Woolf v Kaye

[2018] NZHC 1250

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2015-404-001043

[2018] NZHC 1250

BETWEEN

V WOOLF

First Plaintiff

V WOOLF
as executor of the Estate of N B WOOLF Second Plaintiff

AND

A B KAYE

(previously known as A WOOLF) First Defendant

M W S CLARK

as executor of the Estate of V I WOOLF Second Defendant

Hearing:	On the papers
Appearances:	G A Keene for Plaintiffs
Judgment:	31 May 2018

JUDGMENT OF LANG J

[on review of Registrar’s decision not to waive fees]

This judgment was delivered by me on 31 May 2018 at 3.30 pm, pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar Date……………

WOOLF v KAYE [2018] NZHC 1250 [31 May 2018]

[1]    Ms Woolf is currently engaged in litigation with her brother. The litigation relates to the ownership of a house property in Auckland. The property has always been registered in her brother’s name, but Ms Woolf claims she has an equitable interest in it.

[2]    The trial of Ms Woolf’s claim is currently in progress. It has been allocated two weeks but is likely to extend beyond that time frame.

[3]The hearing fees payable to the Court in relation to the hearing amount to

$30,400.00. This sum is calculated on the basis of a two-week hearing. In addition, Ms Woolf is required to pay a scheduling fee of $1,600.00. If the hearing extends beyond the end of the second week additional hearing fees will be payable.

[4]    Ms Woolf applied to the Registrar for the hearing fees and scheduling fee to be waived on the basis that payment of the fees would cause her undue hardship.1 The Registrar declined the application. Ms Woolf now asks the Court to review the Registrar’s decision under r 2.11(1)(a) of the High Court Rules 2016.

[5]    Ms Woolf paid the sum of $19,200 after the Registrar declined her application for fee waiver. She was due to pay the balance on 24 May 2018, but I suspended that obligation pending determination of the application for review.

Undue hardship

[6]    The payment of hearing fees will often cause hardship to an applicant because, as the present case demonstrates, a civil trial of even moderate duration will require the payment of significant hearing fees. This requirement reflects Parliament’s intention that those who seek to have civil disputes determined by the High Court should contribute to the institutional costs of the trial. For that reason hearing fees may only be waived where they cause hardship to the applicant that is undue.

[7]As Keane J observed in Appleton v Tauranga Law:2

1      High Court Fees Regulations 2013, regs 18 and 19.

2      Appleton v Tauranga Law [2012] NZHC 242, (2012) 21 PRNZ 275.

[17] What is finally important is the degree of  hardship  claimed.  Regulation 6 assumes that a plaintiff may suffer some hardship if obliged to pay hearing fees but that is not enough. The hardship suffered must be ‘undue’; hardship, which is beyond the ordinary or, as the Oxford English Dictionary has it, beyond ‘what is just and right’.

Ms Woolf’s financial position

[8]    Ms Woolf has assets totalling approximately $171,000.00. These comprise three term deposits and represent funds Ms Woolf received from her late father’s estate. One of these, a term deposit in the sum of $54,000, was repaid earlier this month. Ms Woolf would no doubt incur a penalty if she was to break the other two investments.

[9]    Ms Woolf has debts totalling $205,898.74. Of these, the sum of $171,000.00 is owing to her barrister and relates to fees charged for the litigation in which she is currently engaged. She also has a credit card debt of approximately $19,000.00. This was used to fund the hearing fees she has already paid.

[10]   Ms Woolf provides private tutoring services for primary and secondary school students whilst school is in session. She derives no income from this activity during school holidays and, in particular, during the long summer break. Her total weekly income averages between $600.00 and $800.00. Her weekly expenses amount to

$525.00.

[11]Ms Woolf’s income over the last three financial years has totalled just

$85,000.00. Of this sum, she earned $45,000.00 during the year ended 31 March 2018. This sum included interest earned on the funds she received from her father’s estate.

Decision

[12]   Ms Woolf’s total liabilities equal or exceed her current assets. Her assets will only exceed her liabilities if her claim against her brother succeeds. For that reason Mr Keene submits on Ms Woolf’s behalf that it may be appropriate for the final decision as to the payment of hearing fees to await the outcome of the hearing.  If  Ms Woolf is successful, she will easily be able to pay the hearing fees. If she is not,

her financial position will be made worse by the fact that she will be required to pay costs to her brother.

[13]   I do not consider this to be an appropriate approach because it would make the payment of hearing fees contingent on success of the claim. That would not meet the statutory test, which requires the applicant to demonstrate undue hardship as at the date on which the hearing fees are payable.

[14]   It is clear that Ms Woolf has chosen to devote her entire net worth to pursuit of the present litigation. That is her choice, and she has presumably made it based on her estimation of her prospects of success. The issue for present purposes is whether the payment of the hearing fees at this point will cause her undue hardship.

[15]   I consider that Ms Woolf has been able to pay the first instalment of hearing fees to date with some hardship, but not undue hardship. It has left her with a debt that she may not be able to meet unless her claim succeeds. Many litigants are required to borrow money to meet part or all of the costs of litigation.

[16]   Having regard to Ms Woolf’s total liabilities, however, I consider she will suffer undue hardship if she is required to pay the second instalment of hearing fees. This would propel her current financial position into one of significant negative equity. The Court has the power to reduce the hearing fees payable to a point where there will still be hardship but the hardship will not be undue.3 In the present case I consider that point to be the fees she has already paid.

[17]   I therefore set aside the decision of the Registrar and in its place make an order waiving payment of further hearing fees.

Lang J

Solicitors:

Foy & Halse, Auckland

G A Keene, Barrister, Auckland

3      Appleton v Tauranga Law, above n 2, at [16].