Jayashree Limited v Moore
[2021] NZCA 208
•25 May 2021 at 3.30 pm
| IN THE COURT OF APPEAL OF NEW ZEALAND I TE KŌTI PĪRA O AOTEAROA |
| CA34/2021 [2021] NZCA 208 |
| BETWEEN | JAYASHREE LIMITED |
| AND | SAMUEL MOORE |
| Counsel: | Appellant in Person (represented by M H Karmarkar) |
Judgment: | 25 May 2021 at 3.30 pm |
JUDGMENT OF COURTNEY J
AThe application to review the Deputy Registrar’s decision is declined.
B Security for costs is to be paid within 14 days of the date of this decision.
C The respondent is entitled to costs for a standard application on a band A basis, with usual disbursements.
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REASONS
Jayashree Ltd (Jayashree) wishes to appeal a decision of Palmer J refusing judicial review of a decision by the Legal Complaints Review Officer (LCRO) about legal fees.[1] Its request for deferment of or dispensation with security for costs was refused by a Deputy Registrar. This is a review of the Deputy Registrar’s decision.
Background
[1]Karmarkar v Moore [2020] NZHC 3480 [High Court decision].
Jayashree retained a barrister, Mr Moore, to act in proceedings between the company and the Auckland Council. A dispute arose regarding the level of fees being rendered. Mr Moore’s retainer was terminated. A complaint was made to the Central Standards Committee of the New Zealand Law Society (the Standards Committee) with the applicant identified as Madhav Hari Karmarkar on behalf of Jayashree Ltd.[2] The Standards Committee determined that Mr Moore’s invoice was fair and reasonable for the work done and that no further action was necessary or appropriate.
[2]Although the Standards Committee, the LCRO and the High Court refer to the complaint and the judicial review application respectively as having been brought by Mr Karmarkar, it must be the case that the company is the correct entity.
Jayashree applied for a review of the decision. The LCRO reached the same conclusion as the Standards Committee and confirmed the latter’s decision.
Jayashree applied for judicial review of the LCRO’s decision. Jayashree required representation in the High Court for this application.[3] It was allowed time to make those arrangements but did not do so. Mr Moore applied to strike out the judicial review proceeding. Palmer J allowed Mr Karmarkar to file and serve a notice of opposition and supporting affidavit opposing the application. It is evident that Mr Karmarkar was also permitted to appear and make submissions orally. However, the Judge concluded that the company required representation and its failure over a period of some four months to arrange representation was likely to prejudice Mr Moore and cause delay to the court system.[4] The Judge struck out the proceeding. In doing so he noted that, in any event, it appeared to have little merit.[5]
[3]Re G J Mannix Ltd [1984] 1 NZLR 309 (CA) at 310; Commissioner of Inland Revenue v Chesterfields Preschools Ltd [2013] NZCA 53, [2013] 2 NZLR 679 at [25]–[34]; and Dreamtech Designs & Productions Pty Ltd v Clownfish Entertainment Ltd [2015] NZCA 491, (2015) 23 PRNZ 141 at [8]–[10].
[4]High Court decision, above n 1, at [10].
[5]At [11].
Mr Karmarkar filed a notice of appeal in this Court on behalf of Jayashree on 28 January 2021. Security for costs was fixed at $7,060 and required to be paid by 26 February 2021. By letter dated 29 January 2021 Mr Karmarkar requested that security for costs be deferred until there had been a determination as to who should argue the case (presumably a reference to Jayashree’s lack of representation) or, alternatively, for security for costs to be waived. He said, “My appeal is very much about this issue namely whether I would be permitted to represent the appellant or given sufficient time to secure legal representation.”
Mr Moore opposed security being deferred or waived. He pointed out that permitting the company to proceed without security would expose him to unrecoverable costs.
On 3 March 2021, the Deputy Registrar advised Mr Karmarkar that the application was refused.
Jayashree renewed its request for security for costs to be deferred or dispensed with. This request was treated as an application for a review of the Deputy Registrar’s decision and referred to me.[6]
Review of Deputy Registrar’s decision
The Deputy Registrar’s decision
[6]Court of Appeal (Civil) Rules 2005, r 5A(3).
The Court of Appeal (Civil) Rules 2005 provide for the Registrar to fix security for costs and to dispense with or defer the date by which security must be paid “if satisfied that the circumstances warrant it”.[7]
[7]Rule 35(6).
In her decision, the Deputy Registrar referred to the fact that security for costs is payable as a matter of course in all civil appeals unless the applicant is legally aided. She identified grounds on which security may be deferred or dispensed with and the relevant legal principles.
The Deputy Registrar noted that the basis for the request to defer security for costs was that the main issue in the appeal was whether Mr Karmarkar should be able to argue the case. She specifically noted that deferral might be appropriate if a respondent required further time to obtain legal representation.[8] However, she considered that this could not be a live issue in the present case, given the settled position regarding the need for representation in the High Court. Even if that could be regarded as a live issue, it was not a reason to defer security.
[8]Citing New Zealand Cards Ltd v Ramsay [2012] NZCA 285 at [23(c)].
As to dispensation, the Deputy Registrar noted that neither of the grounds on which security is usually dispensed with was being advanced.[9] There was no claim to impecuniosity and no information provided to suggest that. No issue of public interest arose; the case turned on its own facts.
[9]Reekie v Attorney-General [2014] NZSC 63, [2014] 1 NZLR 737 at [19].
Moreover, the Deputy Registrar regarded the proposed appeal as having little merit; the grounds of appeal to be advanced are that the High Court did not allow sufficient opportunity for Jayashree to obtain legal representation and that the arguments that Mr Karmarkar wished to advance were never heard in full by the High Court, the LCRO or the Standards Committee. The Deputy Registrar considered that, given the potential costs compared to the potential benefits and lack of obvious merit, a reasonable and solvent litigant would probably not proceed with the appeal.
The purpose of the rules relating to security for costs, including the basis on which security may properly be reduced, dispensed with or deferred, were considered in some detail by the Supreme Court in Reekie v Attorney-General.[10] As the Supreme Court observed, requiring security for costs creates something of a conundrum for the courts: the poorer the plaintiff, the more exposed the defendant to costs and the greater the apparent justification for security. On the other hand, the poorer the plaintiff, the less likely it is that security will be able to be provided and the greater the risk of a worthy claim being stifled.[11] The Supreme Court considered that the Registrar should only dispense with security if of the view that it is right to require the respondent to defend the judgment under challenge without the usual protection as to costs provided by security.[12] Specifically, the discretion to dispense with security should be exercised so as to (1) preserve access to the Court of Appeal by an impecunious appellant in the case of an appeal which a solvent appellant would reasonably wish to prosecute; and (2) prevent the use of impecuniosity to secure the advantage of being able to prosecute an appeal which would not be sensibly pursued by a solvent litigant:[13]
A reasonable and solvent litigant would not proceed with an appeal which is hopeless. Nor would a reasonable and solvent litigant proceed with an appeal where the benefits (economic or otherwise) to be obtained are outweighed by the costs (economic and otherwise) of the exercise (including the potential liability to contribute to the respondent’s costs if unsuccessful). …
[10] Reekie v Attorney-General, above n 9.
[11]At [2].
[12]At [31].
[13]At [35].
The position regarding the deferral of security may raise slightly different issues. However, the general principle is the same: the date by which security must be paid may be deferred if, in the circumstances, it is right to require the respondent to take some steps in the defence of the appeal without the protection of security for costs having yet been provided.[14]
Grounds of review and opposition
[14]Reekie v Attorney-General (For the Secretary of Justice) [2019] NZCA 251 at [7] and [15].
Jayashree’s request for review does not expressly address the various grounds given by the Deputy Registrar in her decision. It can, however, be viewed as a broad challenge to the Deputy-Registrar’s assessment regarding the apparent lack of merit of the proposed appeal. It canvasses asserted errors by Mr Moore in the litigation, by the Standards Committee and by the LCRO and concludes with the following:
Appellant does not understand as to why it is pertinent to be represented by a lawyer, even though it is a single owner-director company. Unfortunately, appellant is also not able to secure legal representation, for various reasons despite considerable efforts.
For Mr Moore, Mr Bowler points out that Jayashree had ample time (more than six months) to obtain representation and submits that the substantive appeal lacks merit. He submits that Mr Moore should be protected from incurring costs associated with this appeal.
Review of the Deputy Registrar’s decision
The Deputy Registrar’s identification of the basis on which security for costs could be deferred or dispensed with was correct.
The requirement for representation of corporate parties is well settled and Jayashree has not identified any basis on which that settled position ought to be altered, either generally or in this particular case. Nor is there any effort to explain why legal representation has not been secured. The company has had many months in both the High Court and in this Court to secure representation. The bare assertion that it has been unable to do so is a completely inadequate basis on which to seek to have the security for costs deferred.
As the Deputy Registrar correctly identified, neither of the recognised grounds for dispensation of security for costs has been advanced. The available information does not support a conclusion that impecuniosity is hampering the securing of representation and there is no basis to think that there is any public interest aspect.
Finally, I agree with the Deputy Registrar’s assessment of the merits of the proposed appeal. The High Court struck out the proceedings on a narrow but well settled point. The scope of any appeal against his decision will not encompass the substantive arguments that Jayashree wishes to advance about errors made by Mr Moore and the LCRO. The proposed appeal has no apparent merit. The Deputy Registrar was quite right to conclude that a reasonable, solvent party would not pursue this appeal.
Throughout all of this Mr Moore continues to incur costs, which can be seen from the detailed responses made on his behalf to both the original application to defer security for costs and the application for review. It is unfair to require a party in Mr Moore’s position to continue to defend the proceeding without security.
I am satisfied that there was no error by the Deputy Registrar in her decision to refuse either deferral of or dispensation with security for costs.
Result
The application to review the Deputy Registrar’s decision is declined.
If the appeal is to be pursued, security for costs is to be paid within 14 days of this decision, failing which the appeal will be struck out.
The respondent is entitled to costs for a standard application on a band A basis, with usual disbursements.
Solicitors:
Neilsons Lawyers Ltd, Auckland for Respondent
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