Wyatt v Real Estate Agents Authority

[2020] NZHC 856

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2018-404-2880

[2020] NZHC 856

UNDER

the Companies Act 1993

IN THE MATTER

of an appeal against a decision of the Registrar of Companies

BETWEEN

GREGORY JOHN WYATT

Appellant

AND

REAL ESTATE AGENTS AUTHORITY

Respondent

Hearing:

On the papers

Appearances:

Appellant in person

D T Broadmore and L C Sizer for the Respondent

Judgment:

30 April 2020

JUDGMENT OF GAULT J

(Costs)

This judgment was delivered by me on 30 April 2020 at 4:00 pm pursuant to r 11.5 of the High Court Rules 2016.

Registrar/Deputy Registrar

……………………………………

Parties / Solicitors:

The Appellant

Mr D T Broadmore and Mr L C Sizer, Buddle Findlay, Auckland

WYATT v REAL ESTATE AGENTS AUTHORITY [2020] NZHC 856 [30 April 2020]

[1]    In my judgment dated 13 December 2019 dismissing Mr Wyatt’s appeal,1      I indicated that the respondent is entitled to costs and that if they could not be agreed memoranda may be filed and I would determine costs on the papers.2

[2]    The respondent seeks 2B scale costs of $10,067 with a direction that the Registrar is to pay all such amounts as may be available for those costs to the respondent from the security lodged by the appellant.

[3]    Mr Wyatt disagrees with two items claimed. First, the $1,115 claimed for the item “commencement of response to appeal” on the basis that at that stage of the proceeding the respondent was the Registrar of Companies, not the Real Estate Agents Authority. I accept that when the appeal was filed on 20 December 2018 the respondent was named as the Registrar of Companies. Jagose J issued a minute on  25 February 2019 (before the first call) directing that the complainant Real Estate Agents Authority be served and that the notice of appeal not name the decision-maker (the Registrar of Companies) as a respondent. Although the Real Estate Agents Authority would have been served after that, I consider it is still entitled to claim for the item commencement of response to appeal.

[4]    Secondly, Mr Wyatt disputes the $478 claimed for “sealing order”, which he submits only applies to interlocutory applications. I do not accept that the time allocation for sealing orders applies only to interlocutory applications.

[5]    Furthermore, Mr Wyatt seeks that costs be refused or reduced under rules 14.7(e), (f)(ii) and (g) of the High Court Rules 2016, which provide that the Court may refuse to make an order for costs or may reduce the costs otherwise payable if:

(e)the proceeding concerned a matter of public interest, and the party opposing costs acted reasonably in the conduct of the proceeding; or

(f)the party claiming costs has contributed unnecessarily to the time or expense of the proceeding or step in it by—

…

1      Wyatt v Real Estate Agents Authority [2019] NZHC 3291.

2 At [43]. Memoranda were filed over the Christmas vacation but there was a delay in referring them to me.

(ii)taking or pursuing an unnecessary step or an argument that lacks merit; or

…

(g)some other reason exists which justifies the court refusing costs or reducing costs despite the principle that the determination of costs should be predictable and expeditious.

[6]    As to (e), Mr Wyatt submits that the proceeding concerned a matter of public interest and he acted reasonably, submitting that he sought to have the proceeding dealt with as efficiently as possible, with the result that no Court attendances were required. I do not consider the proceeding concerned a matter of public interest such that costs should be refused or reduced. Mr Wyatt was contesting the Registrar’s decision requiring a company of which he was the sole director to change its name. I accept that Mr Wyatt sought to have the proceeding dealt with efficiently. He benefits from that in the sense that scale costs would have been higher if there had been a defended hearing.

[7]    As to (f)(ii), Mr Wyatt again relies on the respondent’s claim for sealing the order. He seeks a reduction, as a penalty, of two times the amount claimed, that is

$956. I have already addressed this item. Even if Mr Wyatt were correct, the appropriate course would be to refuse the amount claimed for the item rather than make a further reduction as a penalty using some multiplier of the amount claimed.

[8]    As to (g), Mr Wyatt seeks a reduction on the ground that his annual income is less than $21,000, relying on Edwards v Bridge, where Doogue J said:3

[19]      Financial hardship is a relevant factor which may be taken into account under r 14.7(g) in exercising the discretion to award costs, but it is not an answer to a claim for a costs award. In cases where a party against whom a cost award is sought contests the claim on the basis of limited financial means or financial hardship, there is a preference for evidence of these matters to be provided in the form of a sworn affidavit (where this is not already established in the substantive proceedings).

[20]      However, there also exist cases which have adopted a different approach. For example, in Singh v Immigration and Protection Tribunal, Cooper J observed that consideration of financial circumstances under r 14.7(g) would “create a precedent of potentially very wide application and

3      Edwards v Bridge [2019] NZHC 3138 (footnotes omitted).

ultimately would not be justified having regard to the other, more specific provisions of the relevant rules.”

[21]Subsequently, in Foni v Foliaki, Muir J stated:

Like Cooper J in Singh, I consider that abatement of costs awards because of personal circumstances will not typically be justified, having regard to the other more specific provisions of the relevant rules. I consider the discretion should be reserved for exceptional cases …

[22]      In Foni v Foliaki, Muir J adopted Dunningham J’s observation in Te Whare O Te Kaitiaki Ngahere Inc v West Coast Regional Council that:

A costs award should be made at a meaningful level, even against an impecunious party, when that party has advanced a case which is poorly pleaded or lacking in merit …

[23]      What this means is that where the unsuccessful party cannot pay the full amount claimed by the successful party, a “meaningful level” is one within that party’s means to pay. However, where a party appears incapable of making any meaningful payment at all, a “meaningful level” is in fact the full amount sought given it avoids arbitrary reductions in the level of costs sought.

[9]    Mr Wyatt submits that I should not follow Singh and that in this case a “meaningful level” of costs is the $1,113 he paid into Court as security for costs.

[10]   I accept that financial hardship is a relevant factor which may be taken into account under r 14.7(g) and that this is not a case where Mr Wyatt has put the respondent to unnecessary expense in responding to an appeal.4 But I also agree with Muir J in Foni v Foliaki that reduction of costs awards on the ground of financial hardship will not typically be justified, having regard to the other more specific provisions of the relevant rules – the discretion should be reserved for exceptional cases.5

[11]   Mr Wyatt has sworn an affidavit simply stating that he is 59 years of age and his income before tax for 2019 was less than $21,000. Accepting that, the affidavit says nothing about Mr Wyatt’s assets and liabilities. In those circumstances, I am not satisfied that financial hardship precludes him from being able to pay costs of the

4      Compare Chesterfields Preschools Ltd v Commissioner of Inland Revenue [2011] NZCA 640 at [7], where the Court of Appeal said that “[h]ardship is not usually regarded as a ground to resist an award of costs in circumstances where the opposite party has been put to unnecessary expense in responding to an application or appeal”.

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

amount sought. I consider that costs should be awarded at scale without a reduction for financial hardship.

[12]   However, given the nature of the appeal, I consider that costs for all steps claimed except preparation of written submissions should be calculated on a 2A basis, with only preparation of written submissions calculated on a 2B basis.

Result

[13]   The respondent is entitled to scale costs calculated in accordance with [12] above.

[14]   I also direct that the Registrar is to pay all such amounts as may be available for those costs to the respondent from the security lodged by the appellant.

Gault J