BLUDGEON OF COSTS IS FAVOURED WEAPON OF NZ JUDGES

New Zealand courts have a sordid tradition of which few members of the public are aware and lawyers fear raising.   It is the bludgeon New Zealand Supreme Courtabuse of judicial discretion to impose costs against litigants – and even their lawyers.

The practice has never been forthrightly recognised by the Court despite numerous challenges.  Where challenges are not obfuscated or suppressed by appellate judges, they are quietly dealt to off the record, as in 2009 when the Courts ignored Rhys Harrison J’s order that counsel pay $11,125 to the Court in a struck out and suppressed proceeding.  Harrison’s order against the claimants’ counsel – not the claimant – was also suppressed, although lawyers can search it on legal search engines under RL v Ministry of Social Development.

This was a human rights claim by a Maori couple against the Ministry of Social Development after their children were taken without due process.  Harrison was infuriated counsel alleged race may have factored in the agency’s refusal to hear from the couple, before the judge intoned the Crown could not be sued for such actions.  Harrison J justified his order for costs, saying counsel was “in gross dereliction of their duties to the Court in filing and advancing this proceeding and that their conduct throughout was contrary to the proper, fair and efficient administration of justice. They must accept liability for the costs unnecessarily incurred by counsel for the children and litigation guardian.”

Harrison may claim, as NZ judges increasingly do, that ordering costs against non-parties and counsel is his way of “advancing the proper, fair and efficient administration of justice”, but the United Nations views such judicial actions as severe threats to justice, primarily because they send a foreboding message to lawyers willing to act for unpopular clients or on claims which conflict with Crown interests.

This editor too was ordered to pay $185,000 in respect to an interlocutory application in 2006.  The appeal went to the New Zealand Supreme Court where, despite the costs being six times higher than similar applications, the costs order was upheld on the reasoning, “The award was a substantial one but there is nothing which indicates that the Judge departed from established principles in any way. She clearly considered what Mr Siemer put to her.  We see no arguable basis on which this discretionary decision could be set aside.”

Thank God for “established principles”.  But can judicial discretion, having been determined by the New Zealand Supreme Court to mean unbridled discretion not to be interfered with, be considered a legal principle let alone an established principle?  In New Zealand court lingo, the term means nothing of substance, as the next examples make more evident.

In another order of costs one year ago (Rabson v Chapman CA855/2012 [2014] NZCA 158), then-President of the Court of Appeal Mark O’Regan joined with two permanent judges to revive an appeal deemed abandoned a year earlier – only to strike it out again.  That bizarre, if not unprecedented, move paled in comparison to what followed.  These 3 senior judges ordered Mr Rabson to pay $2,500 costs after recognising he had no standing; “As a consequence of Mr Rabson’s adjudication in bankruptcy, he has no standing to pursue the appeal which vested in the Official Assignee.   …Mr Rabson is to pay Mr Chapman’s costs”.

The Supreme Court refused to hear an appeal against this unlawful order of costs against a person recognised as a non-party, in an appeal deemed abandoned a year earlier.  Supreme Court Justice Susan Glazebrook instead issued a private Minute suggesting Mr Rabson ask the Court of Appeal to recall the unlawful order.  A full bench then upheld Glazebrook’s private suggestion as its reason why the Supreme Court would not hear the appeal.

A few months later, after the Court of Appeal ordered appellant Margot Crequer pay costs to the Crown because she sought an extension of time (which was denied) in her appeal against the Ministry of Social Development, a full bench of the Supreme Court again refused to consider Ms Crequer’s grounds the Court of Appeal abused discretion when ordering she pay costs to the Crown; and did so in circumstances where the Court of Appeal found no prejudice would result from granting the routine extension it still denied.  Stealthily, the Supreme Court judgment evaded the question of whether such a costs order was lawful, saying only, “(The Crown) has indicated that it will not seek to enforce the award of costs made by the Court of Appeal and does not seek costs in respect of the current application.”

Only when Ms Crequer sought recall of this judgment on grounds the Supreme Court failed to address her legal ground of appeal did the judges identify the legal ground as “At the heart of the issues which the applicant wished to raise in this Court were (a) a procedural ruling the substance of which can be reviewed at the hearing of the appeal in the High Court and (b) an order for costs made by the Court of Appeal which the respondent has undertaken not to enforce.”  Nonetheless, that second judgment ([2015] NZSC 18) just as blindly refused to address the alleged judicial abuse, concluding, “The applicant’s submissions in support of the current application, while challenging the reasoning of the Court, raise nothing that warrants a recall of the 2 September 2014 judgment.”

Earlier this month, in Deliu v New Zealand Law Society [2015] NZSC 75, the Supreme Court flatly pronounced Dr Frank Deliu was “in error” to suggest NZ judges use costs discriminately, often without rhyme or reason, in a manner which leads to a perception the costs regime serves doubtful purposes.  The Judges proclaimed, “If the Court departs from the fundamental principle, as it is entitled to do, a brief explanation should be given.”

Irony of ironies, the Supreme Court two days later ordered costs to the Attorney-General in a proceeding where the Attorney-General was not only not a party but had specifically asked for and received a procedural order of Joe William J confirming he was not a party (Siemer v O’Brien [2015] NZSC 78).  The appeal was against Williams J issuing a substantive judgment three weeks after the formal proof hearing granting the Attorney-General retrospective standing as “a contradictor” on the ground Mr Siemer would have “automatically” won if he did not do so.

The Supreme Court had initially awarded O’Brien costs but when an application for recall was made on the ground O’Brien was abiding and had not incurred any costs, the Court said, “Obviously, there is a typographical error in the leave judgment, but it is one which is immaterial in the present case. As we recorded in the leave judgment, Mr Siemer has issued judicial review proceedings in respect of certain decisions of the first respondent, who is the Registrar of the Court of Appeal. She has not played an active part in the proceedings but, rather, has abided the courts’ decisions. Accordingly, as commonly occurs in such situations, the Attorney-General appeared before the High Court to act as contradictor, and has maintained that role subsequently. Given that the Crown Law Office is the solicitor on the record for both respondents, Mr Siemer can meet his obligation to pay costs by paying the $2,500 plus reasonable disbursements to the Office. Given that the error is immaterial, we see no reason to recall our judgment, but will re-issue it with the typographical error removed, by virtue of our implied power to correct such slips.”

The “judgment issued with the typographical error removed” is Siemer v O’Brien [2015] NZSC 79.  The removals were actually additions of the word ‘second’ before the “respondent” as to whom the order of costs was payable.

Another recall application was filed, this time on the ground the Appellant was not allowed to be heard on costs to the non-party Attorney-General.  The recall application relied upon the material additions to the judgment reissuance which only then ordered costs payable to the non-party Attorney-General.  The Supreme Court judgment response ([2015] NZSC 79) was unequivocal, declaring, “This application is an abuse of process.  Of necessity, the Attorney-General had to intervene in the present proceedings as the first respondent, who is the Registrar of the Court of Appeal, abided the decisions of the courts, and a contradictor was required. Counsel for the Attorney-General filed written submissions opposing Mr Siemer’s application for leave to appeal. The Court declined Mr Siemer’s application. In those circumstances, Mr Siemer was at risk of an award of costs against him, in accordance with the normal practice. Given his extensive experience in this Court, Mr Siemer ought to have been well aware of that.”

With Mr Siemer’s experience confirmed as a reason why he ought to have anticipated the retrospective ambush by the Attorney-General and Courts, the Supreme Court next explained their reasoning for refusing to allow the target of the costs order to be heard, “Mr Siemer has attempted to raise in a sequence of recall applications points that could and should have been raised in the first application. A party seeking recall of a judgment must raise all points in support of the application together: where the points raised could have been raised at the outset, serial attempts at recall of the same judgment are an abuse of process.”

This demonstraes the absence of an independent bar fails New Zealanders.  In any other democracy, one would expect the distilling discipline of an independent bar to derail such a judicial system of vengeance.  Government benefactors never do so.