Joden Finance Limited v Auckland District Court
[2021] NZHC 1452
•18 June 2021
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2020-404-001293
[2021] NZHC 1452
BETWEEN JODEN FINANCE LIMITED
Applicant
AND
THE AUCKLAND DISTRICT COURT
First Respondent
SANAHACHAI PRERSSILP
Second Respondent
On the papers: At Auckland Judgment:
18 June 2021
JUDGMENT OF POWELL J
[Costs]
This judgment was delivered by me on 18 June 2021 at 3.30 pm pursuant to R 11.5 of the High Court Rules
Registrar/Deputy Registrar Date:
JODEN FINANCE LIMITED v THE AUCKLAND DISTRICT COURT [2021] NZHC 1452 [18 June 2021]
[1] The appellant, Joden Finance Ltd (“Joden Finance”) filed an appeal against costs awarded in the District Court after its appeal from the Motor Vehicle Disputes Tribunal had been dismissed.
[2] In the event, Joden Finance’s appeal in this Court never proceeded to hearing. This was because Joden Finance failed to pay security on the appeal as directed, being the sum of $1,195 within 10 days of related judicial review proceedings being determined; that is, by 4 May 2021.1 The failure to pay security meant that pursuant to s 126(3) of the District Court Act 2016 the appeal was abandoned from that date without any need for further order of the Court.
[3] After the abandonment of the appeal was brought to my attention, I confirmed that I would determine any issue of costs arising on the appeal. In accordance with those directions, the second respondent, Sanahachai Prerssilp, now seeks costs on the abandoned appeal. Mr Prerssilp was legally aided, and Ms Fuiava as counsel for Mr Prerssilp submits that as legal aid is a loan, he is entitled to the actual costs incurred ($3,100.92) as these are less than costs calculated on a 2B basis.
[4] Joden Finance does not take any issue with the calculation of the costs claimed but submits that costs should lie where they fall. Joden Finance argues that:
(a)the appeal was a test case that raised an important question of law in terms of how s 20(1)(c) of the Consumer Guarantees Act 1993 (the Act) should be interpreted, against the background of inconsistent decisions from the Motor Vehicle Disputes Tribunal;
(b)As Joden Finance is insolvent, an award of costs will serve no useful purpose.
Discussion
[5] It is well established that costs ordinarily follow the event so that the loser will pay the winner’s costs.2 There can be no doubt that as Joden Finance’s appeal was
1 See Joden Finance Ltd v The Auckland District Court [2020] NZHC 2853 at [12].
2 High Court Rules 2016, rr 14.2-14.5.
dismissed and Mr Prerssilp was therefore successful, he is generally entitled to costs in accordance with the scale set out in the High Court Rules 2016.
[6] In this case, neither of the issues raised by Joden Finance provide a sufficient basis to not award costs as sought to Mr Prerssilp.
[7] First, while other proceedings brought by Joden Finance raised the legal issue identified above, the present appeal was, as noted, an attempt to challenge an award of costs in the District Court. There was accordingly no “important question of law” raised by Joden Finance, nor could the appeal possibly be described as a test case.
[8] I likewise see no basis for reducing the costs claimed on account of Joden Finance’s claimed impecuniosity. This Court may decline to award costs where the party liable to pay is impecunious.3 Typically, however, financial hardship will not be an answer to a claim for costs.4 Only in exceptional circumstances will a party’s financial position animate the Court’s discretion to reduce costs.5 This position is driven by the fact that it is “[un]desirable for this Court to make (what will always be essentially arbitrary) adjustments to costs awards to reflect financial circumstances”.6 This position was emphasised by Muir J in Foni v Foliaki, where his Honour declined to reduce an award of costs on account of impecuniosity, relevantly stating:7
… 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…
[9] In this case, I am not satisfied that Joden Finance’s impecuniosity provides an appropriate basis to further reduce the costs that would otherwise have been recoverable. While Mr Prerssilp was on legal aid for the purpose of the appeal, it is
3 Under r 14.7(g), this Court may reduce costs or decline to award costs for “some other reason” beyond those listed in r 14.7(a)-(f) where that reason is capable of justifying the reduction or refusal. This catch-all ground has been interpreted to include financial hardship or impecuniosity. See Craig v Keith [2017] NZHC 2664, [2017] NZFLR 899 at [23]; Chesterfields Preschools Ltd v Commissioner of Inland Revenue [2011] NZCA 640 at [7]; 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].
5 HA v Refugee and Protection Officer [2018] NZHC 1011 at [14]-[15].
6 At [16].
7 Foni v Foliaki [2018] NZHC 3126 at [11].
well established that legal aid is a loan rather than a grant.8 Therefore, although Joden Finance may not be able to pay those costs Mr Prerssilp is entitled to have Joden Finance held liable as he himself remains liable to the Legal Services Agency, notwithstanding his success in the appeal.
[10] Furthermore, it is clear that the present appeal was entirely unnecessary as had Joden Finance been successful in its substantive challenge it is likely that the costs awarded in the District Court would have also been reversed without the need for the appeal.
[11] Finally, it is also apparent that as Joden Finance never proceeded with the appeal, all of the costs incurred by Mr Prerssilp were entirely wasted. There can be no good reason why Joden Finance should not be held accountable in terms of costs for putting Mr Prerssilp to this unnecessary expenditure.
Decision
[12]Joden Finance is to pay costs in the sum of $3,100.92.
Powell J
8 See “Going to court: Do you need to pay back your legal aid?” (14 January 2021) Ministry of Justice <
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