NR v MR [2016] NZCA 430

NR v MR [2016] NZCA 430 [12 September 2016]ORDER PERMANENTLY FORBIDDING PUBLICATION OF THE NAMESOR IDENTIFYING PARTICULARS OF NR AND MR.IN THE COURT OF APPEAL OF NEW ZEALANDCA443/2014CA465/2014CA522/2014[2016] NZCA 430BETWEEN NRAppellantAND MRRespondentCA460/2014BETWEEN NRAppellantAND DISTRICT COURT AT AUCKLANDFirst RespondentMRSecond RespondentJACKSON RUSSELLThird RespondentHearing: 5 May 2016Court: Winkelmann, Simon France and Woolford JJCounsel: No appearance for AppellantR J Hollyman and A J B Holmes for Respondent MRRespondent District Court at Auckland abides (forCA460/2014)No appearance for Respondent Jackson Russell (forCA460/2014)Judgment: 12 September 2016 at 11.30 amJUDGMENT OF THE COURTA The appeals in CA443/2014 and CA522/2014 (the recusal appeals) are dismissed.B NR's application in CA522/2014 to file further evidence is declined.C The appeal in CA465/2014 is allowed in part. Costs may not be claimed for second counsel. Otherwise the appeal is dismissed.D The appeal in CA460/2014 is dismissed.E NR must pay MR costs in the amount of 40 per cent of costs for a standard appeal on a band A basis and usual disbursements.F Order made prohibiting publication of the names or identifying particulars of the parties.____________________________________________________________________REASONS OF THE COURT(Given by Simon France J)Introduction[1] MR (M) was a sex worker. NR (R) was a client. M ended the arrangement in circumstances not acceptable to R. He sought ongoing contact but M declined. R persisted in his efforts to have contact and eventually M successfully sought a restraining order in the District Court under the Harassment Act 1997.1 R responded with civil proceedings of his own alleging, among other things, breach of contract, breach of confidence and defamation.[2] This judgment addresses four appeals brought by R. Applications to adduce further evidence have previously been determined.2 Concurrently a judgment is1 MLR v NR DC Auckland CIV-2012-004-1034, 9 May 2013 at [25].2 NR v MR [2015] NZCA 426. One final application for further evidence is outstanding which we deal with in the course of this judgment.being issued which addresses all the appeals stemming from M's restraining orderapplication.3[3] R's civil proceedings were struck out in the District Court.4 R appealed the strike-out. Andrews J dismissed the appeal5 and declined leave for a further appeal.6This Court also declined an application for leave to appeal.7 In the course of the proceedings before Andrews J, R twice applied for her Honour to recuse herself.8R now appeals the two decisions declining the recusal applications. Andrews J declined indemnity costs but awarded increased costs.9 R appeals that decision.[4] Following his decision striking out R's civil claim, Judge Gibson awardedindemnity costs against R.10 R did not appeal this but judicially reviewed the decision. Other than in a minor aspect, Katz J dismissed the review.11 R appeals that decision.Recusal applications[5] R applied for Andrews J to recuse herself from determining his application for leave to appeal to this Court. He claimed it would be contrary to natural justice as the Judge would be judge in her own cause. Andrews J declined the application on the papers but then heard further argument from R at the start of the oral leave hearing. Her Honour then confirmed her refusal to recuse herself, noting that it is orthodox for the deciding judge to also consider leave.12 Andrews J cited Muir v Commissioner of Inland Revenue in support.13[6] R appeals on the basis that Andrews J did not address his arguments and was wrong not to recuse herself on the grounds of actual or apparent bias. However,3 NR v District Court at Auckland [2016] NZCA 429.4 [NR] v [MR] DC Auckland CIV-2012-004-1388, 11 November 2013 at [53].5 NR v MR [2014] NZHC 863 at [123].6 NR v MR [2014] NZHC 2045 at [19].7 NR v MR [2015] NZCA 81 at [37].8 [NR] v [MR] HC Auckland CIV-2013-404-4701, 14 July 2014 at [10]; and [NR] v [MR]HC Auckland CIV-2013-404-4701, 26 August 2014 [Second recusal minute] at [10].9 NR v MR [2014] NZHC 1804 at [15] and [17].10 [NR] v [MR] DC Auckland CIV-2012-004-1388. 13 December 2013 at [18] and [23].11 NR v District Court at Auckland [2014] NZHC 1919 at [53].12 Second recusal minute, above n 8, at [5].13 At [5] citing Muir v Commissioner of Inland Revenue [2007] NZCA 334, [2007] 3 NZLR 495.these claims of bias have already been rejected by this Court when declining leave to appeal the substantive decision:14[28] We are not persuaded there is any substance in this proposed ground of appeal. Consideration of the High Court judgment shows plainly that theapplicant's submissions were carefully considered. The judgment does not indicate any appearance of bias, still less actual bias. The applicant'scomplaint about the approach of the High Court Judge during the hearing does not assist his case. Robust exchanges between the bench and litigants are expected in the normal course of argument. They do not give rise to any appearance of bias.[7] It is normally appropriate for the judge who determined a matter to decide leave. There was no reason here for a departure from the normal course. Further, since this Court has declined leave to appeal the strike-out decision, the correctness of Andrews J's recusal decisions is entirely moot. It is not open to the High Court to consider the matter afresh. The appeals in CA443/2014 and CA522/2014 are dismissed.[8] For completeness we note that R had filed an application for leave to adduce further evidence in CA522/2014, namely one of his earlier affidavits. This could not be determined at the leave hearing because it had not yet been filed. The affidavit is now on file. We consider its content is largely irrelevant and much of it essentially submission. Accordingly, we decline leave to file this evidence.Costs — Andrews J in High Court[9] R appeals the decision of Andrews J to award increased costs in relation to his appeal against the strike-out decision of Judge Gibson. The grounds of appeal in summarised form are:(a) the Judge was incorrect in her assessment that R pursued unmeritorious grounds of appeal;(b) the Judge did not address his costs submissions, nor explain why they were rejected;14 NR v MR, above n 7.(c) the Judge incorrectly had regard to a settlement offer allegedly made by M;(d) there should not have been costs awarded for second counsel; and(e) there was apparent bias.[10] Before addressing the decision under appeal, we summarise the costs submissions made in the High Court by R. R first emphasised the principle that costs should be predictable and able to be settled expeditiously. He submitted thatM's costs submissions ignored this and sought to rely on past matters rather than theappeal itself. It was submitted that where steps or applications were claimed to be unnecessary, the scale already provided a costs amount for them. Generally there was nothing in the proceeding to merit increased costs.[11] R next focused on the second counsel issue and submitted it was unnecessary. Then, R advanced the same submission that he has on numerous other occasions concerning the funding arrangements for M, and what he considers to be improper litigation funding and improper withholding of information concerning that. Thesesubmissions then moved into allegations of misconduct by M's counsel bymisleading the Court and failing to draw the Court's attention to relevant authorityand legislation.[12] Against that background we turn to the ruling under appeal.15 Andrews Jstated the relevant principles and summarised competing arguments. Concerning R'scase it was correctly noted that he complained about a lack of notice that increased costs would be sought, made allegations about third party funding and provided calculations as to the amount of costs already awarded against R in various proceedings.16[13] Indemnity costs were first rejected, her Honour noting that R had a right of appeal and she was not satisfied the very high threshold for indemnity costs had been15 NR v MR, above n 9.16 At [11]–[12].reached.17 Increased costs were, however, awarded on the basis that R had pursued unmeritorious grounds of appeal and sought to reargue matters already determined in other proceedings.18 A 50 per cent uplift was applied together with second counsel costs.19[14] We understand why R might consider his submissions were not addressed. The ruling is relatively brief. However, that is somewhat the nature of costs rulings. It is clear Andrews J had read R's submissions but then focused, as normallyhappens, on the matters that influenced the outcome rather than dealing with all matters raised.[15] Looking ourselves at the matters R had raised in the High Court we make the following points. The issue of litigation funding is one R has persistently raised tono effect. There is no basis for any inquiry into M's funding arrangements andconstant repetition of the claim by R does not give it substance. R made applicationsin this Court for disclosure orders in relation to funding and for orders barring M'scounsel from appearing. The application was dismissed with increased costs being ordered.20 It is unnecessary for us to comment further.[16] Concerning the dispute as to whether R was advancing unmeritorious grounds and relitigating settled matters, we note observations made by this Court onthe leave application. R's breach of contract argument was described as "contrived"and of the defamation claim it was said that R was seeking to relitigate the harassment decision.21 These conclusions reflect the same findings made by Andrews J in the costs ruling. Further, this Court also endorsed the Judge'sreasoning on the other causes of action. We note in that regard that Andrews J had upheld the alternative District Court finding that the proceeding could be struck out as vexatious and frivolous.[17] Next, addressing the matters mentioned in R's notice of appeal, we havealready considered bias and the merits. It is correct that Andrews J referred to a17 At [15].18 At [17].19 At [18]–[19].20 NR v MR [2014] NZCA 623, (2014) 22 PRNZ 636 at [49].21 NR v MR, above n 7, at [31] and [33].settlement offer,22 but we do not see it as having been given much prominence. We agree with R that it is not a matter meriting particular weight but there are many other hurdles R must surmount.[18] That leaves the issue of second counsel. Andrews J does not set out why she thought this required. We do not agree R should have been required to meet the costs of second counsel. It was an appeal of an interlocutory decision. R is a laylitigant and M's counsel had by this stage considerable familiarity with the file. R as appellant did not develop matters on the appeal in a way that required any new conceptualisation but essentially ran the same arguments again. We do not consider in these circumstances R should be required to meet the costs of two counsel.[19] Drawing these threads together, we are satisfied that conditions existed to support increased costs. The initial strike-out decision had indicated significantflaws with R's proceeding and this should have alerted R to the weaknesses of his case. Notwithstanding this, an appeal was pursued on all matters, some of which were plainly hopeless. Increased costs of 50 per cent was a reasonable reflection of these factors.[20] We allow the appeal to the extent that costs for second counsel may not be claimed. In all other respects it is dismissed.Judicial review of District Court costs — appeal from Katz J[21] The final appeal concerns R's challenge to the District Court decision toaward indemnity costs on the strike-out of his civil proceedings. R did not appeal the decision but instead sought to judicially review it. Katz J identified five issues for determination:23(a) Had R been denied natural justice because he was not given an oral hearing on costs?22 NR v MR, above n 9, at [7] and [17].23 NR v District Court at Auckland, above n 11, at [5].(b) Was R wrongly prevented from leading evidence about the funding ofM's defence and misconduct by her lawyers?(c) Was the decision irrational in that it had regard to the 3C costs scale in relation to proceedings that were inherently not complex?(d) Did the Judge err concerning GST?(e) Did the Judge err in awarding costs to a non-party, namely Jackson Russell, a law firm and intended defendant?[22] Katz J held against R on each ground, save a small GST adjustment.24[23] R appeals both the substantive judgment and the accompanying costs award (scale costs). To an amended notice of appeal, R appended a paragraph-by-paragraph critique of the judgment under appeal. The critique analyses the judgment by reference to an alleged series of improper techniques R says both Andrews and Katz JJ use. The "techniques" are:(a) turning a blind eye to relevant considerations;(b) acting as an advocate for R's opponent;(c) making and then carrying out improper threats;(d) directly mistaking or misrepresenting R's submissions;(e) superficial and conclusory findings;(f) admitting extraneous prejudicial material;(g) making irrelevant findings;(h) "blunt per incuriam errors of law"; and24 See at [64].(i) other oppressive conduct.[24] Techniques (a), (c), (d), (e), (g) and (h) are in reality different ways of Rsaying he does not agree with the Court's findings of fact or assessment of the merits of his case. They do not need separate consideration from his general proposition that Katz J was wrong in her conclusion.[25] As for the other "techniques", prejudicial material being wrongly admitted isa specific appeal ground. There is nothing on the record to suggest Katz J acted asan advocate for M and R's paragraph-by-paragraph dissection of the judgment does not identify an example of it. The same is true of oppressive conduct.[26] We turn then to the substantive appeal grounds. We begin by noting that Katz J first identified the relevant costs principles, and the discretionary nature of such decisions.25 The structure of the judgment was to address in turn each of the five issues her Honour had identified. In approaching it this way we consider Katz J fully considered the merits of each challenge. As we have already observed, the fact that all the points R made are not expressly addressed does not mean the judgment is deficient.[27] The first question was whether the District Court erred in not affording R an oral hearing. That required analysis of the information available to Judge Gibson and whether the absence of an oral hearing meant he could not determine the matter fairly. R submits that Katz J made unjustified assumptions about the material available. We do not agree. Katz J was referring to material that would be on thefile, including various filings by R in which he alleged improper conduct by M'scounsel.26[28] Otherwise R appears to submit that Katz J ignored his submissions but again that is not so. Her Honour did not accept the correctness of the submissions which is an entirely different matter. The Judge identified the essential points made by R and25 At [7]–[8].26 At [23].gave reasons why a different approach was the correct one. This observation is true for each of the issues and accordingly we will not address this appeal ground further.[29] As best we can discern it, the question of preventing R from adducingevidence relates to R's allegation of misconduct by M's lawyers and the litigation funding matter. Katz J rightly noted that it was a topic well rehearsed already and ofminimal relevance to costs in circumstances where M had fully succeeded and R'sproceedings had been found to be a sinister abuse of process.27 We agree.[30] The next issue is the alleged irrationality of the District Court relying on the 3C band. As Katz J noted, the 3C band was only referred to because Judge Gibson wanted to prune back the actual costs despite an indemnity costs award. Katz J noted that Judge Gibson was not satisfied the actual costs were reasonable and so used the 3C scale as a benchmark.28 We agree with Katz J this was a principled approach.[31] The fourth review ground concerning GST requires no further elaboration. The District Court had overlooked that the third respondent, Jackson Russell, was GST registered so costs should not have been inclusive of GST. An adjustment of $1,395 was directed.29 Likewise, we can discern no error in the High Courtreasoning concerning Jackson Russell's eligibility, as an intended defendant, to be heard on the proceeding and to receive a costs award.30 This was the fifth of the review issues and we agree with Katz J's conclusions.[32] This Court's leave decision indicates that R wished to add actual bias byKatz J as a ground of appeal.31 Permission was given to file R's affidavit of23 October 2014 as evidence on the appeal. The purpose of the affidavit appears to be to provide evidence that Katz J said she was sure that if there was a fee arrangement it would have been done legally.27 At [40].28 At [44].29 At [49].30 At [52].31 NR v MR, above n 2, at [28].[33] We obviously are not in a position to know exactly what was said but, assuming a comment of that type was made, it does not provide evidence of actual bias. It is simply a recognition that there are rules in place concerning fee arrangements. We have otherwise already commented on the funding issue. Finally, for completeness, we note we have not seen any material that would provide support for this appeal ground.[34] Having addressed the specific grounds, it is appropriate to stand back and consider generally the correctness of an indemnity costs award. These were proceedings that R initiated as retaliation to an application by M for a restraining order. Successive courts have found them to lack merit and to be frivolous and vexatious. They are improperly motivated, a factor Judge Gibson recognised at the outset.32 The process followed by the District Court in reaching its decision was orthodox and involved the application of settled principle. Katz J's careful analysis of R's many grounds of review reached a somewhat inevitable conclusion.[35] Accordingly this appeal against the decision on the judicial review is dismissed. Concerning costs, there is simply no basis on which R can resist an award of scale costs, which merely reflects the principle that costs follow the event. Judicial review was an unnecessarily complex way to deal with a challenge to a costs ruling and R is fortunate he did not face yet another increased costs award.Result[36] The appeals against the recusal decisions of Andrews J are dismissed.[37] R's application to file further evidence is declined.[38] The appeal against the costs decision of Andrews J is allowed to the extent that costs for a second counsel are disallowed.[39] The appeal against the decision of Katz J is dismissed.32 [NR] v [MR], above n 4, at [52].[40] R filed no submissions in support of these appeals and nor did M. The appeals were not addressed orally at the hearing. We accept there would be someexpenditure on M's part but consider a reduced award is appropriate. In setting thatfigure we also have regard to the fact R has had some success. R must pay respondent costs in the amount of 40 per cent of costs for a standard appeal on a band A basis and usual disbursements.[41] For privacy reasons, we make a permanent order prohibiting publication of the names or identifying particulars of the parties.Solicitors:Wilson Harle, Auckland for Respondent MRCrown Law Office, Wellington for Respondent District Court at AucklandKennedys, Auckland for Respondent Jackson Russell