Cooke v Valuers Registration Board
[2015] NZHC 2815
•12 November 2015
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
CIV-2015-404-1821 [2015] NZHC 2815
UNDER Sections 4(1) and 4(5), Judicature
Amendment Act 1972
IN THE MATTER
of the Valuers Act 1948
BETWEEN
KENNETH ROBERT COOKE Plaintiff
AND
VALUERS REGISTRATION BOARD First Defendant
JOHN REID Second Defendant
Hearing: 12 November 2015 Counsel:
Appearance:
RKP Stewart for first defendant
JH Whitehead for second defendantKR Cooke, plaintiff in person
Judgment:
12 November 2015
JUDGMENT OF FAIRE J
This judgment was delivered by me on 12 November 2015 at 4:45 pm, pursuant to Rule 11.5 of the High Court Rules.
Registrar/Deputy Registrar
Date……………
Solicitors: Izard Weston, Wellington
DAC Beachcroft New Zealand Ltd, Auckland
And To: RC Cooke, Auckland
Cooke v Valuers Registration Board [2015] NZHC 2815 [12 November 2015]
Contents
The proceeding .......................................................................................................[1] The applications for security for costs ...................................................................[5] The opposition........................................................................................................[6] The court’s approach to security for cost applications ...........................................[7] The threshold issue............................................................................................... [11] Background ..........................................................................................................[12] Analysis ................................................................................................................[21] Orders ...................................................................................................................[30] Costs .....................................................................................................................[31]
The proceeding
[1] The plaintiff has filed this proceeding which invites the court to judicially review a decision of the Valuers Registration Board, notified by letter dated 11 June
2015 and in respect of a complaint the plaintiff made by letter dated 17 August 2014 to the New Zealand Institute of Valuers.
[2] The plaintiff, by implication, pleads that the second defendant, who the New Zealand Institute of Valuers appointed to investigate and report to the Valuers Registration Board in respect of a complaint involving a registered valuer, Mr GJ Clapcott of Albion Banks Valuations Ltd:
(a) Failed to meet the requirements of s 32(1) of the Valuers Act 1948;
and
(b) Produced a report which was not of a sufficient quality to discharge
the second defendant’s professional duty of care.
[3] The plaintiff seeks orders that:
(a) The Valuers Registration Board’s decision not to hold an inquiry into the plaintiff’s complaint about the second defendant’s investigation and report to the Valuers Registration Board be set aside;
(b)Effectively a declaration by the court as to the essential requirements of an investigation in terms of s 31(1) of the Valuers Act 1948;
(c) Effectively a declaration by the court as to whether the second
defendant’s report meets the requirements of the Act;
(d)Effectively a declaration by the court as to whether the second defendant discharged his professional duty of care when he submitted his report to the Valuers Registration Board; and
(e) Effectively a declaration by the court as to whether the Valuers Registration Board properly exercised its statutory powers of decision and properly discharged its professional duty of care in arriving at its decision.
[4] The plaintiff filed his statement of claim on 12 August 2015.
The applications for security for costs
[5] The first and second defendants applied respectively on 10 and 18 September
2015 for orders for security for costs. Directions for the disposal of those applications were made by Peters J in a minute of 24 September 2015, including the allocation of this fixture.
The opposition
[6] The plaintiff acts for himself. He lists the following matters by way of opposition:
3.1 It is not in the interests of justice to do so.
3.2 Exceptional circumstances exist.
3.3The respondent has an arguable case and honestly intends to pursue it.
3.4 The importance of the issues raised is significant.
3.5 There is public interest in having them determined.
3.6The respondent does not rely on impecuniosity alone for the dispensation with security for costs.
The court’s approach to security for cost applications
[7] The application is made in reliance on r 5.45 of the High Court Rules. The relevant parts of that rule for the purposes of this application are as follows:
5.45 Order for security of costs
(1) Subclause (2) applies if a Judge is satisfied, on the application of a defendant,—
…
(b) that there is reason to believe that a plaintiff will be unable to pay the costs of the defendant if the plaintiff is unsuccessful in the plaintiff’s proceeding.
(2) A Judge may, if the Judge thinks it is just in all the circumstances, order the giving of security for costs.
(3) An order under subclause (2)—
(a) requires the plaintiff or plaintiffs against whom the order is made to give security for costs as directed for a sum that the Judge considers sufficient—
(i) by paying that sum into court; or
(ii) by giving, to the satisfaction of the Judge or the
Registrar, security for that sum; and
(b) may stay the proceeding until the sum is paid or the security given.
[8] In McLachlan v MEL Network Ltd helpful guidance is given as to the approach that should be taken on applications for security for costs.1 For the purposes of this application the Court’s comments at [13] – [16] are particularly helpful:
[13] Rule 60(1)(b) High Court Rules provides that where the Court is satisfied, on the application of a defendant, that there is reason to believe that the plaintiff will be unable to pay costs if unsuccessful, “the Court may, if it thinks fit in all the circumstances, order the giving of security for costs”. Whether or not to order security and, if so, the quantum are discretionary. They are matters for the Judge if he or she thinks fit in all the circumstances. The discretion is not to be fettered by constructing “principles” from the facts of previous cases.
[14] While collections of authorities such as that in the judgment of Master Williams in Nikau Holdings Ltd v BNZ (1992) 5 PRNZ 430, can be of assistance, they cannot substitute for a careful assessment of the circumstances of the particular case. It is not a matter of going through a checklist of so-called principles. That creates a risk that a factor accorded weight in a particular case will be given disproportionate weight, or even treated as a requirement for the making or refusing of an order, in quite different circumstances.
[15] The rule itself contemplates an order for security where the plaintiff will be unable to meet an adverse award of costs. That must be taken as contemplating also that an order for substantial security may, in effect, prevent the plaintiff from pursuing the claim. An order having that effect should be made only after careful consideration and in a case in which the claim has little chance of success. Access to the Courts for a genuine plaintiff is not lightly to be denied.
[16] Of course, the interests of defendants must also be weighed. They must be protected against being drawn into unjustified litigation, particularly where it is over-complicated and unnecessarily protracted.
[9] The reference in the Court of Appeal decision to r 60(1)(b) is a reference to the predecessor of the current rule that I have set out.
[10] The first part of the inquiry, often referred to as the threshold test, was summed up by Rodney Hansen J:2
In considering whether the threshold issue of the ability of the plaintiff to pay the defendants’ costs if unsuccessful has been reached, it is, as Hammond J said in Hamilton v Papakura District Council (supra), necessary to make a broad overall assessment. Something more than having difficulty in making payment is, however, required. Some plaintiffs will not be able to meet costs without some financial rearrangement: NZ Kiwifruit Marketing Board v Maheatataka Coolpack Limited (1993) 7 PRNZ 209. And if a plaintiff’s financial position is improving and is likely to improve still further, there may not be reason to find an inability to pay costs: see Rivendell Mushrooms Limited v Horowhenua Electric Power Board
(unreported, High Court, Wellington, CP844/92, 13.11.98, Master
Thomson).
The threshold issue
[11] The plaintiff admits that he is impecunious. The threshold position is clearly
met in this case. What is required, however, is an analysis of the court’s discretion.
Background
[12] I set out a background which has been extracted from the pleadings, affidavits and three judgments. I acknowledge that it is incomplete.
[13] The plaintiff and his wife owned two residential properties at 86 and
86A Kitchener Road, Milford, Auckland. They were subject to a mortgage to the
ASB Bank. The bank sought a registered valuation from Mr Clapcott in February
2009 in preparation for the mortgagee sale of the two properties. The property at
86A Kitchener Road was sold by auction on the instruction of the bank on 8 April
2009 for $1,260,000. The property at 86 Kitchener Road was sold in July 2009 for
$1,300,000. Mr Cooke describes the sale of these properties, at the prices concerned, as disastrous.
[14] On 24 September 2009 he lodged a complaint with the Property Institute of New Zealand on the grounds that Mr Clapcott’s valuation did not meet professional standards. The complaint was passed on to the New Zealand Institute of Valuers. On 11 December 2009 the second defendant was appointed to investigate the complaint. On 14 December 2009 he delivered his findings to the first defendant for its consideration. On 22 February 2010 the first defendant determined that there was no reasonable ground for complaint and that therefore it would not hold an inquiry into the complaint in terms of s 32(2) of the Valuers Act 1948. The decision was communicated to the plaintiff on 16 March 2010.
[15] In February 2013 the plaintiff commence judicial review proceedings against the Board in relation to its decision to not hold an inquiry. Mr Clapcott was joined as a party to that proceeding, having regard to s 9(4) of the Judicature Amendment Act
1972. Duffy J dismissed the application for judicial review in a judgment delivered on 28 February 2014.3
[16] The plaintiff appealed to the Court of Appeal. He sought an order that security for costs, which had been set on the appeal, be dispensed with. The Registrar declined to dispense with the payment. He applied to review the Registrar’s decision. That was dismissed by French J in a judgment delivered on
28 May 2014.4 It is appropriate to record that in that judgment her Honour
observed:5
The merits of the appeal are also far from compelling.
[17] In a judgment delivered on 24 June 2014, Duffy J ordered that the plaintiff pay costs in favour of the first defendant in the sum of $24,328.50, plus disbursements of $2,113.30. Her Honour ordered that the plaintiff pay Mr Clapcott’s costs, he being the second-named defendant, in the sum of $2,686.50, plus disbursements of $108.80. The reason for the lesser sum was that the second defendant played no active role in the proceeding. He was paid costs for his attendances in respect of the s 10 Judicature Amendment Act conference and filing a notice of appearance reserving rights.
[18] As at 8 September 2015 the plaintiff had made payments totalling $900 in respect of his liability for costs to the first defendant in relation to the Clapcott proceedings.
[19] On 17 August 2014, the plaintiff filed a complaint with the New Zealand Institute of Valuers in respect of the performance of Mr John Reid, the person appointed to report to the Valuers Registration Board. The following day he abandoned his appeal against the judgment of Duffy J.
[20] On 11 June 2015 the Valuers Registration Board advised that it would not hold an inquiry. That was followed by the plaintiff filing the current proceeding on
3 Cooke v Valuers Registration Board [2014] NZHC 143.
4 Cooke v Valuers Registration Board [2014] NZCA 203.
5 At [12].
12 August 2015, which was then followed by the applications to which I have made reference.
Analysis
[21] What has driven Mr Cooke’s actions here are sales at which he considers to be an undervalue at the behest of his mortgagee. Whether any action has been pursued by him pursuant to s 176 of the Property Law Act 1952 is not revealed in the papers. What he has chosen to do, however, is to challenge the adequacy of the valuation material produced firstly by Mr Clapcott and secondly, the reporting and investigation of that to the Valuation Board by Mr Reid. Mr Cooke’s submissions disclose that he does not accept the judgment of Duffy J. However, the issues resolved by Her Honour are res judicata. Rights of appeal have been exhausted. A helpful summary of the law is contained in the judgment of Fisher J in Russell v
Taxation Review Authority where he said:6
The Commissioner's first ground for striking out that pleading is that the matter is res judicata in the strict sense, the subject of issue estoppel and/or an abuse of process having regard to prior litigation. Proceedings can be dismissed in whole or in part as an abuse of the process of the Court where the cause of action pleaded could not succeed because of the existence of an issue estoppel with respect to one or more of the essential elements of the cause of action (see for example Spiels v Blakeley & Ors [1986] 2 NZLR
262 (CA); Joseph Lynch Land Co Ltd v Lynch [1995] 1 NZLR 37 (CA)) or where the pleaded cause of action represents an attempt to litigate or re- litigate issues which ought properly to have been included in the previous proceedings (Meates v Taylor [1992] 2 NZLR 36 (CA); NZ Social Credit Political League v O'Brien [1984] 1 NZLR 84 (CA)) or where the pleaded cause of action is statute-barred (DFC New Zealand Ltd v McKenzie [1993]
2 NZLR 576,578, 579; G v GD Searle & Co [1995] 1 NZLR 341, 346, 347);
Homed Abdul Khali Al Ghandi Co v NZ Dairy Board (1999) 13 PRNZ 102, at 107.
Of the two possible forms of res judicata the important one here is issue estoppel. The effect of the authorities appears to be as follows:
(a) The public policy principles underlying cause of action estoppel and issue estoppel are that it is in the public interest that there should be an end to litigation, that there is hardship to an individual in being vexed twice for the same cause (Lockyer v Ferryman (1877) 2 App Cas 519, 530) and that it is undesirable to create an opportunity for different courts to pronounce differently upon the same issue (House of Spring Gardens Ltd v Waite [1991] 1 QB 241, 255 C (CA)).
6 Russell v Taxation Review Authority (2000) 19 NZTC 15,924 (HC) at [19] and [20].
(b) Issue estoppel will apply where (i) a final decision has been made by a court of competent jurisdiction (ii) deciding the same question (iii) between the same parties or their privies (Carl Zeiss supra at
935B per Lord Guest). Each must be considered in turn.
(c) There is a final decision for present purposes where a New Zealand Court of competent jurisdiction has determined the issue as an essential step in the logic of the judgment without which it could not stand (Spencer Bower & Turner: Res Judicata 3rd ed (1996) para
182 pp 88-89).
(d) For present purposes a case involves the same parties if the party in the second proceeding has such a mutuality of interest with the party in the first proceeding that estoppel would produce a fair and just result having regard to the underlying purposes of the doctrine (Shiels v Blakeley supra at 268 line 40).
(e) For present purposes the second proceeding involves the same question as the first where the issue raised in the second proceedings could with reasonable diligence have been raised in the earlier proceedings: Henderson v Henderson (1843) 3 Hare 100 at 114-115, [1843-60] All ER Rep at 381-382; Arnold v National Westminster Bank plc [1991] 3 All ER 41 at 47 C-H (HC) ("Every point which properly belonged to the subject of litigation and which the parties, exercising reasonable diligence, might have brought forward at the time" per Wigram VC in Henderson supra); New Zealand Social Credit Political League Inc v O'Brien supra, 95.
(f) In special circumstances the Courts may depart from the foregoing principles and decline to recognise an issue estoppel where it would otherwise create a clear injustice, for example where important fresh material has become available which could not with reasonable diligence have been adduced in the earlier proceedings: Arnold v National Westminster Bank plc supra at 50E-F; [1991] 2 AC 93,
109; X v Y supra at 213; Nippon Credit Australia v Girvan
Corporation New Zealand Ltd (1991) 5 PRNZ 44, 60 ("There were in my opinion understandable and acceptable reasons why the Maronis did not embark on a full-scale action raising all three possible challenges when it is a matter of fending off a threatened mortgagee's sale").
[22] What is immediately apparent in this case is that Mr Cooke already has a significant exposure to the first defendant for unpaid costs, quite apart from the ongoing exposure if he is unsuccessful in his current judicial review proceeding. There has, by virtue of the hearing before Duffy J been one examination in the High Court of whether the approach adopted by the Valuers Registration Board justified judicial review, which resulted in a refusal.
[23] There has, in addition, been an expression of a preliminary view by French J
in the Court of Appeal of the merits of any challenge to that decision.
[24] The latest challenge is in relation to an investigation and report on the actions taken by Mr Clapcott by Mr Reid. The Valuers Registration Board expressed its opinion that it was satisfied with the steps he had taken.
[25] This judgment cannot come to any final conclusion on the merits of the current judicial review proceeding. Suffice to say, having regard to the history of the matter one is led to the position that the likely chance of a successful judicial review application is remote. That has to be measured against the fact that the plaintiff is already significantly indebted to the Valuers Registration Board for costs as a result of a final judgment.
[26] The plaintiff seems to have been under the misapprehension that the Board was publicly funded. The Board’s secretary has confirmed, in her affidavit in support of the application for security for costs, that the Board’s sole source of funding is an annual levy imposed on all registered valuers.
[27] When I weigh up all aspects of the matter and apply the guidance given by the Court of Appeal in AS McLachlan Ltd v MEL Network Ltd I conclude that this is an appropriate case to order security for costs.7 In addition, it is appropriate having regard to r 5.45 that in the event that the security is not paid that an order for stay be made.
[28] I deal next with the quantum of security. The defendants have not attempted any analysis of the appropriate figure by reference to the steps provided as items in Schedules 2 and 3 to the High Court Rules. Rather, reliance has been placed solely on the costs awarded in the first unsuccessful judicial review proceeding. On its face, the proceeding appears to be a Category 2 proceeding. In terms of Item 2 of Schedule 3 allowance must be made for the defence to that proceeding and for an appearance at, at least, two case management conferences, including the filing of
memoranda for same. If discovery was sought, allowance would also have to be
7 AS McLachlan Ltd v MEL Network Ltd, above n1.
made for Items 20 and 21. There would also have to be preparation for trial in terms of Item 30. Other preparation in terms of Item 33 and appearances at the hearing, Item 34, would have to be allowed for. As is usual, some discount to that total would then be allowed. Before the discount is applied, a figure in the order of $22,523 is the likely exposure for costs in relation to the items that I have mentioned. A discount is appropriate when I consider the allowances in relation to the items that I have referred to for preparation. Taking that into account I am of the view that an appropriate sum for security for costs is $18,000.
[29] With respect to the position of the second defendant, his position is that he is likely to follow limited involvement not unlike Mr Clapcott’s involvement in the first proceeding. Taking that into account I am of the view that an appropriate sum for security for his costs is $1,500.
Orders
[30] I order as follows:
(a) On the first defendant’s application for security for costs, the plaintiff shall pay to the Registrar of the High Court as security for costs the sum of $18,000. Pending such payment this proceeding shall be stayed;
(b)On the second defendant’s application for security for costs, the plaintiff shall pay to the Registrar of the High Court as security for costs the sum of $1,500. Pending such payment this proceeding shall be stayed;
(c) On payment of security for costs the Registrar shall place this proceeding in the judicial review list and notify Mr Cooke and counsel for the first and second defendants of that listing. The purpose of the listing is to give directions covering the matters set out in Schedule 10 of the High Court Rules. Mr Cooke and counsel for the defendants shall file and serve memoranda dealing with those items four working days before the listed dated.
Costs
[31] The defendants have been successful in their applications. The hearing was completed within approximately 1 hour 20 minutes. The defendants are entitled to costs based on Category 2 Band B and in respect of a ¼ day hearing, plus
disbursements as fixed by the Registrar.
JA Faire J
4
0