Dai v Professional Conduct Committee of the New Zealand Institute of Chartered Accountants

[2023] NZHC 278

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

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

CIV-2022-485-392

[2023] NZHC 278

UNDER

the Judicature Procedure Act 2016

IN THE MATTER OF

decisions made under the New Zealand Institute of Chartered Accountants Act 1996

BETWEEN

SANDY ZHUJUN DAI

Applicant

AND

THE PROFESSIONAL CONDUCT COMMITTEE OF THE NEW ZEALAND INSTITUTE OF CHARTERED ACCOUNTANTS

First Respondent

XIAOYAN SONG
Second Respondent

NZ NATURALS LIMITED

Third Respondent

On the papers:

Appearances:

Applicant in person

R B Moon for First Respondent

Judgment:

23 February 2023

JUDGMENT OF CHURCHMAN J [COSTS]

[1]                 On 10 January 2023, I struck out Ms Dai’s statement of claim in these proceedings as an abuse of process.1 I now deal with the issue of costs in relation to these proceedings.

1      Dai v Professional Conduct Committee of the New Zealand Institute of Charted Accountants

[2023] NZHC 4.

DAI v THE PROFESSIONAL CONDUCT COMMITTEE OF THE NEW ZEALAND INSTITUTE OF CHARTERED ACCOUNTANTS (COSTS) [2023] NZHC 278 [23 February 2023]

The Professional Conduct Committee’s (PCC) position

[2]                 The PCC seeks scale costs on a 2B basis with a small increase. Mr Moon submits that there are cogent reasons to increase the amount of costs, particularly:

(a)the PCC advised the applicant on several occasions that the proceedings were misconceived (and may have adverse costs consequences) and that legal advice should be sought;

(b)such matters were reinforced by Isac J during the hearing on 18 October 2022, along with strong encouragement to seek (and follow) the advice of counsel in relation to the proper form of pleading for judicial review;

(c)the proceedings were an abuse of process and taken to advance an improper personal motive; and

(d)any unrecovered costs must be underwritten by other members of the New Zealand Institute of Chartered Accountants (NZICA).

[3]As a result, the PCC submits it is appropriate to increase its scale costs of

$17,686 to $20,000.

Ms Dai’s position

[4]                 Ms Dai’s submissions on costs included commentary on irrelevant matters, and continued to make allegations that I considered in my judgment of 10 January 2023 to be without merit. In summary, her submissions were that:

(a)the proceedings were simple and limited in scope;

(b)the complaints made against her to the NZICA were defamatory, trivial, and frivolous;

(c)the PCC has erred in many ways, which is a matter of public interest;

(d)her claim had merit;

(e)the appropriate categorisation for costs purposes is 1A, because she is self-represented and the proceedings are not complex;

(f)the proceedings are of significant public interest and she acted reasonably in the circumstances, and therefore costs should lie where they fall;

(g)the PCC created unnecessary costs for itself by taking unnecessary and incorrect steps in the proceedings;

(h)the PCC’s costs submissions are incorrect and therefore awarding costs would breach natural justice principles;

(i)the PCC’s claim for costs is excessive, extravagant, baseless, and frivolous, and evidence an intent to gain an advantage from the proceedings;

(j)if costs are awarded, the maximum sum available is $1,325; and

(k)it is in the interests of justice that costs in these proceedings be refused.

Discussion

[5]                 I am of the view that an award of costs is appropriate in the circumstances. As I have previously noted, Ms Dai’s claim was improper and misconceived, being designed to frustrate the disciplinary proceedings against her. It was struck out as an abuse of process. Ms Dai’s submissions on costs are similarly misconceived. The PCC is entitled to costs on the ordinary construction of the costs principles as set out in the High Court Rules 2016, on a 2B basis. Mr Moon’s submissions were clear and appropriate in that respect, rather than incorrect as contended by Ms Dai.

[6]For clarity:

(a)the complaints made against Ms Dai are irrelevant to the determination of costs in these proceedings, as are any parallel proceedings in the Auckland High Court;

(b)Ms Dai’s claim was without merit, and put the PCC to unnecessary cost;

(c)the appropriate categorisation is 2B, as is typically the case;

(d)the proceedings were not in the public interest, and have no public interest aspect, but rather were brought by Ms Dai in the furtherance of her own interests;

(e)the PCC acted properly and correctly throughout the proceedings, and their costs submissions are balanced and appropriate;

(f)there is no basis for a conclusion that the PCC has sought to gain an advantage in the proceedings against Ms Dai either through their costs submissions or otherwise, nor could it have, given that it was Ms Dai who filed the proceedings – the PCC has simply defended its position throughout;

(g)Ms Dai’s calculation of the available costs award is incorrect;

(h)I do not consider that it is in the interest of justice for costs to be refused in this proceedings, rather, it is appropriate that Ms Dai be liable for costs where she has abusively pursued litigation that had no chance of success, and put the PCC to significant cost in doing so, while being aware of the likely costs implications;

(i)Ms Dai was encouraged to seek legal advice by the PCC and the Court, but did not do so; and

(j)I am of the view that it would be inappropriate in the circumstances for the unrecovered costs of the PCC to be entirely underwritten by other members of the NZICA.

[7]                 It is also for those reasons that I am of the view that the increase in costs sought by the PCC is appropriate, pursuant to rr 14.6(3)(b)(ii) and rr 14.6(3)(b)(iii) of the High Court Rules 2016. I am satisfied that Ms Dai has contributed unnecessarily to the time and expense of the proceedings and steps in it by:

(a)taking and pursuing unnecessary steps and arguments that lacked merit; and

(b)failing without reasonable justification to accept legal arguments.

Result

[8]                 Accordingly, I award costs in the sum of $20,000 to the PCC. The PCC did not claim disbursements.

Churchman J

Solicitors:

Richard Moon, Wellington for First Respondent cc:     S Z Dai