Oceanic Palms Limited v Disputes Tribunal at Auckland HC Auckland Civ-2005-404-399

[2005] NZHC 1757

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2005-404-399

BETWEEN

OCEANIC PALMS LIMITED THE DISPUTES TRIBUNAL AT

AUCKLAND

Plaintiffs

AND

THE DISPUTES TRIBUNAL AT AUCKLAND

First Defendant

AND

DANFORTH NOMINEES LIMITED

Second Defendant

Hearing:

23 March 2005

Appearances: B Hubbard (in person) for Plaintiff No appearance for First Defendant V Dale for Second Defendant

Judgment:      13 May 2005

RESERVED JUDGMENT OF COURTNEY J

Solicitors:           Grove Darlow, P O Box 2882, Auckland

Fax: [phone]

B Hubbard, 44a Alfred Street, Onehunga, Auckland

OCEANIC PALMS LTD & ANOR V DISPUTES TRIBUNAL AT AUCKLAND & ANOR HC AK CIV-2005- 404-399 [13 May 2005]

[1]    The plaintiff (Oceanic) and the second defendant (Danforth) were parties in a Disputes Tribunal claim and counterclaim. Danforth succeeded and Oceanic failed. Oceanic applied unsuccessfully to the Disputes Tribunal for a re-hearing. It then appealed unsuccessfully to the District Court.

[2]    Oceanic subsequently applied for judicial review of the Disputes Tribunal’s original decision and its refusal to grant a re-hearing. Danforth applied for security for costs. In a judgment dated 10 December 2004 Associate Judge Sargisson ordered that Oceanic give security for costs in the sum of $6,500 on or before 24 January 2005, staying the judicial review proceedings until the security had been given.

[3]    Oceanic did not pay the security by the required date. Instead, in February 2005, it filed fresh proceedings by way of an application for an order staying enforcement of Associate Judge Sargisson’s decision 10 December 2004. They were met with a notice and affidavit in opposition and an application by Danforth striking out the proceeding on the grounds that the issues were already before the Court in  the judicial review proceedings.

[4]    On 14 March 2005 Oceanic filed a notice of discontinuance together with an affidavit by its director, Mr Hubbard (who has been and continues to conduct the defence for Oceanic) explaining that he did not realise that the fresh proceedings were inappropriate.

[5]Danforth seeks costs on the discontinuance.

Danforth’s Application for Costs

[6]    Danforth seeks costs of $3,790. These are calculated on a 2B basis and cover the preparing and filing of papers in opposition to the original proceedings, three mentions hearings, the application to strike out the proceedings and the memorandum as to costs. Danforth asserts, correctly, that a court may make costs against lay litigants (Belling v Belling (1996) 9 PRNZ 296) and also that the Court has inherent jurisdiction to order costs against a party who invoked the Court’s aid in

a manner which is nullity, thereby putting the other party to expense (Hartner Trustee v Colin McKenzie Plastering (2001) 15 PRNZ 318).

[7]    The thrust of Danforth’s application is that Oceanic’s proceeding had  no basis and put Danforth to quite unnecessary trouble and expense.

[8]    Mr Hubbard takes an entirely practical view of the position. He says, essentially, that as a litigant in person (on behalf of his company) he did not know that the proceedings were inappropriate and discontinued them as soon as he was told of the correct format required. He asserts that Danforth had no need to go to the length it did to oppose the application. He points out that it would be inequitable to require him to pay costs of $3,790 for no more than ignorance of the correct court procedure when the sum in issue is only $4,050.

Decision

[9]    In the normal course there would be no question that costs on the normal 2B basis would be awarded against Oceanic. It elected to follow an entirely inappropriate procedure and put Danforth to quite unnecessary expense. The only question is whether it should be allowed leeway because it is represented by its director in person.

[10]   Danforth maintains that Oceanic was made aware of its error well before it chose to discontinue. Its solicitor, Ms Fletcher, has filed a memorandum advising that oral submissions were made at a mentions hearing on 10 February 2005 to the effect that the procedure adopted by Oceanic was incorrect. Those submissions were recorded in a Minute by Cooper J 10 February 2005, who went on to note that Mr Hubbard was clearly not in a position to respond to the issue and directed that if the procedural issue was to be pursued Danforth should make an appropriate application on or before 23 February 2005 (which it did).

[11]   In these circumstances, it is not open to Oceanic to say that it  discontinued the proceedings as the first opportunity. Plainly, the problem it faced was flagged on

10 February 2005. Oceanic could and should have realised its difficulty and

discontinued then, rather than putting Danforth to the expense of the application to strike out.

[12]   It is obvious that the reason Oceanic failed to recognise the problem it faced (and indeed the reason it made the error in the first place) is that it is  has chosen to  be represented by its director personally, rather than engaging counsel. That is its decision entirely. However, the reality is that litigants in person must be taken to accept the dangers of managing the court process without legal assistance. I cannot see any reason to depart from the usual course I would follow in awarding costs. I therefore award Danforth costs of $3,790 on the basis set out at paragraph 3 of its memorandum 31 March 2005.

P Courtney J