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Deliu v Attorney-General [2023] NZHC 2375 (29 August 2023)

Last Updated: 25 September 2023

JUDGMENT OF BREWER J

[Costs]

This judgment was delivered by me on 29 August 2023 at 2.30 pm pursuant to Rule 11.5 High Court Rules.

Registrar/Deputy Registrar

Solicitors:

Crown Law (Wellington) for Respondents

Copy to Applicant in person

DELIU v ATTORNEY-GENERAL [2023] NZHC 2375 [29 August 2023]

Introduction

• [1] This is a costs judgment.

• [2] In my judgment dated 15 March 2023, I dismissed Mr Deliu’s application for judicial review.¹ He sought to review the decisions of police and the Auckland Crown Solicitor in laying and maintaining criminal charges against him. I did not consider that his claims of mala fides were made out. Further, even if his claims of police impropriety did possess some merit, they were no longer the operative decision, being supplanted by the Crown Solicitor’s review of the charges, and therefore no longer relevant. Finally, most of the claims, even if proven, did not meet the very high threshold for judicial review of prosecutorial discretion and failed to appreciate the restrictions on judicial review of such decisions. In essence, Mr Deliu’s claims failed on all points and by some margin.

• [3] The Crown now seeks increased costs of 50 per cent on the basis that Mr Deliu failed to act reasonably by bringing a claim that was bound to fail. Mr Deliu opposes any award of costs, let alone an award of increased costs.

Attorney-General

• [4] Mr Smith, for the Attorney-General, submits that Mr Deliu’s claims were sufficiently meritless that an award of indemnity costs could be made. He refers to the various rulings I made against Mr Deliu that demonstrate that this high threshold is met. They include:²

[6] I have decided that Mr Deliu’s claims cannot succeed. In short, the Courts will not interfere with the exercise of the prosecutorial discretion to bring and continue charges, other than on the ground of evidential insufficiency, without clear evidence of wrongdoing which requires as a condign response that the charges be stayed or struck out. That is a high threshold to cross and Mr Deliu’s claims do not come close to doing so.

...

[19] Even assuming that Mr Deliu is correct in saying that the police were prejudiced against him, and even if there were actual conflicts of interest, that

¹ Deliu v Attorney-General [2023] NZHC 512.

2. Deliu v Attorney-General, above n 1, citing Moevao v Department of Labour [1980] 1 NZLR 464 (CA); and Polynesian Spa Ltd v Osborne [2005] NZAR 408 (HC).

would not be enough to give him the relief he seeks. Not only does the alleged conduct fail to establish wrongdoing which would require, on a judicial review, charges to be struck out, they are a matter of historical interest only. That is because the operative decision to proceed with the prosecutions is the decision of the Crown Solicitor, Mr Dickey, made in 2022.

...

[22] There is no credible evidence that the Crown and/or the Police have acted in bad faith.

...

• [24] There is simply no evidence of mala fides. This is an improper pleading and should not have been made. Further, the allegations, in substance, were raised in the proceeding before Davison J...

• [25] Justice Davison decided that Mr Deliu failed to establish any of the pleaded grounds of review.

• [26] I consider that the pleading in respect of Mr Flanagan is in substance a collateral attack on Davison J’s decision. I have read Davison J’s analysis and I have considered it against the issues raised by Mr Deliu in the current proceeding. I respectfully agree with Davison J’s analysis and I reach the same conclusion.

• [27] Mr Deliu further claims that the charges of perverting the course of justice were also brought against a Mr Richard Zhou whose alleged culpability is “materially identical” to that of Mr Deliu. However, the charges against Mr Zhou have been withdrawn. Mr Deliu alleges that this is disproportionate treatment contravening the parity principle.

• [28] I disagree. A decision to withdraw charges against one defendant can be made for many reasons. There is no rule that if charges are withdrawn against one defendant then they must be withdrawn against a co-defendant.

• [29] There is nothing in this pleading which would cause a Court, on judicial review, to strike out charges.

...

[And, in respect of the allegation that the police created a legitimate expectation they would reconsider the charging decisions:]

• [30] There is no legitimate expectation in this case that would cross the high threshold for judicial review of prosecutorial decisions. In any event, there was a review and it was carried out by Mr Dickey.

...

[And, in respect of the allegation that Mr Dickey’s first decision was in breach of natural justice and s 27 of the New Zealand Bill of Rights Act 1990:]

[33] None of the particulars given by Mr Deliu in his pleadings go anywhere close to establishing his pleading.

...

[And, in respect of the allegation regarding the structure of New Zealand's criminal justice system:]

[37] New Zealand’s criminal justice system is lawful and is based on statute and constitutional convention. This pleading is frivolous.

...

[And, in respect of the allegation that Mr Deliu is immune from prosecution:]

• [39] This is an issue which, if it is necessary to do so, must be decided by the Court hearing the charges following an evaluation of the relevant evidence.

• [40] In writing this decision I have avoided engaging with the detail of Mr Deliu’s pleadings and submissions. There would be no point in doing so. As my references to Moevao v Department of Labour and to Polynesian Spa Ltd v Osborne illustrate, Mr Deliu has failed to appreciate the restricted role of judicial review when it comes to decisions to bring charges and to continue with them.

• [5] Mr Smith submits that the above extracts demonstrate that Mr Deliu’s claims amounted to a “hopeless case”,³ were “totally without merit”⁴ and “bound to fail”.⁵ Further, Mr Smith relies on Goddard J’s statements in Hedley v Kiwi Co-Operative Dairies Ltd on the grounds for indemnity costs:⁶

(a) making allegations of fraud knowing them to be false and making irrelevant allegations of fraud, which he submits Mr Deliu’s allegations against the police and Crown prosecutors amounted to;

(b) commencing the proceeding in wilful disregard of known facts or clearly established law; and

(c) making allegations which ought to have never been made or unduly prolonging a case by groundless contentions.

3. Bradbury v Westpac Banking Corp [2009] NZCA 234, [2009] 3 NZLR 400 at [29(e)]; and Ben Nevis Forestry Ventures Ltd v Commissioner of Inland Revenue [2014] NZCA 348, (2014) 22 PRNZ 322 at [27].
4. TheCircle.co.nz Ltd v Trends Publishing International Ltd (in liq and in rec) [2021] NZCA 235, (2021) 25 PRNZ 766 at [34].

⁵ At [34].

6. Hedley v Kiwi Co-Operative Dairies Ltd (2002) 16 PRNZ 694 (HC) at [11], citing Colgate Palmolive Co v Cussons Pty Ltd [1993] FCA 801, cited with approval in Bradbury v Westpac Banking Corp, above n 3, at [29].

• [6] Nevertheless, the Crown does not seek indemnity costs. It seeks increased costs instead. Mr Smith argues that if the Court accepts that indemnity costs are appropriate then it would follow that increased costs are available on the basis that Mr Deliu failed to act reasonably. In particular, Mr Deliu’s claims engage r 14.6(3)(b)(ii) of the High Court Rules 2016 in that he took or pursued “unnecessary step[s] or [arguments] that lack[ed] merit”. Mr Smith submits that a 50 per cent uplift on the standard 2B costs is appropriate, which comes to an end figure of $37,642.50.⁷

Mr Deliu

• [7] Mr Deliu submits that he should not be liable to pay any costs award in reliance on r 14.7(g). The thrust of his submissions is that no award is appropriate as my judgment wilfully ignores his submissions and evidence; that he was “denied a trial (in any real sense)”; and that his factual and legal claims were not baseless. He refers to various pieces of evidence that were placed before the Court which, in his submission, amount to incontrovertible evidence of police and prosecutorial malfeasance. He concludes that the Court deliberately ignored this evidence.

• [8] Mr Deliu further criticises the Crown’s submissions and my reasoning suggesting it would be paradoxical and “Orwellian doublethink” that the Court found both that there was no basis for mala fides and also that any such alleged impropriety would have been rendered non-operative because, in his opinion, those are mutually exclusive conclusions. Again, he argues that the Court did not properly address his allegations and ignored his evidence and therefore could not have reached any conclusion about the absence of impropriety.

• [9] Mr Deliu objects to my statement of agreement with Davison J’s reasoning regarding his submissions that prosecutors are not allowed to seek guilty pleas from unserved and unrepresented accused. He argues that I must have deliberately ignored the evidence and asks that the Court formally recognise and “truthfully declare” that it ignored his submission. He also submits that it was incorrect for the Court to rely on Davison J’s decision as it was subject to an extant recall application.

7. The Crown exclude from this a subsequent application for further evidence/cross-examination as this was agreed between the parties.

• [10] Mr Deliu objects to my conclusion that “[h]e wants [his charges] to go away.” He submits that I attributed “imaginary wrongs” to him as the remedies he sought did not include that the charges be struck out.

• [11] Mr Deliu submits that I was incorrect to rule that he misapprehended the restricted role of judicial review of prosecutorial decisions. He submits he made no such error and therefore his claim was not bound to fail. He makes similar assertions in regard to his allegations that the New Zealand criminal justice system lacks independence.

• [12] Mr Deliu concludes his submissions with the following remarks:

(a) his submissions are not excessive;

(b) he is not attempting to relitigate matters, instead he is attacking the gross denial of due process by this Court as a discretionary factor in favour of not awarding costs;

(c) he is not contemptuous; and

(d) prior to any costs judgment being delivered he should be afforded the opportunity to be heard because the Court erroneously characterised him as misunderstanding the law.

Legal principles

• [13] The starting point is that costs follow the event. The party who fails should pay costs to the party who succeeds.⁸ As the successful party, the Crown is presumptively entitled to costs.

Reduced costs

• [14] Rule 14.7 provides that the Court may reduce the costs otherwise payable in certain circumstances. Mr Deliu relies on r 14.7(g):

⁸ High Court Rules 2016, r 14.2(1)(a).

14.7 Refusal of, or reduction in, costs

Despite rules 14.2 to 14.5, the court may refuse to make an order for costs or may reduce the costs otherwise payable under those rules if—

...

(g) some other reason exists which justifies the court refusing costs or reducing costs despite the principle that the determination of costs should be predictable and expeditious.

• [15] The “catch-all” in r 14.7(g) is broad but requires identification of a good reason for departure from the general rule (costs follow the event).⁹

Increased costs

• [16] Rule 14.6 provides for orders to pay increased costs. Various circumstances in which the Court may make such orders are listed at r 14.6(3). Of these, the Crown emphasises that the Court may make an order for increased costs against a party who has contributed unnecessarily to the time or expense of the proceeding by:

(a) taking or pursuing an unnecessary step or an argument that lacks merit;¹⁰ or

(b) failing, without reasonable justification, to accept an offer of settlement whether in the form of an offer under r 14.10 or some other offer to settle or dispose of the proceeding;¹¹ or

(c) where some other reason exists which justifies the court making an order for increased costs despite the principle that the determination of costs should be predictable and expeditious.¹²

9. Examples may include habeas corpus applications and claims under the New Zealand Bill of Rights Act 1990: Taylor v District Court at North Shore (No 2) HC Auckland CIV-2009-404-2350, 13 October 2010 at [10]. The number of exempt categories is to be kept limited — otherwise the exception will swallow the rule: Roberts v A Professional Conduct Committee of the Nursing Council New Zealand [2014] NZCA 141, (2014) 21 PRNZ 753 at [24].

¹⁰ Rule 14.6(3)(b)(ii).

¹¹ Rule 14.6(3)(b)(v).

¹² Rule 14.6(3)(d).

• [17] The threshold for such a departure is unreasonable conduct by the party opposing costs.¹³ That conduct must be in relation to the proceeding, not after or before it was commenced.¹⁴ Uplift will be justified to the extent the failure to act reasonably contributed to the time or expense of the proceeding.¹⁵ The party seeking increased costs bears the onus of convincing the Court they are justified.¹⁶

• [18] When making an order for increased costs the Court uplifts from scale, rather than awarding a percentage of actual costs.¹⁷ This is usually calculated on a step by step basis. However, where they are awarded because an argument lacked merit and was inherently unlikely to succeed, increased costs apply to all steps.¹⁸

• [19] The Court of Appeal, in Bradbury v Westpac Corp, adopted the following considerations and comments in regard to “hopeless” cases and indemnity costs:¹⁹

[23] Sheppard J then turned to consider when the Court may depart from the practice just discussed and order indemnity costs. He cited Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397 where Woodward J said (at 400 - 401):

... Courts in both the United Kingdom and Australia have long accepted that solicitor and client costs can properly be awarded in appropriate cases where “there is some special or unusual feature in the case to justify the court exercising its discretion in that way” (Preston v. Preston [1982] 1 All ER 41 at 58). It is sometimes said that such costs can be awarded where charges of fraud have been made and not sustained; but in all the cases I have considered, there has been some further factor which has influenced the exercise of the court's discretion - for example, the allegations of fraud have been made knowing them to be false, or they have been irrelevant to the issues between the parties: see Andrews v. Barnes [1888] UKLawRpCh 112; (1988) 39 Ch D 133; Forester v. Read [1870] UKLawRpCh 114; (1870) 6 LR Ch App 40; Christie v. Christie [1873] UKLawRpCh 36; (1873) 8 LR Ch App 499; Degman Pty Ltd (in liq) v. Wright (No. 2) (1983) 2 NSWLR 354.

Another case cited in argument was Australian Guarantee Corp Ltd v De Jager [1984] VicRp 40; (1984) VR 483 where (at 502) Tadgell J allowed solicitor and client costs because he found the pursuit of the action to have been “a high-handed presumption”.

¹³ Bradbury v Westpac Banking Corp, above n 3, at [27].

¹⁴ See Paper Reclaim Ltd v Aotearoa International Ltd [2006] 3 NZLR 188 (CA) at [160].

15. Commissioner of Inland Revenue v Chesterfields Preschools Ltd [2010] NZCA 400, (2010) 24 NZTC 24,500 at [165].

¹⁶ Strachan v Denbigh Property Ltd HC Palmerston North CIV-2010-454-232, 3 June 2011.

¹⁷ Holdfast NZ Ltd v Selleys Pty Ltd [2005] NZCA 302; (2005) 17 PRNZ 897 (CA) at [40].

18. NR v MR [2014] NZCA 623, (2014) 22 PRNZ 636 at [52]; and Broadspectrum (New Zealand) Ltd v Nathan [2017] NZCA 434, (2017) 15 NZELR 398 at [57].
19. Bradbury v Westpac Banking Corp, above n 3, citing Colgate-Palmolive Company v Cussons Pty Ltd [1993] FCA 536; (1993) 46 FCR 225.

No doubt the expression ‘high-handed presumption’ was appropriate in the case Tadgell J had to decide, and he needed to go no further; but in order to establish a convenient principle in such cases it is necessary to be a little more prosaic. I believe that it is appropriate to consider awarding ‘solicitor and client’ or ‘indemnity’ costs, whenever it appears that an action has been commenced or continued in circumstances where the applicant, properly advised, should have known that he had no chance of success. In such cases the action must be presumed to have been commenced or continued for some ulterior motive, or because of some wilful disregard of the known facts or the clearly established law. Such cases are, fortunately, rare. But when they occur, the court will need to consider how it should exercise its unfettered discretion.

(Emphasis added.)

Sheppard J then cited the opinion of French J (now Chief Justice of Australia) in J Corp Pty Ltd v Australian Builders Labourers Federation Union of Workers (WÄ Branch) (No 2) [1993] FCA 70; (1993) 46 IR 301 at 303:

Although there is said to be a presumption in such cases that the action was commenced or continued for some ulterior motive or in wilful disregard of known facts or clearly established law, it is not a necessary condition of the power to award such costs that a collateral purpose or some species of fraud be established. It is sufficient, in my opinion, to enliven the discretion to award such costs that, for whatever reason, a party persists in what should on proper consideration be seen to be a hopeless case. The case against the BTA (a reference to one of the respondents) was paper thin. The BTA's name was invoked on a sign associated with the picket and appeared in a newspaper advertisement referred to in the evidence. Two of the union officials involved in the picket had BTA authorisations to inspect premises under the relevant award. But much more than that was necessary to justify proceedings for a contravention of s.45D. In my opinion the order sought by the BTA should be made.

(Emphasis added.)

...

• [29] We therefore endorse Goddard J’s adoption in Hedley v Kiwi Co- operative Dairies Ltd (2002) 16 PRNZ 694 at [11] (HC) of Sheppard J’s summary in Colgate v Cussons at [24]. While recognising that the categories in respect of which the discretion may be exercised are not closed (see r 14.6(4)(f)), it listed the following circumstances in which indemnity costs have been ordered:

(a) the making of allegations of fraud knowing them to be false and the making of irrelevant allegations of fraud;

(b) particular misconduct that causes loss of time to the court and to other parties;

(c) commencing or continuing proceedings for some ulterior motive;

(d) doing so in wilful disregard of known facts or clearly established law;

(e) making allegations which ought never to have been made or unduly prolonging a case by groundless contentions, summarised in French J’s “hopeless case” test.

Discussion

Reduced costs

• [20] The first matter to be addressed is whether there is basis for a reduction in costs. Mr Deliu has extensively argued he should not be liable for any costs. His submissions are misguided. Although he argues that he is not attempting to relitigate his case, he is wrong. His submissions invite the Court to revisit its decision and strenuously assert that the Court reached the incorrect outcome because of wilful blindness to his allegations and evidence.

• [21] This is a costs judgment. It is not a review of the substantive judgment. Mr Deliu may seek to appeal my judgment if he wishes. But, I will decide costs based on the findings in my decision. There is no reason to depart from the presumption that costs follow the event and no reason for an award of reduced costs.

• [22] I will not grant Mr Deliu an oral hearing. His submissions have made clear his position.

Increased costs

• [23] I accept the Crown’s submissions that Mr Deliu acted unreasonably, in particular:

(a) by making unwarranted allegations of fraud;

(b) by commencing proceedings for an ulterior motive (that is, a collateral attack on the decision of Davison J);

(c) by commencing proceedings in wilful disregard of clearly established law (that is, the very high threshold of judicial review of prosecutorial discretion); and

(d) by commencing proceedings that were “hopeless”.

• [24] I accept that if indemnity costs would be available on the basis that the claims were totally without merit and bound to fail, then increased costs should be available

as an alternative. The case law supports such a conclusion as the grounds for increased or indemnity costs for hopeless cases are in substance almost identical.²⁰ I am satisfied that Mr Deliu’s claims were bound to fail. The factual basis for his claims was tenuous and, in reality, untenable. Legally, they had no prospect of success.

• [25] As to the appropriate quantum, the proposed 50 per cent uplift is at the upper end in the typical increased costs case.²¹ However, a 50 per cent uplift is not the limit and increases may go higher.²² For example, in Mueller v Hendren, Heath J awarded a 75 per cent uplift instead of indemnity costs where he considered grounds for indemnity costs had been established but a lesser award was warranted.²³ Similarly, in Intech Inc v Anura Ltd, van Bohemen J, referring to Mueller, allowed an uplift of 70 per cent in circumstances where he considered the threshold for indemnity costs had not been made out but only because certain evidence had not been tested.²⁴

• [26] In my view, an increase in 2B scale costs of 50 per cent is appropriate. It could well be greater.

Result

• [27] The respondent’s application for increased costs is granted. Mr Deliu is ordered to pay increased costs of 50 per cent, being in total $37,642.50.

Brewer J

²⁰ Bradbury v Westpac Banking Corp, above n 3, at [27(b)–(c)], “increased costs may be ordered where there is failure by the paying party to act reasonably; and indemnity costs may be ordered where that party has behaved either badly or very unreasonably.” (Emphasis added). Reasonability is therefore the criterion, and it is simply the degree of unreasonableness that will determine whether indemnity or increased costs are available. See, for example, Mueller v Hendren [2009] NZHC 710; (2009) 19 PRNZ 432 (HC) at [26]–[28], where Heath J held that the grounds of indemnity costs were satisfied but exercise the Court’s discretion to award increased costs instead.

²¹ Holdfast NZ Ltd v Selleys Pty Ltd [2005] NZCA 302; (2005) 17 PRNZ 897 (CA) at [46]–[48].

²² At [48].

²³ Mueller v Hendren, above n 20.

²⁴ Intech Inc v Anura Ltd [2022] NZHC 1876.