Jones v Stace Hammond Lawyers

[2022] NZHC 2666

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2021-404-001313

CIV-2021-404-001621 [2022] NZHC 2666

UNDER

Section 124 of the District Courts Act 2016

BETWEEN

GREGORY JOHN JONES

Appellant

AND

STACE HAMMOND LAWYERS

Respondent

Hearing:

On the papers

Counsel:

Appellant in person

P J Morris for Respondent

Judgment:

14 October 2022

JUDGMENT OF VAN BOHEMEN J

[on costs]

This judgment was delivered by me on 14 October 2022 at 3 pm Pursuant to Rule 11.5 of the High Court Rules

…………………………

Registrar/Deputy Registrar

Solicitors:

Stace Hammond Lawyers, Auckland

Copy to:
Appellant

JONES v STACE HAMMOND LAWYERS [2022] NZHC 2666 [14 October 2022]

[1]    In my judgment dated 29 April 2022,1 I dismissed Mr Jones’s application for leave to appeal my decision of 27 January 2022 dismissing his appeal against the decision of the District Court entering summary judgment against him in the sum of

$14,900.00, plus interest and costs, for fees owing to Stace Hammond Lawyers.2

[2]    I held that none of the errors asserted by Mr Jones had raised questions of law or fact capable of bona fide and serious argument and said they were all contingent on acceptance of the existence of a conspiracy or conflict of interest of which Mr Jones had provided no cogent or credible evidence.3

[3]    I also held that Stace Hammond was entitled to costs on a 2B basis but reserved leave to apply for an increase over scale costs.4

Stace Hammond application for costs

[4]    In a memorandum dated 18 August 2022, Mr Morris, counsel for Stace Hammond, applied for indemnity costs of $21,963.00 rather than an increase on scale costs. The sum sought equates to less than a three per cent increase on Stace Hammond’s calculation of 2B costs of $21,390.50.

[5]    Mr Morris noted that r 14.2(f) of the High Court Rules 2016 provides that an award of costs should not exceed the costs incurred by the party claiming costs.

[6]    Mr Morris submitted that Stace Hammond is entitled to indemnity costs because:

(a)Increased costs exceed actual costs;

(b)Mr Jones acted vexatiously, frivolously, improperly or unnecessarily in defending the claim by Stace Hammond for fees charged for representing him; and

1      Jones v Stace Hammond Lawyers [2022] NZHC 884.

2      Jones v Stace Hammond Lawyers [2022] NZHC 47.

3      Jones v Stace Hammond Lawyers, above n 1, at [64].

4 At [71].

(c)Under Stace Hammond’s letter of engagement, Mr Jones was obliged to pay Stace Hammond’s actual costs.

Mr Jones’s reply

[7]    In a memorandum dated 7 September 2022, Mr Jones said that, to the extent costs were appropriate, he accepted standard costs could be ordered. However, because a leave decision was awaited from the Court of Appeal, he expressed the hope the Courts would accept his view of matters and the costs he was required to pay.

The Court of Appeal’s decision

[8]    On 22 September 2022, the Court of Appeal declined Mr Jones’s application for leave to appeal my decision of 27 January 2022.5 The Court of Appeal said:

[4]     It was not in dispute below that Stace Hammond acted for Mr Jones, or that the fees were incurred in carrying out his instructions. He took issue with the firm’s decision to withdraw on ethical grounds. He contended that the firm was aware when it accepted instructions of his extensive bloodstock interests and existing and potential litigation concerning his animals, including an historic dispute between him and a client of the firm, Te Akau Stud. And he sought to show that there was no ethical barrier to the firm acting, because he is the victim of a conspiracy in the bloodstock industry and Wentwood Grange is among the conspirators.

…

[13] Justice van Bohemen found that the proposed appeal lacked merit, resting as it did on the assumption that his allegation of a conspiracy should be accepted for summary judgment purposes. The Judge followed settled authority in holding that a court need not accept uncritically evidence that is inherently lacking in credibility or is inherently improbable. The evidence established no tenable basis for the existence of the alleged conspiracy or its relevance to the non-payment of Stace Hammond’s fees. Even if the asserted errors were arguable, they plainly were not of general or public importance, or of sufficient importance to Mr Jones, to outweigh the lack of general or precedential value.

5      Jones v Stace Hammond Lawyers [2022] NZCA 450

[9]The Court of Appeal held that:6

(a)Mr Jones’s application for leave to appeal was misconceived because his liability to Stace Hammond did not depend on whether there existed a conspiracy against him;

(b)Stace Hammond undoubtedly had reasonable grounds to withdraw from acting for Mr Jones on ethical grounds;

(c)No purpose was served by Mr Jones attempting to prove the existence of the alleged conspiracy;

(d)Stace Hammond was justified in withdrawing when it did, and that would have remained the case even if the conspiracy did exist; and

(e)Mr Jones was obliged to pay the firm’s reasonable fees to that point.

Discussion

[10]   The Court of Appeal’s decision ends Mr Jones’s attempts to avoid liability for the debt due to Stace Hammond. It also confirms that, in seeking to avoid liability for the debt based on an alleged conspiracy, Mr Jones’s appeal was both misconceived and lacking in merit.

[11]   In my decision of 29 April 2022, I held that Stace Hammond was entitled to costs on a 2B basis.

[12]   Rule 14(3)(b)(ii) of the High Court Rules provides that a Court may order increased costs if a party takes or pursues an unnecessary step or an argument that lacks merit. Mr Jones’s pursuit of an appeal based on the alleged conspiracy clearly comes within the rule.

6      At [16] – [17].

[13]   An increase of at least 50 per cent on scale costs would have been appropriate. However, because of the direction in r 14.2(f) that an award of costs should not exceed actual costs, I limit the uplift to $572.50.

[14]   Rule 14(4)(a) provides that the Court may order indemnity costs if a party has acted unnecessarily in continuing a proceeding. In pursuing his misconceived and unmeritorious application for leave to appeal, Mr Jones has clearly acted unnecessarily. An award of indemnity costs is appropriate, particularly when the difference between scale and indemnity costs is so small.

[15]   As Mr Morris’s memorandum sets out, more could be said about Mr Jones’s conduct of this proceeding. However, those matters have already been well traversed in the decisions of the District Court, High Court and Court of Appeal.

Result

[16]I order Mr Jones to pay Stace Hammond’s costs of $21,963.00.

G J van Bohemen J