Rafiq v Latitude Financial Services Limited

[2024] NZHC 253

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2023-404-108

[2024] NZHC 253

UNDER

Section 56(3) of the Senior Courts Act 2016

IN THE MATTER

Of an application for leave to appeal to the Court of Appeal

BETWEEN

RAZDAN RAFIQ

Appellant

AND

LATITUDE FINANCIAL SERVICES LIMITED

First Respondent

AND

BAYCORP (NZ) LIMITED

Second Respondent

Hearing:

7 February 2024

Appearances:

Applicant self-represented

W R Potter and F R Porter for First Respondent

Judgment:

21 February 2024

JUDGMENT OF GRICE J

(Regarding application for leave to appeal)

[1]                 Mr Rafiq, the appellant, seeks leave to appeal two related decisions. The first is a judgment ordering security for costs in relation to a summary judgment application and substantive proceedings (the security for costs judgment).1 The second is a judgment making an order for costs following the first security for costs judgment (the

1      Rafiq v Latitude Financial Services Ltd [2023] NZHC 1690 [the security for costs judgment].

RAFIQ v LATITUDE FINANCIAL SERVICES LTD [2024] NZHC 253 [21 February 2024]

costs judgment).2 Mr Rafiq also seeks leave to vary or rescind the orders for security for costs.

[2]                 Mr Rafiq issued proceedings against two finance companies (the respondents) in relation to his credit position. The substantive proceedings brought by Mr Rafiq sought orders for damages against the respondents in the vicinity of $2 million for breaches of the Consumer Finance Act 2003 and an injunction for the deletion of   Mr Rafiq’s debt records.

[3]                 I found that the pleadings were difficult to follow and had little merit. I was in a better position than is usually the case, to consider the merits of the application for security at this early stage of the proceeding because affidavits had been filed dealing with the merits of the claims in the summary judgment application.

[4]                 The security for costs judgment ordered the appellant to pay $35,000 in total to be paid in tranches for the substantive proceedings. The first tranche to be paid was the $8,000 directed to be paid for the summary judgment stage.

[5]                 The costs judgment awarded costs of $6,116.50 on a 2B basis to the first respondent as the successful applicant.

Background

[6]                 I found Mr Rafiq’s statement of claim and supporting documentation to be largely unintelligible. The material before me indicated that Mr Rafiq’s summary judgment application was “highly unlikely” to succeed and the proceedings had little, if any, merit.3

[7]                 I found that Mr Rafiq was impecunious.4 At that stage Mr Rafiq was on a jobseeker benefit but had not put full details of his financial circumstances before the Court.

2      Rafiq v Latitude Financial Services Ltd [2023] NZHC 1831 [the costs judgment].

3      The security for costs judgment, above n 1, at [32].

4      The security for costs judgment, above n 1, at [37].

[8]                 Orders restraining Mr Rafiq from commencing or pursuing proceedings without leave of the Court expired shortly before Mr Rafiq filed the present proceedings for leave to appeal. In addition, it appears he was bankrupt or had recently been bankrupt, and owed costs that were ordered in other proceedings which he said he was appealing.

The law and grounds for leave to appeal

[9]                 Section 56(3) of the Senior Courts Act 2016 provides that orders or decisions of the High Court on interlocutory applications may only be appealed to the Court of Appeal if leave is given by the High Court. The Court of Appeal in Greendrake v District Court of New Zealand, citing Finewood Upholstery Ltd v Vaughan, set out the considerations relevant for leave to appeal under s 56(3) as follows:5

(a)a high threshold exists;

(b)the applicant must identify an arguable error of law or fact;

(c)the alleged error should be of general or public importance warranting determination or otherwise of sufficient importance to the applicant to outweigh the lack of general or precedential value;

(d)the circumstances must warrant incurring further delay; and

(e)the ultimate question is whether the interests of justice are served by granting leave.

[10]             Rule 7.49 of the High Court Rules 2016 (the Rules) provides for interlocutory orders to be varied or rescinded if shown to be wrong as follows:

(1) A party affected by an interlocutory order (whether made on a Judge’s own initiative or on an interlocutory application) or by a decision given on an interlocutory application may, instead of appealing against the order or decision, apply to the court to vary or rescind the order or decision, if that party considers that the order or decision is wrong.

[11]However, as noted in McGechan on Procedure:6

Rule 7.49 will generally only be engaged in the following circumstances:

5      Greendrake v District Court of New Zealand [2020] NZCA 122 at [6], citing Finewood Upholstery Ltd v Vaughan [2017] NZHC 1679 at [13].

6     J K Gorman and others McGechan on Procedure (looseleaf ed, Thomas Reuters) at [HR7.49.01].

(a)when there was not full argument at the initial hearing;

(b)if some relevant point of evidence was overlooked;

(c)if there has been a material change of circumstances; or

(d)some other special circumstance has arisen.7

[12]             Mr Rafiq argues in support of his application for variation and recission under r 7.49, and relying on the Court’s “unlimited common law jurisdiction”, that:

(a)there is strong merit to his claims;

(b)he is unable to progress the proceedings as he cannot pay the security for costs; and

(c)it is in the interests of justice.

[13]In support of the leave applications, Mr Rafiq says:

(a)There is strong merit to his claim and no arguable grounds for defences.

(b)There will be a substantial miscarriage of justice if he is not given leave to appeal.

(c)He is on a sickness benefit and cannot afford to pay security for costs, which was not taken into account by the Court in setting security.

(d)The Court lacked jurisdiction to make an order for costs on the security of costs application.

[14]             The first respondent says that the matter was fully canvassed in the High Court, the claims are unmeritorious, and leave should not be granted to appeal. It says that the application for variation or recission is inapt. There was full argument on the security for costs, the evidence before the Court was taken into account, there has not been a material change of circumstances, and no other special circumstance has arisen.

7      Carter v Coroner’s Court at Wellington [2015] NZHC 2998 at [11]; J v Attorney-General [2018] NZHC 1331 at [15]; and Gordon v Attorney-General [2022] NZHC 2801.

[15]             Mr Rafiq appeared in person in the Auckland High Court for the hearing of this application. He had not sought legal aid nor legal advice because he wished to represent himself. He said his benefit was to be reassessed on medical grounds. He said he is living in a van with family so is not paying rent but is paying court fines.

[16]             Mr Rafiq applied for an adjournment which was opposed by Mr Potter for the first respondent. Mr Rafiq said he had been recently assaulted and did not feel ready to argue the applications. However, Mr Rafiq ably argued in support of his applications and indicated that there was nothing further he wished to place before the Court. In view of these circumstances and the fact that the application related to a judgment delivered in early July 2023, I considered that it was not in the interests of justice to adjourn the leave to appeal hearing and declined to grant the adjournment.

Analysis

[17]             Mr Rafiq does not point to any error in the security for costs judgment for which leave is sought other than to say that the merits of his claim were strong and that the Court did not give sufficient weight to his personal financial circumstances.

[18]             Nothing that Mr Rafiq has put before the Court in this application indicates that the merits of his claim are any stronger now than at the time of the security for costs applications. At that time, I said:8

[33]   Despite the fact that this is an early stage of the proceedings, the state of the pleadings and material that Mr Rafiq relies on are virtually unintelligible. I am satisfied for the purposes of the security application that on the information before me the proceedings in general, and the application for summary judgment in particular, have little merit or chance of success.

[19]             In the security for costs judgment, I took into account the fact that Mr Rafiq was on a benefit, although I did not have the full details before me. Nor do I have those details now, but I do accept for the purposes of this application that Mr Rafiq is on a benefit, is paying fines and is unlikely to have anything in the way of assets.

8      The security for costs judgment, above n 1.

[20]             I do not consider that there is any merit to the appeal. Merits were considered in the security for costs judgment, as were Mr Rafiq’s financial circumstances. I acknowledge that the security, requiring the immediate payment of $8,000, may prevent Mr Rafiq’s pursuit of the summary judgment application.

[21]             However, I also bear in mind balancing interests of the plaintiff and defendant in awarding security for costs. McGechan on Procedure refers to the following passage from the Court of Appeal in A S McLachlan v MEL Network Ltd:9

The rule itself contemplates an order for security where the plaintiff will be unable to meet an adverse award of costs. That must be taken as contemplating also that an order for substantial security may, in effect, prevent the plaintiff from pursuing the claim. An order having that effect should be made only after careful consideration and in a case in which the claim has little chance of success. Access to the courts for a genuine plaintiff is not lightly to be denied.

Of course, the interests of defendants must also be weighed. They must be protected against being drawn into unjustified litigation, particularly where it is over-complicated and unnecessarily protracted.

[22]             Mr Rafiq also made submissions on his appeal against the costs order relying on the merits of the claim. However, I note the costs award was on a routine 2B basis with no uplift (or any other feature out of the ordinary) and followed the event. There is no merit in an appeal against that award.

[23]             In this case, the interests of justice dictate that leave to appeal not be granted in relation to the security for costs judgment nor the costs judgment. The proceedings have little, if any, merit. There are no grounds for appeal against either judgment that can be made out in the circumstances.

[24]The applications for leave to appeal are dismissed.

[25]             Similarly, no error nor other special circumstances support a variation or recission of the security for costs award.

9     McGechan on Procedure, above n 6, at [HR5.45.03], citing A S McLachlan v MEL Network Ltd

(2002) 16 PRNZ 747 (CA) at [15] and [16].

Grice J

Solicitors:

Frank Porter Co, Auckland