Foni v Foliaki

[2018] NZHC 3126

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2017-404-109

[2018] NZHC 3126

BETWEEN

METUISELA FONI

Plaintiff

AND

PAE I LOTOMUA FOLIAKI AND PAULINE FINAU TO’A

First Defendants

SINISA LAW LTD

Second Defendant

Hearing:

On the papers

Counsel:

Plaintiff in person

I M Hutcheson for the First Defendants T J Cooley for the Second Defendant

Judgment:

29 November 2018

COSTS JUDGMENT OF MUIR J

This judgment was delivered by me on Thursday 29 November 2018 at 4.30 pm pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar Date:………………………….

Counsel/Solicitors:

I M Hutcheson, Barrister, Auckland T J Cooley, Brookfields, Auckland

Copy to:
The Plaintiff, C/- F Fonokalafi

FONI v FOLIAKI [2018] NZHC 3126 [29 November 2018]

[1]    The defendants seek costs in respect of these proceedings, which were struck out for non-compliance with unless orders. In the case of the first defendant the amount sought is $23,638 together with disbursements of $238.60. In the case of the second defendant the amount is $16,948 plus disbursements of $210. In each case detailed schedules have been provided, calculated on a 2B basis.1 The plaintiff takes no issue with the defendants’ calculations. Likewise, I take no issue with them.

[2]    The plaintiff’s position is that although he “accept[s] that costs are in issue given my non-compliance with the unless order”, nevertheless he is not in a position to meet a costs award and asks that this be taken into account.

[3]    The plaintiff has not provided an affidavit as to his means or health status. I accept, however, based on the medical information attached to his memorandum that he is elderly, suffering from advanced metastatic prostate cancer and is in need of constant care. He says further that his only income is his pension, which is fully committed, and that he has no assets of any kind. He lives with his son in the United States, making a modest contribution to household expenses from his pension.

[4]    As to the relevance of means in a costs context, there is authority for the proposition that financial hardship may be taken into account under the “catch-all” provisions of r 14.7(g),2 which recognises the existence of some “other reason” justifying the Court refusing or reducing costs.3

[5]In doing so these cases have emphasised that:

(a)financial hardship is not an answer to a claim for a costs award;4

1      I note from a review of the file that no formal categorisation for costs purposes appears to have been made but that a prior costs order by Associate Judge Doogue on 25 July 2017 was made on a 2B basis. I consider that an appropriate categorisation.

2      High Court Rules 2016.

3      Craig v Keith [2017] NZHC 2664, [2017] NZFLR 899 at [23]; Chesterfields Preschools Ltd v Commissioner of Inland Revenue [2011] NZCA 640 at [7]; Tuck v Keedwell [2016] NZHC 794 at [11]; Te Whare O Te Kaitiaki Ngahere Inc v West Coast Regional Council [2014] NZHC 2969 at [16]; Simister v Tauranga Cruise Tourism Operators Association Inc [2015] NZHC 2133 at [15]; and Howard v Accident Compensation Corporation [2014] NZHC 3141.

4      Chesterfields Preschools Ltd v Commissioner of Inland Revenue [2011] NZCA 640 at [7].

(b)costs awards must be made at a meaningful level, even against an impecunious party, particularly where the case is found to have lacked merit;5 and

(c)there is a preference for evidence of limited financial means to be provided in the form of a sworn affidavit (where this is not already established in the substantive proceedings).6

[6]In HA v Refugee and Protection Officer I observed that:7

[8] Beyond these observations, however, it is difficult to distil from the authorities any coherent set of principles which might guide exercise of the   r 14.7(g) discretion in the context of an impecunious party liable for costs.

[7]    I also pointed out that other cases have adopted a different approach, referring to the observation of Cooper J in Singh v Immigration and Protection Tribunal that consideration of financial circumstances under r 14.7(g) would:8

[9] … create a precedent of potentially very  wide  application  and ultimately would not be justified having regard to the other, more specific provisions of the relevant rules

[8]    In BR (Bangladesh) v Chief Executive, Ministry of Business, Innovation and Employment, Duffy J followed Singh and held that the unsuccessful applicants’ circumstances, which they said permitted instalment payment of only $2,500 in costs, against a $7,136 liability:9

… do not provide a basis for departing from the general principle regarding costs.

[9]    My decision in HA v Refugee and Protection Officer adopted the approach in Singh and BR (Bangladesh). I accepted the submission of the Crown that the requirement for predictable and expeditious determination of costs would be

5      Te Whare o te Kaitiaki Ngahere Incorporated Society v West Coast Regional Council [2014] NZHC 2969 at [16]; and Tuck v Keedwall [2016] NZHC 794 at [11].

6      Lowe v Auckland Family Court [2017] NZHC 656 at [5]; and Craig v Keith [2017] NZHC 2664, [2017] NZFLR 899 at [22].

7      HA v Refugee and Protection Officer [2018] NZHC 1011 at [9].

8      Singh v Immigration and Protection Tribunal [2014] NZHC 2065.

9      BR (Bangladesh) v Chief Executive, Ministry of Business, Innovation and Employment [2018] NZHC 902 at [6].

significantly undermined if parties’ financial circumstances became a matter of routine inquiry.

[10]I held:

[15]      … Although the catch-all exception in r 14.7(g) is broad, a good reason is required before departing from the general rule that costs should follow the event. There may be limited circumstances in which a party’s financial circumstances animate the jurisdiction (as for example in Simister v Tauranga Cruise Tourism Operators Association Inc where costs were reduced from $37,081 to $10,000 on the basis that the Association would otherwise go into liquidation which would “not be of benefit to either party”),10 but I would regard such cases as exceptional.

[16]      At least within the context of applications by the Crown I do not consider it necessary or desirable for this Court to make (what will always be essentially arbitrary) adjustments to costs awards to reflect financial circumstances…

[11]   This case does not involve an application by the Crown. But in my view the concerns I expressed in HA v Refugee and Protection Officer are equally applicable to this case, as are the limitations I suggested should apply before costs awards are reduced on account of the liable party’s means. Like Cooper J in Singh, I consider that abatement of costs awards because of personal circumstances will not typically be justified, having regard to the other more specific provisions of the relevant rules. I consider the discretion should be reserved for exceptional cases, of which in my view Simister v Tauranga Cruise Tourism Operators Association Inc is an example.

[12]   What also concerns me about the plaintiff’s position in this case is that, even on the authorities discussed in [4] and [5] above, costs awards against impecunious plaintiffs must nevertheless be set at a “meaningful level”. In the present case, any abatement is, on the plaintiff’s advice about his circumstances, an exercise in futility. Unlike Simister where costs were reduced to a level that was meaningful but nevertheless within the defendants’ means to pay, Mr Foni’s position is such that he would appear incapable of making any meaningful payment at all.

10     Simister v Tauranga Cruise Tourism Operators Association Inc [2015] NZHC 2133 at [16].

[13]   In those circumstances, although I have considerable sympathy for the circumstances Mr Foni now finds himself in, I do not consider this an appropriate case to reduce costs by some arbitrary amount to reflect his health and finances.

[14]   I take into account also the fact that the significant breaches by the plaintiff in compliance with court orders are, as the first defendants submit, likely to have justified an application for increased costs. That these have not been sought by the defendants is itself implicit recognition of the plaintiff’s circumstances.

[15]   No doubt also, the reality of such circumstances will feature in any recovery action. As the first defendants acknowledge in their reply memorandum, “there is probably no likelihood of ever recovering an award of costs against the plaintiff”.

Result

[16]I award costs against the plaintiff and in favour of the defendants as follows:

(a)First defendants         $23,638 plus disbursements of $258.00.

(b)Second defendant      $16,946 plus disbursements of $210.00.

Muir J