Chou v Commissioner of Inland Revenue

[2025] NZHC 674

NOTE: PURSUANT TO S 124 OF THE CHILD SUPPORT ACT 1991, ANY REPORT OF THIS PROCEEDING MUST COMPLY WITH SS 11B, 11C AND 11D OF THE FAMILY COURT ACT 1980. FOR FURTHER INFORMATION,

PLEASE SEE https://www.justice.govt.nz/family/family-court/after-the-family- court/restrictions-on-publishing-information/

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE

CIV-2024-485-000122

[2025] NZHC 674

IN THE MATTER OF

an appeal of a decision of the Family Court

UNDER

the Family Court Rules 2002 and the Child Support Act 1991

BETWEEN

[JIA CHOU]

Appellant

AND

THE COMMISSIONER OF INLAND REVENUE

First Respondent

[WEI SONG]

Second Respondent

Hearing:

On the papers

Counsel:

Appellant in Person

E J Norris for the First Respondent

Judgment:

27 March 2025

JUDGMENT OF WALKER J

[Costs]

This judgment was delivered by me on 27 March 2025 at 11 am Pursuant to Rule 11.5 High Court Rules

Registrar/Deputy Registrar

[CHOU] v INLAND REVENUE [2025] NZHC 674 [27 March 2025]

[1]    Following dismissal of the appeal, the first respondent (the Commissioner) seeks costs and disbursements. The appeal has been previously categorised as category 2B.1

[2]    The Commissioner seeks costs of $10,038 plus disbursements of $6.38 reflecting the following steps taken in the appeal:

(a)Filing of memorandum for first case management conference;

(b)Appearance at first case management conference;

(c)Preparation of written submissions; and

(d)Appearance at hearing for sole or principal counsel.

[3]    Ms [Chou] opposes any award of costs.2 She submits that the memorandum seeking costs was filed by the Commissioner outside the Court directed timetable; the judgment is wrong and did not consider one of her arguments on appeal;3 and she has no financial ability to pay any costs because the outcome of the appeal means she has not received the child support warranted. Finally, Ms [Chou] notes that in the decision of P (CA85/2019) v Commissioner of Inland Revenue, which as binding appellate authority determined the outcome of this appeal, the Court of Appeal did not make a costs order against the unsuccessful appellant.4

Determination

[4]    Ms [Chou] is incorrect in terms of the expiry of the stipulated period for filing costs memoranda but in any event, leave would have been granted to extend the period in the absence of established prejudice.

1      [Chou] v Commissioner of Inland Revenue HC Auckland CIV-2024-485-122, 8 April 2024 (Minute of Muir J).

2      This is not the appellant’s real name.

3      Ms [Chou] has filed an application for leave to appeal in the Court of Appeal following a minute issued by La Hood J in which he determined that leave to appeal must be dealt with by the Court of Appeal rather than the High Court. See [Chou] v Commissioner of Inland Revenue HC Wellington CIV-2024-485-122, 13 February 2025.

4      P (CA85/2019) v Commissioner of Inland Revenue [2019] NZCA 531 at [35].

[5]    Ms [Chou] has overlooked the exclusion of “a day in the period commencing 25 December in any year and ending with 15 January in the following year” from any working day calculation.   This follows from the definition of “working day” at        r 1.3(1)(b) of the High Court Rules 2016.

[6]    Ms [Chou]’s objection to payment of costs on the basis that this Court did not consider nor determine one of her arguments is also rejected. That argument was considered by the Commissioner, the Family Court and this Court. It was dismissed as moot as the outcome would have been the same whether the appellant’s view of the number of nights she and the second respondent provided under the relevant parenting order was correct or not.5

[7]    The fact that Ms [Chou] has applied for leave to appeal does not of itself mean that it is inappropriate or unfair to determine the question of costs now. Nor does an appeal (or application for leave to appeal) displace the general principle in civil proceedings that a party who fails should pay costs to a successful party. If leave to appeal is granted and the substantive appeal is allowed, any costs order would be quashed.

[8]    Financial hardship also does not provide a reason to reduce or refuse costs orders in ordinary civil litigation. Generally, that discretion is only exercised in exceptional circumstances where there is cogent evidence of impecuniosity.

[9]    The substantive law in this case was settled by the Court of Appeal in P(CA85/2019) v Commissioner of Inland Revenue. The reason why costs were not awarded against the appellant in that case was that the law had yet to be clarified by the Senior Courts, so the Commissioner responsibly did  not  seek  costs  in  the  High Court. The clarification provided by the Court of Appeal benefitted both parties in terms of the meaning of “ongoing daily care” for which there was no previous decision. However, I also observe that the application of the principles set out in that

5      Notably, the appellant’s submissions and grounds of appeal filed in the High Court in support of her leave application are all directed to the proportions of ongoing daily care established by the Commissioner  under  s  14  of  the  Child  Support  Act  1991  (the  Act),  consistent  with  her  6 August 2022 objection and appeal under s 102 of the Act to the Family Court.

case and the statutory framework are not straightforward issues, particularly in a context where parties will be commonly unrepresented.

[10]   The above factors support the making of a costs award in favour of the Commissioner but, in my assessment, there are two interrelated factors which go the other way. The first is the welfare and best interests of the child. The second is that the appellant has recently provided evidence of her straightened circumstances in support of a successful fee waiver for her application for leave to appeal.

[11]   The impact on the child is material, in my view, in a similar way that it is material in costs decisions in appeals under the Care of Children Act 2004 (COCA). In that context, the weight of authority is that the Court’s paramount consideration must be the welfare and best interests of the children.6 While there is no express statutory imperative in the Child Support Act 1991(the Act) directing regard to the best interests of a child, the legislation is part of the suite of legislation providing for and relevant to, the welfare of children in family disputes.  Similarly to s 142 of COCA,  s 232 of the Act empowers the court to make any order as to costs it thinks fit. It reads:

232     Costs

(1)In any proceeding under this Act the court may make such order as to costs as it thinks fit but all costs awarded against the Commissioner shall be payable out of public money appropriated by Parliament and not otherwise.

(2)This section is subject to section 226B(4).

[12]   I consider that the rationale expressed in the authorities dealing with costs in COCA matters, including most recently in Clark v Moore are apposite.7 I have no reason to consider that the appeal was not genuinely brought in the best interests of the child. The  appellant’s  position  is  arguably  obdurate  in  the  face  of  the  Court of Appeal authority, however I have already noted how difficult and complex the legislative framework is for litigants. Access to justice for litigants in respect of decisions by the state which significantly affect the welfare of children is a material consideration. Genuine and reasonable litigants in the circumstances of this appeal

6      Hawthorne v Cox [2008] NZCA 146 at [26] and TEJ v ROJ [2014] NZHC 3406 at [7]–[12].

7      Clark v Moore [2024] NZCA 264.

ought not fear an award of costs and the costs regime ought not operate to disincentivise advancing challenges impacting the welfare of children.

[13]   I am therefore satisfied that, while the Commissioner is entitled to have an award of costs fixed now, that award is not the more standard 2B assessment. Lest it be misunderstood, this conclusion does not reflect adversely on the approach of the Commissioner in this litigation which was both reasonable and responsible. It is informed by the legislative context, drawing an analogy with cases in the COCA jurisdiction.

[14]   Accordingly, I make an  order  for  costs  against  the appellant in the sum    of 25 per cent of the 2B costs claimed, plus disbursements of $6.38 making a total of

$2,515.88.

............................................................

Walker J