Blomfield v A

[2021] NZHC 3550

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2020-404-1619

[2021] NZHC 3550

IN THE MATTER

of Misfeasance in public office

BETWEEN

MATTHEW JOHN BLOMFIELD

Plaintiff

AND

MR A

First Defendant

THE ATTORNEY-GENERAL

Second Defendant

Hearing:

On the papers

Counsel:

Plaintiff in person

H Ebersohn and J B Watson for defendants

Judgment:

17 December 2021

JUDGMENT OF KATZ J

[Costs]

This judgment was delivered by me on 17 December 2021 at 4:00 pm pursuant to Rule 11.5 High Court Rules

Registrar/Deputy Registrar

Solicitors:           Crown Law Office, Wellington Copy to:  M J Blomfield (Plaintiff)

BLOMFIELD v MR A & THE ATTORNEY-GENERAL [2021] NZHC 3550 [17 December 2021]

Introduction

[1]        Matthew Blomfield is the sole director and shareholder of various companies. His companies provide insolvency and litigation support services.

[2]        Mr Blomfield is currently suing the Attorney-General (in respect of the Inland Revenue Department) (“Inland Revenue”) and an individual Inland Revenue employee, who is referred to in the proceeding as Mr A.   Amongst other things,    Mr Blomfield claims that both defendants have committed misfeasance in public office.

[3]        Mr A and Inland Revenue filed interlocutory applications for security for costs, interim confidentiality/non-publication orders, and further and better particulars of the statement of claim. On 20 October 2021, I granted all three of those applications.1 I reserved leave to file memoranda, if costs could not be agreed.2

[4]        The parties have largely resolved the costs issues between themselves. They agree that costs should be awarded on a 2B scale basis, together with reasonable disbursements. Quantum has been agreed, save that the defendants seek an additional allowance of $1,792.50 for second counsel. The defendants submit that second counsel was necessary and proportionate. Mr Blomfield, on the other hand, considers that second counsel was “overkill” given that he was self-represented.

Should costs be awarded for second counsel?

[5]        The default position in sch 3 of the High Court Rules 2016 is that provision is made for one counsel in a proceeding.3 Generally, a category 2 case must have some exceptional feature to justify a second counsel allowance.4 In Nomoi Holdings Ltd v Elders Pastoral Holdings Ltd, Chambers J considered that:5

The approach is always objective and is focused on the nature of the proceeding, not the actual counsel involved and how he or she or they choose to conduct the litigation. Elders may well have received considerable value

1      Blomfield v A [2021] NZHC 2809.

2 At [76].

3      See Prattley Enterprises Ltd v Vero Insurance New Zealand Ltd [2017] NZHC 1599 at [44].

4 At [44].

5      Nomoi Holdings Ltd v Elders Pastoral Holdings Ltd (2001) 15 PRNZ 155 (HC) at [21].

from having Mr Crossland as second counsel. That is irrelevant, however, to the question I have to determine, namely whether the nature of this proceeding, given the way the trial was conducted, was such as to justify requiring the losing party to contribute to the winning party’s cost in having a junior counsel present.

[6]        The defendants consider that second counsel was necessary and proportionate in this particular case as:

(a)second counsel was required to assist in preparing affidavits covering a wide range of factual material to address the breadth of Mr Blomfield’s allegations;

(b)second counsel was required to assist in the preparation of submissions addressing the wide range of legal issues covered by Mr Blomfield’s claims; and

(c)second counsel took the oral argument for two of the interlocutory applications.

[7]        While second counsel would no doubt have provided value to the defendants, the approach to awarding costs for second counsel is objective. It focuses on the nature of the proceeding, not the actual contributions that second counsel made. The proceeding was of ordinary complexity. It did not have any exceptional feature that would justify requiring Mr Blomfield to pay costs for second counsel. I therefore decline to make such an award.

Set-off of costs

[8]        Mr Blomfield, in his costs memorandum, emphasises his intention to pay the costs award relating to these proceedings. He notes, however, that he was successfully awarded costs in the following proceedings brought against him by Inland Revenue:

(a)A proceeding in which Inland Revenue filed a bankruptcy notice against Mr Blomfield (the “Bankruptcy Proceeding”).6 The proceeding

6      Commissioner of Inland Revenue v Blomfield HC Auckland CIV-2018-404-855, 27 June 2018 (Minute of Associate Judge Smith).

was discontinued upon the bankruptcy notice being set aside by consent. Associate Judge Smith issued a minute by email in which he ordered Inland Revenue to pay costs of $4,460 and disbursements of

$200 to Mr Blomfield.

(b)A proceeding in which Inland Revenue filed an application to liquidate one of Mr Blomfield’s companies, Blomfield & Co Ltd (the “Liquidation Proceeding”).7 The proceeding was discontinued. Associate Judge Bell considered that while Mr Blomfield was a “tardy taxpayer”, there was no justification for Inland Revenue to commence the proceeding when he had complied with the statutory demand. The Judge ordered Inland Revenue to pay costs of $7,582 and disbursements of $420.

(c)Mr Blomfield also refers to a District Court proceeding in which there was an application to set aside a judgment. He attaches correspondence with a Natalie Tabb (presumably his lawyer) in which she states that she claimed around $4,000 in costs. She further stated that “if its important we could apply to the district court to fix costs on that proceeding”.

[9]        Mr Blomfield believes that Inland Revenue has not paid (or may not have paid) these costs awards. He asks for the Court’s assistance in determining whether the costs awards have been paid. If not, he submits that those costs should be deducted from the costs payment he is required to make.

[10]       It is unclear if there was an order for costs in the District Court proceeding, or even what that proceeding was about. Further, issues of costs in the District Court are a matter for that Court. Those costs must therefore be put to one side.

[11]      As for the costs of the Bankruptcy Proceeding and the Liquidation Proceeding, it would be somewhat surprising if Inland Revenue has not met those costs awards or

7      Commissioner of Inland Revenue v Blomfield & Co Ltd HC Auckland CIV-2017-404-2355, 7 May 2018 (Minute of Associate Judge Bell).

accounted for them in some way. I have insufficient information before me, however, to determine that issue. I therefore propose to fix costs but stay enforcement of the costs award for a limited period. This will give the parties time to confer, and for Inland Revenue to address Mr Blomfield’s concerns regarding previous costs awards and his suggestion that (if they are still outstanding) they be set off against the current costs award.

Result

[12]I accordingly order that:

(a)Mr Blomfield is to pay costs to the defendants on a 2B scale basis, together with disbursements, in the total sum of $20,325.70.

(b)Payment of those costs is stayed until 4 February 2022 to enable the parties to confer as to the set off issues raised by Mr Blomfield.

(c)If  Mr   Blomfield’s   concerns   are   not   adequately   addressed   by 4 February 2022, then leave is granted to him to seek a  further stay  of the costs award, or further directions in relation to the set off issues he has raised.

Katz J