Faloon v Commissioner of Inland Revenue

IN THE HIGH COURT OF NEW ZEALAND TAURANGA REGISTRY

CIV 2011-470-000878 [2013] NZHC 1296

BETWEEN CLARENCE JOHN FALOON Plaintiff

ANDTHE COMMISSIONER OF INLAND REVENUE
Defendant

Hearing: On the papers

Appearances: C J Faloon in person the Plaintiff
D Lemmon for the Defendant

Judgment: 4 June 2013

COSTS JUDGMENT OF ASSOCIATE JUDGE CHRISTIANSEN

This judgment was delivered by me on
04.06.12 at 4:30pm, pursuant to
Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar
Date……………

FALOON v THE COMMISSIONER OF INLAND REVENUE [2013] NZHC 1296 [4 June 2013]

[1] On 8 November 2011 I issued a judgment granting the Commissioner’s application to strike out a claim brought by Mr Faloon on the grounds that it was mischievous, frivolous, vexatious and an abuse of process.

[2] At that time I invited submissions on the question of costs. I intimated indemnity costs would be considered. However, before these submissions were filed Mr Faloon filed an application for review of my judgment.

[3] Mr Lemmon for the Commissioner submits that because the review application proceeded as a rehearing of the strike out application that it is reasonable to infer that the Commissioner should be entitled to claim costs for the strike out application on the same 2B basis the review Judge intimated ought be awarded on the review application.

[4] Mr Lemmon has attached an itemised calculation of scale costs for both the strike out and the review applications.

[5] In his response Mr Faloon submits that I “had no jurisdiction to hear the application [for strike out] in the presence of an application for an extraordinary remedy in another proceeding of his which was then “properly before the Court for decision”.

[6] He further submits “as indemnity costs were awarded, and as the plaintiff is given 14 days to reply to any memorandum in relation to costs, [he] submits it is an error of law for Crown Law to seek costs on a 2B basis...”. The fact that Mr Fallon may have yet another application before the Court does not prevent the Court from fixing costs in relation to a proceeding which has now been concluded.

[7] Indemnity costs usually significantly exceed costs awarded on a 2B basis.

Judgment

[8] Costs against Mr Faloon are fixed on a category 2B basis as follows:

(a) Upon the review application in the amount of $7,761.00 and disbursements in the amount of $546.50; and

(b)For the strike out application in the amount of $9,751.00 and disbursements in the amount of $1,048.48.

Associate Judge Christiansen

CaseChat Overview and Summary

The High Court of New Zealand considered a matter between Clarence John Faloon, the plaintiff, and the Commissioner of Inland Revenue, the defendant. Faloon's initial claim was struck out by the court as it was deemed to be mischievous, frivolous, vexatious, and an abuse of process. The court subsequently invited submissions on the question of costs, indicating that indemnity costs might be considered. Faloon filed an application for review of the initial judgment, leading to the current proceedings. The Commissioner argued that he should be entitled to costs on a category 2B basis for both the strike out application and the review application.

The court had to determine the appropriate basis for awarding costs in this case. The Commissioner's counsel submitted that costs should be awarded on a category 2B basis for both the strike out application and the review application. Faloon, on the other hand, contended that the court lacked jurisdiction to hear the strike out application in light of an application for an extraordinary remedy he had filed in another proceeding. He further argued that the award of indemnity costs meant that the court should not consider costs on a category 2B basis. The court ultimately needed to resolve whether the Commissioner was entitled to costs on the specified basis and whether the plaintiff's arguments against such an award were valid.

The court decided that costs should be awarded against Faloon on a category 2B basis for both the strike out application and the review application. The court found that even though Faloon had another application pending, this did not prevent the court from fixing costs in relation to the concluded proceedings. Indemnity costs, which are typically higher, were not awarded. The specific amounts awarded were $7,761.00 plus disbursements of $546.50 for the review application and $9,751.00 plus disbursements of $1,048.48 for the strike out application.

Associate Judge Christiansen fixed the costs against Faloon on a category 2B basis for both the review and strike out applications, totaling $7,761.00 plus $546.50 in disbursements for the review application, and $9,751.00 plus $1,048.48 in disbursements for the strike out application.

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established