Sheeran v Masterton District Council

[2025] NZHC 1558

IN THE HIGH COURT OF NEW ZEALAND MASTERTON REGISTRY

I TE KŌTI MATUA O AOTEAROA WHAKAORIORI ROHE

CIV-2024-435-19

[2025] NZHC 1558

BETWEEN

LEON SHEERAN

Plaintiff

AND

MASTERTON DISTRICT COUNCIL

Defendant

Hearing:	On the papers
Counsel:	N D Chapman and L J Goodwin for Defendant Plaintiff (self-represented)
Judgment:	13 June 2025

JUDGMENT OF ASSOCIATE JUDGE SKELTON

[1]    In my judgment issued on 31 March 2025, I dismissed Mr Sheeran’s claim against the Masterton District Council (the Council) for lack of jurisdiction.1 I indicated my preliminary view that the Council is entitled to costs on a 2B basis. I suggested that a modest uplift may be appropriate under r 14.6(3)(b)(i), (ii) and (iii) of the High Court Rules 2016, and reasonable disbursements.2

[2]    The parties have been unable to agree costs. The Council now claims scale costs on a 2B basis ($38,240) with a 10 per cent uplift ($3,824) and disbursements ($793) in the total sum of $42,857.

[3]    Mr Sheeran has appealed my judgment. His response to the Council’s claim for costs is that it should not proceed until the appeal process has been completed. He requests a stay of the proceeding.

1      Sheeran v Masterton District Council [2025] NZHC 707.

2 At [36].

SHEERAN v MASTERTON DISTRICT COUNCIL [2025] NZHC 1558 [13 June 2025]

Stay of proceeding

[4]    Mr Sheeran’s application for stay is made by memorandum. There is no affidavit evidence in support. The grounds for the application appear to be that he has appealed my judgment, he has applied for legal aid in respect of his appeal, and he has applied for a “dispensation of costs” in the Court of Appeal. I understand this to mean a dispensation from paying security for costs in the Court of Appeal.

[5]Rule 12 of the Court of Appeal (Civil) Rules 2005 provides:

12       Stay of proceedings and execution

(1)None of the matters referred to in subclause (2) operate as—

(a)a stay of a proceeding in which a decision was given; or

(b)a stay of execution of that decision.

(2)The matters are—

(a)an application for leave to appeal; or

(b)the giving of that leave; or

(c)an appeal.

(3)Pending the determination of an application for leave to appeal or an appeal, the court appealed from or the Court may, on an interlocutory application,—

(a)order a stay of the proceeding in which the decision was given or a stay of the execution of the decision; or

(b)grant any interim relief.

(4)An order or a grant under subclause (3) may—

(a)relate to execution of the whole or part of the decision or to a particular form of execution:

(b)be subject to any conditions that the court appealed from or the Court thinks fit, including conditions relating to security for costs.

(5)If the court appealed from refuses to make an order under subclause (3), the Court may, on an interlocutory application, make an order under that subclause.

(6)If the court appealed from makes an order under subclause (3), the Court may, on an interlocutory application, vary or rescind that order.

(7)The Court may, at any time, vary or rescind an order made by it under this rule.

[6]    There are a number of difficulties with Mr Sheeran’s application for a stay. He has not applied by way of interlocutory application as required by r 12(3)(a) of the Court of Appeal (Civil) Rules. Further, I have not yet determined the issue of costs. It is not clear whether Mr Sheeran’s application for stay is intended to prevent me doing so, or whether it is intended to be an application for stay of execution of my costs order once made. I do not consider that it would be appropriate for me to grant a stay of proceedings which prevented me from fixing costs on the Council’s interlocutory application as required by r 14.8(1)(a) of the High Court Rules. Accordingly, I decline the application to the extent it is an application for stay of the proceedings.

Costs

[7]    The Council claims 2B scale costs in the sum of $38,240 with a 10 per cent uplift under r 14.6(3)(b)(i), (ii) and (iii) of the High Court Rules because Mr Sheeran has contributed unnecessarily to the time and expense of the proceeding.

[8]    Mr Sheeran has not directly opposed the Council’s entitlement to costs or the calculation of costs.

[9]    The Council has clearly been successful and is entitled to costs. However, I do not agree with the Council’s calculation of 2B scale costs. In addition to claiming 2B scale costs for the interlocutory application, the Council has sought to claim costs for two substantive affidavit hearings. In particular, the Council seeks costs for preparing affidavits, lists of issues or authorities and agreeing the common bundle (item 30 in sch 3 to the High Court Rules); the additional allowance for whichever party prepared the common bundle (item 31); and preparing for two substantive hearings (item 32). The Council’s application was an interlocutory application for an order dismissing the claim for lack of jurisdiction or striking out the claim. This is not a case where the affidavit evidence is so complex and comprehensive that an additional award of costs is justified under item 30.3 And allowing costs under items 31 and 32 would involve

3      Tandem Group Ltd v ASB Bank Ltd [2021] NZHC 1135 at [14]-[16].

double counting with items 24, 25 and 26. After items 30, 31 and 32 are deducted, the Council’s claim for 2B costs is $17,925.

[10]   I agree that the Council  is entitled to an increase on scale costs because     Mr Sheeran has contributed unnecessarily to the time or expense of the proceeding pursuant to r 14.6(3)(b)(i), (ii) and (iii). In particular, Mr Sheeran was advised by the solicitors for the Council and the Court that his claim for compensatory damages for personal injury would  likely  be  dismissed  or  struck  out.4  It  was  explained  to Mr Sheeran that his claim is barred by s 317(1) of the Accident Compensation Act 2001, but he continued to pursue the claim. Mr Sheeran also apparently failed to follow my direction that he should obtain legal advice on his claim, including whether his claim should be amended to seek exemplary damages. I also explained that he should consider carefully whether he should be pursuing any claim against the Council because of the likely cost consequences.⁵

[11]   Increased costs are often awarded in the range of 30–50 per cent. I consider that a small increase of 10 per cent is appropriate in this case,  recognising that     Mr Sheeran is a litigant in person with little experience in litigation.

[12]   Accordingly, the Council is entitled to costs in the sum of $19,717.50 and reasonable disbursements in the sum of $793.

Stay of execution of the costs order

[13]   The next issue is whether I should stay execution of the costs order pending the outcome of Mr Sheeran’s appeal. The starting point is that “a successful party is entitled to the fruits of its judgment”.6 Therefore, the party applying for the stay must show why the usual consequences of the judgment should not follow.7 As the Court of Appeal explained in Brook Valley Community Group Inc v Brook Waimarama Sanctuary Trust:8

4      Sheeran v Masterton District Council HC Wellington CIV-2024-435-19, 4 December 2024.

5      Sheeran v Masterton District Council, above n 4, at [4].

6      Brook Valley Community Group Inc v Brook Waimarama Sanctuary Trust [2017] NZCA 377 at [10].

7 At [10].

8      At [10] (footnotes omitted); and Keung v GBR Investment Ltd [2010] NZCA 396, [2012] NZAR 17 at [11].

[10] … The court will need to balance the competing rights of the party who has obtained judgment against the need to preserve the appellant’s position in the event of the appeal succeeding. The factors to be taken into account in the balancing exercise when a stay or interim order are sought include:

(a)whether the appeal may be rendered nugatory by the lack of a stay;

(b)the bona fides of the appellant as to the prosecution of the appeal;

(c)whether the successful party will be injuriously affected by the stay;

(d)the effect on third parties;

(e)the novelty and importance of questions involved;

(f)the public interest in the proceeding;

(g)the overall balance of convenience; and

(h)the apparent strength of the appeal.

[14]   In SKIDS Program Management Ltd v McNeill, Woodhouse J emphasised that these factors are amongst the factors that the Court is likely to consider.9 The list is not determinative.10 Ultimately each case must be determined on its own facts.

[15]   With regard to the stay of costs orders, Associate Judge Osborne (as he then was) in Walker v Castlereagh Properties Ltd said:11

[43]      Those involved in litigation in this Court are subject to a regime whereby costs become payable when they are fixed. Successful parties are intended to have (upon the fixing of costs) the cash flow benefits of the costs to which the Court has found them entitled.

[44]      Where the unsuccessful party appeals a substantive judgment, the justice in relation to identifying who should be out of pocket for awarded costs in the interim will most often (albeit not invariably) favour the successful respondent. The respondent has had to bear costs in either suing the other party or defending the other party’s unsuccessful claim. That stage of the litigation is over. If the unsuccessful party elects to embark on a further stage of litigation through appeal it will generally be just that the successful party (through the payment of costs) is reimbursed in the interim for the costs awarded and fixed pursuant to its success.

9      SKIDS Program Management Ltd v McNeill HC Auckland CIV-2010-404-1696, 20 December 2011.

10 At [9].

11     Walker (as liquidator of Gibbston Water Holdings Ltd) v Castlereagh Properties Ltd [2015] NZHC 907, [2015] NZAR 944 at [43]–[45] (footnotes omitted).

[45]      Such an approach will by the nature of the balancing exercise remain subject to influence by factors of particular relevance in an individual case… . But such factors are more likely to inform the Court’s decision on the way in which the unsuccessful party should make any payment in the interim

… rather than on whether the unsuccessful party should be relieved of the requirement to make payment pending the determination of the appeal.

[16]   A further issue is whether a party can apply to stay a costs judgment under r 12 where only the substantive judgment has been appealed. This situation arose in Sullivan v Wellsford Properties Ltd.12 After considering authorities with regard to this Court’s inherent jurisdiction, Gordon J found:13

Without deciding whether r 12 in fact applies, I proceed either under r 12 or if it does not apply, under this Court’s inherent jurisdiction. In any event, I apply the relevant Brook Valley factors.

[17]I adopt this approach.

My assessment

[18]   As noted above, where the unsuccessful party appeals a substantive judgment, the justice in relation to identifying who should be out of pocket for awarded costs in the interim will most often (albeit not invariably) favour the successful party.

[19]   Mr Sheeran has not submitted that his appeal would be rendered nugatory by the lack of a stay. It is not apparent that execution of the costs order would render the appeal futile.

[20]   Mr Sheeran has indicated that he is applying for legal aid for his appeal and seeking a dispensation from paying security for costs. It may be that if a stay is not granted, and Mr Sheeran is unable to pay the costs awarded above, the Council will seek to bankrupt Mr Sheeran.14 However, this would not necessarily prevent the appeal being pursued. It remains open for the appeal to be pursued under the control of the Official Assignee after the Official Assignee has undertaken an independent

12     Sullivan v Wellsford Properties Ltd [2018] NZHC 708.

13     At [13]–[19].

14     I warned Mr Sheeran about this potential outcome at the hearing on 4 December 2024 and in my Minute of 4 December 2024 Sheeran v Masterton District Council, above n 4.

review of the merits of the appeal.15 If the Official Assignee determines that the appeal should not be pursued and/or there is insufficient funding to pursue the appeal, then the appeal would not be pursued. That would not be because of the refusal to order a stay, but because of the decision of the Official Assignee on behalf of Mr Sheeran not to pursue the appeal and/or the absence of funding.16

[21]   On the other hand, the Council and its ratepayers will be adversely affected by any stay of execution in that the recovery of costs will be delayed, possibly for some time. The Council and ratepayers have had to bear the costs of this proceeding since 2023 and are now having to bear the further costs of responding to Mr Sheeran’s appeal.

[22]   The questions involved in this case and the appeal do not involve matters of particular novelty or importance. Nor is there any particular public interest in the proceeding which militates against a stay. Regarding the merits of the appeal, the Council submits that the appeal is premised on a “fresh (and tenuous) argument that was not before the High Court, and does not present a valid basis for an appeal”.

[23]   Finally, there is no risk that if Mr Sheeran pays the costs and is then successful on the appeal, the Council would be unable to repay the costs and any interest.17

[24]   In my view, weighing the factors considered above, the overall balance of convenience is against ordering a stay of execution of the costs order.

Result

[25]   Costs are awarded to the Council in the sum of $19,717.50 and reasonable disbursements in the sum of $793.

15     Bank of New Zealand v Koroniadis [2013] NZHC 2865 at [12].

16     See Walker (as liquidator of Gibbston Water Holdings Ltd) v Castlereagh Properties Ltd, above n 11, at [75]-[76], considering the effect of liquidation on pursuing an appeal.

17     See Court of Appeal (Civil) Rules 2005, r 52A.

[26]   Mr Sheeran’s application for a stay of the proceeding and/or a stay of execution of the costs order pending the outcome of his appeal is declined.

Associate Judge Skelton

Solicitors:

Simpson Grierson, Wellington for Respondent