 4 The intervener was the holder of privilege in certain documents before the Tribunal, and had been permitted to intervene in that forum. The Court considered that the Tribunal's decision was plainly correct and that the appellant's approach had been unreasonable.

10 The facts of these cases can be contrasted with those in Levin v Lawrence where the intervener was unsuccessful in its application for costs against a party. 5 That case concerned an application by a creditor to prevent a debtor company being removed from the Register of Companies and for an order directing the liquidators of

the debtor company to permit the creditor to inspect its records. The debtor company was the vehicle for a joint venture between three companies for the operation of a franchise business. One of the joint venturers was given leave to appear as an intervener. It appeared at the hearing and made submissions but did not call any evidence or cross-examine any of the witnesses

11 The Court accepted that the intervener was the ultimate target of the creditor's application which was brought with the aim of determining...