Barron v Hutton - [2013] NZHC 2281

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2010-404-7270 [2013] NZHC 2281

BETWEEN SUSAN PATRICIA BARRON Plaintiff

ANDANTHONY MORRIS HUTTON First Defendant

GRAEME TREVOR STEPHENS and
MARY STEPHENS Second Defendants
IAG NEW ZEALAND LIMITED Third Defendant

Hearing: 18 July 2013

Counsel: D M Law for the Plaintiff
No appearance for the First Defendant
R Parmenter for the Second Defendant (leave to withdraw) P Smith and M Mitchell for the third Defendant

Judgment: 3 September 2013

JUDGMENT OF WOODHOUSE J

This judgment was delivered by me on 3 September 2013 at 4:00 p.m. pursuant to r 11.5 of the High Court Rules 1985.

Registrar/Deputy Registrar
……………………………………

Solicitors / Counsel:
Ms D M Law, Law & Associates, Solicitors, Auckland
Mr R O Parmenter, Barrister, Auckland
Daniel Overton & Goulding (Instructing solicitors for the 2nd Defendant), Solicitors, Onehunga
Mr P Smith / Ms M Mitchell, Fortune Manning, Solicitors, Auckland

BARRON v HUTTON [2013] NZHC 2281 [3 September 2013]

[1] On 30 August 2012 Associate Judge Doogue made an order that the plaintiff, Mrs Barron pay $100,000 security for the costs of the second and third defendants.1
Mrs Barron has applied for leave to proceed out of time to review the order. This is on the basis that there has been a material change of circumstances in that, on 22
January 2013, she was granted legal aid for this proceeding.

[2] Mrs Barron’s applications are opposed by the third defendant, IAG. Although the second defendants wish to preserve the order they took no active steps to oppose the review application. Mr Parmenter, for the second defendant, was granted leave to withdraw. No steps have been taken in the proceeding by the first defendant.

Application for leave

[3] For IAG, Mr Smith, acknowledged that there would be no material prejudice to IAG if leave is granted. And he acknowledged, in the light of authorities, that a grant of legal aid is a material change of circumstances warranting an application for review out of time.2

[4] These were responsible acknowledgements. I am satisfied that there should be an order granting leave to proceed and order accordingly.

Discussion

[5] Under s 116 of the Legal Services Act 2011 (the Act) there is no bar to an order for security for costs against a legally aided person. However, if a legally aided person is unsuccessful in the proceeding, the power of the Court to award costs against the legally aided person is circumscribed by the Act. I come to the statutory provisions in a moment. These broad principles are relevant because they inevitably influenced the main focus of the argument which was directed to this material
change of circumstances.

1 Barron v Hutton [2012] NZHC 2183 at [76]-[105].
2 O’Malley v Garden City Helicopters Ltd (1994) 8 PRNZ 182 (HC).

[6] Ms Law, for Mrs Barron, and Mr Smith both argued on the basis that, if Mrs Barron fails in her claim, any order for costs against her, now that she is legally aided, could not exceed…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Barron v Hutton

Details

AGLC: Barron v Hutton [2013] NZHC 2281
Case: [2013] NZHC 2281
Decision Date: 3 September 2013

CaseChat Overview and Summary

In Barron v Hutton, Susan Patricia Barron sought to review an earlier order that she pay $100,000 as security for costs against the second and third defendants. The order was made in 2012, before Mrs Barron was granted legal aid in January 2013. The legal issues in the case concerned the principles governing security for costs against a legally aided plaintiff and whether the grant of legal aid constituted a material change of circumstances warranting a review of the security order. The court had to determine whether there were exceptional circumstances justifying the security for costs order under the Legal Services Act 2011.

The court found that while there was no statutory bar to ordering security for costs against a legally aided plaintiff, the court’s discretion must be exercised in light of the statutory restrictions on awarding costs against a legally aided person. The court held that exceptional circumstances must be established for any order for costs to be justified. In this case, the court did not find the exceptional circumstances argued by IAG to be established. The court further noted that the grant of legal aid was not retrospective and that the security order should be reviewed in light of the changed circumstances. The court concluded that the appropriate response was to reduce the security for costs to $5,000 for the costs incurred after the discontinuance by the Official Assignee and before the grant of legal aid.

The result was that the order requiring the plaintiff to pay $100,000 as security for costs was quashed, and a new order required the plaintiff to pay $5,000 as security for the costs incurred by the second and third defendants between the discontinuance by the Official Assignee and the grant of legal aid. The court also ordered that unless the second or third defendants applied for a stay of the orders within 10 working days, the sum of $95,000 paid into court by the plaintiff, along with any interest earned, would be repaid forthwith to the plaintiff.

Orders