Burgess v Malley & Co
[2016] NZCA 484
•6 October 2016 at 3.00 pm
| IN THE COURT OF APPEAL OF NEW ZEALAND |
| CA251/2016 [2016] NZCA 484 |
| BETWEEN | GARY OWEN BURGESS |
| AND | MALLEY & CO |
| Counsel: | Appellant in person |
Judgment: | 6 October 2016 at 3.00 pm |
JUDGMENT OF MILLER J
(Review of Registrar’s Decision)
AThe application to review the Deputy-Registrar’s decision declining to dispense with security for costs is declined.
BThe application to review the Deputy-Registrar’s decision increasing security for costs is granted.
CThe appellant is to pay the sum of $6,600 by way of security for costs by 31 October 2016.
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REASONS
On 5 September 2016 Mr Burgess sought review of a decision by Deputy-Registrar McGrath under r 7(2) of the Court of Appeal (Civil) Rules 2005 (the Rules). The decision of the Deputy-Registrar, dated 22 August, declined Mr Burgess’ application to dispense with security for costs in his appeal and granted Malley & Co’s (Malley) application to have it increased. It directed that security be increased to $10,000 and was to be paid by 19 September.
Mr Burgess’ substantive appeal is against a decision of Gendall J in the High Court in which he gave judgment in favour of Malley in respect of its fees claim against Mr Burgess and dismissed Mr Burgess’ counterclaim for damages resulting from breaches of duty, negligence and fraud.[1] Gendall J ordered Mr Burgess to pay Malley outstanding costs and disbursements of $54,594.81, including interest at 11 per cent.[2] Costs followed the event.
[1]Malley & Co v Burgess [2016] NZHC 907.
[2]At [100].
On 5 September the appeal to this Court was abandoned pursuant to r 43 of the Rules. Mr Burgess has since filed an application for an extension of time under r 43 of the Rules, which the respondent has opposed. In a minute dated 28 September, French J directed that the application for an extension of time not be set down for hearing until after my decision on this application for review had been issued.
The decision not to waive security
Security for costs will not be dispensed with except where it is right to require the respondent to respond to an appeal brought by an impecunious appellant without the usual protection for their costs provided by security.[3] Where the appeal is one that would not be pursued by a sensible, solvent litigant, there will be no basis for dispensing with security for costs.[4]
Impecuniosity and public interest
[3]Reekie v Attorney-General [2014] NZSC 63, [2014] 1 NZLR 737 at [21] and [31].
[4]At [35].
I agree that the information provided by Mr Burgess indicates he is likely to be impecunious and unable to afford security.
I also agree with the conclusion that the proposed appeal raises no issues of public interest. The proceedings between Mr Burgess and Malley are fact‑specific and unique to the relationship between the parties.
Potential costs and benefits
I agree with Deputy-Registrar McGrath’s assessment of the likely costs award against Mr Burgess if the appeal was to be dismissed. On the method set out by r 53C and sch 2 of the Rules and sch 2 of the Judicature Act 1908, the recovery for costs would likely amount to $9,589 or more. I note that the proceedings in the High Court occupied the allocated four days of hearing time without finishing.[5]
[5]Malley & Co v Burgess, above n 1, at [1].
If the appeal succeeds and Gendall J’s decision is overturned, a redetermination may financially benefit Mr Burgess if the High Court accepts that Malley has received a double recovery as claimed by Mr Burgess. His submissions appear to allege that he has paid $12,401.28 towards the fees owed to Malley and that the invoices provided to the Court as the basis of Malley’s claim show no other debt owing. On that basis, I am prepared to accept, as the Deputy-Registrar did, that the potential benefit of the appeal to Mr Burgess outweighs the potential cost.
Merits
I also accept Mr Burgess’ submission that his failure to apply for legal aid should have no bearing on the assessment of the merit of his appeal. The Supreme Court has held that a self-represented litigant’s refusal to seek legal aid may lead to an inference they are unwilling to submit their appeal to an assessment on the basis it is unmeritorious.[6] Such an inference is unavailable where the litigant is not eligible for legal aid, as Mr Burgess has informed me is his position.
[6]Reekie v Attorney-General, above n 3, at [38].
I am nonetheless unconvinced by Mr Burgess’ submissions as to the strength of his appeal. The challenge to Malley’s successful claim for unpaid fees seems to misconstrue Gendall J’s interpretation of the invoices and misrepresents the total amount owing to Malley as against the money Mr Burgess has paid to date. The appeal against the Judge’s dismissal of the counterclaim encompasses almost the entirety of the decision and appears to be an attempt to relitigate each of the findings against Mr Burgess. By way of example, he submits that there was no evidence that Malley provided any legal advice to Mr Burgess at all, which is entirely unsustainable in the face of Gendall J’s findings. On my assessment, parts of the appeal may be hopeless.
As to Mr Burgess’ submissions that Gendall J failed to decide a number of his claims, my interpretation is that those issues were decided summarily because Mr Burgess failed to provide sufficient evidence or particulars to the Court to support them. The grounds of appeal relating to the Judge’s preference for the evidence of certain witnesses over other are also unlikely to succeed — as the Deputy-Registrar correctly pointed out, conflicts of evidence must be resolved by the Judge and it was open to him to do so by preferring the testimony of one witness over another.
On that basis, I agree that the merit of the appeal is not strong.
Conclusion
I have reviewed Deputy-Registrar McGrath’s decision. For the reasons given by her, I agree that there should be no dispensation of security for costs.
The decision to increase security
The application to increase security for costs under r 35(6) of the Rules was granted on the basis Mr Burgess has engaged in past procedural misconduct, which indicates a risk that he cannot or will not meet costs on appeal. Deputy‑Registrar McGrath did not accept Malley’s submission that the appeal is obviously meritless and/or vexatious.
The past misconduct that was found to justify an increase in security was:
(a)the failure to pay an order for costs and disbursements totalling $43,844.29 from 27 November 2014, for which Malley has initiated bankruptcy proceedings that Mr Burgess has applied to have set aside or stayed; and
(b)that Mr Burgess has filed numerous baseless interlocutory applications, appeals and reviews to obscure and delay the substantive proceedings.
The Deputy-Registrar’s decision noted that the failure to pay one costs order would not ordinarily be perceived as past procedural misconduct. The decision therefore rests on the finding that the applications made by Mr Burgess during the course of the litigation were numerous and arguably vexatious. She concluded there was a risk unrelated to Mr Burgess’ impecuniosity that he would not pay any costs ordered against him. This view was supported by Dunningham J’s warning to Mr Burgess on 28 April 2015 that “if further prolix and unmeritorious interlocutory applications are made” an award of indemnity costs would be risked.[7]
[7]Malley & Co v Burgess [2015] NZHC 841 at [46].
Although the issue is finely balanced on the litigation history in this proceeding, I am not sufficiently persuaded that Mr Burgess’ actions constitute procedural misconduct. Malley’s submissions detail that in relation to the related bankruptcy proceedings, Mr Burgess has filed applications to remove lawyers, to set aside or stay bankruptcy, to stay the judgment appealed from and to stay the judgment that is the basis of the bankruptcy proceeding (in the form of two applications). This series of applications is restricted to the bankruptcy proceedings. In the proceedings that are directly related to the judgment under appeal, Mr Burgess is said to have filed “numerous, baseless interlocutory applications which were ultimately resolved against him”, followed by appeals of those decisions and a judicial review. The evidence of Mr Burgess’ request at the hearing before Gendall J to have Parker Cowan removed shows that it was promptly withdrawn on advice from the Judge.
Mr Burgess responds to these allegations — unspecific in their nature — by listing what he describes as the interlocutory applications included in the High Court file. His list includes an application for judgment on the unopposed counterclaim, resolved by granting an extension of time and directing a full trial, a lapsed strike-out application, an application for recall (declined), an application for an extension of time to pay security (granted), an opposed application for consolidation (granted) and an opposed application for further particulars or strike out (declined). He also notes an application for summary judgment by Malley, which was declined in the District Court and on appeal in the High Court.
On the material at hand, I am unable to conclude that Mr Burgess’ behaviour reaches the threshold of being procedural misconduct. There are clear indications that he has become vexatious, but on the memoranda filed his condition has not been shown to reach the standard sufficient to justify an increase in security. The application for review of the Deputy-Registrar’s decision to increase security for costs is granted.
Mr Burgess is to pay the sum of $6,600 by way of security for costs by 31 October 2016.
Solicitors:
Parker Cowan, Queenstown for Respondent
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