Lau v Osbourne
[2017] NZHC 2874
•22 November 2017
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2016-404-002913
[2017] NZHC 2874
BETWEEN AUGUSTINE LAU
Plaintiff
AND
BRENDA OSBOURNE
Defendant
CIV-2016-404-002916 BETWEEN
AUGUSTINE LAU
PlaintiffAND
BEVERLY PASLOW
Defendant
(Continued over
page)
Hearing: 21 September 2017 Appearances:
Plaintiff in Person
William Potter for Brenda Osborne, Paul Northover and Janet Whiteside
Alicia Murray for Beverly ParslowJudgment:
22 November 2017
JUDGMENT OF MOORE J
This judgment was delivered by me on 22 November 2017 at 3:30 pm pursuant to Rule 11.5 of the High Court Rules.
Registrar/ Deputy Registrar Date:
LAU v OSBOURNE [2017] NZHC 2874 [22 November 2017]
CIV-2016-404-003028 BETWEEN
AUGUSTINE LAU
Plaintiff
AND
PAUL NORTHOVER
Defendant
CIV-2016-404-003066
BETWEEN
AUGUSTINE LAU
Plaintiff
AND
JANET WHITESIDE
Defendant
Contents
Paragraph Number
Introduction.............................................................................................................. [1]
Factual background to the Council’s litigation with Mr Lau............................. [8]
The seven properties.............................................................................................. [9]
The litigation streams.......................................................................................... [10]
(a) Illegal earthworks and tree removal jury trial....................................... [12]
(b) Abatement notices................................................................................. [22]
(c) Enforcement order proceedings............................................................ [27]
(i)387 Ormiston Road..................................................................... [28]
(ii)18 and 32 Weranui Road............................................................. [35]
(iii)88 Fairburn Road........................................................................ [47]
(iv)436 Paremoremo Road............................................................... [57]
Multi-property prosecution.................................................................................. [61]
The present proceedings........................................................................................ [64]
Northover proceeding (CIV-2016-404-3028)...................................................... [65]
Osborne proceeding (CIV-2016-404-2913)......................................................... [68]
Whiteside proceeding (CIV-2016-404-3066)....................................................... [71]
Parslow proceeding (CIV-2016-404-2916)......................................................... [75]
Application for security for costs
Legal principles................................................................................................... [79]
Mr Lau’s submissions.......................................................................................... [88]
(a) Is there reason to believe Mr Lau will be unable to pay costs if he is unsuccessful? [93]
(b) How should the Court exercise its discretion under r 5.45(2)?........... [101]
(i)Apparent lack of merit in the proceedings................................ [103]
(ii)Mr Lau’s history of conducting vexatious litigation.................. [111]
(iii)The judicial comments and observations of the
Environment Court.................................................................... [114]
(c) At what amount should security for costs be fixed?........................... [117]
(d) Should a stay be ordered?................................................................... [124]
Application to strike out...................................................................................... [126]
Result.................................................................................................................... [130]
Costs...................................................................................................................... [134]
Introduction
[1] The plaintiff, Augustine Lau, has been the developer and/or property manager of seven properties situated across the Auckland region. He is not the registered proprietor of any. In most instances the owner is resident overseas.
[2] Since mid-2014 Mr Lau has been involved in various streams of litigation with the Auckland Council (“the Council”). These have been in the context of his property activities in breach of the Resource Management Act 1993 (“the RMA”) and the Building Act 2004 (“the BA”). He has been the subject of criminal and regulatory proceedings involving a wide range of alleged unauthorised activities, breaches of abatement notices and enforcement orders. He is also facing two criminal jury trials on related charges in the Auckland District Court, the first of which is scheduled to commence on 27 November 2017.
[3] In the course of his involvement with the Council he has had dealings with each of the defendants who are either Council employees or contractors engaged to assist the Council in the many matters involving Mr Lau. Most, if not all, are expected to be witnesses at his upcoming trial later this month.
[4] Mr Lau has commenced the present proceedings against each of the four defendants. The causes of action allege breaches of novel duties of care arising out the defendants’ dealings with Mr Lau.
[5] The defendants seek alternative interlocutory orders. First, they seek orders for security for costs and, in the event the Court is not prepared to make such orders, they apply to strike out each of the proceedings.
[6] The defendants’ preferred position is to seek orders for security for costs with an order the proceedings be stayed until the security is given. They say that Mr Lau’s long proven history of steadfastly ignoring costs orders is such that in the event any or all of the present proceedings fail the Court should have no confidence that Mr Lau will either be in a position to meet an adverse costs order or, alternatively, comply with any such order.
[7] In order to properly appreciate the basis of the applications it is necessary to examine the factual background in some detail. This requires an examination of the seven properties in question, the various proceedings Mr Lau has been embroiled in with the Council, the orders made in the Environment Court and this Court, various judicial comments regarding Mr Lau and his conduct, and the role each of the defendants has played relative to Mr Lau. I shall then discuss the present proceedings in analysing whether any of the orders sought should be granted.
Factual background to the Council’s litigation with Mr Lau
[8] The following description draws, to a considerable extent, from the affidavit of Mr Northover filed in support of the present applications. Mr Northover is the senior compliance specialist for the Council and prior to that was a building compliance investigator. He has had extensive dealings with Mr Lau. Mr Lau takes issue with some parts of his evidence. Where those differences are material to the present applications I have set out Mr Lau’s contrary position.
The seven properties
[9] Mr Lau has been involved in, and appears to continue to be involved in, the management and development of seven properties situated across the Auckland region. These are:
(a)387 Ormiston Road, Flat Bush;
(b)18 Weranui Road, Waiwera;
(c)32 Weranui Road, Waiwera;
(d)676 Mt Albert Road, Royal Oak;
(e)88 Fairburn Road, Otahuhu,
(f)436 Paremoremo Road, Paremoremo; and
(g)56 Albany Highway, Greenhithe.
The litigation streams
[10] There are four streams of litigation involving the Council and Mr Lau. These are:
(a)criminal jury trial; one charge (originally nine) filed by the Council against Mr Lau and related parties in 2012 relating to unlawful earthworks and unauthorised tree removal at 18 and 32 Weranui Road (“illegal earthworks and tree removal jury trial”);
(b)Mr Lau’s unsuccessful appeal of three Council abatement notices relating to properties at 387 Ormiston Road, 436 Paremoremo Road and 676 Mt Albert Road (“abatement notices appeal”);
(c)enforcement proceedings filed by the Council in the Environment Court in respect of properties at 32 Weranui Road, 387 Ormiston Road, 88 Fairburn Road and 436 Paremoremo Road (“enforcement order proceedings”); and
(d)criminal jury trial; 64 criminal charges laid by the Council against Mr Lau and related parties alleging various offences against the RMA and BA in respect of all properties (“multi-property prosecution”).
[11]I now turn to summarise each.
(a)Illegal earthworks and tree removal jury trial
[12] In early 2013 the Council received a resource consent application to remove various trees at properties situated at 18 and 32 Weranui Road for the purposes of developing a high density suburban subdivision with 45 residential allotments. The resource consent was not granted. Despite this, in early March 2013, Council officers noticed significant tree removal and earthworks at these properties including the formation of a road on the common boundary. None of these works was authorised and a “stop work” notice was issued.
[13] A few days later a Council officer met with Mr Lau on site. Mr Lau indicated that he was in charge of the works and represented the developer. The officer told Mr Lau that the road construction had to stop and that silt control measures needed to be put in place. Despite this, tree removal and earthworks continued and further stop work notices were issued. Council officers spoke with Mr Lau on numerous occasions about the need to stop the works. Despite his assurance that the works would stop they continued and resulted in blocking a natural water course and damage to an archaeological shell midden.
[14] Abatement notices were issued to Mr Lau and the owners of both properties. These were ignored.
[15] In November 2013 Council officers executed search warrants at both properties. Ms Osborne,1 who is a senior ecologist employed by the Council assisted in preparing a report which concluded that the unconsented earthworks, tree removal and other activities were significant and impacted adversely on the ecological value of the properties. Ms Osborne’s report recommended that remediation measures be immediately employed to avoid the further loss of ecological and environmental value.
[16] Despite this, on 13 June 2014, Mr Lau instructed a digger driver to remove a number of native trees. A substantial area of forest was felled.
[17] The Council responded by initiating a prosecution against Mr Lau and the owners of both properties. The nine charges were later consolidated into one against Mr Lau for damaging native trees and vegetation in contravention of the District and Regional Rules. He elected trial by jury.
[18] Mr Lau’s trial was originally scheduled to take place before a jury on 16 May 2016. Four days before the trial Mr Lau requested the Court to summons defence witnesses for him or adjourn the trial. The Court declined to do so. On the morning of the trial Mr Lau failed to appear and a warrant for his arrest was issued.
1 Ms Osborne’s name has been incorrectly spelled as “Osbourne” in these proceedings. The correct spelling will be used for the purposes of this judgment.
[19] The trial was re-scheduled for 3 April 2017. At 2:00 am on 3 April 2017 the Court received a medical certificate advising Mr Lau was unfit for two days. He failed to appear on the morning of the trial and, again, the Court issued a warrant for his arrest. Mr Lau’s counsel was granted leave to withdraw on the basis he had no instructions.
[20] Mr Lau appeared at 2:00 pm on 3 April 2017. The Court was critical of his various excuses for failing to appear. The trial is now scheduled to commence on 27 November 2017.
[21] Ms Osborne will be a witness. Her evidence will cover the extent of the ecological impact of the works. Ms Parslow,2 who is an archaeologist employed by Heritage New Zealand, will give evidence in respect of the damage to the pre-historic remains.
(b)Abatement notices
[22] In early 2016 the Council issued three abatement notices under the RMA. These were:
(a)to Mr Lau to remove an unauthorised, relocated house from 436 Paremoremo Road;
(b)to Mr Lau (and others associated with the property at 387 Ormiston Road) requiring all earthworks to cease at that property; and
(c)to the registered proprietor of 676 Mt Albert Road (Ms Chen) requiring her to cease using the property for more than two residential units.
[23] The abatement notices were not complied with. Mr Lau filed an appeal in the Environment Court in respect of all three. Mr Northover made an affidavit in respect of the proceedings before the Environment Court. He also gave evidence in which he
2 Ms Parslow’s name has been incorrectly spelled “Paslow” in these proceedings. The correct spelling will be used for the purposes of this judgment.
detailed various site visits to the Ormiston Road property and described the inadequate wastewater systems.
[24] The Environment Court dismissed Mr Lau’s appeals noting it had serious concerns as to whether the evidence given by him was honest and observing that the appeals amounted to an abuse of process.3 The Court also commented on Mr Lau’s disingenuous and obfuscatory evidence.
[25] Mr Lau appealed the Environment Court’s decision to this Court. Security for costs was ordered in the sum of $2,230.
[26] Fogarty J dismissed Mr Lau’s appeal on 7 October 2016 describing the appeal as “completely hopeless”.4 Mr Lau was ordered to pay the Council’s costs and disbursements totalling $8,410. The Court also directed that the $2,230 security for costs paid by Mr Lau be released to the Council. The Environment Court subsequently ordered Mr Lau to pay $29,000 in costs as a contribution to the Council’s legal costs in those proceedings.5
(c)Enforcement order proceedings
[27] The Council has obtained a number of enforcement orders under the RMA against Mr Lau in respect of various unlawful activities at four of the properties. Some appreciation of the extent of Mr Lau’s non-compliance may be gained from the following narrative.
(i)387 Ormiston Road
[28] The property at 387 Ormiston Road is situated in a semi-rural area. From June 2015 the Council became aware that four relocated buildings had been brought onto the site and seven unconsented household units established. Extensive unconsented earthworks were undertaken without any erosion or sediment controls. Mr Lau and the registered proprietors were issued with abatement notices requiring them to cease
3 Lau v Auckland Council [2016] NZEnvC 145.
4 Lau v Auckland Council [2016] NZHC 2397 at [25].
5 Lau v Auckland Council [2016] NZEnvC 211.
the earthworks. These were ignored. Additionally, illegal discharges of wastewater were noted. The Council applied to the Environment Court for interim enforcement orders under the RMA and Mr Northover made an affidavit in support.
[29] On 29 September 2016 the Environment Court granted ex-parte interim enforcement orders requiring Mr Lau and the other parties to give written notice to all tenants of the property terminating their tenancies on the basis of authorised wastewater discharges and effluent.6 The orders also required Mr Lau and others to provide alternative toilet facilities at the address and to adequately fence the unauthorised and unlawful discharge points.
[30] Mr Lau did not comply and a few weeks later filed an affidavit in opposition. Mr Lau deposed that the Council, through the actions of its officers, had acted corruptly. In essence he claimed a Council officer had deliberately damaged the wastewater system before taking a sample and Council officers had conspired with the neighbours to frustrate the development for the purpose of forcing the owners to sell the property to the neighbours at a discounted price. He claimed Mr Northover had given false evidence.
[31] On 16 December 2016 the Environment Court issued final enforcement orders which were largely to the same effect but also required the demolition or removal of the two converted classrooms and the relocated house which had been moved on to the property.7 Orders were also made decommissioning the dwellings which had been constructed in a converted barn and upstairs and downstairs in a converted garage.
[32] It would appear that the final enforcement orders, at least in part, have still not been complied with.
[33] Mr Lau appealed the Environment Court’s final decision to this Court. The Court directed Mr Lau to pay security for costs totalling $557.50 by 1 March 2017. He did not pay the security for costs by that date. The Court enlarged the date. Still Mr Lau made no payment nor did he file his submissions as directed. On 3 May 2017
6 Auckland Council v Lau & Ors ENV-2016-AKL-251.
7 Auckland Council v Mao & Ors [2016] NZEnvC 251.
this Court struck out Mr Lau’s appeal for non-compliance with the costs order. He was ordered to pay the Council indemnity costs of $9,666.33 together with disbursements of $187.50.
[34] On 1 May 2017 the Environment Court awarded costs to the Council in the sum of $90,000.8 In doing so, it noted that Mr Lau’s conduct represented one of the more serious enforcement matters the Court had dealt with; repeated and deliberate non-compliance with Court directions and Mr Lau’s repeated attempts to delay proceedings and dispute matters without evidential foundation.
(ii)18 and 32 Weranui Road
[35] Broadly similar conduct is reflected in the management and development of the properties at 18 and 32 Weranui Road, Waiwera. Although the properties in question were zoned as high intensity residential activity under the Rodney District Plan, much of the land is heavily wooded coastal forest with steep slopes. In March 2013 works commenced on the properties to clear bush and form a track. In September 2013 the Council visited the site and discovered that large scale unauthorised earthworks and vegetation clearance had taken place at both properties. Furthermore, there were a number of ancient midden sites which had been damaged.
[36] Without any lawful authorisation three relocated houses were moved onto the property at 32 Weranui Road. These were used as multiple household units. Council officers observed puddles of sewage and the strong smell of human excrement next to one of the houses. Further investigation revealed that the wastewater system was grossly inadequate and had been installed without consent. The New Zealand Fire Service confirmed the dwellings constituted a dangerous fire hazard. No resource consents or building consents had been given in respect of any of this work.
[37] The Council applied to the Environment Court for interim enforcement orders in respect of both properties.
8 Auckland Council v Mao & Ors [2017] NZEnvC 60.
[38] Ms Osborne made two affidavits for the purposes of the Environment Court proceedings. They covered the environmental damage observed at the addresses.
[39] Ms Parslow made an affidavit in respect of the damage to the archaeological remains.
[40] Following a hearing in early May 2016, which included a site visit, the Environment Court granted interim enforcement orders.9 At the hearing Mr Lau cross- examined Ms Osborne and Ms Parslow at length.
[41] On 28 October 2016 the Environment Court granted final enforcement orders requiring Mr Lau, with another, to obtain geotechnical reports regarding the site’s geological stability, slippage, erosion and remediation for the earthworks and revegetation.10 The Court concluded that the earthworks were unstable. There were signs of rocks falling onto the track and below. There were indications that the instability of the work had created a danger in respect of large rocks and also some large trees which had lost their support due to the excavations. The Court also directed that an ecological remediation plan be obtained consistent with Ms Osborne’s recommendations and also made directions in respect of the archaeological damage. Other ancillary orders were made.
[42] In making those final orders the Environment Court accepted the evidence of Ms Osborne and Ms Parslow and noted its concern that Mr Lau continued to make allegations against the Council and its officers without addressing the substantive matters of relevance or importance in the proceedings.
[43] On 26 October 2016 this Court dismissed Mr Lau’s application for special leave to appeal.11 Venning J commented that the proposed appeal was “hopeless and entirely without merit.12 His Honour ordered that Mr Lau was jointly and severally liable to pay costs to the Council together with disbursements.
9 Auckland Council v Lau & Ors [2016] NZEnvC 103.
10 Auckland Council v Lau & Ors [2016] NZEnvC 212.
11 Lau v Auckland Council [2016] NZHC 2556.
12 At [38].
[44] On 8 December 2016 the Environment Court ordered Mr Lau and the other party to jointly and severally pay $75,000 in costs as a contribution towards the Council’s costs.13 The Court commented on Mr Lau’s repeated failure to comply with procedural deadlines and his abuse of the Court’s process in other ways.
[45] Mr Lau appealed the Environment Court’s decision to this Court. Woodhouse J dismissed the appeal on 15 May 2017 on the basis it did not raise any questions of law capable of argument.14 Significantly, Mr Lau’s challenge in this Court related directly to Mr Lau’s claim that Ms Parslow had misinterpreted the shells as midden deposits when, in fact, they were the result of tectonic uplift. It appears his criticisms were the same as those made in the Environment Court and those which he repeats in the present proceedings.
[46] In respect of the enforcement order proceedings the Environment Court granted a total of $86,178 in costs against Mr Lau (jointly and severally). On the related High Court appeal cost orders were made against Mr Lau totalling $4,049.
(iii)88 Fairburn Road
[47] This property is a large residential site with an existing house. There is dense vegetation which runs down to a branch of the Tamaki Estuary in the Curlew Bay area. The estuary is tidal and ringed by mangroves. Chen Hong Co Limited is the registered proprietor.
[48] In mid-2016 the Council became aware of significant earthworks at the property. This included vegetation removal and the dumping of a large amount of non- clean fill including material containing asbestos. No erosion or sediment control measures had been implemented. Mr Lau was the developer and property manager.
13 Auckland Council v Lau & Anor [2016] NZEnvC 243.
14 Lau v Auckland Council [2017] NZHC 1010.
[49] The Council applied without notice to the Environment Court for interim enforcement orders against Mr Lau and others. These were granted on 1 September 2016.15 They required Mr Lau to cease undertaking earthworks. The orders also prohibited the establishment of more than two dwellings at the property. Other ancillary orders designed to protect the environment were made.
[50] None of these enforcement orders was complied with. The earthworks continued.
[51] On 14 October 2016 the Environment Court amended its interim orders. These, too, were not complied with.
[52] On 8 December 2016 the Environment Court heard the Council’s application for enforcement orders. Mr Lau appeared in opposition.
[53] On 1 February 2017 the Environment Court delivered its reserved decision.16 It granted permanent enforcement orders against Mr Lau; orders which were broadly the same as the interim orders. This decision has not been appealed. Despite the orders, Mr Lau has not complied with the directions.
[54] It is not apparent from the material before me which final costs decision of the Environment Court relates to the Fairburn Road proceedings. However, in September 2017 the Environment Court made two separate cost awards against Mr Lau in favour of the Council.
[55]On 12 September 2017 Judge J A Smith ordered Mr Lau to pay the Council
$8,700 which appears to relate to Mr Lau’s application for the amendment or cancellation of an enforcement order.17
[56] The second costs decision was delivered by Judge B P Dwyer on 13 September 2017 when he ordered Mr Lau, and others, to pay the Council costs of $127,500.
15 Auckland Council v Lau & Ors ENV-2016-AKL-180.
16 Auckland Council v Lau & Ors [2017] NZEnvC 8.
17 Auckland Council v Lau & Ors [2017] NZEnvC 151.
(iv)436 Paremoremo Road
[57] A broadly similar situation arises in relation to the property at 436 Paremoremo Road. Ying Qiu Zhang is the registered proprietor.
[58] Since October 2015 Council officers have undertaken numerous site visits and observed significant illegal earthworks next to a stream, substantial tree removal, the relocation of a house onto the property and the creation of multiple tenancies and unauthorised wastewater discharges and building works.
[59] Again, the Council applied to the Environment Court for interim enforcement orders. Mr Northover filed an affidavit in support of the application. He deposed to seeing nine separate residential units erected on the property over various site visits. Five of these units were tenanted. The wastewater systems were unsanitary.
[60] On 28 March 2017 the Environment Court granted ex-parte interim enforcement orders against Mr Lau and others which prohibited them from continuing any of the tenancies or allowing the use of toilet facilities at the houses. Other related orders were made.
Multi-property prosecution
[61] In addition to the criminal trial arising out of the events surrounding 18 Weranui Road, the Council has laid some 64 charges in the Auckland District Court alleging serious breaches of the RMA and BA in respect of a number of properties discussed above. Thirty-four of the charges are in respect of Mr Lau personally. The balance are companies and individuals alleged to be involved in the unlawful activities described above. Mr Lau has elected trial by jury. He is self-represented and the Court has appointed counsel to assist.
[62] Both Mr Northover and Ms Whiteside signed a number of the charging documents.
[63] It is expected that Mr Northover will be an important prosecution witness at the upcoming trial.
The present proceedings
[64] Mr Lau has issued proceedings against Mr Northover, Ms Osborne, Ms Whiteside and Ms Parslow. I shall deal with each of these proceedings in turn.
Northover proceeding (CIV-2016-404-3028)
[65] Mr Northover has given evidence for the Council at the hearing of its application for enforcement orders against Mr Lau.18 He also assisted in the application for and execution of search warrants at properties associated with Mr Lau.
[66] As with Ms Whiteside, Mr Northover signed a number of the charging documents for the multi-property prosecution. Specifically, Mr Lau alleges that Mr Northover attempted to “create false evidence” in order to “revenge [the] plaintiff”.
[67] Mr Lau sues in negligence. He asserts Mr Northover breached his duty of care to Mr Lau by not testing the sewage system in accordance with proper procedures and by encouraging the tenants to cease paying rent. His prayer for relief is set out below:
“Plaintiff alleges that the defendant owes a duty of care to plaintiff by not testing the sewage system on proper procedure where the drain layers and water care experts should come together and not damaging the system then test by water care experts. Defendant defendant (sic) owes a duty of care to plaintiff by spreading the idea of not paying rent among the tenants while tenants still using power, water and other services provided by the plaintiff for free.”
Osborne proceeding (CIV-2016-404-2913)
[68] Ms Osborne also gave evidence at the Council’s application for enforcement orders against Mr Lau and others at 32 Weranui Road.
[69] Mr Lau claims that Ms Osborne’s ecological remediation plan did not properly take into account the geology of the site with the consequence that if adopted, the risk of slips would increase during wet periods and the risk of fire would increase during dry periods. He also claims she did not consider the instability of the land.
18 Auckland Council v Lau & Ors ENV-2016-AKL-251 and Auckland Council v Lau & Ors ENV- 2015-AKL-102.
[70]The prayer relief reads as follows:
“Plaintiff alleges that the defendant owes a duty of care to plaintiff by not consider the GEOLOGICAL effects of the property while preparing the re- planting plan. Even if plaintiff given the information to defendant of the science of sandstone/GEOLOGICAL onsite in the email dated 7.11.2016. The proposal of Gum Tree and other large trees is not appropriate in the sandstone zone. Defendant proposed additional say 6,000 m2 covenanted area as per proposed planting area that potentially causing the loss of say $250,000 times 20 lots of $5,000,000 to plaintiff as yet finalised by a registered valuer. The additional area of 6,000 m2 outside the 2 farm tracks that have dispute with Auckland Council.”
Whiteside proceeding (CIV-2016-404-3066)
[71] Ms Whiteside is a senior officer in the Council’s compliance unit. She signed some of the charging documents which the Council filed against Mr Lau and others. She was not a witness in any of the proceedings but rather co-ordinated the Council’s global investigation of various properties.
[72] Ms Whiteside gave evidence for the Council in the Environment Court on 10 October 2016.19 However, the claim against her does not appear to relate to the evidence she gave in those proceedings. Instead, it seems to be a claim that not only was Ms Whiteside negligent in signing the charging documents but she also acted corruptly in doing so.
[73]Mr Lau’s prayer for relief reads:
“Plaintiff alleges that the defendant owes a duty of care to plaintiff, Auckland Council and member of public by not read or Court orders from Environment Court before issuing the charging documents and wasted the time and money of plaintiff and member of public that paid to council as due to defendant over used her power as senior Resort Consent Advisor to issue close to 20 Charging documents against plaintiff/company/plaintiff’s landlord at Auckland district Court.”
[74] It thus appears that Mr Lau’s claim is that the charging documents were false and that Ms Whiteside, in dealing with them, misused or abused her powers. Mr Lau claims that the charges were designed to place pressure on him, probably for the
19 Auckland Council v Lau & Ors ENV-2015-AKL-102.
purpose of supporting corrupt neighbours or competitors who hoped that through these actions Mr Lau would suffer extra costs or would be forced into bankruptcy.
Parslow proceeding (CIV-2016-404-2916)
[75] As noted, Ms Parslow is an archaeologist employed by Heritage New Zealand. She is not a Council officer or employee.
[76] She provided advice in relation to damage to pre-historic terrace and midden sites at the Weranui Road properties and gave evidence in one of the enforcement proceedings relating to 32 Weranui Road. She did so at the request of the Council.
[77] Ms Parslow, as with the other defendants in the related proceedings, is likely to be called as a witness in the multi-property criminal proceedings. The subject matter of Ms Parslow’s evidence relates to the same factual matters set out in the statement of claim. Ms Parslow’s evidence in respect of these issues was accepted by the Environment Court. Mr Lau adduced no evidence to the contrary and his appeal to the High Court was dismissed.
[78]Mr Lau’s prayer for relief reads as follows:
“Plaintiff alleges that the defendant owes a duty of care to plaintiff by not consider (sic) the GEOLOGICAL EFFECTS on the even if plaintiff given the information to defendant of the science of sandstone/GEOLOGICAL ONSITE in the email dated 7.11.2016 (sic). Plaintiff also given to defendant all the doubts of no sign of burnt or any mixture of ash, bones, shell size are small with the size range from 15-25 mm not suitable for consumption, neighbours or competitors try to stop plaintiff’s development by spreading the shells on site from beach as to misleading Rod Clough, shells may came (sic) from sea floor while uplife (sic) of the platform when titanic force/fault during earthquake.”
Application for security for costs
Legal principles
[79] It is against this background I now turn to consider the principles which apply in applications for security for costs.
[80] Rule 5.45 of the High Court Rules provides the Court’s power to make an order for security of costs. It states:
“5.45 Order for security of costs
(1)Subclause (2) applies if a Judge is satisfied, on the application of a defendant,—
(a)that a plaintiff—
(i)is resident out of New Zealand; or
(ii)is a corporation incorporated outside New Zealand; or
(iii)is a subsidiary (within the meaning of section
5 of the Companies Act 1993) of a corporation incorporated outside New Zealand; or
(b)that 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.
(2)A Judge may, if the Judge thinks it is just in all the circumstances, order the giving of security for costs.
(3)An order under subclause (2)—
(a)requires the plaintiff or plaintiffs against whom the order is made to give security for costs as directed for a sum that the Judge considers sufficient—
(i)by paying that sum into court; or
(ii)by giving, to the satisfaction of the Judge or the Registrar, security for that sum; and
(b)may stay the proceeding until the sum is paid or the security given.
(4)A Judge may treat a plaintiff as being resident out of New Zealand even though the plaintiff is temporarily resident in New Zealand.
(5)A Judge may make an order under subclause (2) even if the defendant has taken a step in the proceeding before applying for security.
(6)References in this rule to a plaintiff and defendant are references to the person (however described on the record) who, because of a document filed in the proceeding (for example, a counterclaim), is in the position of plaintiff or defendant.”
[81] The principles relating to the ordering of security for costs are well settled. It is generally accepted the following steps are to be followed:20
(a)Has the applicant satisfied the Court of the threshold under r 5.45(1)?
(b)If so, how should the Court exercise its discretion under r 5.45(2)?
(c)At what amount should security for costs be fixed?
(d)Should a stay be ordered?
[82] The Court does not need to be satisfied to the civil standard that the plaintiff is impecunious. All that is required is “reason to believe”. The applicant need only advance credible evidence of impecuniosity.21
[83] A plaintiff’s conduct in litigation is relevant to the exercise of discretion. In Lee v Whangarei District Council the Court declined to order security for costs where a litigant in person, as plaintiff, was conducting the proceedings reasonably.22 However, the Court observed that the defendant would be entitled to reapply for security if the plaintiff refused to comply with directions, delayed or ran pointless or unmeritorious applications.
[84] In Bevan-Smith v Team New Zealand the Court awarded security for costs where a self-represented plaintiff’s statement of claim contained various causes of action which were, in some respects, “incomprehensible”.23 The Court also regarded as relevant the plaintiff’s failure to comply with timetabling orders or to file the correct documentation.
[85] In Bush v Zion Wildlife Gardens Limited an order for security for costs was made where the defendant feared being drawn into further litigation involving the
20 Busch v Zion Wildlife Gardens Limited (In rec and in liq) [2012] NZHC 17 at [2].
21 Yarrow v Noel & Melval Yarrow Charitable Trust [2017] NZHC 1772 at [26].
22 Lee v Whangarei District Council [2014] NZHC 2989 at [51].
23 Bevan-Smith v Team New Zealand HC Auckland CIV-2003-404-468, 5 April 2004 at [24]-[25].
plaintiff and deserved reassurance that she would be protected for costs in the event she was successful.24
[86] The amount of security is not necessarily to be fixed by reference to the likely costs awards but is to be what the Court considers fit in all the circumstances.25 Where a plaintiff brings a second application following the first failing for lack of merit, the Court may be inclined to make an order for security close to, if not fully reflective of, the pre-estimated costs of the proceedings.26
[87] The general course is to stay proceedings until security is given; only in unusual situations will the stay be refused when security is ordered.
Mr Lau’s submissions
[88] Before turning to consider the relevant principles I first set out what Mr Lau submits in opposition.
[89] At the hearing Mr Lau addressed me passionately and at some length. In advance he filed an affidavit and written submissions. However, nowhere did he address the relevant principles. Instead, he essentially repeated the same claims he has made on previous occasions to the Environment Court and, to a lesser extent, this Court. He attacked both the Council and the defendants claiming it was unjust that he was expected to be responsible for meeting his own legal expenses while the Council, and probably the defendants, had all but unlimited means. He attacked the Council collaterally suggesting that the Council should not be permitted to undertake enforcement action against him until they had remedied the plight of Auckland’s homeless, diverted untreated sewage to proper treatment plants and replaced all leaky homes.
[90] For example, Mr Lau claims that Ms Parslow’s archaeological report for Weranui Road was fundamentally flawed. He says that her claim that there were
24 Bush v Zion Wildlife Gardens Limited, above n 20, at [17].
25 A S McCaughlan Limited v M E L Network Limited (2002) 16 PRNZ 747 (CA) at [27].
26 Ballantyne Trustees Limited v Papprill Hadfield & Aldous Solicitors Nominee Company Limited
[2016] NZHC 713 at [55].
archaeological remains, particularly middens at the site, was wrong for several reasons. First, she did not present any evidence of Carbon 14 testing. Secondly, it would have been impossible for the pre-historic occupants to have dug in the area due to the hardness of the sandstone substrate. Thirdly, he says the scattered shells showed no signs of burning, ash or bones which one would expect in such deposits. Finally, he submits that the shell sizes are too small for human consumption and, in any event, no one in a pre-historic community would have carried the shellfish over such a distance. Instead, Mr Lau claims that what Ms Parslow has mistaken as archaeological remains are, in fact, geological artefacts caused by the sea floor lifting due to tectonic forces.
[91] Attempts during the course of the hearing to have Mr Lau address the specific issues engaged in the present applications were all but futile. Mr Lau has simply repeated essentially the same accusations he made unsuccessfully in the Environment Court and before Woodhouse J. This tactic was particularly evident when he submitted that Ms Osborne, Ms Parslow and Ms Whiteside should “reconsider [their] evidence”. He also submitted Mr Northover was acting in “revenge”. Almost exclusively, his submissions in respect of each defendant involved a recitation of his complaints to the Environment Court.
[92] I now turn to consider each of the four steps which are required to be addressed in applications for security for costs.
(a)Is there reason to believe Mr Lau will be unable to pay costs if he is unsuccessful?
[93] I am satisfied that there are good reasons to believe Mr Lau will be unable to pay the defendants’ costs in the event he is unsuccessful in one or more of the proceedings.
[94] The most powerful and convincing ground is Mr Lau’s past conduct. In Lee v Whangarei District Council Bell AJ, when considering the threshold requirement, made the observation that the defendant could justifiably point to the fact that having obtained one order for costs against the plaintiff which she had not paid, there was good reason to believe that she would fare no better in the event of making a fresh
order for costs.27 It is a truism that previous conduct is the best predictor of future conduct, an aphorism which is apt in the present case.
[95] As at the time of the hearing Mr Lau had been ordered to pay costs to the Council totalling $379,210. This is the combined sum of all extant and unpaid costs. At that time Mr Lau had not paid any part of the outstanding costs awards. Indeed, in an email sent to the Council on 23 May 2017 he expressly refused to pay stating:
“I will not pay the cost that derived by the false evidence that creates by your council officials that suspected influence or corrupted by the neighbourhood competitors and the stay proceedings will be filed in the high court today.”
[96] I agree with Mr Potter, for Mr Northover, Ms Osborne and Ms Whiteside, when he submits that Mr Lau’s attitude to previous costs awards alone provides strong evidence that he will not pay further costs awards against him in the present proceeding. The size of the combined outstanding awards, his steadfast refusal to make any payments, and the absence of any evidence as to his financial capacity, are all indicative he will be unable or will refuse to pay existing or future costs awards. Indeed, in his submissions to me he confirmed he had no income and little or no means to meet any order for security.
[97] Mr Potter has undertaken inquiries into Mr Lau’s means. These reveal that he is not the registered proprietor of any property. There is no property registered to him on the Personal Property Securities Register and companies linked to him are not the registered owners of any real or other property.
[98] The Inland Revenue Department has commenced bankruptcy proceedings against him. An application to set aside the bankruptcy notices was dismissed. The Council has served two bankruptcy notices on Mr Lau. The period of compliance has expired and as at the time of this hearing the Council was in the process of drafting bankruptcy proceedings.
27 Lee v Whangarei District Council, above n 22.
[99] Furthermore, this is not the first time security for costs orders have been sought against Mr Lau. He has had orders made against him on at least two previous occasions being:
(a)On 7 October 2016 when he was ordered to pay $2,230 in costs. It appears he complied with that order.
(b)On 15 February 2017 when he was ordered by Hinton J to pay security for costs of $557.50 before 1 March 2017 with a later extension to 30 March 2017. His appeal was struck out when he failed to pay and an award of indemnity costs was made against him.28
[100] For these reasons I am easily satisfied that there is reason to believe Mr Lau will be unable to pay the costs of the Council if he is unsuccessful in any of his proceedings.
(b)How should the Court exercise its discretion under r 5.45(2)?
[101] I am satisfied that having regard to the extensive background set out above it is just, in all the circumstances to make an order that Mr Lau gives security for costs and that the defendants not be required to take further steps in the proceedings until such time as the security has been paid. In exercising my discretion I am, in particular, influenced by three factors:
(a)the apparent lack of merit in the proceedings;
(b)Mr Lau’s history of conducting vexatious litigation is relevant; and
(c)the judicial comments and observations of the Environment Court.
[102]I shall deal with of these in turn.
28 Lau v Auckland Council CIV-2016-404-3225 (Minutes of Hinton J dated 15 February and 23 March 2017).
(i)Apparent lack of merit in the proceedings
[103] The Court, so far as it is possible, should endeavour to assess the merits of the statements of claim and defence and endeavour to form some view of the respective prospects of success. In the present case, none of the defendants have filed a statement of defence and in any event, such is the state and nature of the statement of claim that it is difficult to see how any of the defendants could sensibly respond.
[104] As Master Williams QC in Nikau Holdings Limited v Bank of New Zealand put it this way:29
“If the claim appears weak, that may increase the likelihood of an application for security for costs being successful so as to avoid the prospect of a plaintiff of limited means bringing a weak claim, persisting with it, and so exerting pressure on a defendant either to offer settlement or to incur the cost of a trial when such cost cannot be recouped if the plaintiff is unsuccessful. If the defence appears weak, that may increase the likelihood that the defendant may be applying for security for costs in order to delay or prevent a hearing on the merits, particularly when such an application is coupled with the usual application for a stay of the proceedings pending the provision of security.”
[105] In my view these proceedings, if not classified as abusive, are almost certainly without merit. This militates in favour of granting the application for security for costs.
[106] I am satisfied that each of the claims is flawed in form and substance. Not one has any realistic prospect of success.
[107] I agree with Mr Potter when he submits there are significant difficulties with the statement of claim which discloses no reasonably arguable cause of action and is an abuse of the processes of the Court. There is no recognised duty of care which exists which would apply to the relationship between Mr Lau and any of the defendants.30 Furthermore, it is doubtful, in my view, that an expert owes a duty of care to a party who did not retain them.
29 Nikau Holdings Limited v Bank of New Zealand (1992) 5 PRNZ 430 at 437.
30 Rolls-Royce New Zealand Limited v Carter Holt Harvey Limited [2005] 1 NZLR 324 (CA).
[108] There is also the question of whether witness immunity applies in the present case. In Darker v Chief Constable of West Midlands, Lord Cooke observed that while in principle absolute immunity is inconsistent with the rule of law, in a few strictly limited categories of cases it has been granted, grudgingly, for practical reasons.31 The practical reasons which justify the immunity from suit enjoyed by a witness is to encourage freedom of speech in the judicial process by relieving the witness of the fear of vexatious litigation and to limit the scope for re-litigation.32 The legal position in relation to expert witnesses has not been settled in New Zealand. However, I regard it as likely that a Court would regard the principle as applying in these proceedings given their circumstances.
[109] I also agree with Mr Potter that the statements of claim are not pleaded in a fashion to which the defendants can reasonably respond. This is not a case where the defects are capable of being cured by amendment. The pleadings are barely comprehensible and would appear, on their face, to be totally misconceived.
[110] It is also a matter of concern which cannot be overlooked that these proceedings have been issued as the prospect of criminal prosecution looms. The subject matter of the criminal charges is, to a very considerable extent, duplicated by the substance of the civil proceedings. Most, if not all of the present defendants, will be witnesses in the trial. Given the nature of the claims made against the four defendants it is difficult to avoid the impression that Mr Lau’s civil actions are designed to deter or intimidate the defendants as witnesses.
(ii)Mr Lau’s history of conducting vexatious litigation
[111] This has been traversed in considerable detail above, however, some further, specific examples reinforce this conclusion. One illustration relates to Ms Osborne, the senior ecologist who provided ecological remediation plans to the Environment Court.
31 Darker v Chief Constable of West Midlands [2001] 1 AC 435 (HL) at 453.
32 EBR Holdings Limited (In liquidation) v McLaren Guise Associates Limited [2016] NZCA 622, [2017] 3 NZLR 589 at [32].
[112] The claim against Ms Osborne appears to be an attempt to re-litigate the challenges to her evidence. This was an issue which Woodhouse J dealt with in Mr Lau’s appeal.33 One of the grounds of appeal was that Ms Osborne’s replanting plan was flawed for the same reasons as he claimed in the Environment Court and which forms the subject matter of the present proceedings against Ms Osborne. The plaintiff’s appeal against that decision was dismissed by this Court. Both claims constitute a collateral attack on the previous decisions of the Court.
[113] A similar observation can be made in respect of the claim against Ms Parslow. Mr Lau now seeks to challenge the correctness of her archaeological report to the Environment Court in the same fashion as it was challenged before that Court and this Court. In other words, Mr Lau seeks to re-litigate these matters. In view of the timing and the approach of Mr Lau’s criminal trial, the bona fides of these attempts must be viewed with some scepticism.
(iii)The judicial comments and observations of the Environment Court
[114] I regard the observations of Judges of this Court and the Environment Court as relevant to the exercise of my discretion. This is because the present litigation arises out of proceedings in the Environment Court. The views of that Court, having reviewed the evidence adduced by both parties, provide an insight into Mr Lau’s conduct.
[115]The catalogue set out below is just a sample.
(a)Lau v Auckland Council [2016] NZEnvC 145 at [16], [22] and [23]:
“We conclude that Mr Lau’s evidence was both disingenuous and intended to obfuscate the issues and deviate away from the real situation.
The Court has serious concerns as to whether the evidence given by Mr Lau to this Court is true and correct.
Quite simply, we have concluded that none of the appeals are warranted in the slightest. We consider them an abuse of process and to be misfounded both in law and in fact. It must
33 Lau v Auckland Council, above n 14.
follow, therefore, that we would have been minded to strike them all out as an abuse of process under the Act.”
(b)Auckland Council v Mao [2016] NZEnvC 251 at [69]:
“[Mr Lau] suggests that particular Council staff seek revenge against him. I wish to make it quite clear there is no evidence to support that allegation.”
(c)Auckland Council v Mao [2017] NZEnvC 60 at [11]:
“I have concluded that this is a clear case of repeated and deliberate non-compliance with directions of the Court. This is in the context of other cases that the Court has dealt with, which puts Mr Lau in one of the most serious categories of breaches of the Resource Management Act and local planning provisions. Mr Lau’s repeated attempts to delay proceedings and dispute matters without any evidential basis, establishes strong grounds for an award of costs.”
(d)Auckland Council v Lau [2016] NZEnvC 212 at [21], [24] and [28]:
“Quite simply, Mr Lau produced no expert evidence in contradiction. His main response was to suggest that the Council had slips on other coastal land nearby and that there was some form of impropriety by Council officers. Can we say that we reject any assertions by Mr Lau in this regard. None were supported by any evidence. We are satisfied that the evidence produced by the Council witnesses, particularly their expert witnesses, has been thoroughly researched and properly presented.
We remain concerned that Mr Lau seems unable or unwilling to address the issues in this case and instead becomes embroiled in making allegations against the Council or its officers rather than addressing the matters the subject of this hearing.
Mr Lau was asked directly by the Court if he would comply with an order of the Court. In respect of the Osborne report, he said he would try to comply with some of it.”
…”
(e)Auckland Council v Lau [2016] NZEnvC 243 at [22] and [23]:
“This case has been remarkable, from the Court’s perspective, for the complete disengagement of Mr Lau from the issues that are relevant to determining the matters before the Court.
Given that Mr Lau is self-represented, the Court has gone as far as it possibly can to give Mr Lau every opportunity to address the issues. Mr Lau has, notwithstanding that advice, consistently returned to the irrelevant matters.”
(f)Auckland City Council v Lau [2017] NZEnvC 151 at [4] and [7]:
“This is a case where the Court has already indicated that it considers that an application for costs should be made, given that the appeals are vexatious, frivolous and have no reasonable prospect of success. Further, I concluded in the substantive decision at [27]34 that they were misconceived entirely. At [28], furthermore, the motivation for this application appears to have been to delay or prevent the Council from undertaking a legitimate function by Court Order under s 315. At [30] I concluded ‘this does appear, on the face of it, to be a case justifying indemnity costs but I make the following directions’.
The Council has sought indemnity costs. Given that the application to change or cancel the enforcement order was devoid of any merit, there is considerable strength to this submission. Furthermore, the Court is particularly concerned that it was suggested that the Court had made directions in favour of Mr Lau when this is not the case. The Court considers that it should mark this type of behaviour in the most serious terms.”
[116] For these reasons I am satisfied this Court should exercise its discretion to make an order.
(c)At what amount should security for costs be fixed?
[117] In considering quantum, the Court should fix an amount which is appropriate in the interests of justice having regard to all the circumstances of the case. The Court will often take into account the amount or nature of the relief claimed, the nature of the proceedings including the complexity and novelty of the issues, the estimated
34 Auckland Council v Lau [2017] NZEnvC 131.
duration of the trial and any unusual costs in conducting the trial such as expert evidence.35
[118] The amount fixed by the Court is not intended to be an estimate of the actual amount the defendant will be liable for following an adverse costs award but the likely costs award is a relevant consideration in setting a figure.36
[119] It is generally inappropriate to make an order for security for costs that have already been incurred.37 The security should look to the future.
[120] Counsel for the defendants submit that an order for $30,000 security in respect of each proceeding together with an order staying the proceeding until such time as security has been paid is appropriate.
[121] Mr Lau, in his submissions, suggests any order should not exceed $5,000 in each case.
[122] A schedule of likely scale costs in the event the claims fail estimates an adverse cost award of $55,527 for each proceeding. I note, however, that Mr Northover, Ms Osborne, and Ms Whiteside, as employees of the Council, are represented by the same law firm. While each of their proceedings involves its own set of facts and raises its own legal issues, I consider that preparations for their respective defences will involve a degree of overlap. A reduction to the proposed security is appropriate to reflect the anticipated costs savings.
[123] As the authors of McGechan on Procedure have commented, past cases generally represent some discount on the likely award of costs as calculated under the High Court Rules.38 Having regard to this general trend in the case law and the fact that three defendants are represented by the same law firm I consider that the suggested security, totalling $120,000, is excessive. Rather, I consider a security in the sum of
35 Nikau Holdings Limited v Bank of New Zealand, above n 29, at 438-439.
36 Nikau Holdings Limited v Bank of New Zealand, above n 29, at 439.
37 Pickard v Ambrose HC Wellington CIV-2003-091-143, 13 August 2009 at [90]; upheld on appeal in Ambrose v Pickard [2009] NZCA 502.
38 Andrew Beck (ed) McGechan on Procedure (Thomas Reuters, online loose-leaf ed) at [HR5.45.07].
$25,000 in respect of the Northover, Osborne and Whiteside proceedings and a security of $30,000 in respect of the Parslow proceedings is appropriate. The resulting figure of $105,000, while still substantial, reflects my view that there is a lack of merit in the proceedings viewed in the context of Mr Lau’s history of conducting vexatious litigation.
(d)Should a stay be ordered?
[124] Although discretionary under r 5.45(3)(b) the general course is for the Court to order a stay of proceedings until the security ordered is given.39
[125] In the circumstances of this case I can see no principled reason which might justify a departure from the usual course. Indeed, having regard to Mr Lau’s past conduct such an order, in my view, is necessary.
Application to strike out
[126] The defendants’ primary position is that this Court should order security for costs. The defendants’ alternative, but less preferred, position is that the Court should strike out the proceedings as an abuse of process.
[127] I have already determined that the applications for security for costs should be granted and for that reason it is not necessary for me to consider the alternative applications. Indeed, to do so at this stage would be inappropriate.
[128] If Mr Lau meets the security the stay will be lifted. In those circumstances it would be open for the applicants to renew their applications for a permanent stay on the grounds of an abuse of process.
[129] For me to consider the merits of such applications at this stage may well have the unsatisfactory effect of appearing to influence the views of the judicial officer who may be required to consider the applications.
39 McGechan on Procedure at [HR5.45.11].
Result
[130]Each of the applications for security for costs is granted.
[131]An order is made that Mr Lau pay into Court security for costs in the sum of
$30,000 in respect of the Parslow proceeding or give security for that sum to the Registrar’s satisfaction.
[132]An order is made that Mr Lau pay into Court security for costs in the sum of
$25,000 in respect of the Northover, Osborne and Whiteside proceedings or give security for that sum to the Registrar’s satisfaction.
[133]Each proceeding is stayed until security is given in respect of it.
Costs
[134] The defendants, being the successful parties, are entitled to costs on the present applications. I direct all parties to file memoranda within 30 working days of the date of this judgment. No memorandum of any party may exceed four pages in length.
Moore J
Solicitors:
Meredith Connell, Auckland DLA Piper, Auckland
Copy to:
The Plaintiff
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