Mawhinney v Waitakere City Council HC Auckland CIV 1999-404-1850

[2005] NZHC 1711

In the High Court of New Zealand

AUCKLAND REGISTRY

CIV 1999-404-1850

BETWEEN  P W MAWHINNEY

Plaintiff

AND  WAITAKERE CITY COUNCIL

Defendant

Hearing:         21 December 2004

28 January 2005

Appearances: Plaintiff in Person

R B Enright for Defendant Judgment:  2 May 2005 at 4.30 pm

JUDGMENT OF ASSOCIATE JUDGE H SARGISSON

E-mail:

R B Enright – [email protected]

Fax:
P W Mawhinney – 09-810-8656

Post:
P W Mawhinney, PO Box 95-157, Auckland

Solicitors:

Lowndes Associates, PO Box 7311, Auckland Kensington Swan, Private Bag 92101, Auckland

[1]                 The Waitakere City Council seeks an order that Mr Mawhinney provide security for costs and related orders.

Background

[2]                 Companies associated with Mr Mawhinney, Waitakere Forest Park Limited, Abacus Developments Limited, Boutsen Holdings Limited and Kitewaho Bush Reserve Limited, commenced this proceeding in the District Court at Waitakere in August 1999. The proceeding arises out of their proposals for the subdivision of forestry land which was spread across numerous certificates of title and comprised approximately 160 hectares at Bethels.  The land is known as Waitakere Forest and  is located in the Council’s district.

[3]                 Some of the land has now been sold but much of it remains under the control of Mr Mawhinney or in the ownership of entities that he controls, including the Waitakere Forest Land Trust.

[4]                 Starting in 1994, Mr Mawhinney and the companies lodged a number of subdivision applications with the Council. This proceeding is concerned with four of the applications which Mr Mawhinney describes as follows:

(a)   The March 1994 subdivision application;

(b)   The minor household unit subdivision, lodged in 1995;

(c)   The unit title subdivision application, lodged in 1996; and

(d)   The Lydiard subdivision application, lodged in 1996.

[5]                 The 1994 subdivision application was eventually granted by way of a consent order made by the Environment Court. The minor household unit and the unit title subdivision applications were deferred by the Council under s 91 of the Resource Management Act 1991. The Council determined that other resource consents were

needed from the Auckland Regional Council and that the relevant applications should be made before it continued further with these subdivision applications. It considered that such applications would promote a better understanding of the effects of the subdivision proposals and the activities which the new lots were likely to be used for. The Lydiard application was granted in part, but it appears that the application included six separate subdivision proposals and the consent was limited to the first. It involved the creation of two five hectare lots.  The Council decided  that the remaining proposals should be dealt with at a later stage. The result was that the companies made various applications for declarations and enforcement orders to the Environment Court.

[6]                 In the case of the minor household unit application, Judge Jackson upheld the deferral: see Waitakere Forest Park Ltd v Waitakere City Council [1997] NZRMA

231. However, in the case of the unit title subdivision, Judge Treadwell overturned the deferral. He considered that the Council could not properly defer the application in circumstances where the applicant was challenging the need for the further applications from the Auckland Regional Council. The Lydiard issues were also dismissed as part of a finding on a range of other issues. Judge Treadwell found the companies’ case on these issues was an abuse of the Court’s processes: see Kitewaho Bush Reserve Company Limited & Ors v Waitakere City Council Decision No. A106/2001.

[7]                 The Council appealed to the High Court against Judge Treadwell’s decision on s 91 issues and Mr Mawhinney’s companies filed a cross appeal in which they challenged Judge Jackson’s findings on s 91 and raised a large number of questions of law under some 14 topics.

[8]The result in respect to the above applications was that Randerson J:

a)Held the s 91 issues relating to the minor household units were determined by Judge Jackson and were res judicata:

b)Allowed the appeal by the Council on the s 91 issue and set aside the decision of the Environment Court on that issue. Consequently, the Council’s decision made under s 91 remained in place; and

c)The issues raised by the applicants in respect of the Lydiard subdivision and other issues were part of a plethora of applications which amounted to an abuse of the processes of the court, and did not need to be considered further. Consequently, the Court did not need to form a view on whether there were further subdivision plans to be considered arising from the Lydiard application.

[9]                 Mr Mawhinney and the companies applied to the Court of Appeal for leave to appeal. The application was unsuccessful. Suffice it to note that the Court of Appeal saw no grounds for a second appeal. It approved the High Court’s reasoning except in respect of the abuse of process finding. As to that finding, the Court of Appeal described the matters in issue as a failure by the applicants to the Environment Court to comply with the statutory requirements of particularity set out in ss 269 to 288 of the Resource Management Act. It stated:

Where an applicant fails to comply with requirements of a statute or regulation in relation to a prescribed process it will generally be open to a statutory body, subject to any specific applicable statutory requirements, to adjourn the matter until there is proper compliance. It is unhelpful to catergorise that situation as an abuse of process. Ultimately what the Environment Court found was that the applicant was proceeding in a way that the statute did not countenance because of the lack of particularity in what was proposed. We are satisfied that question is predominantly one of fact and judgment for the specialist Court concerned, which the High Court has in effect upheld. It does not give rise to any question of law which warrants a second appeal.

[10]The Court of Appeal also noted:

The applicants cannot continue with the proceedings the subject of the appeal in any event because they have not observed the statutory requirements. In those circumstances there is no proper basis for them to bring a second appeal.

The Claim and Procedural Matters

[11]             The proceeding was transferred to the High Court and it was stayed pending the outcome of the Environment Court proceedings and the related appeal and leave application.

[12]             Most recently, Mr Mawhinney has been substituted as plaintiff following orders for the liquidation of the companies.

[13]             Mr Mawhinney pleads three causes of action. The first involves 27 alleged breaches of statutory duty under various provisions of the Act. The second cause of action is based in negligence. The third is based on alleged misfeasance in public office. Mr Mawhinney pleads among other things that various Council officers deliberately processed and administered the March 1994 subdivision application as an application for land use consent knowing their actions were invalid and that the Council is vicariously liable for the misfeasance of its employees.

[14]             Mr Mawhinney also seeks various orders against the Council to require it to grant rights of way and to review its actions in respect of the applications which have been defined under s 91 of the Resource Management Act.  He also  seeks damages in excess of $6 million together with interest.

[15]             The claim raises a large number of issues. The foremost issue concerns the Council’s s 91 deferrals, the effect of which is that the minor household unit and unit title subdivisions applications effectively remain on hold. At the hearing Mr Mawhinney described this as the key issue in the claim. Then there are issues arising out of the Council’s handling of the March 1994 subdivision application. These include allegations that the Council acted unlawfully by issuing a second subdivision consent in order to impose more onerous conditions on the subdivision; that it unlawfully required financial contributions and a bond as security for compliance with consent conditions; that it unlawfully refused to refund the bond; and that it unlawfully refused to allow the grant or reservation of rights of way under the Local Government Act 1974. The claim also alleges that the Council used threats to wrongfully insist on the carrying out of stabilisation works which were not required by the conditions attaching to the subdivision consent.

[16]             In addition, the claim contains numerous allegations about the Council’s conduct in respect of the minor household unit subdivision. These allegations are, in some respects, bound up with the deferral decisions. Among other things, the allegations attribute to the Council a wrongful decision to treat the subdivision proposals as non-complying activities instead of controlled activities; an unlawful failure to process the application pending payment of unlawful changes, and a failure to hear an objection against the charges under s 357 of the Act.

[17]             In the case of the remaining applications, Mr Mawhinney pleads a number of unlawful acts by the Council including its failure to treat the unit title subdivision as a permitted activity, and its refusal to process the Lydiard application completely.  He alleges that the Council’s decisions have wrongfully prevented him from carrying out subdivision and have caused him loss. He makes a further allegation about the Council’s failure to take steps to give notice in its district plan about flooding risks and to take proper steps to attenuate flooding risks.

The application for an order for security for costs

[18]             The Council has concerns that if Mr Mawhinney is unsuccessful at trial he will not be able to meet an award of costs against him. As a result, it made an application under High Court Rule 60 for an order for security for costs and an order that the claim be stayed until payment. The Council filed an amended application in October 2004 based on Mr Mawhinney’s failure to pay several outstanding costs orders in favour of the Council and the Auckland Regional Council; his likely exposure for yet further costs arising out of outstanding costs applications awaiting decision in the Environment Court and the Court of Appeal; and on other matters going to the Court’s discretion under the rule.

[19]             When the application first came on for hearing, counsel for the Council advised that Mr Mawhinney had recently paid two of the costs orders but he indicated that the Council’s position had hardened . He submitted that the Court should make orders that the proceeding not simply be stayed but that it be dismissed if security is not given within a reasonable time. He contended that eight weeks would be a more than reasonable time for payment.

[20]Mr Mawhinney opposes the application on grounds I will come to shortly.

[21]             The parties filed affidavit evidence in support of their respective positions. The evidence relied on by Waitakere City Council is contained in affidavits from Ms Peddie and Mr Sheard.

[22]             On 25 January, before the second hearing Mr Mawhinney filed and served a fifty-five page rebuttal affidavit annexing almost two hundred pages  of exhibits. This followed two earlier affidavits to which Mr Mawhinney had also attached voluminous documentation. The Council has opposed the filing of the  third affidavit.

[23]             Although much of Mr Mawhinney’s affidavit relates to matters already covered in his earlier affidavits, counsel for the Council did not point to any real prejudice that might result from its admission. He submitted that the affidavit does not provide further information as to Mr Mawhinney’s personal asset position and therefore does not assist the Court to decide whether or not Mr Mawhinney will be unable to pay an award of costs if he is unsuccessful. However, in the affidavit Mr Mawhinney responds to submissions made at the first hearing as to the quantum of security which he did not have notice of and also deposes as to the constraints on his ability to pay costs within particular timeframes. In the circumstances, I have decided to allow the affidavit and an affidavit in response filed by Ms Peddie.

Events since the hearing

[24]             Since the hearing, both sides have filed memoranda. Mr Mawhinney filed a memorandum on 28 January advising that the deed of trust for the Waitakere Forest Land Trust was filed as an exhibit to his affidavit sworn 31 May 2004. The affidavit is not before the Court in this present application and I decline to take it into account.

[25]             Counsel for the Council also filed a memorandum drawing to the Court’s attention the decision of the Environment Court on 23 February 2005 in Kitewaho Bush Reserve Company Limited & Ors v Waitakere City Council A/028/2005 concerning costs on the applications Judge Treadwell dealt with.   In the decision the

Court ordered that Mr Mawhinney and others must pay costs and disbursements of

$74,848.14. The Council had sought solicitor/client costs of $143,824.67.

[26]             Mr Mawhinney filed a memorandum in reply requesting that the Council’s memorandum be disregarded. I reject the submission. It is appropriate  that  this Court be apprised of the decision which is a matter of public record.  However,  I note Mr Mawhinney’s submission that:

If the Court does take the new evidence into account, it should be noted that the actual award of costs is just over half the amount that was provided for in my submissions, and that as a result of the Environment Court’s reduction of
$60,000.00 from the amount originally claimed by the defendant, I am even more able to pay an award of costs.

[27]For reasons I will come to, I do not accept that submission.

Grounds in Opposition

[28]In broad terms, Mr Mawhinneys’s grounds of opposition are that:

a)He is able to pay an order for costs and has no outstanding debts other than costs which he is able to pay but does not wish to pay; and

b)He has control over “asset owning” entities including the Waitakere Forest Land Trust which he can look to in order to meet any costs award.

Legal Provisions

[29]The relevant part of r 60 of the High Court Rules reads:

60. Power to make order – (1) Where the Court is satisfied, on the application of a defendant, -

…

(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, -

the Court may, if it thinks fit in all the circumstances, order the giving of security for costs.

(1)An order under subclause (1) –

(a)Shall require the plaintiff or plaintiffs against whom the order is made to give security for costs in respect  of such sum as the Court considers sufficient –

(i)By paying that sum into Court; or

(ii)By giving, to the satisfaction of the Registrar, security for that sum; and

(b)May stay the proceeding until the sum is paid or the security given, as the case may be.

[30]             The principles to be applied in determining whether the Court should grant an order for security for costs are not in doubt. First, the Court must determine whether 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 proceeding. This is sometimes called the ‘threshold test’, and, if it is met, the Court will then consider whether to exercise its discretion to order security (Lunn v Fourth Estate Holdings (1997) 11 PRNZ 316).

[31]             There is no burden of proof or predisposition one way or the other (Nikau Holdings Ltd v BNZ (1992) 5 PRNZ 430). Rather, it is a discretion the Court will exercise having regard to all the circumstances of the case (National Bank of NZ Ltd v Donald Export Trading Ltd [1980] 1 NZLR 97).

[32]             The interests of both the plaintiff and the defendants must be considered and the Court should not allow the rule to be used oppressively to deny a plaintiff with limited means the ability to bring his case before the Court. On the other hand, an impecunious plaintiff must not be allowed to use his inability to pay costs to act oppressively or to place unfair pressure on the defendant. Overall, a balancing of a number of factors is required.

[33]             The general principles as to the exercise of the discretion can be found in Nikau Holdings Ltd and in Bell-Booth Group Ltd v Attorney-General (1986) 1 PRNZ 457 (confirmed by the Court of Appeal at p 466). Importantly, the Court’s discretion is not to be fettered by the automatic application of ‘principles’ extracted from previous cases. Rather, the Court must carefully consider the facts of the particular

case in issue (McLachlan & Ors v MEL Network Ltd (CA 39/02, 29 August 2002) at [13].

Issues

[34]             The application is made under r 60. In broad terms, the primary issues I must decide are whether there is sufficient reason for me to believe that Mr Mawhinney is unlikely to be able to pay an order for costs if his claim is unsuccessful and, if so, whether there are good reasons to exercise my discretion to require Mr Mawhinney to give security for costs.

Decision

The threshold test – is it met?

[35]             It is not disputed that if Mr Mawhinney is unsuccessful in his claim, the defendant’s costs in this proceeding are likely to be substantial. A trial may well  take between two and three weeks, given the number of issues raised by Mr Mawhinney and the voluminous evidence he seems bound to present. At best, scale costs for Mr Mawhinney are likely to be assessed on a category 2 basis band B basis. Counsel for the defendant provided a schedule of likely scale costs which shows that such scale costs are likely to be close to $98,000.00 for a two week trial. They could well be more if the trial exceeds two weeks, which seems likely.

[36]             The Council contends that there is reason to believe that Mr Mawhinney will be unable to pay the Council’s costs if he is unsuccessful in his claim. The Council relies on several matters:

a)First, Mr Mawhinney had failed over a long period to satisfy a number of orders for costs made against him. These were:

i)An order for costs made by Randerson J on 10 June 2004 in  the High Court proceeding (AP 23/SW02) in favour of the Council. The amount of the order including  disbursements was $48,503.42. Payment was to be made on 1 July 2004.

ii)An order for costs made by the Environment Court in the sum of $7,000.00 on a District Plan appeal involving Variation 87 to the Waitakere City District Plan. The proceeding number is A158/203.

iii)Several orders for costs made by the High Court and the Environment Court in favour of the Auckland Regional Council against Mr Mawhinney amounting in total to

$8,980.00.

iv)An order for costs made by the Court of Appeal against Mr Mawhinney on his unsuccessful application for leave to appeal, amounting to $3,000.00 plus  reasonable disbursements.

b)Secondly, Mr Mawhinney’s exposure for costs would likely escalate on determination of its application for costs on the proceeding before Judge Treadwell.

[37]             As matters have turned out, the Environment Court has made a somewhat smaller costs award but at almost $75,000.00 the award is still very substantial. As against that, by the first date of hearing Mr Mawhinney had in fact paid the two costs awards of $48,503.42 and $7,000.00. That left costs of $11,980.00 outstanding. Mr Sheard, a solicitor employed by the Waitakere City Council as Legal Services Manager deposed that Mr Mawhinney made payment only after the service of a bankruptcy notice and a consent order which dismissed Mr Mawhinney’s application to set aside the bankruptcy notice. The net result is that outstanding costs currently amount to almost $87,000.00.

[38]             The Council’s contention is that it would be unsafe to rely on Mr Mawhinney’s claim that he controls various properties and can rely on those assets  to cover any award of costs. Counsel argued that Mr Mawhinney did not disclose  the existence of any personally owned assets; the basis for his assertion that he can control various assets; the nature of any beneficial interest he may have in the assets

he controls; or provide any adequate evidence as to the current value or level of equity in those assets.

[39]             Counsel argued that the position is not substantially different from the position described by Randerson J in his minute dated 14 November 2003:

....the affidavits reveal a complex picture involving companies, trusts, and joint ventures which do not give the Court any confidence that there could be an award of costs successfully sustained against the respondents/cross appellant. It may be that money could be produced from somewhere but that is not clear to the Court at this stage. As well, all of the companies involved are in liquidation. Mr Mawhinney submits that the companies are only there as trustees and they have now been replaced. But the fact that these companies are in liquidation contributes to the Court’s concerns about liability to pay costs”.

[40]             Counsel submitted that in all the circumstances it was proper to infer that Mr Mawhinney lacks the ability to pay a costs award in the event that he is unsuccessful.

[41]             In reply Mr Mawhinney deposes that he has paid significant sums by way of costs; that he has no debts apart from Court costs that have been awarded or are contingent; and that he has no borrowings. He says any costs outstanding are costs  he has chosen not to pay, and that they are not costs he is unable to pay. In his voluminous evidence, he also goes to some lengths in an endeavour to support his contention that he controls various properties which he can rely on to cover an award if he is unsuccessful. The properties in question are:

a)Lot 324. It is the subject of an agreement for sale and purchase. He says that this lot will produce to him $60,000.00 in cash in the short term and $150,000.00 in the medium term arising out of an agreement to a re-subdivision proposal involving the amalgamation of Lot 324 with Lot 323.

b)Lot 323. He says that a Mr and Mrs Swainston hold Lot 323 for him  as their trustees and that once he has been able to rid the title of unlawful amalgamation conditions, he will be able to sell or  charge his interest in the land. He says that a sale or  mortgage of Lot 323  will produce $170,000.00.

c)Land owned by a joint venture between called the Glorit Joint Venture. He said that he is due $70,000.00 from the Joint Venture once its three remaining lots are sold. He pointed to three agreements for sale and purchase having settlement dates in December last year and March of this year.

d)Lot 8. He says that this lot can be sold when he can rid the title of the unlawful amalgamation conditions currently attaching to it. He contends he will then be in a position to require all interests in the  land to be transferred to him so as to “capitalise” on proposed District Plan changes when they come into force. Those District Plan changes will allow further subdivision of Lot 8 with the result that the land will be worth some millions.

[42]             However, Mr Mawhinney acknowledges in his own evidence that he is “cash poor” and is unable to meet an order for security in the short term. While acknowledging that he still has outstanding costs awards to meet, he has provided no adequate explanation as to why he has not paid the outstanding awards of $11,980.00 and $3,000.00, other than to assert that he chooses not to pay them. In addition, as I have noted, his outstanding liability for costs has escalated to almost $87,000.00.

[43]             Although Mr Mawhinney has paid a significant sum towards his outstanding costs recently, that is not cause for confidence that he is able to pay the outstanding sums or that he “is even more able to pay an award of costs as he maintains”. Mr Mawhinney does not disclose his financial circumstances in a straight forward manner which of itself gives rise to an adverse inference as to his ability to pay.

[44]             Further, my strong impression is that there is little prospect of Mr  Mawhinney being able to realise within a reasonable time the interests that he claims to have in various parts of the land within Waitakere Forest. The key asset on which he relies is Lot 8 but there are several problems. There is the problem with the amalgamation conditions and nothing to give the Court any level of confidence that he can rid the title of these conditions. In addition, there is a caveat against  Lot  8 and the evidence is not sufficient to satisfy the Court that the caveat is or can be

removed within a reasonable time so as to enable Lot 8 to be sold or charged for the purpose of providing security. The result is that it is difficult to have any confidence that Mr Mawhinney will be in a position to dispose of Lot 8 or to subdivide it for  sale in the near future. Lot 8 cannot therefore be safely relied upon for the purpose of meeting a costs award.

[45]             In the case of Lot 324, Mr Mawhinney says he loaned $60,000.00 to North Kaipara Nominees Limited of which he is the sole shareholder and director and that there are back-to-back agreements for sale and purchase which will produce sufficient monies to enable North Kaipara Nominees Limited to pay him back when it completes its purchase of Lot 324 and on-sells the property to a Mr and Mrs Chia. However, Mr Mawhinney’s own evidence is that the purchase is still conditional and that is not satisfactory evidence to indicate that any such sale is likely to occur within a reasonable time.

[46]             Mr Mawhinney also refers to his intention to subdivide Lot 324 together with Lot 323 which he says he controls. He acknowledges that the subdivision will  require the approval of Mr and Mrs Chia. He says the subdivision should produce a minimum of $70,000.00 which represents “more ability to pay Court costs”. Again, there is no reliable indication as to when this subdivision is likely to occur or even that a subdivision application has been made. At this stage, I am not prepared to  treat Mr Mawhinney’s statement about the subdivision as anything more than speculative.

[47]             As to the interest that Mr Mawhinney claims to have in the Glorit Joint Venture, Mr Mawhinney asserts that he has a personal and beneficial interest in the joint venture. He claims that under a joint venture agreement he holds an interest as trustee for the Glorit Forestry Trust and the Waitakere Forest Land Trust. Mr Mawhinney says that on a pessimistic view the trusts should realise $70,000.00 out of three land sales which were to settle in December 2004 and March 2005. He deposes that as trustee of these trusts he will ensure they pay him the proceeds of  sale  because  the  Waitakere  Forest  Land  Trust  owes  him  well  in  excess  of  the

$70,000.00. Even assuming this is correct, it will not be sufficient to pay existing outstanding costs awards.   That is a factor that  cannot be  ignored when considering

Mr Mawhinney’s contentions about his ability to meet costs in and his case if he is unsuccessful.

[48]             In short, it is far from clear that assets he relies on will provide him with the money he is likely to need. Certainly that is so in the short to medium term.

[49]             I am satisfied in these circumstances that there is good reason to believe that Mr Mawhinney will not be able to pay an award of costs. In reaching this finding I am mindful of the fact that the likely costs, in the event that he is unsuccessful, will be substantial. The position remains essentially the same as it was when the Court of Appeal’s described it on 28 September 2004. The Court stated:

The applicants have encountered financial difficulties in relation to the proposals for development in part because of the litigation, and in part because of their inability to proceed with the sale of the land that is the subject of subdivision application. Indeed one of the applications  made to the Court was to adjourn the hearing of the application for special leave to appeal for a period of three to nine months within which, according to Mr Mawhinney who appeared for himself and other applicants, he would raise the money needed to obtain legal advice and representation in respect of  both the application for special leave and, if leave were granted, the substantive appeal.

This Court indicated to Mr Mawhinney that it would prefer to deal with his concerns over financial difficulties first by hearing the application for leave to appeal and then, if that were granted, addressing the request as one for an extension of time for filing the case on appeal and seeking a fixture pending the taking of the necessary steps to fund legal representation. We proceed accordingly.

[50]             The result is that I am satisfied, on the evidence, that there is good reason to believe that Mr Mawhinney will be unable to pay the costs of the Council if he is unsuccessful in his proceeding. I find accordingly.

[51]             In view of the above finding, the real matter at issue is whether or not I  should exercise my discretion to order security and, if so, the amount that I should require.

[52]             I turn then to consider the matters the parties have invited me to take into account when exercising my discretion.

The apparent weakness of the claim

[53]             The Council’s contention is that the claim is unmeritorious and lacks any real prospect of success given the decisions of the Environment Court, High Court and Court of Appeal. It points especially to the findings of the High Court and the Court of Appeal to uphold the Council’s decision to defer the minor household unit and  unit title subdivision applications. It says that these decisions trigger the doctrine of res judicata in respect of the s 91 issues in the claim and that Mr Mawhinney is unlikely to succeed in at least this major aspect of his claim.

[54]             Mr Mawhinney relies on Randerson J’s observation to dispute that the s 91 issues barred by the doctrine of res judicata. He says that Randerson J dealt with three limited grounds and that it remains open to him to make a further application for a declaration to set aside the Council’s decision under s 91(3) not to process the subdivision applications on other grounds. The argument appears misconceived. If there were other grounds for such a declaration then they should have been raised in the context of the applications to the Environment Court and the appeal to the High Court. Arguably, it would be an abuse of the Court’s processes to raise them now:  see Reid v New Zealand Trotting Conference [1984] 1 NZLR 8 at 9 (CCA).

[55]             It is clear that Mr Mawhinney seeks to re-run a number of the arguments advanced before the Environment Court, the High Court and the Court of Appeal, particularly in respect to the s 91 deferrals. As Mr Mawhinney observed in his submissions, the s 91 matters are key matters in the proceeding. It is difficult to see any basis for revising the lawfulness of the deferrals in a claim for review in this Court or to see how they could possibly form the basis of a valid claim for damages. The same may be said of a number of other matters he raises because they are bound up with the s 91 matters and could only lead to a successful claim if the decisions to defer were able to be challenged.

[56]             That is not to say that Mr Mawhinney cannot ask the Council to reconsider the minor household unit and unit title subdivision applications under s 91(3) of the Act if he decides to follow the indications given in the High Court’s judgment by putting a firm subdivision proposal to the Council and providing the information that

the Council is entitled to ask for. Randerson J observed if the applicant were still dissatisfied, he would have rights of appeal to the Environment Court. Randerson J held at [28]:

...obviously if an applicant is dissatisfied with the consent authority’s determination, then an application may be made to the Environment Court under s 91(3) for a revocation order.

[57]             However, as matters presently stand, Mr Mawhinney’s own evidence suggests that he has not produced the particulars that resulted in the decisions to defer the applications. He continues to debate the need to particularise his proposals and to provide the required information.

[58]             Some other issues Mr Mawhinney raises in the claim have also already been disposed of in other proceedings. By way of example, the Court of  Appeal’s decision makes clear that the Council was entitled to adjourn the Lydiard application because the requirements of the Act had not been complied with. Again, it is difficult to see how an action for review or damages could succeed in respect of this  particular application.

[59]             Other parts of the claim appear to amount to a challenge to  the reasonableness of conditions which the Council imposed on the original subdivision application. If Mr Mawhinney was unhappy with those conditions, then the  Resource Management Act provided for appeal although s 296 of the Act would appear to present a significant hurdle in the way of success.

[60]             It has been said that the Court should assess the merits of the claim at an  early stage to ascertain whether security for costs should be granted.  In attempting  to do this, Courts have stressed how hard it  is  particularly in the preliminary stages to ascertain the merits without the benefit of all the evidence and arguments: see Meates v Taylor (1992) 5 PRNZ 524 (CA). In this case, the claim has been on foot for some time. In terms of procedural steps, it has not made a great deal of progress. However, the outcome of the related proceedings gives no cause for optimism that the key elements of the claim have real merit.

[61]             While there are other parts of Mr Mawhinneys’s claim that may yet be meritorious, it is very clear that substantial parts of the claim can only be described as weak at best. Furthermore the evidence presently before the Court is insufficient to justify a finding that there appears to be a strong basis for other parts of the claim.

[62]These are factors that tend to favour the Council’s case.

Council has caused his “impecuniousity”

[63]             The assertion made by Mr Mawhinney about his impecuniousity raises, to some extent, the need for an element of pre-judgment because in general a plaintiff sues a defendant for loss allegedly caused (in some way) by that defendant, but an affirmative answer must of course await the outcome of the trial. However, it is hard to say on the evidence presently before the Court that the defendant caused Mr Mawhinney’s impecuniousity.

[64]In short, I do not think this factor assists Mr Mawhinney.

Course of proceedings

[65]             The claim has proceeded in a slow and tortuous fashion. There have been several statements of claim which have involved the addition of and changes to the original causes of action. Although detailed, the claim provides little explanation for the underlying grounds for asserting lawful conduct.

[66]             Whether or not deliberate, Mr Mawhinney’s process of developing and changing his claim has been drawn out and made it difficult for the defendant to determine the true nature of the allegations against it.

[67]             Furthermore, Mr Mawhinney’s approach to the application for security for costs has been to swamp the Court and the Council with voluminous material as happened in the Environment Court and my impression suggests that the proceeding is likely to take considerably more time than would normally be the case.

[68]These factors count in favour of the Council.

Public interest in providing security.

[69]             The Council submits that in circumstances where there is little apparent merit in the proceeding and where the ratepayers of Waitakere City are likely to be drawn into lengthy proceedings, it is reasonable that they should have some protection for their costs. I accept this submission. It is one that also favours  the  Council’s position.

Access to justice

[70]             On the basis of my earlier finding as to impecuniousity, it is reasonable to conclude that an order for security may result in Mr Mawhinney’s claim being discontinued. He argues that result would be a denial of his right to justice.

[71]             It is inherent in the power to order a plaintiff to provide security for costs that the plaintiff cannot actually meet an adverse costs award. In such a situation, an order may result in the claim being discontinued. It is important that an order having that effect should only be made after consideration and in a case in which the claim has little chance of success: see McLachlan & Ors v MEL Network Ltd (CA 39/02, 29 August 2002) at [15]. In such a case, an impecunious plaintiff must not be allowed to use his inability to pay costs, to act oppressively, or to place unfair pressure on the defendants: see Hammond J in Hamilton v Papakura District  Council (1997) 11 PRNZ 333, 336. An order for security for costs is not, in such circumstances, a denial of that person’s right to be heard, or a breach of the right to justice. It is a means of doing justice having regard to the interests of all of the parties.

[72]             I consider that my finding on the likely prospect of success weighs in favour of an order for security as a means of doing justice.

Result

[73]             After taking into account all of the above factors, I take the view that the application ought to be granted so as to provide the Council with some protection for costs in the event that Mr Mawhinney is unsuccessful in his proceeding.

[74]             As earlier indicated, Mr Enright set out in a schedule the steps involved or likely to be involved in the proceeding. He submitted that if costs are estimated in accordance  with  the  High  Court  scale   on  a  2B  basis  a  sum  of  approximately

$98,000.00  would  be   involved  and   if   estimated  on  a   2C   basis   in   excess of

$170,000.00 would be involved. He suggested in the circumstances that there be a two staged order for security.

[75]             Mr Enright also said that there should be  an order to strike  out to take effect if the first payment is not made within eight weeks. He relies on the Court’s discretion to strike out for failure to comply with the Court’s directions or orders within the time for compliance.

[76]             I think the more appropriate course is to stay the proceeding under r 60 until the required sum is paid or security given; and to reserve leave to the Council to seek an order for dismissal by way of memorandum if Mr Mawhinney does not take neither step within a specified period. I also take the view that justice between the parties would be served if I were to allow Mr Mawhinney an extended time in which to make payment or to give security before any application for dismissal can be made. If the proceedings are stayed in the meantime, then the Council will not be incurring cost for which it may not get security.

[77]I also take the view that a sufficient sum by way of security would be

$60,000.00. It seems to me that security in this sum would afford a reasonable measure of protection for the Council.

Orders

[78]I make the following orders:

a)Mr Mawhinney is ordered to give security for costs of the  defendant in the sum of $60,000.00 within fourteen days failing which the proceeding will be stayed for six months or until such earlier time as security has been given.

b)Security is to be given by paying the required sum into Court, or by giving to the satisfaction of the Registrar, security for such sum in another form.

c)In the event that security is not given before or within the period of the stay, then the defendant has leave to make an application under r 254 to seek an order striking out the proceeding for non-compliance. The application may be made by memorandum.

[79]             There  is  a  settlement  conference  on 4 May 2005.    Given the order I have made as to security, I think it is appropriate that the conference still take place.

Costs

[80]The Council is entitled to an award of costs.

[81]             Accordingly I make an order for costs on a 2B basis together with disbursements as fixed by the Registrar.

Dated at Auckland onatam/pm.

Associate Judge Sargisson