BOLTON V AUCKLAND DISTRICT LAW SOCIETY HC AK CIV-2006-404-3312

BOLTON V AUCKLAND DISTRICT LAW SOCIETY HC AK CIV-2006-404-3312 1 December 2006IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY CIV-2006-404-3312BETWEEN MELVILLE JOHN BOLTON Plaintiff AND AUCKLAND DISTRICT LAW SOCIETY Defendant Judgment: 1 December 2006 In accordance with r540(4) I direct the Registrar to endorse this judgment with a delivery time of 11.30am on the 1st day of December 2006.JUDGMENT AS TO COSTS OF ASSOCIATE JUDGE D.I. GENDALL[1] In a Judgment I issued in this matter on 26 October 2006 the defendant succeeded in striking out the whole of the plaintiff's claim in this proceeding. The proceeding sought an order setting aside a settlement agreement concluded between the plaintiff and the defendant at a Judicial Settlement Conference on 6 April 2005. [2] At paragraph [61] of that Judgment I set out a timetable for the filing and exchange of memoranda as to costs by the parties and indicated that I would determine the issue of costs based upon the material filed. [3] Counsel for the defendant has filed its costs memorandum on 8 November 2006. Mr Bolton the plaintiff has filed his costs memorandum on 23 November 2006. I have now had an opportunity to consider those memoranda, which have just been referred to me. [4] I now set out my decision on the costs question. [5] In my 26 October 2006 Judgment I found:that the plaintiff's claim here is hopeless and discloses no reasonable cause of action (Paragraph [48])And:The plaintiff's causes of action against the defendant here are also an abuse of the processes of the Court in terms of r186(c) and should be struck out on this ground as well. (Paragraph [58]).[6] The defendant being successful in its strike out application, I see no reason here why the usual position noted in r47(a) that the successful party is entitled to costs against the unsuccessful party should not be followed. [7] In his memorandum as to costs, the plaintiff, however, submitted that either costs should lie where they fall, or alternatively the plaintiff should be awarded costs totalling $1,180.00. [8] The plaintiff was unsuccessful in defending the strike out application. In addition, the plaintiff is a self-represented litigant, and in the normal course of events would not be entitled to an order for costs – see McGechan on Procedure para HR46 Intro.08, and Re Collier (a bankrupt) [1996] 2 NZLR 438. [9] There can be no question therefore that any award of costs to the plaintiff here is inappropriate. Costs are to be awarded in favour of the defendant. [10] The only issue for consideration relates to what level of costs should be awarded to the defendant. [11] Counsel for the defendant indicates that if costs were calculated on a scale basis at category 2B, then they would amount to $3,040.00. [12] The defendant's actual costs incurred here it says totalled $7,300.00 plus GST and disbursements. Copies of bills of costs totalling this amount were attached to the memorandum from counsel for the defendant. [13] It is the defendant's contention that this entire proceeding lacked any merit and it was pursued by the plaintiff unnecessarily. The proceeding endeavoured to challenge a Court-sanctioned settlement which the defendant says was entered intoin good faith. The defendant maintains there was no sound basis for making the challenge. Its argument continues that it is in the interests of the administration of justice that the Court upholds agreements reached at Court-convened settlement conferences, and that this should be reflected here in the costs order made. [14] Accordingly, it is the defendant's position that an order of costs on an increased or an indemnity basis should be made pursuant to r48C(4)(a) or (f). These rules state in part:48C(4) The Court may order a party to pay indemnity costs if – (a) The party has acted vexatiously, frivolously, improperly, or unnecessarily in commencing, continuing or defending a proceeding or a step in the proceeding; Or: (f) Some other reason exists which justifies the Court making an order for indemnity costs despite the principle that the determination of costs should be predictable and expeditious.[15] It is clear that the threshold for awarding indemnity costs is a high one –Hedley v Kiwi Co-operative Dairies Limited (2002) 16 PRNZ 694. In that case Goddard J noted that indemnity costs are only to be awarded under r48C in "truly exceptional circumstances". [16] In her decision in Hedley, Goddard J cited an Australian decision Colgate Palmolive Company v Cussons Pty Ltd (1992) 118 ALR 248 where Shepherd J described six instances where indemnity costs might be justified in the following way:The question must always be whether the particular facts and circumstances of the case warrant the making of an order for payment of costs other than on party and party basis. Circumstances warranting the exercise of the discretion to award indemnity costs include: (a) the making of allegations of fraud knowing them to be false, and the making of irrelevant allegations of fraud;(b) evidence of particular misconduct that causes loss of time to the court and other parties; (c) the fact that the proceedings were commenced for some ulterior motive; (d) the fact that the proceedings were commenced in wilful disregard of known facts or clearly established law; (e) the making of allegations that ought never to have been made or the undue prolongation of a case by groundless contentions; (f) an imprudent refusal of an offer to compromise.[17] Here, counsel for the defendant contends that the points noted in paragraph [16](e) and (f) above are relevant. He says first that the plaintiff's claim was always doomed to fail and secondly, it involved the making of allegations that ought never to have been made. These allegations in particular concerned promises allegedly made by counsel and the presiding Associate Judge at the settlement conference concerning the legal effect of a letter on an outside party, the Disputes Tribunal. [18] Further, the defendant maintains that although the particular case did not involve a refusal to accept a settlement offer, this entire proceeding has been based on a change of heart by the plaintiff about the earlier settlement offer he had accepted. [19] The defendant says it follows necessarily that this case should be put into the same category as those where there has been an "imprudent refusal of an offer to compromise" – see paragraph [16](f) above. [20] Accordingly the plaintiff seeks costs at an indemnity level, or alternatively at a level substantially more than the category 2B costs noted above. [21] In response, the plaintiff in his memorandum as to costs states that he relies on r48D, particularly (b), (c), (d), (e)(ii), (iii), (v) and (f). [22] Rule 48D deals with the Court's ability to refuse or reduce costs and the circumstances in which this might occur. In my view, the present case is not one where it is appropriate to apply the provisions of r48D. The defendant was entirely successful in its strike out application and as I have noted, it is entitled to costsagainst the plaintiff. Further, there is no reason, as I see it, why any reduction of the costs to be awarded from those otherwise payable under the High Court Rules would be appropriate. I reject the plaintiff's submission that r48D has any application here. [23] As best I can tell from the plaintiff's submissions in his memorandum as to costs, he raises a further point. This relates to what the plaintiff says is an important element of public interest which he maintains exists here surrounding his endeavours to have the settlement set aside. He maintains that this relates to a direct public interest in what he describes as "the honourable functioning of lawyers, ADLS, lay observers and tribunals to see natural justice maintained according to its expectation of consumer protection and fair trading". These are important general principles. In my view, however, it is not appropriate under the circumstances of this case for the plaintiff to endeavour to call these matters in aid of his own arguments. [24] The issue here is simply that the plaintiff pursued his claim against the defendant in this Court in a way which can only be described as improper and unnecessary. In this proceeding the plaintiff effectively attempted to re-litigate the outcome of earlier proceedings in an attempt to have what was a judicially sanctioned settlement agreement set aside. Under the circumstances here, that was not appropriate. [25] I am mindful, however, that the plaintiff is a self-represented litigant. In addition, as I understand the position, the amount essentially at issue here (the $1,180 earlier costs award) could be seen as being of reasonably low value given the amounts generally in question in High Court litigation. [26] The Court must have considerable sympathy for the position in which the defendant found itself here, given the plaintiff's determination to push ahead with this ill-conceived claim. Notwithstanding that, I am not satisfied that it could be said that the plaintiff's actions in pursuing this claim were for some ulterior motive or that they involved direct allegations of fraud. [27] Weighing up all the factors to be considered here, I find, but only by a fine margin, that the defendant has not been able to make out the "truly exceptionalcircumstances" noted in Hedley v Kiwi Co-operative Dairies Limited which are required to justify an award of indemnity costs. An award of scale costs is to be made. [28] An order is made therefore that the defendant is entitled to costs on a category 2B basis (which I understand total $3,040) against the plaintiff, together with disbursements of $740. __________________________Associate Judge D.I. GendallSolicitors:Glaister Ennor, Auckland for Defendant