Cho v Real Estate Agents Authority (CAC 2108)
[2024] NZHC 3840
•13 December 2024
ORDER SUPPRESSING THE IDENTITY OF THE SECOND RESPONDENT IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY
I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE
CIV-2024-485-231
[2024] NZHC 3840
UNDER an appeal under s 116 of the Real Estate Agents Act 2008 BETWEEN
HAO YING CHO
Appellant
AND
REAL ESTATE AGENTS AUTHORITY (CAC 2108)
First Respondent
X
Second Respondent
On the Papers Counsel:
C T Walker KC and E G Thom for Appellant
S McMullan and M P Morrison for First Respondent Mr X in person
Judgment:
13 December 2024
JUDGMENT OF RADICH J
[Costs]
[1] In September of this year, I issued a judgment in which I dismissed Hao Cho’s appeal against a decision of the Real Estate Agents Authority.1 The second respondent, Mr X,2 now applies for costs of $135,250. He is a self-represented litigant. His
1 Cho v Real Estate Agents Authority [2024] NZHC 2812.
2 The second respondent was the purchaser of a property in the transaction that is the subject of the underlying decision of the Real Estate Agents Authority. An order suppressing his identity was made by Churchman J in a minute of 6 June 2024.
CHO v REAL ESTATE AGENTS AUTHORITY (CAC 2108) & ANOR [2024] NZHC 3840 [13 December 2024]
position on the appeal aligned with that of the Authority. Mr Cho opposes the costs sought, saying that Mr X is entitled to costs of $375.
The costs application
[2] An exchange of memoranda on costs was directed in my decision on the appeal.3 In Mr Cho’s memorandum of 25 October 2024 it was said that Mr Cho does not dispute that, by virtue of Part 2 to Schedule 2 of the High Court Rules 2016 coming into force, Mr X is entitled to costs for steps taken on or after 1 September 2024 and that, based upon the daily recovery rate for costs of a self-represented litigant of $500, Mr X is entitled to claim total costs of $375 for the appeal hearing, which took three-quarters of a day.
[3] In a memorandum in response of 31 October 2024, Mr X sought $120,750 in costs. The figure was made up of $47,250 for his time, and for the time of two other people, in preparing for the appeal, together with $73,500 in compensation for a pre-existing back injury that Mr X believes was aggravated by the appeal. The memorandum was accompanied by three affidavits. One was from Mr X. Another was from an individual who provided “non-legal assistance to [Mr X]” through helping him with “various support tasks”. It attached that person’s invoice to Mr X for $11,280. The third affidavit was from Mr X’s son who assisted Mr X with “various non-legal tasks related to his self-representation in the appeal” and who rendered his father an invoice for $16,920 for that work.
[4] On 1 November 2024, Mr Cho filed a further memorandum, reiterating his position on costs. Mr X filed a memorandum in response on 5 November, resisting the appellant’s approach. Mr X filed another memorandum on 7 November 2024 in which he said that he now seeks $135,250 in costs. The difference—an increase of
$14,500—relates to adjustments in his claim for compensation for the aggravation of his back injury.
3 Cho v Real Estate Agents Authority, above n 1, at [77].
[5] Mr X has said, in addition, that Mr Cho cannot oppose his application for costs now, in circumstances in which Mr X’s memorandum on the substantive appeal sought an order for costs against Mr Cho and in circumstances in which Mr Cho did not, expressly, oppose that order being made at the time. That is not the case.
Legal principles
[6] The overriding principle is that costs are at the discretion of the Court.4 Rule 14.2 of the High Court Rules 2016 prescribes a set of general principles for the determination of costs. Included amongst them is the principle that the party who fails in a proceeding or appeal should pay costs to the party who succeeds and that, so far as is possible, the determination of costs should be predictable and expeditious.
[7] It is only very recently that self-represented litigants, or litigants in person, became eligible to claim costs under the High Court Rules. Previously, the general understanding was that a successful litigant in person was entitled to recover disbursements but not costs, other than in exceptional circumstances.5 The understanding is often referred to as the “primary rule”. It has a long history with roots in the common law6 and formed part of the costs regime prescribed in the High Court Rules in 2000.7
[8] Following some criticism of the primary rule by the Supreme Court,8 the Rules Committee undertook extensive consultation before agreeing to recommend that the primary rule should be abolished. Draft amendments to the Rules that would give effect to this change received the concurrence required under s 148(2) of the Senior Courts Act 2016 before being presented to Cabinet, which agreed to the amendments. They came into force on 1 September 2024.9
4 High Court Rules 2016, r 14.1.
5 McGuire v Secretary for Justice [2018] NZSC 116, [2019] 1 NZLR 335 at [55] and n 42.
6 At [56].
7 High Court Amendment Rules 1999.
8 McGuire v Secretary for Justice, above n 5.
9 High Court Amendment Rules 2024, s 2.
[9]The amendments changed r 14.2(1)(f) so that it now reads:
…
(1)The following general principles apply to the determination of costs:
…
(f)An award of costs should not exceed the costs incurred by the party claiming costs (not being a party acting in person);
(emphasis added)
[10] The term “party acting in person” within sub-r (1)(f) is now defined in r 14.2(2A):
(a)means a party who is without a solicitor on the record and who represents their own personal interests; and
(b)includes a party who is a lawyer and who represents their own personal interests.
[11] The amended Rules set the appropriate daily recovery rate for a party acting in person at $500 per day, regardless of the category of proceeding.10 Costs are assessed by applying that daily recovery rate to the time considered reasonable for each step reasonably required in relation to the proceeding.11 Whether a step was reasonably required is fact dependent. Whether the amount of time spent on a step is considered reasonable is determined by the time allocations set out in sch 3 of the Rules.
[12] The Court is for the most part not interested in a party’s actual costs when it comes to the costs regime.12 As r 14.2(1)(e) provides:
What is an appropriate daily recovery rate and what is a reasonable time should not depend on the skill or experience of the solicitor or counsel involved or on the time actually spent by the solicitor or counsel involved or on the costs actually incurred by the party claiming costs.
10 High Court Rules, sch 2.
11 Rule 14.2(1)(c).
12 Holdings Ltd v Elders Pastoral Holdings Ltd (2001) 15 PRNZ 155 (HC) at [33]–[34]; McGuire v Secretary of Justice, above n 5, at [66].
Disbursements
[13] Disbursements are a sub-category of costs that may be awarded by the Court under the Rules. Rule 14.12(1) of the High Court Rules defines disbursements in the following way:
disbursement, in relation to a proceeding,—
(a)means an expense paid or incurred for the purposes of the proceeding that would ordinarily be charged for separately from legal professional services in a solicitor’s bill of costs; and
(b)includes—
(i)fees of court for the proceeding:
(ii)expenses of serving documents for the purposes of the proceeding:
(iii)expenses of photocopying documents required by these rules or by a direction of the court:
(iv)expenses of conducting a conference by telephone or video link; but
(c)does not include counsel’s fee.
[14] Rule 14.12(2) provides that the Court must include any verified disbursements that have been claimed in the costs awarded for a proceeding, but only to the extent that the disbursement is:
(a)of a class that is either—
(i)approved by the court for the purposes of the proceeding; or
(ii)specified in paragraph (b) of subclause (1); and
(b)specific to the conduct of the proceeding; and
(c)reasonably necessary for the conduct of the proceeding; and
(d)reasonable in amount.
[15] Self-represented litigants may make claims for reasonable disbursements.13 Reasonableness is assessed in the same way as it is for represented litigants who claim disbursements.14
Discussion
Steps taken by Mr X before 1 September 2024
[16] Mr X claims $24,690 in costs for the steps taken by him to prepare for and in attending the appeal.
[17] Mr Cho accepts that the daily recovery rate of $500 for a party acting in person will apply but says the costs incurred before the amendments to the High Court Rules came into force on 1 September 2024 are not recoverable. Mr X believes his 3 September costs to be recoverable under the High Court Rules as they stood before amendment and says that, if it is the case that self-represented litigants could not recover costs under the pre-amendment rules, then the Court should in its discretion make an exception.
[18] In my decision on the appeal, I said that Mr X could only recover costs for steps taken on or after 1 September 2024.15 The amendments are assumed not to be retrospective. They do not change the law as it stood before they came into force. Any steps taken by a party or counsel prior to the amendment taking place will be assessed under the Costs Rules as they stood at that time and any steps taken on or after the commencement of the amendment will take place under the amended Rules.16
13 McGuire v Secretary of Justice, above n 5, at [55].
14 Re Collier (A Bankrupt) [1996] 2 NZLR 438 (CA) .
15 Cho v Real Estate Agents Authority, above n 1, at [77].
16 Delegat v Norman [2014] NZHC 1099; FM Custodians Ltd v Pati [2012] NZHC 1902; EA v Rennie Cox Lawyers [2020] NZHC 1372 at [18]; and see Rules Committee Minutes of Meeting of 21 September 2020 (Judicial Office for Senior Courts, Wellington, 23 September 2020) at Item 10.
[19]The principle is reflected in the wording of the amendments:17
(1)If an award of costs is made to a party acting in person,—
(a)the award in respect of the costs incurred by the party before 1 September 2024 is subject to the principle set out in rule 14.2(1)(f) as in force immediately before 1 September 2024; and
(b)the award in respect of the costs incurred by the party on or after 1 September 2024 is subject to the principle set out in rule 14.2(1)(f) as in force on 1 September 2024.
[20] While, under the Rules, before they were amended, the Court had a discretion in awarding costs, the discretion is not unfettered.18 It was and remains subject to the costs regime in Part 14 of the Rules. That regime should only be departed from in any material way in situations not contemplated, or unfairly recognised, by the regime.19 While, as Mr X says, an objective of the High Court Rules is to secure the just determination of any proceeding,20 another principle that guides the assessment of costs is that the determination of costs should be predictable and expeditious.21 The limited discretion available could not be applied in such a way as to cause the amendments to the regime to be applied retrospectively.
[21] The pre-amendment position is clear. The Rules did not allow self-represented litigants to claim costs, other than in exceptional circumstances, before 1 September 2024. There are no exceptional circumstances here.
[22] The only step taken by Mr X on or after 1 September 2024 was his attendance at the hearing itself, which took three-quarters of a day. When multiplied by the $500 a day recover rate, the resulting recoverable costs figure for Mr X is $375.
[23] Even if there was a basis upon which it might have been possible for Mr X to recover costs for steps taken before 1 September 2024, the costs that he has claimed here, largely, would not have been recoverable under the Rules. As I have mentioned,
17 High Court Amendment Rules 2024, s 3.
18 Manukau Golf Club Inc v Shoye Venture Ltd [2012] NZSC 109, [2013] 1 NZLR 305 at [7].
19 Bradbury v Westpac Banking Corporation [2009] NZCA 234, [2009] 3 NZLR 400 at [6]; citing
Glaister v Amalgamated Diaries Ltd [2004] 2 NZLR 606 (CA) at [22].
20 High Court Rules, r 1.2.
21 Rule 14.2(1)(g).
costs are assessed by applying the appropriate daily recovery rate to the time considered reasonable for each step reasonably required in the proceeding. The amount of time considered reasonable for a step is prescribed in sch 3 of the Rules. Mr X has not attempted to categorise his time by reference to the rules that apply.
Preparatory steps by people assisting Mr X
[24] Mr X says that the invoices of the two people who assisted him in preparing for the appeal are disbursements that should be paid by Mr Cho. In the affidavits they have filed, those people say that the disbursements in question were incurred in relation to the litigation. It is not said whether or not the disbursements have been paid.
[25] It is said for Mr Cho that the disbursements are not claimable because the services provided are not those that would “ordinarily be charged for separately from legal professional services and a solicitors bill of costs”, in terms of r 14.12.
[26] In some cases, disbursements have been held to include expenses incurred by a legal professional for help in preparing documents and preparing to appear and argue the case in person.22 The authors of McGechan on Procedure say that the rationale is that incurring costs of this sort have assisted in relieving the unsuccessful party from having to pay costs for the lay litigant’s legal representation at the hearing.23 However, this approach has not been universal. In Sax v Simpson, costs of preparatory work on submissions by a barrister for a litigant in person were held not to be recoverable.24
[27] There are no cases of which I am aware in which a self-represented litigant has recovered disbursements relating to advice and assistance in the preparation of a case by someone who is not a legal practitioner. In Taylor v Attorney-General, Mr Taylor sought costs, including disbursements, for the assistance of a McKenzie Friend who had charged $2,950. Johnston AJ held that a litigant in person may not recover
22 Working Capital Solutions Holdings Ltd v Pezaro [2014] NZHC 2480 at [15]–[20]; Harrison v Keogh [2015] NZHC 3320 at [10]; and Hamilton v Kirwan [2021] NZHC 634 at [31].
23 Andrew Beck and others McGechan on Procedure (online ed, Thomson Reuters) at [HRPt14.10].
24 Sax v Simpson [2017] NZHC 1128 at [9].
disbursements of this type – unless the assistance was provided by a legal practitioner.25 He said:
[22] For the Court to allow a litigant in person to claim the cost of obtaining advice and assistance with the conduct of the case (as opposed to such disbursements as filing fees and the like) from a party other than a solicitor or counsel is tantamount to allowing costs, and would certainly be breaking new ground.
[23] As matters stand, the position is that a litigant in person may only recover disbursements that fall into the categories identified in r 14.12(1) such as filing fees and the like, and the only disbursement relating to advice and assistance with the preparation and presentation of the case which the courts have to date allowed are reasonable fees rendered by legal practitioners. Mr Taylor — perhaps understandably — would suggest this is unfair. However, this is not a case in which the Court would be justified in effectively expanding on those categories, even having regard to the need to adopt a “reasonably liberal” approach to disbursements. It appears to me that if that is to be done it should be done in the context of an amendment to the Rules. And, as already noted, the Rules Committee is currently undertaking consultation on this very issue.
[28] The same set of principles apply here. Even in the face of the amendments made to the Rules, rules were not introduced that would allow self-represented litigants to claim disbursements for time spent by a non-legal person in rendering assistance in the preparation of a case. Moreover, it is questionable whether assistance in the preparation for a hearing can be a disbursement at all.
[29] Accordingly, the costs claimed by Mr X for assistance on the part of the two people in question are not recoverable.
Compensation for ill-health
[30] Mr X claims compensation of $88,000 for the alleged aggravation of a back injury. He arrives at this figure by multiplying the days during which he has claimed to have been incapacitated by the daily recovery rate in the Rules. It is said that the sum claimed can be awarded by the Court in its discretion under r 14.1.
[31] The amount claimed under this head is not recoverable. Rule 14.12(1)(c) provides that costs are to be assessed by applying the appropriate daily recoverable
25 Taylor v Attorney General, [2021] NZHC 2303 at [23].
rate to the time considered reasonable for each step reasonably required in relation to a proceeding. Quite apart from the significant causation issue that Mr X faces under this head, the daily recovery rates cannot be applied to physical injuries and, moreover, the injury cannot be considered as a disbursement. The costs regime does not enable costs to take the form of damages, where a party may succeed in receiving compensation for health complications or injury to feelings.26
Other disbursements
[32] Mr X has provided no other evidence of disbursements of the kind envisaged by r 14.12 – for example, court fees.
Result
[33]Mr X is entitled to costs of $375.
Radich J
Solicitors:
Wootton and Kearney, Wellington for Appellant Meredith Connell, Auckland for First Respondent
26 For example, in Director of Human Rights Proceedings v Slater [2019] NZHRRT 13, (2019) 11 HRNZ 721 damages were awarded under ss 85(1)(c) and 88(1)(c) of the Privacy Act 1993 – not under the costs regime in the High Court Rules.
0
11
0