Appleton v Tauranga Law
[2012] NZHC 242
•22 February 2012
IN THE HIGH COURT OF NEW ZEALAND TAURANGA REGISTRY
CIV 2010-070-385 [2012] NZHC 242
BETWEEN JOHN APPLETON AND NATALIE MARIE RYAN AS TRUSTEES OF THE APPLETON FAMILY TRUST
First Plaintiff
ANDJOHN APPLETON Second Plaintiff
ANDTAURANGA LAW Defendant
Hearing: On the papers
Counsel: D W Grove for Plaintiffs
Judgment: 22 February 2012
JUDGMENT OF KEANE J
Solicitors:
Ellis Law, Auckland for Plaintiffs
Copy to:
JOHN APPLETON AND NATALIE MARIE RYAN AS TRUSTEES OF THE APPLETON FAMILY TRUST V TAURANGA LAW HC TAU CIV 2010-070-385 22 February 2012
[1] On 12 December 2011, after a four day hearing, Allan J dismissed the plaintiffs' claim against their former solicitors, Tauranga Law, for a deposit of
$112,407 that Mr Appleton had lost in a failed Blue Chip investment, and a related claim against the third party, a co-trustee in the Appleton Family Trust. Allan J required Mr Appleton to pay the solicitors' costs and the solicitors the co-trustee's costs.
[2] On 22 December 2011 the plaintiffs appealed this decision to the Court of Appeal, contending essentially that Allan J erred in concluding that any negligence on the solicitors' part, and he held they were negligent, was not causative of the plaintiff's loss; that Mr Appleton would have pressed on with the investment in any event.
[3] Then still outstanding were hearing fees for which the plaintiffs remained liable for the four day hearing, $9,425.40, meant to be paid before the hearing. Mr Appleton had applied beforehand for a fee waiver, contending that if he had to meet the fees he would suffer 'undue financial hardship'. In a decision given on 4
November 2011, after the hearing, the Registrar declined that application.
[4] Mr Appleton, now with the assistance of his counsel, applies to have the
Registrar's decision set aside on review.
Decision under review
[5] The Registrar considered that, under Reg 6 of the High Court Fees Regulations 2001, he could only either waive the hearing fees payable altogether or not waive them at all, and though he considered Mr Appleton's position 'marginal', he was not convinced that if Mr Appleton did have to pay the fees he would suffer
'undue financial hardship'.
[6] The Registrar recorded that Mr Appleton had an annual income after tax of
$57,200 and itemised expenditure amounting to $40,691 each year. Mr Appleton's declared assets, the Registrar recorded, were worth $437,000. His principal asset was
his home, $430,000. He declared his liabilities, principally his mortgage, came to
$229,000.
[7] Mr Appleton declared no dependents and the Registrar also took into account that Mr Appleton had himself brought the case in April 2010, nearly 17 months before trial, and could have anticipated this hearing fee liability.
Grounds for review
[8] Firstly, Mr Appleton's counsel contends, any assessment of Mr Appleton's ability to pay the fee must begin with the reason why he brought the case in the first place: his loss of substantial funds following the collapse of the Blue Chip Group,
$112,000. This is a loss difficult to redress at the age of 61.
[9] Secondly, his counsel contends, Mr Appleton elected to bring this case in the District Court, where hearing fees would have come to $3,625.20, but the case was transferred to this Court on the election of the defendants, increasing his liability to
$9,425.40.
[10] Thirdly, his counsel contends, Mr Appleton was obliged under the deed of trust to indemnity the co-trustee joined as a third party. As well as incurring his own costs he had, before trial, to meet the per-trial costs of the co-trustee, coming to
$18,500.
[11] Fourthly, his counsel contends, the Registrar has left out of account some items of expenditure, omissions that are not obvious to me, but more materially has not taken into account the absence of normal expenses that would be inevitably incurred, like those for car and motor cycle repairs, clothing, dental costs, and the like.
[12] Finally, his counsel contends that Mr Appleton is the real plaintiff in this case and will be so on the appeal. The trust is without income and there is no basis on which the liability is able to be shared. And, since the Registrar's ruling, Mr Appleton's financial position has become worse.
[13] The Registrar is granted power by Reg 6 of the 2001 Regulations to waive hearing or other fees, where satisfied that a plaintiff or applicant is 'unable to pay the fee' as a result of being legally aided or a beneficiary, neither of which apply in this instance, or 'would otherwise suffer undue financial hardship if he or she paid the fee'.[1]
[1] High Court Fees Regulations, reg 6(2)(a)(iii).
[14] There is an alternative basis for waiver and that is that the case involves a
'matter of genuine public interest' that would be unlikely to proceed unless the fee were waived.[2] But that does not apply in this instance. The application was based solely on a claim of undue financial hardship.
[2] Regulation 6(2)(b)(iv).
[15] Regulation 6, on its face, only confers on the Registrar a power to waive a fee completely, or to decline to do so, but in principle I cannot see why the Registrar cannot also waive a fee partly.
[16] In principle, the exercise of a power within its purpose to less than its full extent cannot be objectionable and often that is an ability granted expressly. That apart, while a complete waiver may be proportionate where a plaintiff or applicant is a beneficiary or legally aided person, it might not be on a claim of 'undue financial hardship'. An applicant might not then qualify for a complete waiver, but might, against the test, qualify for a part waiver.
[17] What is finally important is the degree of hardship claimed. Regulation 6 assumes that a plaintiff may suffer some hardship if obliged to pay hearing fees but that is not enough. The hardship suffered must be 'undue'; a hardship, which is beyond the ordinary or, as the Oxford English Dictionary has it, beyond 'what is just
and right'.
[18] Regulation 6 does not confer on a plaintiff or applicant any ability to apply for review. Nor is that right conferred in the regulations as a whole. HCR 2.11(1)(a), however, gives an affected party to a proceeding the ability to apply for review of 'a Registrar's exercise of jurisdiction', as this surely is. That apart, a Judge of this Court must have that inherent jurisdiction.
[19] Assuming HCR 2.11 does apply, it obviates any need to apply for an extraordinary remedy.[3] Instead on an interlocutory application for review under the rule a Judge may 'make any orders he or she thinks just'. If HCR 2.11 does not apply, a Judge must have an equivalent summary inherent jurisdiction. In either event the power is both wide and flexible. The Judge must start afresh.
[3] HCR 2.11(3).
[20] The result is that on an application for review the issue is not whether the Registrar made any reviewable error. Nor need the Judge be tied to the information before the Registrar when the decision under review was made. To make an order that is just, the Judge must be able to take into account anything material since the Registrar's decision.
[21] The issue the Judge must decide, however, is the same finally as it was before the Registrar, certainly in this case; and it is in this instance whether Mr Appleton would be unable to pay the fee, or any part of it, because to do so would cause him
'undue financial hardship'.
Conclusions
[22] The Registrar was justified in concluding, I consider, on the careful analysis that he made of Mr Appleton's then disclosed income and expenditure and assets and liabilities, that Mr Appleton did have an apparent surplus from which to meet the
hearing fees without undue hardship.
[23] Mr Appleton's counsel has, however, identified items of normal expenditure that Mr Appleton did not disclose and the Registrar was not able to take into account, which suggest that any income surplus is likely to be more slight than appears on the face of the application.
[24] Equally, while Mr Appleton may enjoy an equity in his home, his mortgage remains considerable for a man of his means, $220,000, and as at 1 February 2012 his mortgage account was overdrawn. It stood at $238,064.38. He also had two overdrawn loan accounts. His capacity to borrow more now has to be questionable.
[25] Then when one takes into account the other considerations Mr Appleton's counsel identifies, the loss that prompted Mr Appleton to bring his case, his funding of the co-trustee and the way in which his liability for hearing fees escalated, there is a wider basis to conclude that he could not meet the full hearing fee payable without undue financial hardship.
[26] To my mind it is within Mr Appleton's means, though with hardship, to pay the hearing fees he would have incurred in the District Court, $3,625.20, but not more, without undue hardship. I make an order fixing that lesser sum to be the fee he
has to pay, waiving the balance for which he would otherwise be liable.
P.J. Keane J
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