Maori Trustee v Hill
[2017] NZHC 2758
•10 November 2017
IN THE HIGH COURT OF NEW ZEALAND PALMERSTON NORTH REGISTRY
I TE KŌTI MATUA O AOTEAROA TE PAPAIŌEA ROHE
CIV-2016-454-85 [2017] NZHC 2758
BETWEEN MĀORI TRUSTEE
Judgment creditor
AND
FREDRICK PIRIPI KINGI HILL Judgment debtor
on the papers Counsel:
C M Reuhman for the Judgment creditor
Mr Hill in personJudgment:
10 November 2017
JUDGMENT OF ASSOCIATE JUDGE SMITH
Introduction
[1] On 29 September 2017 I gave judgment dismissing an application by Mr Hill to set aside a bankruptcy notice issued against him. At [80] of my judgment I invited the parties to file memoranda on costs, noting:1
The Trustee is entitled to costs. In view of the fact that Mr Hill has attempted to re-run some of the same arguments which have been rejected by the Courts in the past, it may be that the case is appropriate for an award of increased or indemnity costs. The Trustee may file a memorandum on costs within 15 working days of this judgment. Mr Hill may file a memorandum in reply on costs, within 15 working days of service of the Trustee’s memorandum.
[2] I have now received memoranda from the parties. The Māori Trustee seeks
2B costs with an uplift of 50 per cent. Mr Hill submits costs should be reserved pending the outcome of further filings for appellate proceedings.
1 Māori Trustee v Hill [2017] NZHC 2377.
Principles
[3] Rule 14.1 of the High Court Rules 2016 provides that costs are at the discretion of the Court. Subject to that broad discretion, a number of general principles are applicable to the determination of costs. One of them is that the party who fails in the proceeding should pay the costs of the party who succeeds.2
[4] Rule 14.3 provides for three separate categories of civil proceedings for costs purposes (categories 1, 2 and 3). A category 2 proceeding is a proceeding “of average complexity requiring counsel of skill and experience considered average in the High Court.”
[5] Appropriate daily recovery rates for each category of proceeding are set out in Schedule 2 to the High Court Rules. The daily rate for a category 2 proceeding is
$2,230.
[6] Rule 14.5 and Schedule 3 to the High Court Rules together set out times which are considered reasonable for cost recovery purposes, in respect of particular steps taken in the course of a civil proceeding. Three separate time “bands” are provided for (bands A, B and C). Band B will be applicable where the Court considers that a “normal amount of time” is reasonable for taking the steps.
[7] Rule 14.6(1) allows the Court to exercise its discretion to grant increased costs, over and above the amounts that would be payable under the applicable category and band in Schedules 2 and 3 to the High Court Rules. Under r 14.6(3):
(3) The court may order a party to pay increased costs if:
…
(b) the party opposing costs has contributed unnecessarily to the time or expense of the proceeding or step in it by –
(i) failing to comply with these rules or with a direction of the court; or
(ii) taking or pursuing an unnecessary step or an argument that lacks merit; or
2 High Court Rules 2016, r 14.2(1)(a).
(iii) failing, without reasonable justification, to admit facts, evidence, documents or accept a legal argument; or
…
[8] Increased costs may be ordered where there is a failure by the paying party to act reasonably.3 The percentage uplift from scale is to be justified by the extent to which the failure to act reasonably contributed to the time or expense of the proceeding.4 Any increase above 50 per cent is unlikely, given the daily recovery rate should normally be two-thirds of the daily rate considered reasonable in relation to the proceeding.5
Submissions
The Māori Trustee
[9] Ms Reuhman submits that the starting point is that Mr Hill’s application to set aside the bankruptcy notice would normally be a category 2 application, with the reasonable time determination made by reference to band B. She then submits that Mr Hill raised a number of arguments that lacked merit, including arguments that have been comprehensively dismissed by the courts in the past. She submits that Mr Hill has contributed to time-wasting and unnecessary expense, and that it is appropriate for the Court to order an increase of 50 per cent above 2B costs.
[10] In support, Ms Reuhman refers to Mr Hill’s claims that “final order or orders subject of the judgment have not been finally determined”, and “a set off [is] filed with the High Court”. Mr Hill was referring there to proceedings filed in this Court claiming $4.5 million, which Dobson J (by minute dated 29 November 2016) rejected as an abuse of process. Mr Hill also repeated a counterclaim for $16,000 which had been advanced by him in the proceeding in which judgment was entered, and on which the bankruptcy notice was based. That claim had been dismissed both at first instance and on appeal. Mr Hill also re-ran previously unsuccessful
arguments as to his “two personalities”.
3 Bradbury v Westpac Banking Corp [2009] NZCA 234, [2009] 3 NZLR 400 at [27].
4 Commissioner of Inland Revenue v Chesterfields Preschools Ltd [2010] NZCA 400, (2010) 24
NZTC 24,500 at [165].
5 High Court Rules 2016, r 14.2(1)(d).
[11] Ms Reuhman calculates costs on a 2B basis at $9,366 (4.2 days at $2,330 per day). She asks for a 50 per cent uplift on that figure, giving a total costs claim of
$14,049.
Mr Hill
[12] Mr Hill submits that costs should be reserved pending the outcome of further filings, including an appeal to the Court of Appeal against my judgment of 29
September 2017. He submits also that the Court is on notice of his “independent fee schedule”, and an application he is making for an order for injunction relating to the return of his personal items and compliance with owners’ resolutions. Mr Hill submits that his fee schedule for Court appearances encompassing incidentals has previously been served on the Court and Māori Trustee and “was effectively accepted by both”.
[13] Mr Hill then submits that new evidence was provided to the Court on the application to set aside the bankruptcy notice which had not been considered in previous judgments (such as the quorum required for convening owners’ meetings, and the provisions of the 1986 Trust Order). He submits that, had the 1986 Trust Order been disclosed before the judgment on which the bankruptcy notice was based was given, the claim for unpaid rent would have been quashed.
[14] Mr Hill also raises a number of more general concerns:
(a) while the Māori Trustee was required to meet with Advisory Trustees each year, the Māori Trustee has put forward the excuse that “one was dead and the other was in Australia”. That did not meet the requirements of the 1986 Trust Order.
(b) criminal action will be taken against the Māori Trustee for fraud and
stealing.
(c) the beneficial owners have been treated with “utter contempt” by a
“rogue trustee” supported by others of “dubious impartiality”.
(d)the Māori Land Court seems to be in “cahoots” with the Māori Trustee, as it habitually returns his applications to determine status, with the same excuses.
(e) the decisions of the Māori Land Court in most instances have been made per incuriam, and this will likely also occur in the criminal jurisdiction, without justification.
(f) the High Court hearing Mr Hill’s substantive appeal from the District Court failed to comment about the trust or its constitution, as a notice of opposition was filed by Ms Reuhman. The Court also failed to consider a report and advice which had been provided to Mr Hill by a solicitor who had been acting for him at an earlier stage. Further, Ms Reuhman influenced the legal advice given to Mr Hill in phone calls made by her to that solicitor.
Discussion and conclusions
[15] An appeal does not operate as a stay of the proceedings, or a stay of enforcement of any judgment or order appealed against,6 and there is no basis for reserving costs as Mr Hill requests.
[16] I accept Ms Reuhman’s submission that the starting point in fixing costs is that the Māori Trustee must be entitled to at least 2B costs. I also accept her calculation of 2B costs at $9,366, being 4.2 days at $2,230 per day.7 The issue is whether an order for increased costs is appropriate.
[17] Mr Hill re-ran a number of arguments that had been conclusively determined in other proceedings. These included his two personalities argument (which has now been rejected by the courts as a hopeless argument in a number of cases, including in the judgment of Dobson J on Mr Hill’s appeal from the District Court judgment), and
his purported counterclaims of $16,000 and $4.5 million. Either the claims
6 High Court Rules 2016, r 20.10; Court of Appeal (Civil) Rules 2005, r 12.
7 The breakdown is as follows: 0.2 days for the callover appearance on 23 February 2017, 2 days for the notice of opposition and affidavits filed in opposition to Mr Hill’s application, 1.5 days for preparing written submissions, and 0.5 days for the hearing.
themselves or the foundation for them had been considered and dismissed by
Dobson J, whether in his judgment on the appeal or in his minute of 29 November
2016. To run again the same arguments in an application to set aside the bankruptcy notice was in my view an abuse of process. I am satisfied that this material did contribute unnecessarily to the time and expense of the proceeding.
[18] However, a number of arguments raised by Mr Hill were new, and did require careful consideration of the law and the facts. For example, arguments relating to the 1986 Trust Order do not appear to have been fully argued in earlier Court proceedings.
[19] I do not consider the more general arguments raised by Mr Hill (as described at paragraph [14] above) can have any bearing on the quantum of costs awarded in this proceeding. Mr Hill also asked for a number of orders in his submissions, including orders relating to leave to file an appeal, an injunction relating to the return of personal items, and compliance with owners’ resolutions. These will need to be considered elsewhere: they cannot be dealt with on a costs application such as this.
[20] I do not accept Mr Hill’s submission that the Court and the Māori Trustee are on notice of his “independent fee schedule”. This submission appears to relate to Mr Hill’s successive invoices of $1.5 million per appearance in the District Court and High Court proceedings, and/or to his claim for $4.5 million. The suggestion that Mr Hill could unilaterally bind the Māori Trustee to any kind of liability of the kind suggested is hopelessly misconceived: there is no evidence that any “fee schedule” has been accepted by any party, and of course Mr Hill’s application to set aside the bankruptcy notice failed.
[21] I do not accept there is any basis to depart from the costs rules as set out in the High Court Rules, including the presumptive rule that a party who fails must pay costs to the successful party, except to the extent that I consider an award of increased costs is appropriate.
[22] In my view Mr Hill’s actions in re-running some arguments that were completely devoid of merit, and had been rejected in earlier Court proceedings,
justifies a costs uplift above the amount of a 2B costs award, but not to the 50 per cent level sought by the Māori Trustee. In my judgment, the justice of the case will be met if I award costs to the Māori Trustee calculated on a ‘2B’ basis, with an uplift of 20 per cent, and with disbursements to be fixed by the registrar.
Result
[23] The Māori Trustee is entitled to costs in the sum of $11,239.20, plus disbursements as fixed by the registrar. I make orders accordingly.
Associate Judge Smith
Solicitors:
Te Tumu Paeroa, Wellington for the Judgment creditor
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