DOWDEN v COMMISSIONER OF INLAND REVENUE [2021] NZCA 206

DOWDEN v COMMISSIONER OF INLAND REVENUE [2021] NZCA 206 [25 May 2021]IN THE COURT OF APPEAL OF NEW ZEALANDI TE KŌTI PĪRA O AOTEAROACA624/2019[2021] NZCA 206BETWEEN JOHN ALFRED DOWDENAppellantAND COMMISSIONER OF INLANDREVENUERespondentCourt: Miller and Courtney JJCounsel: Appellant in PersonM J Bryant for RespondentJudgment:(On the papers)25 May 2021 at 11 amJUDGMENT OF THE COURTA The Commissioner's application for costs is granted.B There is an order in favour of the Commissioner for costs of $3,824, to bepaid from Mr Dowden's security for costs.____________________________________________________________________REASONS OF THE COURT(Given by Courtney J)[1] In late 2019 Mr Dowden filed an appeal against a judgment of Peters Jdismissing his appeal against a decision of the Taxation Review Authority.1 Therewere delays in advancing the appeal. Eventually it was deemed to have been1 Dowden v Commissioner of Inland Revenue [2019] NZHC 2729, (2019) 29 NZTC 24-025 [HighCourt decision].abandoned. Mr Dowden applied under r 43(2) of the Court of Appeal (Civil) Rules2005 (the Rules) for an extension of time for the allocation of a hearing date and tofile the case on appeal. The application was declined.2[2] The Commissioner of Inland Revenue has applied for costs totalling $3,824 onthe r 43 application, Mr Dowden's earlier, unsuccessful, application to dispense withsecurity for costs and the Commissioner's successful application for increased securityfor costs.3 An order is sought that the costs be paid from the security for costspreviously paid by Mr Dowden. Mr Dowden opposes the application and requeststhat the security for costs be repaid to him in full.[3] Mr Dowden submits, first, that the lack of any reference to costs in the decisiondeclining the r 43 application suggests that the Court intended costs to lie where theyfell. We do not accept this submission. The Commissioner did not raise the issue ofcosts in its submissions on the r 43 application and the Court accordingly made noorder as to costs. However, the Commissioner's failure to raise the issue of costs at thetime of the application does not does not preclude an application for costs now.4The general principle is that costs follow the event and that applies equally tointerlocutory applications.5[4] Secondly, Mr Dowden says that the figure claimed for costs is excessive giventhe work involved. He contends that the Commissioner "didn't have to do much workat all and the documents they filed are pretty much the same thing". This submissionengages r 53F(a) of the Rules which provides that the Court may refuse to make anorder for costs or may reduce the costs otherwise payable if "the nature of the appealor the step in the appeal is such that the time required by the party claiming costs willbe substantially less than the time allocated under band A".[5] The Rules provide a formula for fixing costs as a reasonable contribution tothe actual costs incurred by a successful party. The formula reflects the amount of2 Dowden v Commissioner of Inland Revenue [2020] NZCA 630, (2020) 29 NZTC 24-085 [Rule 43decision].3 Dowden v Commissioner of Inland Revenue [2020] NZCA 152, (2020) 29 NZTC 24-068 [Securityfor costs decision].4 See, for example, BASF New Zealand Ltd v Brian Roberts (1998) Ltd [2020] NZCA 662.5 Court of Appeal (Civil) Rules 2005, rr 53GA(1), 53G(1) and r 53A(1)(a).time allowed under the Rules for the steps taken calculated on the basis of the dailyallowance for those steps.6 Some steps are presumed to take only part of a day, inwhich case the allowance will reflect that.[6] The Commissioner has correctly calculated her costs in accordance withthe band A time allocations in sch 2 of the Rules, applying the appropriate dailyrecovery rate as set out in r 53C(1)(a) of the Rules and sch 2 of the High Court Rules2016.7 We have reviewed the steps taken on behalf of the Commissioner for whichcosts are now claimed.[7] Half a day was allowed to prepare the application for increased security forcosts. This was a four-page application that set out the grounds for the application,the nature of the appeal and the relevant rules and legal principles relied on. The timeallowed for that work was reasonable.[8] One-fifth of a day was allowed for each of the memoranda filed in relation toMr Dowden's application to dispense with security for costs, to the filing of a case onappeal without consent and to the application to extend time. All requiredconsideration of the information provided by Mr Dowden and the preparation of amemorandum. Even if the documents themselves were relatively brief, the timeallowed for that work was reasonable.[9] Half a day was allowed for the submissions in opposition to the application foran extension of time. We can see that there is overlap with the application for increasedsecurity for costs in that the description of the history of the case is essentially thesame as that set out in the application for increased security for costs. But thesubmissions also canvassed the procedural history in this Court and the differentprinciples applying to the application. The allowance was a reasonable one for thework required to produce the submissions.6 Rule 53A(1)(c).7 0.5 (successful application for increased security for costs) + 0.2 (memorandum opposingapplication to waive security) + 0.2 (memorandum relating to case on appeal filed withoutconsent) + 0.2 (memorandum opposing extension of time) + 0.5 (submissions on extension oftime) = 1.6. 1.6 x daily recovery rate of $2,390 =$ 3,824.[10] The Commissioner's application for costs is granted.[11] There is an order in favour of the Commissioner for costs of $3,824, to be paidfrom Mr Dowden's security for costs.Solicitors:Crown Law Office, Wellington for Respondent