COETZEE V BANK OF NEW ZEALAND HC AK CIV-2011-488-872

COETZEE V BANK OF NEW ZEALAND HC AK CIV-2011-488-872 [30 May 2012]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYCIV-2011-488-872[2012] NZHC 1186UNDER the Land Transfer Act 1952 Section 145AIN THE MATTER OF an application that a caveat not lapseBETWEEN GERT-MULLER COETZEEApplicantAND BANK OF NEW ZEALANDRespondentHearing: On the PapersAppearances: G-M Coetzee in personPL Rice for RespondentJudgment: 30 May 2012JUDGMENT (NO. 3) OF TOOGOOD J[COSTS]This judgment was delivered by me on 30 May 2012 at 11:00 amPursuant to Rule 11.5 High Court RulesRegistrar/Deputy RegistrarSolicitors:N Robertson, Sanderson Weir, Auckland: Nicola.robertson@sandersonweir.comCopy:P Rice, Auckland: phillip.rice@aspx.co.nzM G-M Coetzee, PO Box 11062, Whangarei[1] On 27 January 2012, I dismissed an application by the applicant under s 143 of the Land Transfer Act 1952 for an order that Caveat 8934232.1 not lapse ("the first judgment").1[2] On 18 April 2012, I issued Judgment (No. 2) declining the applicant'sapplication to recall the first judgment.2 While I acknowledged that one of the grounds for dismissing the application that the caveat not lapse was based on an inadvertent error of fact, I rejected the application for recall because the second ground for dismissal was based on an unfavourable view of the merits of the application.[3] In Judgment (No. 2) I said:3The respondent is entitled to costs. Any application for costs should be filed and served by the Bank on or before Wednesday, 9 May 2012. Any submissions in reply shall be filed and served by Mr Coetzee no later thanWednesday, 30 May 2012. The matter will then be dealt with on the papers[4] A memorandum of submissions on behalf of the Bank was filed and served one day after the date on which the submissions were due in accordance with the timetable. By a Minute dated 10 May 2012, I granted leave to the Bank to file and serve the memorandum late but varied the timetable quoted above to provide that theapplicant's submissions in reply should be filed and served no later than 1 June 2012.[5] The applicant, who has been unrepresented by counsel throughout, has filed his submissions. He does not address any of the matters set out in the relevant High Court Rules relating to awards of costs and does not suggest, therefore, that the amount sought by the Bank is excessive in terms of the costs rules and Schedule 2 to the High Court Rules.1 Coetzee v Bank of New Zealand HC Whangarei, CIV-2011-488-872, [2012] NZHC 21, 27 January 2012.2 Coetzee v Bank of New Zealand (No.2) HC Whangarei, CIV-2011-488-872, [2012] NZHC 730, 18 April 2012.3 At [2].[6] Instead:(a) he says he is a single father with two children on the Domestic Purposes Benefit with no ability to pay such fees as suggested by theBank, or any other fees as he is "stretched to the max as it is". Insupport of that proposition he has attached a letter dated 15 May 2012 from Work and Income showing that the total income support received by him is $579.05 per week. I do not know whether he has any other source of income;(b) he calls in aid the Universal Declaration of Human Rights 1948;(c) he alleges that the Bank "is the predator who started all of this" by lapsing the caveat, and he appears to be critical of the Bank for selling chattels, the rights to which he says the Bank did not own, to an associated third party for $50,000 less than had been offered to the Bank unconditionally;(d) he says the case has cost him just as much as that claimed by the Bank in time, effort and studying and more in emotional distress;(e) he claims the matter has not been satisfactorily resolved and he intends to appeal to the Court of Appeal; and(f) he complains that the respondent's memorandum was not filed on time and that a double standard may operate because the Court was prepared to issue a judgment against him for not doing everything within a prescribed time period.[7] The costs claimed by the respondent in relation to the hearing of the application that the caveat not lapse and the hearing of the application to recall judgment total $8,084, on a 2B basis and in accordance with Schedule 2.[8] The relevant provisions of the High Court Rules, so far as the Court'sdetermination of costs in this case is concerned, are the provisions of rr 14.1, 14.2 and 14.7, as follows:14.1 Costs at discretion of court(1) All matters are at the discretion of the court if they relate to costs—(a) of a proceeding; or(b) incidental to a proceeding; or(c) of a step in a proceeding....14.2 Principles applying to determination of costsThe following general principles apply to the determination of costs:(a) the party who fails with respect to a proceeding or an interlocutory application should pay costs to the party who succeeds:(b) an award of costs should reflect the complexity and significance of the proceeding:(c) costs should be assessed by applying the appropriate daily recovery rate to the time considered reasonable for each step reasonably required in relation to the proceeding or interlocutory application:(d) an appropriate daily recovery rate should normally be two-thirds of the daily rate considered reasonable in relation to the proceeding or interlocutory application:(e) what is an appropriate daily recovery rate and what is a reasonable time should not depend on the skill or experience of the solicitor or counsel involved or on the time actually spent by the solicitor or counsel involved or on the costs actually incurred by the party claiming costs:(f) an award of costs should not exceed the costs incurred by the party claiming costs:(g) so far as possible the determination of costs should be predictable and expeditious....14.7 Refusal of, or reduction in, costsDespite rules 14.2 to 14.5, the court may refuse to make an order for costs or may reduce the costs otherwise payable under those rules if—...(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.[9] Turning to the applicant's grounds for opposing an award of costs, I amsatisfied that there is nothing in the Universal Declaration of Human Rights which assists the applicant, and I am also satisfied that in taking the steps available to it in the proceeding, the Bank has done no more than exercise the rights properly available to it and in an appropriate manner.[10] So far as the suggestion of a double standard is concerned, I note that in extending the time available to the respondent to file its costs submissions, retrospectively, by one day, I extended the time available to the applicant to file his memorandum by two days.[11] I acknowledge that the originating application was dismissed, in part, on the basis of an error on the part of the Court as to an essential fact.[12] In the circumstances, however, I do not consider any reduction in the costs related to the recall of the application should be allowed to the applicant on that account. The applicant elected to engage the Bank in litigation by bringing an originating application for an order that the caveat not lapse. He must have appreciated there was a risk the application would fail. The applicant then persisted in pursuing the application for a recall of the first judgment despite having been reminded that, even if the first judgment was based in part on an error, a second reason for dismissing the application was that the Court was not satisfied of themerits of the applicant's claim.[13] I accept that the applicant may not have fully appreciated the extent of hispotential liability to contribute to the Bank's costs if he was unsuccessful in theproceeding, given that he does not appear to have taken legal advice. It may be, also, that the applicant's persistence in this litigation is driven by a genuinely held view ofthe legal position with regard to the Bank's rights as mortgagee of the land in question. But that view is entirely mistaken.[14] Being satisfied that the costs sought by the respondent have been calculated in accordance with the rules and Schedule 2, it would be proper to refuse costs or order a reduced amount only if that was justified by the application of r 14.7. There is nothing in paragraphs (a) to (f) of the rule which applies here, so that leaves only the residual discretion provided by r 14.7(g).[15] Given the specific justifications listed in paragraphs (a) to (f) of rule 14.7, I consider it to be clear that the discretion in r 14.7(g) may be exercised only on a principled basis.[16] I am mindful that, for a person on a very modest fixed income, an award ofcosts in the order of $8,000 represents a substantial burden. In directing the Court'sattention to the matters to be taken into account in making a costs order, however, the rules make no reference to the ability of the party opposing costs to pay, or to the burden on that party of meeting its own costs in the proceeding.[17] I do not consider the Court would be justified in refusing costs or awarding a reduced amount in circumstances where the applicant's case is devoid of merit. Theprimary principle that a party who fails should pay costs to a party who succeeds4 is intended, in part, to provide a disincentive to the bringing of hopeless cases.[18] In accordance with the calculations set out in the Schedule to therespondent's costs memorandum, I direct the applicant to pay a contribution to the respondent's costs of $8,084.[19] It is appropriate, in the circumstances, to provide a warning to the applicant. It is entirely over to him whether he pursues an appeal against the judgments issued in this case. But he would do so now in the knowledge that if he fails in that pursuit he will be liable for a further award of costs in favour of the Bank. The amount of any award is likely to be substantial. Further, the applicant faces the prospect of an application by the Bank for an order for security of costs, the outcome of which may be that he is prevented from taking any further step to pursue an appeal until the4 High Court Rules, r 14.2(a).order for costs made in this judgment is satisfied and adequate security for any future costs liability is provided.......................................... Toogood J