BOLTON V AUCKLAND DISTRICT LAW SOCIETY HC AK CIV 2007-404-1289

BOLTON V AUCKLAND DISTRICT LAW SOCIETY HC AK CIV 2007-404-1289 8 June 2007IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY CIV 2007-404-1289BETWEEN MELVILLE JOHN BOLTON Plaintiff AND AUCKLAND DISTRICT LAW SOCIETY Defendant Hearing: 14 May 2007 Appearances: Plaintiff in person Mr McKendrick for respondent Judgment: 8 June 2007 at 10 amJUDGMENT OF WINKELMANN JThis judgment was delivered by me on 8 June 2007 at 10 am pursuant to Rule540(4) of the High Court Rules. Registrar/ Deputy RegistrarM J Bolton, 15 Penney Avenue, Mt Roskill Glaister Ennor, Auckland[1] Mr Bolton makes application to review costs orders made by Associate Judge Gendall on 1 December 2006 in relation to the defendant's successful application to strike out the plaintiff's, (Mr Bolton's) proceeding. The application was filed on 14 March 2007 along with an application for an enlargement of time for the making of the application. There is a seven day time limit to make an application for review, so that the plaintiff's application was filed more than 13 weeks beyond the statutory time limit.Background to this proceeding[2] In October 2006, Associate Judge Gendall gave judgment striking out the statement of claim in this proceeding. In doing so he set out the lengthy background to Mr Bolton's claim. I set out the background he narrates as a useful summary:[9] The present proceeding is the second of two interconnected proceedings issued by the plaintiff against the defendant. The general background to the plaintiff's current proceeding is best understood by reference to the factual background set out in the Judgment of Justice Heath dated 14 July 2005 in the earlier proceeding Bolton v Auckland District Law Society & Others (HC AK, CIV-2004-404-6908) in the following way:Introduction(1) Mr Bolton has brought judicial review proceedings arising out of a complaint made to the Auckland District Law Society about the conduct of a law practitioner who acted for him and his wife in 2000. In short, his complaint focussed on an alleged failure by the solicitor to process an application for legal aid in a timely manner, and to advise adequately as to the applicability of the Crown charge in the circumstances of the case. (2) Relief is sought against the Office of the Lay Observer ("the Lay Observer"), the Disputes Tribunal and the District Court, settlement having been achieved with the Auckland District Law Society. (3) Prior to settlement with the District Law Society, the relief sought against both the Society and the Lay Observer was based on alleged deficiencies in the investigative processes used to examine Mr Bolton's complaint. (4) Mr Bolton, believing that his complaint had not been properly addressed, decided to sue the solicitors in the Disputes Tribunal to recover the $1,500 subject to the Crown charge. The claim was brought by both Mr and Mrs Bolton. The claim was based onnegligence on similar grounds to those considered as part of the Law Society's disciplinary functions. The Tribunal had jurisdiction to entertain the claim as one based on the implied term of a contract of retainer to exercise proper skill and care: see s10(1)(a) Disputes Tribunals Act 1988. (5) The Disputes Tribunal dismissed the claim. A subsequent appeal to the District Court was also dismissed. (6) Mr Bolton seeks judicial review of both the Tribunal's and the District Court's decisions based on alleged failure to address his claims properly.Settlement with the Auckland District Law Society(7) Settlement with the Auckland District Law Society was effected on 6 April 2005, following a settlement conference over which Associate Judge Abbott presided. Settlement was confirmed and directions given by Wild J on 23 May 2005. (8) The settlement involved payment of a sum of money to Mr Bolton with a denial of liability on the part of the Society. The Society expressly recorded that the settlement related to disciplinary issues and did not address claims against the solicitors for negligence. (9) Mr Bolton elected to proceed with the claim for judicial review against the Lay Observer, the Disputes Tribunal and the District Court, notwithstanding his settlement with the Auckland District Law Society. [10] In the event, the parties which had not settled with the plaintiff Mr Bolton, the Lay Observer, the Disputes Tribunal and the District Court, were successful in that proceeding CIV-2004-404-6908 in having the plaintiff's claim against them struck out. The present proceeding before this Court is concerned only with the defendant Auckland District Law Society. It is effectively an attempt to re-litigate the outcome of the earlier proceeding by having the judicially sanctioned settlement agreement set aside. [11] In completing the factual summary, reference needs to be made to the settlement agreement itself. This was a hand-written agreement entered into at a Judicial Settlement Conference presided over by Associate Judge Abbott on 6 April 2005. The terms of this settlement agreement were: Background (1) The plaintiff (Mr Bolton) and the first defendant (ADLS) have participated in a judicial settlement conference today, before His Honour Associate Judge Abbott. They have agreed on terms by which the plaintiff's application for judicial review will be settled in respect of the first defendant. (2) The terms of that agreement are recorded here.Agreement (3) ADLS will provide a letter to the plaintiff in the form of the attached draft. (4) ADLS will pay the plaintiff the sum of $1,500 within 14 days of the date of this agreement. (5) The provision of the letter in (3) above and the payment money in (4) will constitute a full and final settlement of the judicial review application and any other claims or complaint by the plaintiff against the first defendant arising out of or in connection (with) his earlier complaint against the practitioner Geraldine Ryan. (6) Upon receipt of the letter and the money the plaintiff will provide a signed Notice of Discontinuance of this judicial review proceeding against ADLS. (7) The terms of this settlement are strictly confidential to the parties. (8) Although Mrs Bolton is not a party to this proceeding, she was the person making the initial complaint to ADLS, which was the subject of the judicial review application. Accordingly she agrees to be bound by this settlement. (9) This settlement is agreed without any acknowledgement of liability or reviewable error by ADLS. [12] The Minute from Associate Judge Abbott from the settlement conference referred to the parties' agreement in these terms: They have recorded that agreement in their attached settlement agreement and seek to have their agreement recorded as a formal order of the Court; and I direct that the matter be referred to the Duty Judge for formal approval of the settlement. I take this approach out of an abundance of caution having regard to the decision Reid v New Zealand Fire Service Commission (1995) PRNZ 550. I recommend that the settlement agreement be approved. [13] Subsequently, the letter contemplated in paragraphs 3 and 5 of the settlement agreement was provided to the plaintiff in the agreed form, and the sum of $1,500 was paid to him. [14] A Notice of Discontinuance was then filed, which read: As a result of a binding settlement agreement between the plaintiff and the first defendant, the plaintiff hereby discontinues this proceeding against the first defendant. No orders for costs are sought by either party.[3] In the present proceeding, Mr Bolton filed a notice of application to set aside the settlement. Associate Judge Gendall summarised this proceeding as follows:[17] The substance of the present proceeding seems to be set out in the plaintiff's "Notice of Application to Set Aside Settlement" in the following way: Upon the grounds that a certain term in the (settlement) agreement was that the first defendant (ADLS) provide the plaintiff with a letter clarifying the matters at issue, such as would allow matters at issue to be revisited in the Disputes Tribunal. That the letter did not have this effect and accordingly that the parties were mistaken as to the efficacy of the letter provided by the first defendant. [18] In similar fashion, the key pleading in the plaintiff's Statement of Claim seems to be set out at paragraph 17 in the following way: At the Settlement Conference, the plaintiff made it plain and it was understood by ADLS, that the letter of clarification had to be sufficient for the plaintiff to proceed with the Judicial Review and to have the erroneous Disputes Tribunal decision annulled – with the $1,180 held by the Court, being then paid back to the plaintiff – that being the logical outcome expected instead of ADLS making good that sum directly. When the plaintiff expressed doubts that the Letter was sufficient and was unwilling to sign a Settlement, he was assured by both ADLS and the presiding Judge that legally trained minds would understand the Letter's meaning, enabling the desired outcome. As a direct consequence, the plaintiff signed the settlement, having regard also for the Court's time. [19] The purported causes of action noted in the plaintiff's Statement of Claim are "breach of natural justice" and "contractual mistake". And, the remedies sought by the plaintiff in his Statement of Claim are: (a) That the settlement with ADLS be set aside. (b) That the sum of $1,180 (being the amount of $1,000 plus collection costs) [ordered to be paid by the plaintiff to the firm of solicitors concerned] wrongly awarded against the plaintiff by the Disputes Tribunal, be made good to the plaintiff by ADLS. (c) Costs of and incidental to these proceedings. [20] Although in his pleadings the plaintiff refers to a "breach of natural justice", before me the parties accepted that this was not an application for judicial review in terms of the Judicature Amendment Act 1972. The claim essentially seeks to set aside the settlement and consent order, and to obtain reimbursement of the $1,180 costs awarded against the plaintiff by the Disputes Tribunal.[4] Associate Judge Gendall held that Mr Bolton's claims were hopeless and that his pleading disclosed no reasonable cause of action against the defendant. He found that the claim should be struck out on that basis alone. He then proceeded to consider whether the proceeding was otherwise an abuse of process, although he observed it was not strictly necessary for him to do so, having already held that the proceeding should be struck out. He concluded that the proceeding was an abuse of the processes of the Court in terms of r186(c) and if he were required to do so, he would have struck the proceeding out on that ground as well. [5] After the October 2006 judgment striking out Mr Bolton's claim the defendant made application for costs on an increased or indemnity basis. The application for increased or indemnity costs was made on the grounds that the entire proceeding lacked any merit and was pursued by the plaintiff unnecessarily. Mr Bolton responded that costs should lie where they fell, or alternatively that he should be awarded costs totalling $1,180, the sum of the costs award made against him by the Disputes Tribunal. The Associate Judge found that there was no reason to depart from the usual position that costs should follow the event and it was therefore the defendant, not the plaintiff who was entitled to the award of costs. Although the Associate Judge expressed himself as satisfied that Mr Bolton had pursued his claim against the defendant in a way which could only be described as improper and unnecessary, he said that he bore in mind that Mr Bolton was a self- represented litigant. He said further: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.[6] Weighing up all the factors he found, by a fine margin only, that the defendant had not been able to make out the "truly exceptional circumstances" noted in Hedley v Kiwi Co-operative Dairies Limited (2002) 16 PRNZ 694 as required to justify an award of indemnity costs. He therefore awarded scale costs on a 2B basis against the plaintiff ($3,040) together with disbursements of $740. [7] Mr Bolton did not make application to review the October 2006 judgment striking out the statement of claim. The application for review is brought in respect of the costs award only.Application for enlargement of time[8] The first issue that arises for consideration is whether the time for the making of the application to review the costs order should be enlarged on Mr Bolton's application. The same principles apply as for an application to extend the time for an appeal (Sim's Court Practice at HCR61C.7) The relevant factors are (Sutton v New Zealand Guardian Trust Company Ltd (1989) 2 PRNZ 111): (a) The lapse of time since the expiry of the prescribed period. (b) The explanation for the delay. (c) Whether there is substance or merit in the proposed appeal or review. (d) Whether any party is likely to be prejudiced by the grant or refusal of the application to extend. [9] As already noted the delay in filing the application for review was extensive. Mr Bolton says that the delay arose because, as an unrepresented person, he preferred to communicate directly with counsel for the defendant. When that proved unsuccessful he wrote a memorandum to Associate Judge Gendall dated 2 February 2007 which he intended to take the form of an appeal. Associate Judge Gendall responded by minute dated 20 February 2007. The Associate Judge noted that the memorandum filed by Mr Bolton did not amount to a request that he recall his judgment, and said:As best I can tell, matters raised in the plaintiff's memorandum dated 2 February 2007 may possibly go to the question of a possible appeal with respect to either of the two Judgments in question, but as I understand it from counsel for the defendant, there has been no appeal lodged in these proceedings. These are matters for the plaintiff to consider, including any possible application for an appeal out of time.[10] Mr Bolton says that after he received this minute he discussed the matter with a Registrar of the High Court and learnt that he could proceed by way of reviewrather than appeal, so that the matter could be dealt with in Auckland rather than Wellington. This would make it possible for him to pursue a challenge to the costs award, which he otherwise could not do in his increasingly financially pressed circumstances. [11] The principal cause of the delay was therefore the tactical decision taken by Mr Bolton to pursue discussions with the defendant before pursuing a challenge through the Courts. This is not an adequate excuse for the delay. Although I accept that Mr Bolton made some attempt to initiate Court proceedings in early February, he would have been aware by 20 February 2007, or very shortly thereafter, that the memorandum filed by him was not effective for that purpose, yet there was still a further delay of more than three weeks until the present applications were filed. [12] The next issue is whether there is any merit in the proposed review. Mr Bolton filed a memorandum dated 1 December 2006 which he also annexes to his affidavit of 12 April 2007 as an exhibit. In that memorandum he sets out what he says were errors made by the Associate Judge in exercising his discretion to strike out the plaintiff's claim of October 2006. In particular he lists a number of matters which he says should properly have been taken into account, matters which should not have been taken into account and factual errors that the Associate Judge made in reaching his decision. Mr Bolton is therefore again attempting to relitigate matters already effectively disposed of. In relation to the merits of the costs order he makes only three points: (a) Heath J did not allow the plaintiff's claim to proceed, but still considered that costs should lie where they fell. (b) Mr Bolton is a superannuitant without property, business or other means of support. (c) The defendant was a causative party necessitating these actions. [13] None of these three matters can form a successful basis for review. Heath J's decision was made in relation to different proceedings and had no bearing on theissue before Associate Judge Gendall. As to Mr Bolton's financial circumstances, he is not in receipt of legal aid and is therefore liable to an award of costs being made against him. As to the defendant's causative role, I take this to be a reference to the defendant's alleged conduct which forms the basis of the proceedings struck out by the Associate Judge in October 2006. The Associate Judge considered and disposed of that argument in that judgment. These are not therefore matters that the Associate Judge was required to have regard to. [14] Mr Bolton does not articulate any error in the approach taken by the Associate Judge to costs. The Associate Judge has applied conventional principles in reaching his decision, and there was no apparent basis upon which Mr Bolton could resist an award of costs on a scale basis. Indeed, given the Associate Judge's finding that the proceeding was an abuse of process, it was open to the Associate Judge to make an award of increased or indemnity costs. [15] The application for review has no prospect of success. The delay in bringing the application has been substantial and there is no adequate explanation for that delay. The application for leave to bring the application for review out of time is therefore declined.CostsThe defendant seeks an award of indemnity costs pursuant to r48C(4)(a) which provides: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 a proceeding; or[16] It says that the proceeding was brought for a collateral purpose, namely delaying the progress of bankruptcy proceedings against Mr Bolton. Mr Bolton was served with a bankruptcy notice on 8 February 2007. The defendant says that the Associate Judge observed that "only by a fine margin" did he not award indemnity costs. The defendant submits that the "fine margin" has been crossed with this application.[17] While I am not persuaded that these proceedings were brought for the collateral reason of delaying the bankruptcy proceedings, they were brought for the collateral purpose of re-arguing issues which the Associate Judge found had been resolved on the settlement of the earlier proceedings, and which were in any case disposed of when the Associate Judge struck out the proceeding. An application to review a costs order is not an appropriate method by which to reventilate issues resolved in a judgment that is not itself the subject of review. I am persuaded that Mr Bolton has acted unnecessarily and vexatiously in bringing this application for review in relation to the Associate Judge's costs decision. The defendant is therefore entitled to indemnity costs on this application. [18] The defendant has provided a memorandum setting out its estimated actual costs in respect of this application. An estimate is necessary as some fees rendered by the defendant's solicitors were for more than one matter. The estimated costs are $6,643.88. This is to be compared with costs calculated on a 2B basis which would total $2,880.00. I consider that an award of costs of $6000.00 is appropriate. Because that amount sought by the defendant is an estimated amount, a small discount is necessary to avoid over recovery of costs. Winkelmann J