Broadbent v Chief Executive of the Ministry of Social Development

[2017] NZHC 2123

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2016-485-463 [2017] NZHC 2123

BETWEEN

GWYNETH BROADBENT

Appellant

AND

THE CHIEF EXECUTIVE OF THE MINISTRY OF SOCIAL DEVELOPMENT

Respondent

Hearing:	On the papers
Counsel:	S Broadbent as litigation guardian for the Appellant O Upperton for the Respondent
Judgment:	1 September 2017

JUDGMENT OF KATZ J [Costs]

This judgment was delivered by me on 1 September 2017 at 3:30pm

Pursuant to Rule 11.5 High Court Rules

Registrar/Deputy Registrar

Solicitors:           Crown Law, Wellington

Copy to:            S Broadbent, Auckland

BROADBENT v THE CHIEF EXECUTIVE OF THE MINISTRY OF SOCIAL DEVELOPMENT [2017] NZHC 2123 [1 September 2017]

Introduction

[1]      Gwyneth Broadbent successfully appealed a decision of the Social Security Appeal Authority.   She was represented by her son, Stephen Broadbent, who was her litigation guardian.  Mr Broadbent, on Mrs Broadbent’s behalf, now seeks costs against the Chief Executive of the Ministry of Social Development (“MSD”).

Costs for litigants in person and litigation guardians – legal principles

[2]      Costs are at the discretion of the court.1   However, there is an established rule in New Zealand that a litigant in person is not entitled to recover costs except in exceptional cases.2    The rationale for this rule is that costs are awarded only to reflect costs “out of pocket”.   As Brett MR observed in London Scottish Benefit Society v Chorley:3

When an ordinary party to a suit appears for himself, he is not indemnified for loss of time; but when he appears by solicitor, he is entitled to recover for the time expended by the solicitor in the conduct of the suit.   When an ordinary litigant appears in person, he is paid only for costs out of pocket. He cannot himself take very step, and very often employs a solicitor to assist him: the remuneration to the solicitor is money paid out of pocket.  He has to pay the fees of the court, that is money paid out of pocket; but for loss of time the law will not indemnify him.

[3]      That rule is not without exception, however.  In Re Collier (A Bankrupt) the Court of Appeal observed that the rule is one of practice, not law.   Costs may be awarded to a litigant in person where he or she involves himself or herself in an action  “without  hope  of  any personal  gain  or  advantage,  but  purely  out  of  the

concern for the welfare of the general public”.4   Such exceptions were discussed by

Mallon J in Lincoln v New Zealand Police:5

Under the current costs regime, such exceptions, although not referred to in the specific rules, might be seen as situations not fairly recognised by them and so potentially within the Court’s general discretion.  The specific rules

1      High Court Rules 2016, r 14.1.

2      Re Collier (A Bankrupt) [1996] 2 NZLR 438 (CA); Lysnar v National Bank of New Zealand Ltd

[1935] NZLR 557 (CA) at 562; Re G J Mannix Ltd [1984] 1 NZLR 309 (CA) at 310 and 314;

and Commissioner of Inland Revenue v Chesterfields Preschools Ltd [2010] NZCA 400, (2010)

24 NZTC 24,500 at [162].

3      London Scottish Benefit Society v Chorley (1884) 13 QBD 872 (CA) at 875.

4      Above n 2, at 441.

5      Lincoln v New Zealand Police (2010) 20 PRNZ 19 (HC) at [4].

already  contemplate  that  an  award  of  costs  “should   reflect   the  … significance of the proceeding”, that increased costs may be ordered if “the proceeding is of general importance to persons other than just the parties and it was reasonably necessary for the party claiming costs to bring it or participate in it in the interests of those affected, and that costs may be refused or reduced against an unsuccessful party on this basis.  Nevertheless, the case would have to be exceptional because, in not providing for lay litigants to claim costs, it must be assumed that ordinarily they cannot be claimed.

(Footnotes omitted).

[4]      Little turns on the presence of a litigation guardian.  That is because r 4.41 prescribes its irrelevance:

4.41     Representation to be disregarded in making award of costs

The fact that an incapacitated person is, or has been, represented by a litigation guardian must be disregarded in making an award of costs under the rules in favour of or against the incapacitated person.

[5]      A litigation  guardian  is  entitled  to  be  reimbursed  from  the  incapacitated

person’s property under r 4.45:

4.45Litigation guardian may be reimbursed for costs out of property of incapacitated person

Unless the court otherwise orders, a litigation guardian is entitled to be reimbursed out of the property of the incapacitated person for any costs (including solicitor and client costs) paid or incurred, or that are to be paid or incurred, by the litigation guardian on behalf of the incapacitated person.

[6]      Otherwise, ordinary costs principles apply.

Discussion

[7]      Mr Broadbent makes multiple submissions to the effect that costs should be awarded to reflect the professional skill and labour he provided to Mrs Broadbent, and to reflect the fees later charged to Mrs Broadbent by his accountancy practice, ATX Ltd.   These submissions are misconceived.   Mr Broadbent’s skill does not elevate his status from litigation guardian to legal adviser.   He is merely a representative of Mrs Broadbent, acting for her benefit.  Mr Broadbent, as litigation guardian, has all the powers in relation to the proceeding that Mrs Broadbent would

have if she were not incapacitated, including the power to appoint counsel.6     Mr Broadbent chose not to appoint counsel in this case.  Had he done so, costs would likely have been recoverable against MSD.

[8]      I do not consider that this proceeding is an exception to the general rule that litigants in person cannot recover costs.  The substantive proceeding was essentially a test case, and undoubtedly carries a degree of public importance.  Mrs Broadbent, however, was clearly self-interested in the decision.   As counsel for MSD rightly identified,  the  exception  for  matters  of  public  interest  requires  as  well  that  the litigant have no self-interest.  It is not sufficient that the litigant in person merely be successful in a case carrying some element of public importance.  In such cases it would appear that costs are awarded to reflect the selfless public benefit derived from the plaintiff’s choice to litigate.  Such themes are not present here.

[9]      Mr Broadbent additionally relies on the exception applied by Mallon J in Lincoln.  In essence, that exception is for litigants in person who provide assistance to the court akin to that of an expert witness.  In Lincoln the litigant had particular knowledge about firearms which was helpful to the court.  Justice Mallon exercised discretion to award costs:7

… I acknowledge the assistance that Mr Lincoln provided to the court. Mr Lincoln  demonstrated  considerable  knowledge  of  firearms  and  he provided to the Court very useful research about firearms and the meaning of “military pattern” in particular.  I consider that he can be treated as an expert in this respect.  Expenses paid to experts can be recovered as a disbursement. The nature of a disbursement is that it is an amount that has been paid out, and the definition refers to “an expense paid or incurred for the purpose of the proceeding”.   Although Mr Lincoln has not “paid” or incurred an “expense”, and so the time he incurred and the cost to him in so doing do not quite fit within the definition, it might be an appropriate exercise of the general discretion to award costs on this basis.

[10]     Mr  Broadbent  does  not  fit  within  this  exception.     His  knowledge  of accounting concepts was presumably very helpful to him when preparing his case. However, his assistance to the court was not akin to that of an expert.   I see no reason to draw an exception in this case for Mr Broadbent’s knowledge of law in this area.

[11]     Finally,  Mr  Broadbent  appears  to  rely  on  the  Court  of Appeal’s  recent decision in Joint Action Funding Ltd v Eichelbaum.  In that case the Court held that the lawyer-litigant exception, that a practising barrister and solicitor who brings or defends a proceeding in person is entitled to the same costs as when acting on behalf of  a  client,  should  no  longer  apply  in  New  Zealand.8      Mr  Broadbent  has  not explained how the Court’s decision in Eichelbaum supports his case.  I do not see how it can.  As counsel for MSD point out, the Court in Eichelbaum considered that the phrase “costs actually incurred” envisages invoices rendered for legal services,

and  not  periods  of  time  “spent  in  connection  with  litigation  upon  which  some notional numerical value is placed but which is not the subject of a bill of costs”.9

[12]     Given the above findings in respect of costs, it is not necessary to consider

Mr Broadbent’s additional contention that indemnity costs ought to be awarded.

[13]     Ordinarily Mr Broadbent would be entitled to recovery of his reasonable disbursements, including court fees.  In his memorandum, however, he stated that:

I have no interest in recovering only meagre disbursements. It is an insult to the value I have contributed and not worth the time to produce the invoice. If the court decides that I am entitled to disbursements only, then make it nil.

Result

[14]     Mr Broadbent is not entitled to an award of costs.  Costs are to lie where they fall.     Ordinarily Mr Broadbent would be entitled to recover his disbursements, including such things as court filing and hearing fees.   I make no order in respect of

disbursements, however, as requested by Mr Broadbent.

Katz J