SKAGEN v WELLINGTON STANDARDS COMMITTEE OF THE NEW ZEALAND LAW SOCIETY [2015] NZHC 675

SKAGEN v WELLINGTON STANDARDS COMMITTEE OF THE NEW ZEALAND LAW SOCIETY [2015] NZHC 675 [9 April 2015]IN THE HIGH COURT OF NEW ZEALANDWELLINGTON REGISTRYCIV-2015-485-61[2015] NZHC 675UNDER the Lawyers and Conveyancer's Act 2009IN THE MATTER OF discipline under the Lawyers andConveyancers Disciplinary TribunalBETWEEN CHRISTOPHER KNUTE SKAGENAppellantAND WELLINGTON STANDARDSCOMMITTEE OF THE NEW ZEALANDLAW SOCIETYRespondentHearing: On the papersCounsel: C K Skagen in personT Mackenzie for RespondentJudgment: 9 April 2015JUDGMENT OF WILLIAMS J(SECURITY FOR COSTS)Background[1] Mr Skagen appeals against a decision of the Lawyers and Conveyancers Disciplinary Tribunal that struck him from the Roll of Barristers and Solicitors.1 The Tribunal found proven various charges relating to, among other things, accepting instructions directly, accepting fees in advance, failing to comply with trust account regulations, and failing to act in a timely or competent manner. The Tribunal was unanimous in its decision.1 Wellington Standards Committee v Skagen [2014] NZLCDT 82.[2] The first case management conference is yet to be held. Counsel for the Respondent and Mr Skagen are in agreement on all matters but for the fixing of security for costs.[3] The Respondent asks the Court to fix security for costs at $995. Counsel for the Respondent observes that this is a modest sum in the context.[4] Mr Skagen asks that security for costs not be fixed. He relies on his limited financial means and the alleged general importance of the matters to be heard as grounds for a waiver of security for costs.[5] Mr Skagen is, according to his account of his circumstances, a man with little to lose, at least in a financial sense. Until recently he has lived in a homeless shelter in the United States. His health is precarious. Funds available will support his living in New Zealand for a couple of weeks.The rules concerning security for costs[6] Rule 20.13(2) of the High Court Rules requires that security for costs for an appeal be fixed at the first case management conference unless the appellant isfunded by legal aid, or "the Judge considers that in the interest of justice no security is required". The default is that security is to be fixed. Waiver is the exception.[7] Mr Skagen submits that the approach of the Court of Appeal in A S McLachlan Ltd v MEL Network Ltd to an order for security for costs ought to be followed here.2 But that case concerns the rules for fixing of security for costs before a proceeding at first instance.3 The Court there observed that "[a]ccess to thecourts for a genuine plaintiff is not lightly to be denied."4 A different approach is to be taken when the security for costs is in relation to an appeal.52 A S McLachlan Ltd v MEL Network Ltd (2002) 16 PRNZ 747 (CA).3 Rule 60(1)(b) of the then High Court Rules; r 5.45 of the present High Court Rules.4 At [15].5 Reekie v Attorney-General & Anor [2014] NZSC 63, [2014] 1 NZLR 737 at [3], referring to A S McLachlan Ltd v MEL Network Ltd (2002) 16 PRNZ 747 (CA).[8] The Respondent's submissions on the law are confined to a quotation ofMcGechan on Procedure. The materials quoted provide some general guidance. Butas to the meaning of "interests of justice", the authors cite the Supreme Courtdecision in G v Chief Executive of the Ministry of Social Development [2010] NZSC 141 as endorsement of the then current approach of the Court of Appeal to fixing security for costs. That approach has been refined, or elaborated upon, by the Supreme Court in the later judgment in Reekie v Attorney-General & Anor.6[9] The judgment in Reekie serves as the starting point, then, for the present matter. Although the language of the provisions concerning security at the Court of Appeal and High Court differ,7 the same policy considerations underlie both appellate schemes. The principles set out by the Supreme Court are therefore useful in the application of r 20.13, despite that provision not having been considered by the Court.8[10] Impecuniosity alone does not warrant a waiver of security for costs.9 The overarching enquiry is whether or not it is right to require the respondent to defend the judgment under challenge without the usual protection as to costs provided by security.10 Because respondents will in any case not often be fully compensated for the costs of defending a judgment, the security for costs will be of "limited economic significance." It imposes nonetheless some discipline on a prospective appellant.Where legal aid has been granted, or counsel is representing the appellant on deferred or conditional fee arrangement, the prospects of the appeal will have been subject to some independent scrutiny. Frivolous proceedings are therefore less likely in such circumstances. Thus the exception for security in respect of legally aided appellants. But a litigant in person who is also impecunious has not necessarily been subject to those disciplines, and may initiate litigation that is in its costs disproportionate to its purpose.6 Reekie v Attorney-General & Anor [2014] NZSC 63, [2014] 1 NZLR 737.7 Rule 35(6) of the Court of Appeal (Civil) Rules 2005 provides that " the Registrar may, on application, if satisfied that the circumstances warrant it, make an order dispensing with security".8 This was the approach adopted in Jones v Waitemata District Health Board [2014] NZHC 3370 at [3], per Katz J.9 Reekie v Attorney-General & Anor [2014] NZSC 63, [2014] 1 NZLR 737 at [20].10 This and the following is a distillation of the principles expressed in Reekie v Attorney-General & Anor [2014] NZSC 63, [2014] 1 NZLR 737 at [31]-[44].[11] The discretion to not fix security for costs should, therefore, be exercised so as to:11(a) preserve access to the Court by an impecunious appellant in thecase of an appeal which a solvent appellant would reasonably wish to prosecute; and(b) prevent the use of impecuniosity to secure the advantage of being able to prosecute an appeal which would not be sensibly pursued by a solvent litigant.[12] Indeed, it would be unjust, or contrary to the interest of justice, for anappellant to be prevented from pursuing an appeal which "a solvent appellant would reasonably wish to prosecute" because he or she was unable to provide security for costs. That is a matter which requires examination of the merits of the appeal. The question is, as expressed in a different manner in Sim's Court Practice, "whether the case is deserving of consideration of appeal".12[13] The costs and benefits to be assessed in making such a determination are not, though, exclusively financial. Matters personal to the appellant such as reputation may be relevant to the assessment, as well as the public interest in the resolution of issues the appeal may raise.13Is it in the interest of justice that security for costs not be fixed?[14] Mr Skagen's livelihood, so far as it is reliant on practicing as a barrister inNew Zealand, depends on his succeeding on appeal.[15] There is also a reputational aspect to the appeal, insofar as the decision under appeal concludes that Mr Skagen was dishonest. In relation to these findings, Mr Skagen submits that:11 At [35].12 Sim's Court Practice (online looseleaf ed, LexisNexis) at [HCR20.13.3].13 Reekie v Attorney-General & Anor [2014] NZSC 63, [2014] 1 NZLR 737 at [41].Lawyers must be on the 'cutting edge' of the law, and to do that we must attimes take a position unpopular, which ordinary society may call 'dishonest'.[16] As to the public significance of the appeal, Mr Skagen submits that theappeal raises "substantial common law issues" concerning the "contract law and the common law relating to barristers", as well as the standard of proof in disciplinary matters. The matter the Tribunal determined was not, though, one of contract law or the common law. The Tribunal exercised its function in enforcing the rules governing the conduct of lawyers in New Zealand. Those rules are binding on the practitioner independent of the contract between a lawyer and a client.[17] Counsel for the Respondent submits that the decision under appeal concerned an orthodox application of the rules fees in advance, trust accounting, failing to carry out instructions and failing to return client monies. The Notice of Appeal indicates that Mr Skagen disputes the factual and legal conclusions in relation to all of the findings in the decision under appeal. It is difficult, without more, to assess the merits of the appeal. Mr Skagen has not assisted his prospects in that respect in this application.[18] Because security for costs is to be fixed unless it would be in the interests of justice for security not to be fixed, the starting point must be that security will be fixed. The provision does not require that the Court be "satisfied", which mightimply some evidential onus, but rather that it need simply "consider" that it is in theinterest of justice that security for costs not be fixed. I must therefore come to a positive conclusion that the interests of justice require that no security for costs be fixed. I do not think that Mr Skagen has, aside from pointing to the effect of the decision upon his livelihood, provided a real basis for this Court to consider that his appeal is one that a solvent appellant would reasonably wish to prosecute.[19] Security for costs are fixed at $995 accordingly.___________________________Williams J