Patel v Patel

[2023] NZHC 1466

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2020-404-1927

[2023] NZHC 1466

BETWEEN

JAYSHREE RATILAL PATEL

Plaintiff

AND

HEMANTKUMAR RATILAL PATEL

First Defendant

AND

HEMANTKUMAR RATILAL PATEL

as executor/trustee of the estates of Ratilal Parbhu Patel and Shanta Patel Second Defendant

AND

RITA PATEL

Third Defendant

AND

KRISAJ PROPERTIES LIMITED

Fourth Defendant

Hearing:	On the papers
Counsel:	Plaintiff in person supported by K Magbool as McKenzie friend K B Arthur for the Defendants
Judgment:	13 June 2023

JUDGMENT OF HARLAND J AS TO COSTS

Introduction

[1]                 This judgment addresses an application for costs made by the first, third and fourth defendants who successfully defended the claim by the plaintiff, being a derivative claim in equity on behalf of the plaintiff and first defendant’s late parents’ estates, that half of the value of certain properties owned by the first, third and fourth

PATEL v PATEL [2023] NZHC 1466 [13 June 2023]

defendants were held in a constructive trust by them for the beneficiaries of their mother’s estate.

[2]                 I issued my reserved judgment in respect of this matter on 20 December 2022 dismissing the plaintiff’s claims against any of the defendants.1 Although observing that costs would normally follow the event, I asked the defendants to carefully consider whether they wished to advance an application for costs. The first, third and fourth defendants have applied for an award of costs on a 2B basis, totalling $58,316 plus disbursements of $550. The plaintiff asks the Court to reduce the claim on account of her financial circumstances.

The application for costs and response to it

[3]                 Ms Arthur acknowledged that the Court has discretion in awarding costs. However, she submitted costs following the event is a fundamental principle and the assessment as to the amount to be awarded must be predictable, with any departure from the rules justified only on a principled basis.2

[4]                 Ms Arthur emphasised that the fact the plaintiff represented herself should not be a shield to her liability for costs as the losing party.3 Ms Arthur noted the plaintiff was aware she would be liable for costs if she did not succeed in her claim, having previously been advised as such by Lang J4 and after costs were awarded against her in relation to an earlier Family Court dispute.5 Furthermore, Ms Arthur noted that the plaintiff was advised by Judges and Associate Judges to obtain legal advice on multiple occasions.6 Ms Arthur submitted a defendant should not be penalised because they instructed counsel, particularly in civil proceedings, because a defendant is required to continue participating in the proceeding to avoid judgment and consequently incurs costs while doing so.

1      Patel v Patel [2022] NZHC 3567.

2      Glaister v Amalgamated Dairies Ltd [2004] 2 NZLR 606 (CA) at [22].

3      Oceanic Palms Ltd v Danforth Nominees Ltd CA179/05, 15 December 2005 at [18].

4      During an interlocutory hearing on 15 July 2021, Lang J advised the plaintiff that she would be liable for significant costs if she lost.

5      Patel v Patel [2020] NZFC 7937.

6      Minute of Associate Judge Bell, 10 February 2021; Minute of Lang J, 15 July 2021; and Minute of Harland J, 3 February 2022.

[5]                 Ms Arthur submitted that all the defendants’ steps were reasonably required, sometimes in response to steps taken by the plaintiff which resulted in costs that were either unnecessary or unlikely to have been incurred if she had been advised or represented. In particular, Ms Arthur pointed to the interlocutory hearing on 16 March 2022 in relation to an application for joinder. In that hearing, the plaintiff said she would not bring new claims against the third defendant, however, afterwards, she filed the sixth amended statement of claim doing just that.

[6]                 As well, Ms Arthur submitted that further costs were incurred by the defendants that would usually have been met by the plaintiff, such as preparing the chronology and common bundle.

[7]                 Ms Arthur’s overall argument was that represented parties should not suffer or be penalised because of a self-represented party.

[8]                 As outlined above, the plaintiff requested that the amount of costs she is ordered to pay be kept to the minimum amount possible due to her financial circumstances which she submitted are “not all that great”. However, no affidavit outlining her financial position was provided.

Legal principles

[9]                 The starting point is the general principles about costs set out in the High Court Rules 2016 (the Rules).7 The exercise of the Court’s discretion must be guided by the principles provided in r 14.2 which, most relevantly, for present purposes include that the unsuccessful party to a proceeding should pay costs to the successful party (“costs follow the event”),8 and the determination of costs should reflect the complexity and significance of the proceeding.9 The Court should also take a realistic and holistic approach to success, having regard to many factors, including what was sought to be achieved by the proceeding and the parties’ positions in relation to it. This discretion must be exercised judicially.10 Ultimately, the Court must make an assessment of the

7      High Court Rules 2016, pt 14.

8      Rule 14.2(1)(a).

9      Rule 14.2(1)(b).

10     Manukau Golf Club Inc v Shoye Venture Ltd [2012] NZSC 109, [2013] 1 NZLR 305 at [7].

overall justice as between the particular parties.11 The High Court Rules provide a guide in relation to this objective, but should not act as an inflexible barrier to this goal.12

[10]             The Court retains discretion in awarding costs. A reduction may be made if “some other reason” apart from those listed under r 14.7 exists which justifies a reduction despite the principle that determining costs should be predictable or expeditious.13

Discussion

[11]             At the outset, I note the costs sought by the defendants are reasonable and the nature and complexity of the proceedings was such that they are appropriately categorised as 2B, being proceedings “of average complexity requiring counsel of skill and experience considered average in the High Court”.14

[12]             The defendants are the successful party to the proceeding. The plaintiff’s claims were dismissed.15 As outlined in The Law of Costs in New Zealand:16

It is fair that the party that is put to cost in successfully bringing or defending a proceeding is compensated for some or all of its costs incurred in doing so. That party has been required to engage in legal processes, and put to cost, in circumstances in which its rights or position have ultimately been vindicated.

[13]             I am satisfied that the steps taken by the first, third and fourth defendants were reasonable and were necessary to respond to the plaintiff’s claim. Therefore, my initial view is that the full costs claimed by the defendants should be awarded.

[14]             I turn now to consider whether there are any circumstances that require a departure from this initial approach.

11     Kawarau Jet Services Holdings Ltd v Queenstown Lakes District Council HC Invercargill CIV- 2008-425-518, 19 May 2009 at [18].

12     Matthew Casey Sim’s Court Practice (NZ) (online ed, LexisNexis) at [HCR 14.1.3].

13     High Court Rules, r 14.7(g).

14     Rule 14.3(1).

15     Patel v Patel, above n 1, at [180].

16     David Bullock and Tim Mullins The Law of Costs in New Zealand (LexisNexis, Wellington, 2022) at [1.3].

[15]             I am not prepared to make a finding that the plaintiff’s actions were generally unreasonable. However, it is important to note that she sought to amend her pleading to include causes of action against the third defendant shortly before the trial.

Self-representation

[16]             Generally speaking, an unsuccessful litigant in person is liable to pay costs to a represented party.17 As the Court of Appeal found in Oceanic Palm Ltd, there is no principle distinguishing lay litigants from represented ones, and that, “although some indulgence may be accorded to lay litigants, in principle they should be subject to the same costs awards as any other party.”18 Although an unrepresented party should not be penalised simply on that account, if the result of the self-representation results in an extra costs burden on a represented party, then that burden may be recognised when costs are awarded. 19

[17]             I recognise that a lack of knowledge and understanding of court procedures, in most cases, comes with the territory of being self-represented, and that this can result in extra costs being incurred. Ms Arthur submits that some of the plaintiff’s conduct which has resulted in the defendants having to respond and incur costs could be attributable to her self-representation, such as making allegations without evidence, pursuing irrelevant claims, and withholding documents. As well, Ms Arthur submitted that interlocutory hearings were required as a result of the plaintiff’s lack of representation or advice.

[18]             In Oceanic Palms Ltd, Oceanic continued using an inappropriate procedure despite having been warned of doing so. Similarly, the plaintiff was advised by several judicial officers to obtain legal advice in relation to procedural matters but did not act on that advice. Had she done so, the costs being claimed now would likely be less.

[19]             Despite the Court’s discretion in awarding costs, the Supreme Court has made clear that the costs regime set out in the Rules means “there is a strong implication that a Court is to apply the regime in the absence of some reason to the contrary.”20

17     Above n 16, at [2.45].

18 Above n 3, at [18].

19     Belling v Belling (1996) 9 PRNZ 296, citing Aplin v Lagan (1993) 10 FRNZ 562 at 576.

20     Manukau Golf Club Inc, above n 10, at [7] citing Mansfield Drycleaners Ltd v Quinny’s Drycleaning (Dentice Drycleaning Upper Hutt) Ltd (2002) 16 PRNZ 662 (CA) at [27].

Although r 14.7(g) does provide an avenue for a reduction of costs, I cannot find a satisfactory argument in relation to the plaintiff’s self-representation that would justify a departure from the principled basis of awarding costs in a predictable and expeditious manner.

The plaintiff ’s financial situation

[20]             The plaintiff referred in her submissions to her financial position not being “all that great”. Indeed, the fees associated with obtaining legal advice and/or representation likely contributed to, or were the sole cause of, the plaintiff opting to represent herself.

[21]             For the purposes of r 14.7(g), financial hardship is a relevant factor which may be taken into account,21 but it is not an answer to a claim for costs.22 There is also a preference for the party who is contesting a costs claim on the basis of financial matters to provide an affidavit of their limited financial means or financial hardship they would experience.23 As referred to above however, the plaintiff has not provided such an affidavit.

[22]             Other cases, however, have adopted a different approach in relation to financial hardship and r 14.7(g). Taking into account financial circumstances within the scope of r 14.7(g) was held in Singh v Immigration and Protection Tribunal to “create a precedent of potentially very wide application and ultimately would not be justified having regard to the other, more specific provisions of the relevant rules.”24 This reasoning was agreed with in Foni v Foliaki, wherein Muir J considered that “abatement of costs awards because of personal circumstances will not typically be justified” and that the discretion should be reserved for exceptional cases.25

21 Edwards v Bridge [2019] NZHC 3138 at [19].

22 At [19], citing Chesterfields Preschools Ltd v Commissioner of Inland Revenue [2011] NZCA 640 at [7]; Brown v The New Zealand Law Society [2018] NZHC 1692 at [9]; Craig v Keith [2017] NZHC 2664, [2017] NZFLR 899 at [23]; Tuck v Keedwell [2016] NZHC 794 at [11]; Te Whare O Te Kaitiaki Ngahere Inc v West Coast Regional Council [2014] NZHC 2969 at [16]; and Simester v Tauranga Cruise Tourism Operators Association Inc [2015] NZHC 2133 at [15].

23     Lowe v Auckland Family Court [2017] NZHC 656 at [5]; and Craig v Keith, above n 22, at [22].

24     Singh v Immigration and Protection Tribunal [2014] NZHC 2065 at [8].

25     Foni v Foliaki [2018] NZHC 3126 at [11].

Result

[23]             Ultimately, the defendants have incurred costs to defend against claims brought against them, were successful in the proceeding, and have acted reasonably throughout. It would be unfair and unjust to deny them costs on the basis of the plaintiff’s financial situation (in relation to which she has provided no supporting evidence) or her self-representation.

[24]             The plaintiff is ordered to pay the first, second and third defendants’ costs and disbursements. I award costs and disbursements as outlined in appendix 1 of the application, being a total amount of $58,866.

[25]             Interest is awarded from the date of judgment26 to the date of payment in accordance with pt 1 and ss 9 and 10 of the Interest on Money Claims Act 2016.

Harland J

Solicitors:

K B Arthur, Barrister Copy to:

J R Patel, Plaintiff.

26     Patel v Patel, above n 1.