Cosmo Holdings Limited v Van Dyk

[2024] NZHC 1071

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

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

CIV-2024-485-204

[2024] NZHC 1071

UNDER

Section 119 of the Residential Tenancies Act 1986, and rr 2.5, 2.11(1) and (5), 7.19(4) and
7.23 of the High Court Rules 2016

IN THE MATTER

of an appeal against a Tenancy Tribunal decision dated 28 March 2023

BETWEEN

COSMO HOLDINGS LIMITED

Applicant

AND

ILANA SEAGER VAN DYK AND BRUCE SEAGER VAN DYK

Respondent

Hearing:	On the papers
Judgment:	3 May 2024

JUDGMENT OF McHERRON J

Introduction

[1]                  This is an application to review a decision of the Deputy-Registrar to refuse to accept documents for filing. I dismiss the application for review, for the following reasons.

Background

[2]                  Cosmo Holdings Ltd seeks to appeal a decision of the District Court dismissing its appeal against a decision of the Tenancy Tribunal.1 In its decision of 28 March 2023, the Tribunal ordered Cosmo Holdings to pay the tenants of its property

1      Cosmo Holdings Ltd v van Dyk [2024] NZDC 1624.

COSMO HOLDINGS LIMITED v VAN DYK [2024] NZHC 1071 [3 May 2024]

exemplary damages of $3,500 (plus the filing fee). The Tribunal found that Cosmo Holdings gave its tenants an unlawful and retaliatory notice of termination of their tenancy.

[3]                  The director of Cosmo Holdings, Sandy Dai, submitted various documents to this Court through File and Pay on 5 April 2024.2 On 15 April 2024, the Deputy Registrar emailed Ms Dai to advise that the documents could not be accepted for filing, because:3

1.     The appellant is Cosmos [sic] Holdings Ltd and you appear to be representing this company in your notice of appeal.

A Litigant in person, whether an officer of the company or another agent of it, cannot represent a company as of right in litigation in the Court of Appeal or in the High Court.

[4]The Deputy Registrar’s email also:

(a)identified a relevant decision of the Court of Appeal, Re G J Mannix Ltd, a copy of which the Deputy Registrar attached for Ms Dai’s information, together with relevant page references from that decision;4

(b)advised Ms Dai that even if her Court documents were able to be accepted for filing, various amendments would need to be made to them;

(c)pointed out that an outstanding fee was payable for the on-notice application for stay of proceedings;

(d)stated that she was returning the Court documents to Ms Dai.

[5]                  Ms Dai disagreed with the Deputy Registrar’s decision. She submitted that  Re G J Mannix permitted her to represent Cosmo Holdings. Ms Dai pointed out that there have been numerous Tenancy Tribunal appeals to the High Court in which

2      A notice of appeal, notice of interlocutory application for stay of proceeding, affidavit in support and bundle of documents.

3      Emphasis in original.

4      Re G J Mannix Ltd [1984] 1 NZLR 309 (CA).

company  owners  have been self-representing.    She referred to Whakatihi v Rent Assured Rotorua Ltd as an example.5

[6]                  Ms Dai later identified specific passages within Re G J Mannix Ltd, which she said supported her position, as follows:6

In general, and without attempting to work out hard-and-fast rules, discretionary audience should be regarded, in my opinion, as a reserve or occasional expedient, for use primarily in emergency situations when counsel is not available or in straightforward matters where the assistance of counsel is not needed by the Court or where it would be unduly technical or burdensome to insist on counsel. Especially in minor matters, cost-saving could also be a relevant factor. A “one-man” company might be allowed to be represented by its owner if the Judge saw fit in a particular case. But it could not be right, for instance, to issue some sort of tacit continuing or general licence to an unqualified agent to appear in winding up or any other class of proceedings.

…

Individual cases can be met, as they have been met in the past, by the exercise of a discretion to allow representation by company officers, or possibly agents, in the particular circumstances of the case: O’Toole v Scott [1965] AC 939; Hubbard Association of Scientologists International v Anderson. I would hesitate to place any fetter on the exercise of this discretion, leaving it for the exercise of the individual Judge. The nature of the litigation, the complexities of the case, the extent of the dispute and the points upon which audience is sought are some of the matters that may then be relevant. But representation of that kind is likely to be the exception rather than the rule.

…

But I consider the superior Courts have a residual discretion in this matter arising from the inherent power to regulate their own proceedings. Cases will arise where the due administration of justice may require some relaxation of the general rule. Their occurrence is likely to be rare, their circumstances exceptional or at least unusual, and their content modest. Such cases can confidently be left to the good sense of the Judges

[7]                  However, the Deputy Registrar affirmed her decision on 16 April 2024 that the Re G J Mannix Ltd judgment does not give her jurisdiction to accept Ms Dai’s documents for filing. The reason for this position is that the named appellant (Cosmo Holdings Ltd) cannot be represented by a lay person, as of right, in litigation in the Court of Appeal or in the High Court.

5      Whakatihi v Rent Assured Rotorua Ltd [2019] NZHC 2873.

6      Respectively, Re G J Mannix Ltd, above n 4, at 314 per Cooke J, at 316 per McMullin J, and at 316-317 per Somers J.

[8]                  The Deputy Registrar offered Ms Dai the opportunity to have her decision reviewed by a Judge under r 2.11 of the High Court Rules.

[9]                  On 22 April 2024, Ms Dai filed an “interlocutory application without notice” seeking:

1.1Judge review of the Registrar’s exercise of jurisdiction pursuant to rule 2.7, and Judge review of Registrar’s refusal to file a complying Notice of Appeal tendered for filing and Registrar’s refusal to commence an appeal under r 5.1B(2).

1.2An order for a Stay of the Proceeding under rule 2.11(5) and rule 7.19.

[10]              Ms Dai advances the following grounds in support of her application for review of the Deputy Registrar’s decision:

(a)the Registrar lacks jurisdiction to refuse to file a complying notice of appeal brought within the appeal period;

(b)the notice of appeal complies with the High Court Rules and s 119 of the Residential Tenancies Act;

(c)the prescribed fee for the notice of appeal was paid on 5 April 2024 and under r 5.1B(2) the appeal proceeding was commenced on 5 April 2024. It is “inappropriate for the Registrar to perform a job duty placed under the High Court Rules”;

(d)“the landlord seeks the right to be heard in this appeal and the Court is obliged to hear matters of general or public importance when a significant miscarriage of justice occurred in the courts below”;

(e)the landlord seeks to avail itself of “the exception rule” in Re G J Mannix given the “nature of the litigation is straightforward, the complexities of the dispute and points upon which audience is sought are low, and it was a tenant-instigated legal proceeding at the Tribunal. The amount of the award at the Tenancy Tribunal is “minor”.”

Assessment

[11]              Rule 2.11(1)(b) of the High Court Rules provides that an affected party to a proceeding or an intended proceeding may apply to a Judge by interlocutory application for a review of a Registrar’s refusal to file a document tendered for filing.

[12]              Ms Dai correctly points out that the Registrar’s power to refuse to file documents tendered for filing is not provided for in rr 2.5 and 2.6. However, Registrars’ powers are not limited to the powers contained in those rules. In addition, Registrars (including Deputy-Registrars) have the duties and powers “necessary or desirable to ensure the efficient and effective administration of the business of the High Court”.7

[13]              It is well-recognised that a Registrar has power to refuse to accept documents for filing either because they do not comply with the rules or otherwise are an abuse of the Court’s process or contrary to a Court direction.8

[14]              I am satisfied that the Deputy Registrar was correct in rejecting the documents for filing in the present case.

[15]              As the Deputy Registrar advised Ms Dai, the general rule is that a company must be represented by a solicitor at all stages of a proceeding.9 This includes the initial procedure of filing documents.10

[16]              In 89 Courtenay Place Ltd v Portland Wines Ltd, Associate Judge Smith dismissed an application for review of a Registrar’s decision to decline to accept for filing a liquidation proceeding. The proceeding in that case had been filed by a director of the company.

7      Senior Courts Act 2016, s 34.

8      LFDB v SM [2021] NZCA 445, (2021) 25 PRNZ 794; LFDB v SM [2021] NZSC 164; Muir v

Commissioner of Inland Revenue [2017] NZHC 2082; Re Howes Tindall & Associates Ltd (in liq)

[1990] 2 NZLR 323 (HC).

9      Commissioner of Inland Revenue v Chesterfields [2013] NZCA 53 at [33].

10     89 Courtenay Place Ltd v Portland Wines Ltd [2016] NZHC 158.

[17]              There are sound policy principles why a solicitor rather than an officer of a company should act for the company in commencing and continuing civil litigation, including:11

(a)a company is not a natural person and may have a number of officers, each with their own individual concerns and interests;

(b)a solicitor is ethically constrained to represent the company’s interests, unlike an individual officer who seeks to represent it;

(c)if a solicitor is involved, the Court can generally be satisfied that careful attention has been given to the validity of the proceedings and that the company’s interests will be adequately preserved and protected;

(d)solicitors recognise the duties and responsibilities that are owed to the Court and to the defendant in the conduct of litigation, and are less likely to require indulgences in the rules of procedure or to use Court processes for vexatious purposes;

(e)the Court must have a solicitor on the record as it cannot exercise its disciplinary powers over a company;

(f)if a director or shareholder is representing the company there is a heightened risk that the representative will lack the objectivity that an independent solicitor can bring to the case.

[18]              Ms Dai submits that, according to the G J Mannix Ltd case, the Courts have a discretion to depart from the general rule when there are “exceptional circumstances”. However, having reviewed the decision of the District Court that Ms Dai proposes to appeal, I consider there is nothing exceptional about the present case to justify any departure from the general rule.

11     Commissioner of Inland Revenue v Chesterfields, above n 9, at [34].

[19]              Rather, having reviewed the documentation filed by Ms Dai, and having regard to her approach in dealing with the Deputy Registrar, I consider that Cosmo Holdings’ proposed second appeal would greatly benefit from a lawyer’s involvement for the reasons outlined in principles [17](c), [17](d) and [17](f) above.

[20]              Ms Dai identified a case which she says supports her claim that the High Court commonly allows companies to be represented by their directors in appeals from the Tenancy Tribunal. However, I note that in that case the Judge pointed out that the company ought to have been represented by a solicitor but had been granted a “significant indulgence in being permitted to be represented by an individual rather than a solicitor”.12 No satisfactory basis has been identified for Cosmo Holdings to be permitted a similar indulgence in the present case.

[21]              None of the other grounds for review of the Deputy Registrar’s decision identified by Ms Dai have any merit. Cosmo Holdings may appeal the District Court’s decision to the High Court on a question of law.13 However, it will need to instruct a lawyer to file compliant appeal documentation and represent it.

[22]              As Associate Judge Smith identified in 89 Courtenay Place Ltd v Portland Wines Ltd:14

… a company is deemed in law to be a separate legal “person” from its directors and shareholders. That separate legal statutes provide advantages for the individual shareholders, as they will generally not be personally liable for the company’s debts (beyond the amount of share capital they have agreed to subscribe). But creating a company as a separate legal person also has consequences, and one of them is that filing Court documents and representing the company in Court is generally the preserve of solicitors and barristers qualified under the Lawyers and Conveyancers Act 2006.

[23]              Accordingly, in my view the Deputy Registrar was correct to reject Ms Dai’s documents for filing. It follows also that there is no basis for any order for a stay of the proceeding.

12     Whakatihi v Rent Assured Rotorua Ltd, above n 5.

13     Residential Tenancies Act 1986, s 119.

14     89 Courtenay Place Ltd v Portland Wines Ltd, above n 10, at [16].

Result

[24]              Ms Dai’s application for review of the Deputy Registrar’s decision is dismissed.

McHerron J