Janif v Hamilton Taxi Society Limited

[2016] NZHC 1306

IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY

CIV-2015-419-000337 [2016] NZHC 1306

IN THE MATTER	of an application for Judicial Review
BETWEEN	SAHEED MOHAMMED JANIF Plaintiff
AND	HAMILTON TAXI SOCIETY LIMITED Defendant

Hearing:	8 June 2016
Counsel:	S McKenna for Plaintiff MJ Meier for Defendant
Judgment:	8 June 2016

JUDGMENT OF ASHER J

Solicitors:

Whitfield Braun Ltd, Hamilton. Grantham Law, Taupo.

JANIF v HAMILTON TAXI SOCIETY LTD [2016] NZHC 1306 [8 June 2016]

Introduction

[1]      In this proceeding Saheed Janif, a student, brings a judicial review claim against  the  Hamilton Taxi  Society Ltd,  claiming  that  his  membership  has  been wrongly terminated. I must determine an application for security for costs.

[2]      The Hamilton Taxi Society Ltd (the Taxi Society or the Society) asserts that Mr Janif is impecunious.  At present he owes the Society $10,810 for costs awarded in the Taxi Society’s favour in the District Court proceedings that preceded these proceedings.  The judgment was sealed for that amount on 13 August 2015 and has not been paid.  Mr Janif, in his affidavit in response, has advised that he is a student and that he has had a heart attack, and indicates he may not be able to return to driving.  He states that he is of very limited means.  The Taxi Society asserts that the application for judicial review is without merit, and that it will be put to great expense to answer the allegations.

[3]      In response Mr McKenna who acts for Mr Janif submits that the application has real merit.  He submits that Mr Janif should not be prevented from pursuing the claim and that to prevent him from doing so would be a significant injustice.  In his submissions he has accepted the allegation that Mr Janif is impecunious.

Approach

[4]      Rule 5.45 of the High Court Rules applies.  The Judge may make an order if 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.   There is essentially a two-stage approach.  First, whether the plaintiff will be unable to pay the costs, and second, whether the Court in its discretion should make an order.  As I have indicated, it is agreed by both parties that the first stage is crossed by the plaintiff.

[5]      The case of McLachlan v MEL Network Ltd provides guidance as to the exercise of the discretion. 1   As was observed in that case, the rule contemplates that

the plaintiff will not be able to meet an adverse award of costs, and that it therefore

1      McLachlan v MEL Network Ltd (2002) 16 PRNZ 747 (CA).

follows that ordering security may well have the effect of preventing the plaintiff from pursuing the claim.  It was stated:2

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.

[6]      However, the Court also noted that against that, 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.3

The issues

[7]      The submissions before me have focussed on the key issue highlighted in the McLachlan decision – what, after careful consideration, can be said of Mr Janif’s chances of success?  This is not a claim (as was the case in McLachlan) where such an assessment cannot be carried out.   I have affidavit evidence and the claim is relatively straightforward.

[8]      The statement of claim asserts that Mr Janif was a shareholder and member of the Taxi Society.  In December 2009 he had entered into an agreement to purchase share 7015 for a purchase price of $11,100.   He says he made regular payments towards that amount, culminating in a final payment of $1,300 made on 27 May

2011.  On paying that amount he was issued a receipt.  I have a copy of that receipt. It states the amount of $1,300 and reads “paid off share no. 15”.  Mr Janif says he paid off the full amount, this being the last payment.

[9]      In this respect he is supported by the former Chief Executive Officer of the Taxi Society, Mohammed Hassan, who was aware that Mr Janif was making the payments.   The administration  officer who  received  payments  and  provided the receipt was Kavina Shield.  Mr Hassan deposes that it was part of his duties to check payments of the kind made by Mr Janif, and that Ms Shields  confirmed to him in

2011 that Mr Janif had no money owing and thus he was permitted to vote at the

2      McLachlan v MEL Network Ltd, above n 1, at [15].

3      McLachlan v MEL Network Ltd, above n 1, at [16].

AGM in that year.   He states that he is sure that the Taxi Society has records of

Mr Janif’s payments.

[10]     The  affidavits  for  the  Taxi  Society  have  been  provided  by  the  General Manager, Andrew Collins, presumably the successor to Mr Hassan, although there may be a difference in the two positions.   He has stated that Mr Janif has not provided receipts accounting for payment in full, and indeed has only substantiated payments of $2,100.  He states that the auditors have reviewed these figures.

[11]     Needless  to  say,  the  judicial  review  proceedings  are  not  directly  about whether the payments were made or not.   The ground for review is pleaded as follows:

The Defendant breached the principles of natural justice by appointing itself as the arbiter of a dispute to which it was a party.

[12]     There were two decisions in question.   First, the decision that only $2,100 had  been  paid,  and  not  $11,100,  and  second,  following  that  first  decision,  the decision to terminate Mr Janif’s membership from the Taxi Society because of that non-payment.

[13]     There are therefore two issues to be considered, in the general way that is appropriate on a security for costs application.  The first is whether a judicial review claim might succeed.   The second, although it does not directly arise, is whether there is a basis for Mr Janif’s claim that he has paid in full.

[14]     Mr  McKenna  put  the  first  argument  on  the  basis  that  the  board  who considered whether Mr Janif should remain part of the Taxi Society was made up of members of the Taxi Society.  They were not independent.  The Taxi Society would benefit from having a terminated membership because it would have another membership to sell.   He argued that they were biased in terms of the test for bias articulated in Muir v Commissioner of Inland Revenue.4     He submits that a fair- minded lay-observer could not reasonably apprehend that the board could bring an

impartial mind to the resolution of the case.

4      Muir v Commissioner of Inland Revenue [2007] NZCA 334, [2007] 3 NZLR 495 at [62].

[15]     Mr Meier for the Taxi Society submits that this argument has little chance for success.   He refers to the small amounts of money involved, and the inevitable practicalities of a Taxi Society and its need to run its own affairs using its unpaid members.  He refers to Knight v Veterinary Council of New Zealand where a claim of bias was not upheld in a context where the professionals on a board deciding the issue, may have had some remote interest in the practice which was ultimately

censured.5

My assessment

[16]     The application is finely balanced.   In relation to the bias cause of action, Mr McKenna has not been able to refer me to any authority where a finding of bias has been made, in similar circumstances to those alleged by Mr Janif.  In the end, determination of that issue might well turn on a closer examination of the way in which the Taxi Society was run, and the importance of the termination of the licence to members. All I can say at this stage is that I am not prepared to reject the claim as hopeless, but nor can it be seen as strong.

[17]     In terms of the merits of the claim that all the payments were made, there are some factors that would appear to support Mr Janif’s claim.  He is the only person who has provided some corroboration of his position, in terms of the signed receipt and the affidavit of Mr Hassan (although I note that Mr Hassan has been or is Mr Janif’s  accountant).    The  Taxi  Society  has  not  produced  any  corroborative evidence.  In particular it is surprising, given the efforts that have already been made by the Taxi Society in pursuit of this application, that it has not presented an affidavit from Kavina Shield, the administration officer who signed the final receipt, which can be read as acknowledging full payment.

[18]     I record that I can readily understand the feelings of outrage that members of the Taxi Society must have when they are faced with a claim from a person who they

perceive already owes a significant sum of money to it, which has not been paid.

5      Knight v Veterinary Council of New Zealand HC Wellington CIV-2007-485-1300, 19 May 2009 at [78].

[19]     In my assessment, it cannot be said that on balance the claim has little chance of success.  I hasten to add that success is far from guaranteed.  It would be going too far to say that the case is a strong one, but nor is it patently weak.

[20]     Weighing all these factors, I have decided that the only fair result is not to let Mr Janif off entirely but instead to order a modest amount of security for costs.  The amount to be paid will be $5,000.   If Mr Janif’s statements are correct it will be beyond his ability at the moment to pay that amount, but it will be an amount which, if he really is convinced of his chances of success, he should be able to put his hands on in the months to come.  It would not be fair to let him pay nothing at all while the defendant has to pay legal costs, knowing that any reimbursement if it is successful is unlikely.

[21]     In the end this decision will leave both sides unhappy.  The Taxi Society will feel it has to run the risk of large costs that it will largely not be able to recover, on a weak claim.  Mr Janif will feel he has had a burden placed on him that he may not be able to meet and may have to abandon his case.  Nevertheless for the reasons that I have given a modest amount of security must be paid to ensure that the Taxi Society is not left entirely lamenting, but also so that the threshold for Mr Janif is not impossibly high.

Result

[22]     I fix security for costs in the sum of $5,000.  The claim will be stayed until that amount is paid.

……………………………..

Asher J