NR v MR
[2014] NZCA 623
•18 December 2014 at 11.00 am
| ORDER PERMANENTLY FORBIDDING PUBLICATION OF THE NAMES OR PARTICULARS LIKELY TO LEAD TO THE IDENTIFICATION OF THE APPELLANT OR THE FIRST RESPONDENT, PURSUANT TO S 39(1) OF THE HARASSMENT ACT 1997. NOTE: LOWER COURT ORDERS PROHIBITING PUBLICATION OF NAMES OR IDENTIFYING PARTICULARS OF THE APPELLANT OR FIRST RESPONDENT PURSUANT TO S 39 OF THE HARASSMENT ACT 1997 REMAIN IN FORCE. |
| IN THE Court of appeal OF new Zealand |
| CA443/2014 CA465/2014 CA522/2014 CA532/2014 [2014] NZCA 623 |
| BETWEEN | NR Appellant |
| AND | MR Respondent |
| CA460/2014 | |
| AND BETWEEN | NR Appellant |
| AND | DISTRICT COURT AT AUCKLAND MR JACKSON RUSSELL |
| CA461/2014 | |
| AND BETWEEN | NR Appellant |
| AND | DISTRICT COURT AT AUCKLAND First Respondent MR Second Respondent |
| Hearing: | 24 November 2014 |
| Court: | French, Miller and Cooper JJ |
| Counsel: | Appellant in person No appearance for District Court at Auckland G Latimour and AJB Holmes for MR No appearance for Jackson Russell |
| Judgment: | 18 December 2014 at 11.00 am |
JUDGMENT OF THE COURT
AThe applications are dismissed.
BIn accordance with the views of the majority, NR must pay MR costs as for a standard application on a band A basis with a 50 per cent uplift, and usual disbursements. We certify for second counsel.
COrder permanently forbidding publication of the names or particulars likely to lead to the identification of the appellant or the first respondent, pursuant to s 39(1) of the Harassment Act 1997.
____________________________________________________________________
REASONS
Miller J [1]
French and Cooper JJ [48]
MILLER J
NR has six appeals pending in this Court, all directed at the second respondent MR and all arising one way or another out of a harassment order that she obtained against him. They are to be heard together.
A seventh appeal, CA144/2014, has been dismissed. I will call it the contempt appeal.
The appeals and the lower court proceedings to which they relate are helpfully recorded in the attached flow chart.
This judgment responds to interlocutory applications by NR for orders directing disclosure of MR’s litigation funding arrangements and barring her solicitors, Wilson Harle and Mr Browne, and counsel, Messrs Hollyman and Holmes, from acting for her in the appeals. Having regard to the nature of the applications, independent counsel, Mr Latimour, appeared for MR.
Narrative
I need not survey the entire history of the litigation, but some narrative is needed to set the applications in context.
MR was a sex worker at an Auckland brothel where she worked under a false name. NR paid her for sexual services once a week for about two months. He became emotionally attached to her, but his feelings were not reciprocated and she refused his request that she make herself available exclusively to him.
On 8 February 2012 NR paid for three hours of MR’s services. While with her he gave her a mobile phone as a gift. He demonstrated the phone’s features using his own phone, inadvertently revealing that he had been searching her car’s registration number. She immediately insisted that he leave the premises, making it clear she would not see him again. She tried to return the phone and refund some of the money he had paid.
NR would not accept MR’s decision to have nothing more to do with him. Later the same day he returned to the brothel with a letter, in which he apologised and sought contact with her. Between 8 and 10 February he attempted to make further bookings with MR, but the brothel’s management refused him. On 14 February he met the owner of the brothel and asked that MR be ordered to see him. He was refused. On the same day he wrote to MR through the brothel. Later the same week he again returned to the brothel, and this time he was banned from the premises. On 15 February he waited nearby to see MR, and on 5 March he sent an email to the brothel asking to speak to her and advising that if his request was refused he would find another way to do so. He made another such attempt on 12 March.
On 2 May 2012 NR instructed a private investigator to obtain personal details about MR, including her real name and contact details. It appears that the private investigator contacted MR’s mother and former landlord to obtain her telephone number and address.
On 5 May 2012 NR sent an email to MR at her personal email address threatening proceedings unless she met him so that he could present “things from his standpoint”, and on 10 May he phoned her personal mobile phone twice. On 10 May he also sent her another letter via the brothel, threatening proceedings and demanding damages and a meeting with MR to “discuss the incident”.
Lawyers became involved but NR was not deterred. In dealings with her lawyers he continued to seek meetings with MR, at which he appeared to contemplate that he would persuade her he did not mean to obtain her true identity and she would apologise for the hurt she had caused him.
This narrative was not disputed when, at a hearing on 9 May 2013, Judge Sharp made a harassment order against NR, with a term of five years. The Judge drew attention to disturbing comments that NR had made in correspondence and commented adversely on his presentation in court. She concluded that NR is obsessed with MR and held that her fears of him were well-founded.
NR appealed the harassment order and enjoyed some success before Duffy J. The Judge found the order plainly justified, but she doubted whether NR’s threats of legal proceedings could amount to harassment and noted that he had otherwise complied with the restraining order; further, MR could always apply for a new one; accordingly, 12 months was an appropriate term. That period having passed by the time her judgment was delivered, the order was set aside. She also reduced (to scale) the indemnity costs awarded in the District Court.
In the meantime NR had launched civil proceedings against MR in the District Court. He sued for breach of contract and unjust enrichment, in defamation, for malicious prosecution of her harassment application, for breaches of confidence and privacy, and for breaches of the Consumer Guarantees Act 1993. The contract cause of action pleaded that in return for gifts MR agreed to express “appreciation and gratitude”. It may have been framed in that way because a sex worker cannot be compelled to provide sexual services. The Consumer Guarantees Act claim alleged that MR’s services were not carried out with reasonable care and skill, in that she was supposed to provide him pleasure but instead exhibited “unreasonably excessive negative emotions” toward him during the mobile phone incident. The relief sought was damages. Judge Gibson struck out all of NR’s claims, and Andrews J dismissed an appeal and refused leave to appeal to this Court.
NR has been required to pay costs on a number of occasions, including indemnity costs on the striking out of his civil proceedings in the District Court. He sought judicial review of that award, securing a minor reduction in the costs awarded.
From an early stage NR has sought to discourage or disqualify MR’s solicitors – initially Jackson Russell and now Wilson Harle – and counsel. In January 2013 he applied to the High Court for orders that her then advisors be held in contempt. That was met with a successful application for orders that his application be struck out. That judgment of Woodhouse J was the subject of the contempt appeal.
This Court’s judgment in the contempt appeal was delivered on 30 October 2014 after a hearing on 31 July. NR asked that Harrison and Cooper JJ recuse themselves. That application was dismissed. NR also complained that he had had inadequate time to prepare, but the Court was satisfied that he was fully acquainted with the materials and observed that he had filed comprehensive papers. The Court recorded that NR had attacked Woodhouse J and counsel, describing this as part of a pattern of escalation of peripheral litigation. The Court noted that NR often referred in argument to a litigation funding agreement between MR and third parties, without explaining how such agreement might be relevant to the litigation, especially in circumstances where MR was defending rather than pursuing a claim. The Court dismissed all of NR’s complaints, finding them at best misguided. None of the conduct could possibly amount to contempt.
This narrative is dense but nonetheless incomplete. The various judgments below reveal that a remarkable number of interlocutory applications have been made in the various proceedings.
The applications
NR seeks orders requiring MR, Wilson Harle, Mr Holmes and Mr Hollyman to disclose by way of affidavits any litigation funding arrangement, including without limitation any contingent or conditional fees agreements, in relation to any of the proceedings between NR and MR. The grounds are, inter alia, that the funding affects the interests of justice and is unlawful, that NR is entitled to know who the “real parties” are, and that the funding arrangements “have direct relevance to the subject matter of the appeals” and to the issue of costs. NR asserts in a lengthy appendix that, among other things, MR has claimed she is impecunious but her lawyers’ fees exceed $415,000, that her lawyers are overcharging her, that if she cannot pay her lawyers someone else must be doing so, or there is a conditional fee arrangement, or her lawyers are acting pro bono. All of these possibilities are said to present concerns. In particular, it is said that it would not be appropriate for MR’s lawyers to charge only what she wins by way of costs awards, for that would give the lawyers an improper motivation to win by any means. It is also suggested that she may have assigned her cause of action under the Harassment Act 1997 to her lawyers.
NR also seeks an order barring Wilson Harle, Mr Browne, Mr Holmes and Mr Hollyman from acting as legal representatives of MR in all current proceedings in this Court. He maintains that they have breached their obligations to the courts. He instances failures to cite adverse authorities and legal principles; failures to comply with discovery orders against MR; improper assertion of without prejudice privilege; reliance on authorities that are said not to support the propositions argued for; overcharging by, among other things, applying to strike out the contempt proceeding; manipulating court processes; acting when a conflict of interest exists; misrepresenting evidence and pleadings in argument; unlawfully disclosing privileged information; and oppressing him by late service of documents and arguing non-pleaded issues.
The hearing before us
As noted, NR filed his applications on 3 October 2014. With the applications he filed an affidavit. On the same day Wild J issued a minute directing that all six appeals be heard together and attaching two appendices, one describing the subject matter of each appeal and the other the state of play in each of them.
On 16 October Wilson Harle asked that the applications be heard before the substantive appeals. By memorandum dated 20 October NR agreed, adding that should he succeed in debarring counsel he might seek further orders “striking out the infected documents filed by the current lawyers” and allowing reasonable time for MR to replead.
By minute dated 22 October Wild J directed that the applications would be heard on 24 November and set a timetable for the exchange of papers in opposition and submissions on each side. He explained that 24 November was the last confirmed available date for the application, which needed to be disposed of promptly.
NR complained by memorandum dated 3 November that the timetable left him inadequate time to prepare. He explained that he had a number of legal matters requiring his constant attention. Most of these comprised obligations to file cases on appeal. He said that if an adjournment were not granted a fair minded lay observer might reasonably apprehend bias, and alleged that Wild J was in fact biased, the Judge having dealt (in his view) summarily with his application for review of a Registrar’s decision refusing disclosure to NR of information relating to payment or waiver of filing fees by MR, who has sought to appeal Duffy J’s decision. He also indicated that he would seek recusal of Cooper J, who had by then been assigned to the panel on 24 November. He complained that MR had failed to file an affidavit in support of her opposition but he still needed to adduce additional documentary evidence relating to matters not covered in his affidavit. Finally, he complained that MR’s decision to have independent counsel represent her at the hearing of the application was nothing but a thinly veiled attempt to have her current lawyers continue to act, since they had prepared the papers in opposition.
By minute dated 6 November Wild J declined a request for an adjournment, but he did extend time for NR to file the cases of appeal in the other appeals.
In due course NR filed submissions in the hearing before us, under protest. He also filed a notice of application for leave to appeal to the Supreme Court in relation to Wild J’s review of the Registrar’s decision and filed an affidavit which he had sworn in support of that application. We received these documents. The point, as I understand it, was that NR wished to draw our attention to allegations that Wild J misconducted himself by, among other things, setting such a short timetable for the hearing of these applications.
At the hearing before us NR first pursued his request that Cooper J recuse himself on account of an interlocutory judgment he delivered in the judicial review proceeding. That request was refused. It has already been decided, in effect, because precisely the same allegation was made in the contempt appeal, on which Cooper J also sat. I refer to para [5] of that judgment, which I adopt.
NR next pursued his request for an adjournment. He repeated that he had been heavily committed to appeals which he is prosecuting in this Court and in the Supreme Court. Many papers are involved, and they have taken him a long time to prepare. He was unable to prepare adequately his own submissions, bundle of documents and bundle of authorities, and he received MR’s submissions only one clear day before the hearing.
We refused to adjourn. The papers already filed were detailed and comprehensive, and NR is an intelligent and capable person who had plainly mastered the background materials and studied the authorities. As noted, Wild J gave him an extension of time in which to file cases on appeal in his appeals. Nor would any purpose be served by giving him more time, for the result is inevitable. For reasons which I will shortly explain, neither application has any prospect of success.
NR also objected to a bundle of materials described as “case for allegations of misconduct” which was supplied for the hearing by Wilson Harle. Mr Latimour explained that this bundle comprises materials on which NR relies but has not produced here or which form part of MR’s response. We have had recourse to it only to the extent necessary to check details referred to in the submissions or in the case prepared for these applications.
These being interlocutory applications, each side was given 15 minutes in which to speak to their substantive submissions, with NR having five minutes in reply.
The application to debar solicitors and counsel
The relevant principles are well-settled. This Court has concisely summarised them as follows:
[32] The Court has jurisdiction to debar counsel or solicitors from acting where that is necessary in order for justice to be done or to be seen to be done. Removal will usually be ordered where counsel will not be able to comply with his or her duties to the Court: where there is a conflict of interest, or where there is a real risk that a client will not be represented with objectivity. The threshold for removal is a high one, requiring something extraordinary. The Court should guard against allowing removal applications to be used as a tactical weapon to disadvantage the opposing party.
NR’s allegations focus on alleged failures to draw to the attention of various courts’ relevant authorities, evidence or legal principles. He also complains that MR’s lawyers improperly disclosed privileged information to a court. Every one of the 10 kinds of behaviour instanced in his application can be and is policed by the court concerned, or by professional disciplinary bodies. Such conduct, even if made out, does not warrant a lawyer’s removal at the request of the opposing party.
I observe too that in this case no judge (beginning with Judge Gibson) has sustained NR’s criticisms of MR’s lawyers. For example, Woodhouse J dismissed what appear to be some of the same, or very similar, complaints. No conflict of interest has been identified, save for an alleged economic interest in the litigation as a source of fees: of course such interest is held in common with every lawyer. Allegations of overcharging have not been made out in any court, and they are of no concern to NR, who can rely upon the courts to ensure that costs he must pay MR are reasonable. Indeed, he himself points out that Judge Gibson did just that when disallowing part of the claim for indemnity costs.
The Court must also guard against tactical applications designed to disadvantage the opposing party. MR’s view is that NR’s applications to debar counsel and secure disclosure of funding arrangements are designed to separate her from legal representation so he can harass her all the more effectively. Naturally NR does not accept that; he maintains that he is merely exercising his lawful rights. But a series of courts have made grave findings against him, and those findings cannot be ignored merely because NR will challenge them on appeal. Woodhouse J, for instance, characterised NR’s contempt proceeding as an abuse of process and an attempt to further victimise and harass MR; on striking the application out he awarded indemnity costs. As noted, an appeal against that judgment has been dismissed. Katz J dismissed very similar allegations of impropriety against MR and Jackson Russell; I note those allegations included a claim that Jackson Russell were champertously funding MR’s defence.
These findings having been made, this Court will not countenance removing MR’s lawyers. NR’s application is hopeless. It should not have been made.
The application for disclosure of litigation funding arrangements
I have summarised NR’s application above. It was particularised not only in the appendix but also in his affidavit in support. MR resists it on the grounds that there is no duty to disclose funding arrangements of the sort NR speculates upon and the information he seeks is not relevant to the appeals.
The leading authority is Waterhouse v Contractors Bonding Ltd. That case establishes that in some circumstances litigation funding arrangements may be relevant: notably, where a stay may be justified on the ground that a cause of action has been assigned impermissibly, or on costs applications against the funder directly where the litigation would not have been undertaken without the funder’s involvement and the funder substantially controls or benefits from it. In such cases a court may require disclosure not only of the funder’s involvement but also the funding arrangement.
However, the Supreme Court was at pains to emphasise that it was concerned with a narrow class of third party litigation funders. The Court specified that its judgment did not address funding by relatives or associated bodies, or conditional fee arrangements with lawyers.
NR argues that the mere potential for improper litigation funding justifies disclosure in a case such as the present. That cannot be correct. None of the kinds of application to which the Supreme Court referred in Contractors Bonding has been made, or could be: MR is not a plaintiff, so there arises no question of improper assignment of a cause of action, or of security for costs, and she has not been ordered to pay costs at all, let alone costs that NR might claim against a litigation funder. I repeat that Contractors Bonding was concerned with third party litigation funders without whose support a claim would not have been brought. MR is a defendant. She seeks no compensation from NR. Any benefit which a litigation funder might obtain, then, is confined to the cost of MR’s legal services.
I assume that MR’s lawyers may work on a conditional fee arrangement, but such arrangements are permitted. They may even work pro bono, receiving only such amount by way of fees as NR is ordered to pay. None of this is of concern to a court, which does not ordinarily supervise litigation funding and finds inherently nothing wrong with a lawyer acting on the basis that he or she will be paid on a win and not on a loss. The court’s only concern is to ensure that NR is not required to pay more by way of costs than is needed to indemnify MR. That concern can readily be addressed, if it be thought necessary, by requiring a solicitor’s undertaking, or for that matter an affidavit, in any given case to the effect that MR has incurred a liability to pay not less than the sum awarded. It does not require that NR be permitted to intervene in the relationship between MR and her lawyers.
Further, I accept Mr Latimour’s submission that to require disclosure in this case would not be in the interests of justice. The application appears to be part of NR’s attempt to remove or discourage MR’s solicitors and counsel. There is force in Mr Latimour’s submission that NR’s request that lawyers and counsel be required to swear affidavits is a transparent attempt to disqualify them from continuing to act.
I observe that the same arguments were advanced before Katz J, who dismissed them succinctly. The application for disclosure should not have been pursued in this Court.
Decision
The Court being unanimous in the result, both applications are dismissed.
Costs
There is a difference of opinion among us on this issue and I am in the minority.
We inquired of Mr Latimour whether he sought indemnity costs. He did not, but he did seek increased costs.
In my opinion there is a settled distinction between indemnity and increased costs. Indemnity costs are calculated as a proportion of actual costs. They may be awarded where, for example, an allegation ought never have been made. Increased costs are awarded by reference to steps and scales in the costs rules. They may be awarded where, for example, the losing party has contributed unreasonably to the time taken for a given step in the proceeding. So far as the present applications are concerned, my view is that NR’s conduct does not warrant increased costs.
FRENCH AND COOPER JJ
We agree that these applications should be dismissed, and with Miller J’s characterisation of them as applications that should not have been made. We also agree with the reasons that he has expressed for reaching that conclusion.
We are however unable to agree that the respondent should not have increased costs. We are of the view that neither Bradbury v Westpac Banking Corp nor Holdfast NZ Ltd v Selleys Pty Ltd requires that outcome.
Rule 53E(2)(b)(ii) of the Court of Appeal (Civil) Rules 2005 provides that the Court may order a party to pay increased costs if the party opposing costs has contributed unnecessarily to the time or expense of the appeal or a step in it by “taking or pursuing an unnecessary step or an argument that lacks merit.”
In our opinion, the present applications fall readily within those words. They are based on issues previously advanced and dismissed as meritless in the High Court. The arguments are devoid of merit. Repeating them on appeal was an unnecessary step. By taking that course, NR has contributed unnecessarily to the time and expense of the appeal.
In a case such as this, we do not consider that there needs to be a blow by blow comparison between time properly taken in respect of a particular step and the appropriate uplift for each such step. All of the steps that have been necessary to oppose the application are steps that should not have been necessary, and have been taken at a cost that it should not have been necessary to incur.
The fact that indemnity costs were not sought does not mean that r 53E(2)(b)(ii) should not be applied. In our judgment, the appropriate order to make on the dismissal of the applications is that NR should pay MR’s costs as for a standard appeal on a band A basis, but uplifted by 50 per cent, together with usual disbursements. We certify for second counsel.
In the interests of MR and the public we make an order permanently forbidding publication of the names or particulars likely to lead to the identification of the appellant or the first respondent, pursuant to s 39(1) of the Harassment Act 1997.
Solicitors:
Wilson Harle, Auckland for MR
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