Slavich v New Zealand Institute of Chartered Accountants Professional Conduct Committee HC Tauranga CIV 2009-470-826

[2010] NZHC 1509

IN THE HIGH COURT OF NEW ZEALAND TAURANGA REGISTRY

CIV 2009-470-000826

UNDER  s. 4 of the Judicature Amendment Act 1972

IN THE MATTER OF     of an application for judicial review and separate relief under r. 626 High Court Rules

BETWEEN  JOHN KENNETH SLAVICH Applicant

ANDNEW ZEALAND INSTITUTE OF CHARTERED ACCOUNTANTS - PROFESSIONAL CONDUCT COMMITTEE

First Respondent

ANDJOHN ROBERT DOBSON Second Respondent

Hearing:         25 May 2010 (Heard at Rotorua)

Appearances: J K Slavich, in person the Applicant

M F McClelland for the First Respondent

Judgment:      25 May 2010

ORAL JUDGMENT OF ASSOCIATE JUDGE CHRISTIANSEN

Solicitors/Counsel:

J Slavich, Hamilton –  [email protected]

M McClelland, Barrister, Wellington – [email protected]

JOHN KENNETH SLAVICH V NEW ZEALAND INSTITUTE OF CHARTERED ACCOUNTANT- PROFESSIONAL CONDUCT COMMITTEE AND ANOR HC TAU CIV 2009-470-000826  25 May 2010

[1]      The  first  respondent  (the  Institute)  applies  for  security  for  costs.    The applicant (Mr Slavich)  has applied for a review of a decision of the Institute’s Professional Conduct Committee (PCC) in respect of Mr Slavich’s complaint dated 5

September 2008 against Mr Dobson, chartered accountant.   The PCC determined that Mr Dobson should be admonished for failing to record the purpose of the valuation  he  undertook  in  connection  with  interests  involving  Mr  Slavich.    Mr Slavich contends that the PCC determination did not respond or respond adequately to his complaint.  By his relief application Mr Slavich seeks:

(i)     A declaration that the Institute has not responded to his complaint. (ii) A declaration that the determination of the PCC is invalid.

(iii)    An award of exemplary damages against the Institute.

(iv)An order directing the Institute to negotiate a settlement between the plaintiff and Mr Dobson.

[2]      The security application is brought pursuant to Rule 5.45(1)(b).

[3]      The Institute seeks security in the sum of $20,000.  The hearing is estimated to last one-day, and counsel calculates costs on a 2B basis at $26,080 exclusive of disbursements.

[4]      Until two weeks ago Mr Slavich was an undischarged bankrupt.  Apparently he is unemployed.

[5]      Mr Slavich has filed a notice of opposition.  He contends:

1.        Security for costs of $20,000 is excessive.

2.His  review  application  is  brought  on  behalf  of  the  Slavich family trust and therefore his financial status and inability to pay has no relevance to the security question.

3.The  merits  of  the  review  application  are  strong  and  the prospects of success are reasonable.

4.The  review  application  involves  issues  of  public  interest because “the rulings sought are fundamental to the conduct for a judicial body; whether conduct was illegal, procedurally and proper and irrational” and if it was there “ was a misuse of its power, thus justifying extraordinary remedies”.

[6]      This matter was first set for hearing on 27 April 2010.  On that date Judge Doogue adjourned the fixture.  Before then Mr Slavich complained on 26 April 2010 that the Institute’s synopsis had not been received.  He filed a memorandum with the Court on 26 April 2010.  According to him the Institute’s synopsis was received by him two hours later.  On 27 April 2010 he filed submissions seeking a dismissal of the security application because the Institute failed to meet the Court’s timetable for filing of same.   This notwithstanding the application was adjourned for hearing today.

[7]      In his submissions filed for today’s hearing Mr Slavich requests his previous dismissal application be heard.  The application is refused.  The matter is ready for hearing today and any prejudice Mr Slavich may have claimed with respect to the late filing of the Institute’s synopsis has abated.   He is now fully apprised of the Institute’s submissions, as his own submissions attest.

[8]      Since, on 13 May 2010 Mr Slavich has filed a notice to admit facts.   He asserts the five matters referred to in it are fundamental to the judicial review.  They, he says reveal its merits.  But that notice is not a matter for consideration upon the security  application.    A  consideration  of  the  merits  of  a  review  or  appeal  is sometimes undertaken upon a security application particularly if it is clear that the review or appeal is without merit.  I am not prepared to adopt that conclusion in this instance.   It seems to me a proper analysis of the merits ought to be left to the hearing of Mr Slavich’s review.

[9]      However it is clear that the review will not succeed in two aspects:

1.There will not be an award of exemplary damages.  Likely if the review is successful the matter will be referred back to the Institute for reconsideration, possibly subject to Court directions.  There will likely not be an award at all for costs, for those are intended to reimburse, in some measure, the costs of the lawyer representing the successful party.  Mr Slavich is self represented.

2.The Court will not order the Institute to negotiate a settlement between Mr Slavich and Mr Dobson.  The Court does not have that authority.

[10]     Essentially that leaves only the question of whether the Court should exercise its discretion to require Mr Slavich to provide security.

[11]     He says he brings this review on behalf of a family trust.   That much is pleaded by his statement of claim.   Mr Slavich argues therefore that his personal financial status and inability to pay have no relevance to the claim for security.

[12]     That position overlooks the fact that the security is sought from the applicant, whoever Mr Slavich says that is.  The fact is that if he was to fail on the review, then notwithstanding he represents a family trust, any costs payable would have to be met by him.  Mr Slavich has not provided any information at all that he (or his trust) is with means to meet an adverse costs award.  No details of the family trust have been provided, of assets, or indeed of its existence.  Further, because Mr Slavich is or has until very recently been an undischarged bankrupt, the Court has credible evidence from which it can reasonably infer that the ‘applicant’ will be unable to pay the costs.   In this case Mr Slavich’s failure to disclose his or his trust’s financial circumstances gives rise to an adverse inference as to ability to meet costs.

[13]     The remaining matter for my consideration is Mr Slavich’s claim that this is a matter of public importance.  He says there is unlikely to be a more important case.

It is about a public body that makes rules under its statutory power, he says.  Those rules are to protect the public from members who are in a privileged position who break the rules.

[14]     But in this description of things it is no different to the kinds of cases often referred to the High Court for review.

[15]     I disagree with Mr Slavich’s claim that the case involves a matter of public interest.  I think it is very much a private matter.  The review is about whether the Institute/PCC properly considered and determined Mr Slavich’s complaint.  I prefer the submission of Mr McClelland that the PCC is not a judicial body and that the Court will be slow to review a prosecutorial discretionary decision.

Result

[16]     This is a proper case for the Court to exercise its discretion to fix security for costs.  I fix security in the sum of $15,000.  That sum is to be paid into the Court and until it is, the review application will be stayed.

[17]     The costs of this application shall be reserved, for determination in the cause.

Associate Judge Christiansen