Commissioner of Police v Burgess

[2017] NZHC 407

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV 2010-404-2893 [2017] NZHC 407

BETWEEN

COMMISSIONER OF POLICE

Applicant

AND

ROBIN ADRIAN BURGESS First Respondent

LLANYS GWEN BURGESS Second Respondent

Hearing:	On the papers
Judgment:	10 March 2017

COSTS JUDGMENT (NO 2) OF DUFFY J

This judgment was delivered by me on   10 March 2017 at 4.00 pm pursuant to

Rule 11.5 of the High Court Rules.

Registrar/ Deputy Registrar

Solicitors:

Crown Solicitor, Auckland

Boyle Mathieson, Henderson
Woodward Chrisp, Gisborne

Counsel:

C Wilkinson-Smith, Auckland

F Deliu, Barrister, Auckland

COMMISSIONER OF POLICE v BURGESS (NO 2) [2017] NZHC 407 [10 March 2017]

[1]       On  25  February  2016  I  delivered  a  judgment  on  costs  relating  to interlocutory applications brought in this proceeding.1    At [35] of the judgment I found that Mrs Burgess was entitled in principle to costs for applications two, three and four.  I directed that she needed to quantify those costs and timetabled for the filing of further information.  This was done to ascertain the scale costs to which she would be entitled and from there to determine if she was entitled to increased costs,

which she sought.

[2]       Mrs Burgess has now filed a memorandum which quantifies her costs at category 2B of the High Court Rules.  She has responsibly itemised all steps taken for each application into one costs schedule to eliminate any double counting.  This is a correct approach to take given that each application progressed towards and was disposed of at the one hearing.  The total costs at category 2B come to $17,490.02.

[3]        Save for one arithmetical error (an over claim of $240 for item 26) the Commissioner accepts the scale costs are correctly calculated.   However, the Commissioner advances arguments that seek to reduce the scale costs.  This is in a context where Mrs Burgess  seeks  an increase of costs above  scale, and  I have already partly determined her entitlement to costs.  It is therefore necessary to refer back to the earlier judgment where I found in principle that Mrs Burgess was entitled to costs for the applications.

[4]        In response Mrs Burgess rejects the Commissioner’s suggestion there is an arithmetical error at item 26.   Mrs Burgess contends the item of concern can be accounted for by different scale costs applying after 1 July 2015.  This means the one day hearing on 31 July 2015 is calculated at current cost scale of $2,230 per day whereas the earlier 1.5 hearing days are to be calculated according to the scale as it applied prior to 1 July 2015, which works out at $1,990 per day.   Accordingly, Mrs Burgess contends the total for item 26 is $5,215.

[5]        I accept  the  explanation  proffered  by Mrs  Burgess  for  item  26.    I am satisfied that Mrs Burgess has correctly calculated her costs entitlement for the three

applications at category 2B.

1      Commissioner of Police v Burgess [2016] NZHC 267.

[6]       Mrs Burgess seeks an increase above scale costs.   Her total actual costs come to $32,173.01.  She estimates those costs can be apportioned as follows:2

(a)       Application Two  - $9,219.78;

(b)       Application Three  - $18,155.43; and

(c)       Application Four $4,797.80.

[7]        Application Two was an application filed by the Commissioner seeking orders for the sale of some of the already restrained property; and to restrain further items of property.  At [13] of the judgment of 25 February 2016 I said Application Two was heard by me on 19 June and 31 July 2015.   At [14] I state that this application was abandoned at the second stage of the hearing being 31 July 2015.  At [18] I indicated that I considered that an award of scale costs could appropriately be made at scale 2B.   Room was left for Mrs Burgess to pursue her argument for indemnity or increased costs.

[8]        The Commissioner now explains making Application Two on the ground he sought sale of the restrained items in order to avoid criticism from Mrs Burgess if they depreciated.   He contends any complaint about the restraining orders causing her  prejudice  by  way  of  depreciation  was  waived  by  Mrs  Burgess  filing  an opposition  to  the  sale  application.    The  Commissioner  acknowledges  that  he withdrew the application at the hearing.  In short, the Commissioner contends that he changed his position on the sale application through a change of circumstance that was brought about by Mrs Burgess.

[9]        On the other hand, Mrs Burgess sees the sale application as driven by an ulterior motive on  behalf  of the Commissioner to  retaliate against  her,  with  its abandonment reflecting his recognition that the application had little merit.  This is because she asserts there was no risk of the assets depreciating and therefore no need

for an early sale.

2      The invoices she has provided support the total costs incurred in relation to the applications but this work is not itemised in a way that ties it to a specific application.

[10]      I am unable to determine disputes of this nature on the papers.   Nor is it necessary there be such resolution.   As mentioned in my judgment of 25 March

2016,3  the general principle in civil proceedings is that a party who abandons or

discontinues an application will generally be liable for costs incurred.  As noted at [16] of the earlier judgment I found that Mrs Burgess was put to the trouble and expense of opposing applications in which she had some measure of success.

[11]      At [7] of his memorandum on costs quantification the Commissioner argues that in relation to Application Two, hearing costs should be excluded because there was no hearing.  He also seeks to exclude sealing costs including one third balance of costs and half filing fees for opposition and one third of travel and photocopying. He reaches a deduction total of $3,944.67.  Mrs Burgess on the other hand seeks an increase in costs.

[12]      The Commissioner decided he wanted to pursue a sale application of certain items of seized property before the substantive application for forfeiture was determined.   I reject the Commissioner’s argument there was no hearing of the application.   The application was heard before me insofar as it was one of the applications that was before me for hearing on 19 June and the application was not formally  discontinued  by  the  Commissioner  until  the  second  stage  hearing  on

31 July 2015.  Thus the application had gone beyond the point where it can be said there was no hearing.  I see no reason therefore for excluding hearing costs from the calculation of scale costs.   Nor do I see any proper basis for the other exclusions sought by the Commissioner.   I am satisfied that Mrs Burgess is entitled to scale costs at category 2B for Application Two.

[13]      Concerning  Mrs  Burgess’  application  for  increased  costs,  the  accounts provided  to  me  by  Mrs  Burgess’  lawyers  do  not  apportion  the  actual  costs  as between the three applications.  That is understandable as from their perspective they were  addressing  concerted  action  on  a  number  of  fronts  by the  Commissioner. However their attempt to avoid double counting, for which they should be commended, adds to the difficulty of assessing whether to increase costs.  Standing

back and looking at this application and the steps taken overall, there is nothing

3 At [14].

extraordinary about it and the steps taken by Mrs Burgess to support increased costs. I consider scale costs provide sufficient recompense for the time and trouble she was put to by Application Two.

[14]      I shall now deal with Application Four.

[15] This was an application by Mrs Burgess seeking discharge of restraining orders in relation to some of the restrained property. She was partly successful on that application. In the judgment of 25 March 2016 I considered whether her partial success should be reflected in a reduction in costs and found that was not so, for reasons expressed at [22]. I found that I would make no reduction of costs to reflect the fact Mrs Burgess did not achieve a discharge of the restraint or restrained items. Accordingly, it is not open to me to revisit that topic in relation to Application Four.

[16]      Mrs Burgess would seek increased costs in relation to Application Four.  I do not consider she is entitled to increased costs.   The fact she was only partially successful in the application seems to me to be something I can take into account when deciding whether there should be an increase in costs, which I see as a separate topic from whether scale costs should be reduced.  Again, looked at overall, there was nothing about this particular application which made it stand out from the usual. It strikes me as being no different from the ordinary type of applications of this nature  and  it  required  no  special  effort.    Those  factors,  coupled  with  the  fact Mrs Burgess was only partially successful, satisfy me that she is entitled to no more than scale costs for Application Four.

[17]      Application Three was an application filed by the Commissioner seeking an order for cancellation of the weekly payment of $800 that the Court had earlier permitted to be made to Mrs Burgess for living expenses, coupled with a further order that all such earlier payments were to be paid back either by the second respondent or by her lawyer.  This is the application that dominated the hearing.  The most striking feature about this application was that the Commissioner sought to contend Mrs Burgess had obtained the order for payment of living expenses by some underhand  means.     The  Commissioner  was  granted  leave  to  cross-examine

Mrs Burgess and it was in the course of cross-examination that the real thrust of the

Commissioner’s application came to light.

[18]      At [8] of a memorandum the Commissioner filed on 5 June 2015 for leave to cross-examine (the leave memorandum) the Commissioner refers to Mrs Burgess’ affidavit of 28 May 2015 in which she asserted that:

[19]     (a)       there was  no  arrangement  on  her  part  for the  purposes  of defeating  the  operation  of  the  Criminal  Proceeds  (Recovery)  Act

2009; and

[20]     (b)       she did not know that she was required not to spend the $800 on legal expenses.

[21]      At [9] of the leave memorandum the Commissioner said:

The Commissioner takes issue with Mrs Burgess’ assertions.  He wishes to put to Mrs Burgess his case that the entire scheme by which Mrs Burgess secured living expenses payments was designed to facilitate the payment of legal expenses, structured so as to mislead the Court as to the true purpose of her applications.  Mrs Burgess’ credibility is not accepted (and indeed has been impeached regularly by evidence which contradicts her various assertions in earlier affidavits).

[22]      In his memorandum opposing costs the Commissioner referred to these passages of the leave memorandum as constituting notice that he saw something underhand in the way in which Mrs Burgess had obtained the court order for living expenses.

[23]      Nevertheless,  the Commissioner properly accepts  that  at  the  hearing  of Application Three his cross-examination along the lines he had indicated in his leave memorandum was stopped by the Court because the Court ordered that the case he wanted to put to Mrs Burgess by way of cross-examination was outside the bounds of his application.  At that hearing, the Commissioner had the opportunity to draw the Court’s  attention to  where in  Application Three he  gave notice he asserted Mrs Burgess  had  obtained  the  living  expenses  he  wished  to  have  cancelled  by underhand means he could not do so.

[24]      I do not propose to go over what I said in the ruling of 31 July 2015 (the ruling) and judgment on 25 March 2016 regarding the need in civil proceedings for a party who relies on fraud or deceit to expressly plead the allegation with particulars. When the matter was drawn to the Commissioner’s attention at the hearing and following delivery of the ruling he responsibly accepted that the form of the application fell short of how it needed to be if he wanted to maintain the allegations of underhand conduct against Mrs Burgess.

[25]      Mrs Burgess now seeks increased costs on the ground it was unreasonable and irresponsible of the Commissioner to attempt to make a case essentially based on fraud and deceit in order to achieve cancellation of the living expenses when that was not properly pleaded in Application Three.

[26]      In summary the Commissioner argues that there should be no uplift in costs because  once  the  defect  in  the  form  of  Application  Three  was  brought  to  his attention, he abandoned the allegations of underhand conduct.

[27]      The  view  I  took  of  the  form  of  Application  Three  has  already  been expressed in the ruling which precluded the Commissioner from cross-examining Mrs Burgess on the alleged underhand conduct, as well as the comments made in my judgment of 25 March 2016.  Both are sufficient to inform the Commissioner of the views I take of the deficiency in the form of Application Three.  Further, I note that at the hearing on 31 July, when the matter was first brought to the Commissioner’s attention, he did not immediately choose to abandon his stance, but instead there was opposed argument from both parties and I made a formal ruling.  The effect of the ruling precluded further cross-examination, which in turn meant the Commissioner was no longer in a position to pursue Application Three effectively.  Allegations of underhand conduct are serious allegations to make.   The well settled principle in civil proceedings is that such allegations are made expressly and supported by particulars, none of which happened here.

[28]      The Commissioner now contends there were proper grounds for him to make the allegation.  However, I am not in any position in dealing with costs on the papers to determine whether that was so.  Further, the point I am dealing with is not

so much whether in substance he could make the allegation, but whether he had properly done so in the context of Application Three.  By not doing so he wasted Mrs Burgess’ time and the Court’s time by bringing an opposed application which ultimately could not proceed due to deficiencies in its form.  More can be expected of the Commissioner than that.  The conduct demonstrates to me some element of unreasonableness.   Applications under the Criminal Proceeds (Recovery) Act are made routinely by the Commissioner.  The parties affected by them and this Court are entitled to expect that the form of such applications and any attendant interlocutory applications is properly done.  For that reason I think some small uplift in scale costs is warranted, which I assess as around $3,000.   That to me seems sufficient compensation for the additional effort Mrs Burgess faced in having to deal with a poorly made application.

Conclusion

[29]      The judgment of 25 March 2016 found that in principle Mrs Burgess was entitled  to  scale  costs  with  quantification  and  any  further  uplifts  yet  to  be determined.  I am now satisfied that on the three applications she is entitled to scale costs at category 2B, with an uplift of $3,000 in relation to Application Three.  That comes to a total sum of $20,490.02.

[30]      I am aware that since the memoranda on costs were filed the Commissioner has succeeded in his substantive application.  That does not detract from the measure of success Mrs Burgess enjoyed in the interlocutory applications for which she now seeks the costs I find she is entitled to.

Result

[31]      Mrs Burgess is awarded costs of $20,490.02.