Mawhinney v Environment Court - [2016] NZHC 20

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2014-404-2503 [2016] NZHC 20

UNDER the Judicature Amendment Act 1972

BETWEEN

PETER WILLIAM MAWHINNEY

Applicant

AND

ENVIRONMENT COURT First Respondent AUCKLAND COUNCIL

Second Respondent

Hearing: 3 December 2015

Counsel:

Applicant in person
No appearance for first respondent
P Moodley for second respondent

Judgment:

25 January 2016

JUDGMENT OF KATZ J [Security for costs]

This judgment was delivered by me on 25 January 2016 at 3:30pm pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar

Solicitors: Crown Law, Wellington
Brookfields Lawyers, Auckland

Copy to: Applicant

MAWHINNEY v ENVIRONMENT COURT [2016] NZHC 20 [25 January 2016]

Introduction

[1] Peter Mawhinney has applied to judicially review a decision of the Environment Court ordering him to pay costs of $427,139.00 to the second respondent, the Auckland Council (“Costs Decision”).1 The Council seeks an order that Mr Mawhinney provide security for costs, in the event that his application for judicial review is unsuccessful.2

[2] The Court’s power to order security for costs is set out in r 5.45 of the High Court Rules. Rule 5.45 requires a two stage approach. First, as a threshold requirement, the Court must be satisfied that there is reason to believe that a plaintiff will not be able to meet an award of costs if unsuccessful in the claim. Second, if the Court is so satisfied, then the Court then has discretion to order security in whatever sum it considers just.3

[3] I will consider each issue in turn, after outlining the key aspects of the relevant background.

Background

[4] The Environment Court proceedings which resulted in the Costs Decision have a lengthy history, which has been summarised, at least in part, in a number of previous court decisions.4 The original proceedings commenced in 1998 when Mr Mawhinney lodged a reference in respect of a proposed plan. The first Environment Court hearings took place in 2002 and 2003. There have been further hearings in
2006, 2007 and 2010.

[5] On 22 July 2010, Mr Mawhinney was adjudicated bankrupt. While Mr Mawhinney was bankrupt, the Environment Court issued its final decision regarding the 1998 reference. In that decision, issued on 25 November 2010, the Environment
Court found for the Council. On 26 October 2011, the High Court upheld the

1      Mawhinney v Auckland Council [2012] NZEnvC 117.
2      The first respondent abides the decision of the Court.
3      McLachlan v MEL Network Limited (2002) 16 PRNZ 747 (CA) at [13].
4      See for example Mawhinney v Auckland Council (2011) 16 ELRNZ 608 (HC).

Environment Court’s decision and dismissed Mr Mawhinney’s appeal.5 The

Environment Court then delivered its Costs Decision.

[6] Mr Mawhinney was discharged from his 2010 bankruptcy on 24 September

2013. He was adjudicated bankrupt again, however, on 24 February 2015, as a result of his failure to pay the costs awarded against him in the Costs Decision. He remains bankrupt.

[7] Mr Mawhinney has previously filed a notice of appeal against the Costs Decision in this Court. Ellis…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2016] NZHC 20
Decision Date: 25 January 2016

CaseChat Overview and Summary

Peter Mawhinney has applied to judicially review a decision of the Environment Court ordering him to pay costs of $427,139 to the Auckland Council. The Council has applied for an order that Mawhinney provide security for costs in the event that his application for judicial review is unsuccessful. The Court's power to order security for costs is set out in Rule 5.45 of the High Court Rules, which requires a two-stage approach. Firstly, the Court must be satisfied that there is reason to believe that a plaintiff will not be able to meet an award of costs if unsuccessful in the claim. Secondly, if the Court is so satisfied, then the Court has discretion to order security in whatever sum it considers just.

In this case, the Court found that there was reason to believe that Mawhinney, in his trustee capacity, will not be able to meet an award of costs if unsuccessful in these proceedings. The Court took into account the history of the proceedings, Mawhinney's previous refusals to pay sums that should be paid, and the fact that the Waitakere Trust's debts exceed its assets. The Court also noted that Mawhinney had procured the registered proprietors of the Property to grant themselves a second mortgage, which has priority over the mortgage to 66 Auckland Limited, in the sum of $200,000. However, the Court found that the prospects of the Waitakere Trust's $200,000 equity in the Property being available to meet any costs award in these proceedings are exceedingly remote.

In exercising its discretion under Rule 5.45 as to whether to order security for costs, the Court balanced the interests of both parties. The Court noted that the merits of a plaintiff's claim are relevant to the exercise of the Court's discretion, but found that the prospects of Mawhinney being able to meet the costs of these proceedings in the event that security for costs is not ordered appear to be remote. The Court also noted that defending the multiplicity of proceedings brought by Mawhinney is an expensive exercise for the Council, and that the Council's submission that Mawhinney is a serial litigant clearly has some force. The Court concluded that this is an appropriate case in which to order the provision of security for costs.

The Court ordered security for costs in the sum of $22,500, which is approximately half of the 2B scale costs. The proceedings are stayed pending payment of that security. Mawhinney is to pay the Council the costs of this application on a 2B scale basis, and if the parties are unable to agree on the appropriate quantum, then leave is reserved to file memoranda. Any memorandum from the Council is to be filed by 15 February 2016, with any response from Mawhinney to be filed by 29 February 2016.

Orders