Auckland Transport v Prescott

[2014] NZHC 1674

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2013-404-4100 [2014] NZHC 1674

IN THE MATTER	The Insolvency Act 2006
and in the matter of	The Bankruptcy of Peter Richard Prescott
BETWEEN	AUCKLAND TRANSPORT Judgment Creditor
AND	PETER RICHARD PRESCOTT Judgment Debtor

Hearing:	16 July 2014
Appearances:	Mr D M Hughes for Auckland Transport Mr P Prescott in person
Judgment:	16 July 2014

ORAL JUDGMENT OF ASSOCIATE JUDGE J P DOOGUE

AUCKLAND TRANSPORT v PRESCOTT [2014] NZHC 1674 [16 July 2014]

[1]      This proceeding has reached the point where the judgment debtor has paid the original debt upon which the creditor’s application was supported. However, because of continuing litigation between the parties, further expenses have been incurred by Mr Prescott which the judgment creditor now wishes to add into the creditor’s application by way of amendment.   Specifically, the judgment creditor seeks to amend the amount claimed to $2,540 which represents the amount of a costs order made by Cooper J in judicial review proceedings which were filed in this Court.  It is unnecessary to go into the detail of those proceedings except to say that they were connected with the original circumstances which brought the judgment creditor and the judgment debtor before the Court in the first place.

[2]      The judgment creditor in addition to claiming that the amount of the judicial review costs ought to be paid, also seeks to have costs fixed on its application.  It seeks indemnity costs against Mr Prescott.

[3]      I  offered  Mr  Prescott  the  opportunity  to  comment  upon  the  amendment however he did not make specific submissions on that but did raise other matters more connected with the overall merits of the dispute between the parties.

[4]      In my view it is just and reasonable for the judgment creditor to be permitted

to amend the creditor’s application as indicated.

[5]      Dealing with the matter of costs, the judgment creditor submitted that it should be entitled to indemnity costs in this proceeding.  While for obvious reasons, which I will set out later in this judgment, I will not be able to finally dispose of the main part of the claim today, I can deal with the issue of costs and give a judgment which in principle will provide guidance to the parties about the basis upon which costs are to be issued.

[6]      The judgment creditor says that in reliance on Bradbury v Westpac Banking

Corporation,1  indemnity costs may be ordered in circumstances which include the following:

1      Bradbury v Westpac Banking Corporation [2009] NZCA 234, [2009] 3 NZLR 400.

(i)       Particular misconduct that causes loss of time to the Court and to other parties;

(ii)      Unduly prolonging the case with groundless contentions.

[7]      The  basis  upon  which  the  judgment  creditor  puts  forward  its  asserted entitlement to indemnity costs is that at an earlier stage in this  proceeding and following a suggestion from Associate Judge Sargisson that Mr Prescott take steps to settle the amount of the claim against him, Mr Prescott wrote a letter to the counsel for the judgment creditor dated 2 May 2014.  He headed that letter without prejudice. Within the letter he essentially made offers to discontinue other proceedings that were extant including a prosecution of the mayor of Auckland, Mr Len Brown. Mr Prescott objected to that letter being put in evidence because it was written on a without prejudice basis.

[8]      Before a document can qualify for protection under the without prejudice rule, the Court must be able to form the view that the contents of the document represent a bona fide attempt to compromise proceedings between the parties.   I would not be prepared to view the document in question in this case as coming within that category.  That a debtor should be able to claim protection of the rule in circumstances where he is essentially offering to discontinue criminal proceedings in return for having a debt forgiven can not in my view justifiably be accorded without prejudice protection.  It would be contrary to public policy were it otherwise.

[9]      There is no need to comment in detail on the terms of the letter and annexures that were produced with it.  The contents are unpleasant and may, on one view of matters, amount to illegal activity on the part of the letter writer.  It is not necessary to make a judgment on those matters but rather it is relevant to analyse the reasons why the judgment creditor puts it forward.

[10]     Counsel for the judgment creditor describes the sending of the letter as being “wholly inappropriate” behaviour in the context of a legitimate Court proceeding and says it exhibits a level of misconduct which was sufficient in Bradbury to justify an order for indemnity costs being granted.

[11]     Mr Prescott has filed submissions on the costs question.  He says that he has limited capacity to put forward arguments on these legal matters because he is not a lawyer.  I will not need to refer to any of these but will note one or two of the points raised at paragraph 10 of his memorandum.

[12]     Mr  Prescott  refers  to  a  case  called  Motsepe  v  Commissioner  of  Inland Revenue justifying the proposition that the Court should be cautious in awarding costs against litigants who seek to enforce their constitutional right against the state. 2

While one would have no quarrel with caution being required in cases that are sensibly brought on proper bases where there is an issue of substance that involves the constitutional rights of individuals, I consider that the present proceeding is a long way from being so described.

[13]     This  proceeding  started  in  circumstances  where  Mr  Prescott  sued  in  the District Court for tortious remedies against Auckland Transport for alleged battery and unlawful detention by Police officers.   All of this arose out of Mr Prescott’s dispute with a parking officer regarding whether or not he was illegally parked.  The District Court found against Mr Prescott’s contentions and awarded costs against him.  He attempted to appeal and to obtain leave to appeal out of time to that end. The latter application was unsuccessful and was dismissed.

[14]     He then took steps to bring judicial review proceedings against the District Court.    Again  the  outcome  was  unsuccessful.     While  it  might  be  said  that Mr Prescott’s arrest and detention (which undeniably occurred) could potentially have involved issues of constitutional sensitivity, he failed to bring an appeal against the decision of the District Court.   Instead he has brought other misconceived proceedings.  Having done so, he now faces the consequence which is an application for costs.   The question of whether or not he should pay costs which have been ordered in other courts is not one that can be revisited in a bankruptcy proceeding. This Court has to proceed on the basis that those orders were properly made.  The bankruptcy court cannot go behind the propriety of the making of the orders in the

District Court.   The bankruptcy court does not in any sense sit in appeal on the

2      Motsepe   v   Commissioner  for   Inland   Revenue   [1977]   ZACC   3,   1997(6)   BCLR   692 (Constitutional Court of South Africa).

District Court.  For all of those reasons, the phase of this litigation which might have raised questions of constitutional interest closed quite a long time ago and what is left is what appears to be a rear guard action on the part of Mr Prescott to avoid having to pay the costs which he was adjudged to be required to pay pursuant to a District Court order which has never been set aside.

[15]     Other points were made such as that the judgment debtor did not have access to  legal  materials  which  would  enable  him  to  mount  a  defence  against  any application for indemnity costs.  In particular Mr Prescott states that he not being a lawyer was unable to obtain access to LexisNexis in order to research his position. This submission assumes that having access to subscription based legal services such as LexisNexis represents the only way in which a person can research the law.  That is manifestly incorrect.

[16]     Mr Prescott may be on stronger ground though when he moves onto the question of whether there should be an indemnity cost award made against him.  I do not agree that he can invoke the New Zealand Bill of Rights Act 1990, s 27 which is declaratory of a party’s right to bring proceedings against and defend civil proceedings brought by the Crown.  Whatever implication s 27 might have for costs orders, obviously does not apply in a case where the Crown is not a party to the proceedings so nothing more needs to be said about that.

[17]     Further, his submissions that he is disadvantaged as a lay litigant does not mean that the Court should not apply the law.  It is accepted that a lay litigant will be at a disadvantage.   The Court where possible do what it can to mitigate that disadvantage but beyond that, responsibility of decisions about what state funded provision of legal assistance ought to be made are policy questions for the legislature and not for the judiciary.  A self-represented person is bound just as any other is by the determinations of the Court before which he or she litigates.

[18]     Mr Prescott draws attention to the fact that the judgment creditor’s claim for indemnity costs rests exclusively on the alleged impropriety of his conduct when attempting to negotiate a settlement with the judgment creditor and sending a letter to the persons I referred to earlier in this judgment.  The Court does not in any way

approve attempts to achieve settlements out of Court by either explicitly making a threat or conversely offering to withdraw a coercive criminal process.   But it is necessary not to lose sight of the fact that we are dealing with the fixing of costs. Costs are necessarily connected with the way in which a party comports him or herself in the course of proceedings and whether that conduct results in time being wasted and features disregard of Court rules or a failure to obey Court orders.   I would see the conduct alleged against Mr Prescott, while undesirable, as being at a step removed from such matters.  It is a matter of degree in every case.  There is no black or white answer on this issue.  The Court has to exercise a discretion which in the end is a matter of inquiring whether the making of such an order would have positive implications for observance of proper Court processes.   In my view the balance  comes  down  in  Mr  Prescott’s  favour  and  I  do  not  intend  to  make  an indemnity order.   I see no reason however why he ought not to be ordered to pay costs on a 2B basis together with disbursements to be fixed by the Registrar.

[19]     I mentioned earlier in this judgment that it would not be possible to bring this matter to a final resolution today, no matter how attractive such an outcome might be.   I consider that the fact that the Court has permitted the judgment creditor to amend  the  application  to  admit  a  fresh  debt  which  is  sought  to  be  recovered. However I believe that Mr Prescott needs to be given a brief time to reflect upon the position that has now been reached and to make arrangements to pay the amount owing under the amended creditor’s application.  For that reason the proceeding is adjourned to the bankruptcy list at 10 a.m. on 21 August 2014.

[20]     At the next hearing I will expect the judgment creditor to have an updated schedule of costs that are claimed in the proceeding.  I will then decide whether or not the cost of any future appearance (if indeed there needs to be one at the next

mention of this matter) should be added to the costs order that will need to be made.

J.P. Doogue

Associate Judge