DAI v PROFESSIONAL CONDUCT COMMITTEE OF THE NEW ZEALAND INSTITUTE OF CHARTERED ACCOUNTANTS [2023] NZCA 132

DAI v PROFESSIONAL CONDUCT COMMITTEE OF THE NEW ZEALAND INSTITUTE OFCHARTERED ACCOUNTANTS [2023] NZCA 132 [28 April 2023]IN THE COURT OF APPEAL OF NEW ZEALANDI TE KŌTI PĪRA O AOTEAROACA83/2023[2023] NZCA 132BETWEEN SANDY ZHUJUN DAIApplicantAND PROFESSIONAL CONDUCTCOMMITTEE OF THE NEW ZEALANDINSTITUTE OF CHARTEREDACCOUNTANTSFirst RespondentXIAOYAN SONGSecond RespondentNZ NATURALS LIMITEDThird RespondentCourt: Brown and Collins JJCounsel: Applicant in personR B Moon for First RespondentNo appearance for Second and Third RespondentsJudgment:(On the papers)28 April 2023 at 11.00 amJUDGMENT OF THE COURTA The application to review the Deputy Registrar's decision declining anapplication for waiver of the filing fee is declined.B The application to review the Deputy Registrar's decision not to dispensewith security for costs is declined.C The application to stay execution of the Costs judgment made by theHigh Court is declined.D The Professional Conduct Committee of the New Zealand Institute ofChartered Accountants is entitled to costs for a standard appeal on a bandA basis with usual disbursements.E The Registry is not to accept for filing any further documentation inrelation to the matters dealt with in this judgment.____________________________________________________________________REASONS OF THE COURT(Given by Collins J)[1] This judgment addresses three applications made by Ms Dai:(a) an application to review the Deputy Registrar's decision to decline anapplication for waiver of a filing fee;(b) an application to review the Deputy Registrar's decision not to dispensewith security for costs; and(c) an application to stay execution of a Costs judgment made by theHigh Court.Background[2] Ms Dai, who represents herself, is an accountant and a member of theNew Zealand Institute of Chartered Accountants (the NZICA). The first respondent,the Professional Conduct Committee (the PCC), referred complaints about Ms Dai'sprofessional conduct and practice to the NZICA's Disciplinary Tribunal (the Tribunal).Three charges against Ms Dai were upheld by the Tribunal.1[3] Ms Dai then filed judicial review proceedings against the PCC. She filedseveral interlocutory applications, including for summary judgment, interim orders,1 Dai v Professional Conduct Committee of the New Zealand Institute of Chartered Accountants[2022] NZHC 4 at [15] [High Court judgment].discovery, and joinder of additional respondents. The PCC applied to have Ms Dai'sstatement of claim struck out.2[4] In striking out Ms Dai's statement of claim, Churchman J noted the majorityof the matters alleged in Ms Dai's statement of claim were not matters that wereamenable to judicial review.3 Where matters were justiciable, they lacked any merit:[31] The allegations made by Ms Dai are clearly part of an ongoing patternof behaviour, as identified in the Tribunal's decision. Not only is it apparentthat the allegations in the statement of claim are baseless, but it appears thatthese proceedings have been filed for an improper purpose, in an attempt byMs Dai to obtain a collateral advantage, rather than to properly interrogate thePCC's decisions to refer the complaints to the Tribunal. Virtually none of thevoluminous material filed by Ms Dai in support of her application wasrelevant, and none of it provided a basis upon which the Court could concludethat her allegations are anything other than meritless.[5] On 13 February 2023, Ms Dai filed a notice of appeal against the High Courtjudgment. The notice of appeal was amended on 23 March 2023. Ms Dai's groundsof appeal are difficult to comprehend. Her grounds of appeal appear to be:(a) The PCC breached s 27 of the New Zealand Bill of Rights Act 1990(NZBORA) by allowing the Tribunal to carry out its five-day hearingwithout her consent.(b) The High Court judgment was wrong because it did not give a humanrights consistent interpretation to the issues which Ms Dai wished topursue.(c) The High Court judgment omitted a significant amount of strong orarguable causes of action that Ms Dai submits were available to her.(d) The High Court judgment relied on false and misleading affidavitsprovided by the PCC. The scope of the judicial review proceeding wasmisconceived by the High Court and the PCC's decision on 12 May2 At [1]–[3].3 At [10] and [29].2022 to prosecute Ms Dai was prima facie defamatory and designed tointimidate her.First application: Application for review of the Deputy Registrar's decision todecline fee waiver[6] At the time she filed her notice of appeal, Ms Dai made an application forwaiver of the filing fee of $1,100.[7] Regulation 5(2) of the Court of Appeal Fee Regulations 2001(the Fee Regulations) outlines when the Deputy Registrar can waive a fee:The Registrar may waive the fee payable by the applicant if satisfied,—(a) on the basis of one of the criteria specified in subclause (3), that theapplicant is unable to pay the fee; or(b) that the proceeding,—(i) on the basis of one of the criteria specified in subclause (4),concerns a matter of genuine public interest; and(ii) is unlikely to be commenced or continued unless the fee iswaived.[8] Ms Dai made her application solely on the ground of genuine public interestunder reg 5(2)(b) of the Fee Regulations.[9] The Deputy Registrar did not consider that the first requirement, reg 5(2)(b)(i),was met, as they were not satisfied that the proposed appeal of the strike out decisionraised any question of law that was of significant interest to a substantial portion ofthe public. This is the criterion outlined in reg 5(4) of the Fee Regulations.[10] The Deputy Registrar concluded that the second requirement, reg 5(2)(b)(ii),was not met, as Ms Dai said in her application that she would continue with theproceeding even if the fee was not waived.Application for review of the Deputy Registrar's decision[11] On 7 March 2023, Ms Dai paid the filing fee and filed an application to reviewthe Deputy Registrar's decision declining the waiver. Ms Dai said that reg 5(4)(a) hasbeen met, as there is a question of law, and that judicial review cases commonly engagepublic interest. Ms Dai says the question of law raised is the interpretation ofrr 13.99 and 13.100 of the NZICA Members Rules, which relate to disclosure ofconfidential information.[12] Ms Dai also says that the second requirement for a fee waiver in reg 5(2)(b) issatisfied as the proceeding is a matter of genuine public interest.[13] The PCC oppose the review application and say that neither ground requiredby reg 5(2)(b) have been established by the evidence. In particular, the PCC say thatthe appeal would be limited to its own facts and thus does not raise any matters ofpublic interest, and the proceeding appears likely to continue, even if the applicationfor review is declined.[14] Subsequent to Ms Dai's application to review the decision to decline the feewaiver, Ms Dai amended her application to say the proceeding would be unlikely toproceed if the application was declined. She emphasised the application is not madeunder financial hardship grounds, but in reliance on public interest.Analysis[15] Ms Dai has not adequately explained how the appeal has any public interest.Her review application fails to highlight how either of the grounds in reg 5(2)(b) areapplicable. This case is confined to a very fact-specific situation and in any event,Ms Dai has already paid the filing fee. As such, the proceedings could proceed.Ms Dai has not provided reasons why the proceedings could not proceed if the filingfee was not waived for public interest grounds. This makes her case unsuitable for afee waiver under reg 5(2)(b)(ii).[16] The application to review the Deputy Registrar's decision to decline to waivethe fee waiver is declined.Second application: Application for review of the Deputy Registrar's decision notto dispense with security for costs[17] After the notice of appeal was accepted for filing on 13 February 2023, securityfor costs was set at $21,180 under r 35 of the Court of Appeal (Civil) Rules 2005(the Rules). On 28 February 2023, Ms Dai filed an application to reduce and dispensewith security for costs under s 35(6) of the Rules.[18] The Deputy Registrar was satisfied that security for costs should be reduced,as the PCC is the only respondent that has filed a notice of appearance. Security wasreduced to $7,060, which is the amount required for one respondent.Application to dispense with security for costs[19] In her application to dispense with security, Ms Dai again says that her appealis in the public interest.[20] The security for costs regime ensures that a respondent has some protection asto costs in the event the appellant is unsuccessful and is ordered to pay costs. However,there are limited situations where security for costs can be dispensed with.[21] In Reekie v Attorney-General, the Supreme Court identified two broad groundson which security could be dispensed with:4(a) where costs are unlikely to be ordered against the appellant; or(b) where the appellant cannot pay or will suffer severe hardship ifpayment is required.[22] The Deputy Registrar noted that there was no suggestion that this appeal is onewhere a costs order was unlikely to be made. As such, the first ground identified inReekie is not applicable.4 Reekie v Attorney-General [2014] NZSC 63, [2014] 1 NZLR 737 at [19].[23] At the time of her application, Ms Dai did not make her application based onimpecuniosity. This means the second ground was also not applicable when theDeputy Registrar made their decision. Ms Dai submitted security should be dispensedwith because the public importance of the appeal makes it right for the PCC to defendthe appeal without security for costs.[24] The Deputy Registrar concluded that the appeal does not involve matters ofpublic interest but concerns the application of strike out principles. Security could notbe dispensed with based on impecuniosity, nor on the basis that costs would not beordered. As such, the dispensation application was declined, and security for costswas reduced to $7,060.Application for review of Deputy Registrar's decision not to dispense with security[25] On 21 March 2023, Ms Dai applied for a review of the Deputy Registrar'sdecision not to dispense with security for costs. Ms Dai's application reiterates thepublic interest concerns from her statement of claim and her original applicationregarding security for costs. Ms Dai also submits that the appeal engages importantrights and values, including the right to justice affirmed by s 27 of NZBORA.[26] In addition, Ms Dai contends that there have been breaches of s 21 of theHuman Rights Act 1993, which states the prohibited grounds of discrimination.Ms Dai says s 21(1)(d) has been breached, which protects her right to "ethical belief".Ms Dai says that the PCC referred her to the Tribunal because of her willingness toseek her rights to justice, human rights and righteousness, which is her ethical belief.She says the referral was retaliatory and discriminatory.[27] Further, Ms Dai submits there are serious racial discrimination issues becauseMs Dai stood up for her rights, and the NZICA caused her to suffer unequalopportunities due to her ethnicity.[28] Despite her original application not claiming impecuniosity, Ms Dai has sinceprovided this Court with information regarding her personal and company funds,including a signed affidavit. Ms Dai says this information supports her inability topay security for costs, but it is unclear whether she intends to rely on impecuniosityfor her review application. For completeness, we consider whether Ms Dai'sapplication for dispensation of costs would succeed on the ground of impecuniosity.[29] The Court in Reekie discussed the principles that apply when reviewingdispensation decisions:5(a) it is for the appellant to show impecuniosity;(b) impecuniosity is not in itself enough to warrant dispensing withsecurity;(c) security is the norm and security should be dispensed with only inexceptional circumstances;(d) a reduction in the amount of security required may, in some cases, meetthe justice of the case; and(e) some assessment of the merits of the case is required, along with anassessment of whether the appeal raises issues of public interest.[30] The discretion to dispense with security should be exercised to "preserveaccess to the Court of Appeal by an impecunious appellant in the case of an appealwhich a solvent appellant would reasonably wish to prosecute", and to "prevent theuse of impecuniosity to secure the advantage of being able to prosecute an appealwhich would not be sensibly pursued by a solvent litigant".6 In addition, securityshould be dispensed with if it would be right to require the respondent to defend thejudgment under challenge without the usual protection of security.7Analysis[31] While Ms Dai has now provided this Court with evidence of her impecuniosity,dispensation is limited to exceptional circumstances.8 An appellant is not required to5 Reekie v Attorney-General, above n 4, at [27].6 At [35].7 At [31].8 At [27]–[28].show an exceptionally strong case to warrant dispensation.9 Ms Dai's case howeveris meritless, and there is no public interest in her appeal. This is not a case a solventappellant would reasonably wish to prosecute. As noted in Reekie, dispensation isgenerally not granted when the appeal is hopeless or of doubtful merit.10 In addition,it would not be fair to require the respondents to defend this appeal without securityas to costs, considering the costs already owed by Ms Dai and the vexatious approachMs Dai has taken thus far.[32] In any event, the Deputy Registrar did not have information on Ms Dai'simpecuniosity at the time they declined to dispense with costs, nor was this groundrelied on by Ms Dai. Therefore, the Deputy Registrar's decision was appropriate giventhe only ground submitted was on the basis that the appeal is in the public interest,which it is not. The public importance is limited to the current proceeding only. Evenif the information about Ms Dai's financial position can be considered for the review,or Ms Dai made a fresh application to dispense with security on the basis ofimpecuniosity, dispensation would not be granted.[33] The Deputy Registrar's decision was entirely appropriate because none of thebases on which to dispense with security are applicable to Ms Dai's case.[34] The purported public interest is confined to a very fact-specific scenario thatconcerns the applicability of well settled strike out principles.[35] The application to review the Deputy Registrar's decision not to dispense withsecurity for costs is declined.9 At [28].10 At [27].Third application: Application for a stay of execution of the High Court'sjudgment as to costs[36] Following the High Court judgment on 10 January 2023, Churchman J issueda Costs judgment on 23 February 2023.11 In the Costs judgment, Churchman Jawarded costs in the sum of $20,000 to the PCC.12[37] Churchman J considered that an award of costs was appropriate in thecircumstances, as Ms Dai's claim was improper, misconceived and designed tofrustrate the disciplinary proceedings against her.13 The Judge said the PCC hadincurred unnecessary costs and had acted properly throughout the proceedings.In addition, the proceeding was not of public interest.[38] On 6 March 2023, Ms Dai applied for a stay of the enforcement of theCosts judgment. Her application is based on the following grounds:(a) It was incorrect to strike out her original statement of claim.(b) The High Court judgment has been appealed, and as such, the PCC hasnot yet succeeded.(c) She would be prejudiced by misapplying funds to an incorrect costsdecision, distracting her focus from her appeal, and thus, according toMs Dai, this is against her "natural justice".(d) A costs award is irrelevant to the NZICA process, and it is inappropriateto increase costs because of the NZICA's own actions of breaching s 27of NZBORA.(e) It is NZICA's responsibility to bear the costs because it breached the"Court process and [NZBORA]".11 Dai v Professional Conduct Committee of the New Zealand Institute of Chartered Accountants[2023] NZHC 278 [Costs judgment].12 At [8].13 At [5]. Also see the High Court judgment, above n 1, at [31]–[32].(f) The PCC took unnecessary steps in Court by requesting anadjournment, contributing unnecessarily to time and costs for bothparties.[39] Churchman J commented on the stay application in a name suppressionjudgment issued on 10 March 2023:14As to Ms Dai's application for a stay of the [C]osts judgment, she is requiredto persuade the Court that if that application is not granted, her appeal rightswould be rendered nugatory. I am satisfied that there is no sense in whichMs Dai's appeal rights would be rendered nugatory if a stay is not granted. Assuch, the ordinary position, that a party is entitled to enjoy the fruits of ajudgment in its favour, must apply.Analysis[40] Ms Dai's application to stay execution of the Costs judgment is based on r 12of the Rules. Subparagraphs (3) and (4) are most relevant. They provide:(3) Pending the determination of an application for leave to appeal or anappeal, the court appealed from or the Court may, on an interlocutoryapplication,—(a) order a stay of the proceeding in which the decision was givenor a stay of the execution of the decision; or(b) grant any interim relief.(4) An order or a grant under subclause (3) may—(a) relate to execution of the whole or part of the decision or to aparticular form of execution:(b) be subject to any conditions that the court appealed from orthe Court thinks fit, including conditions relating to securityfor costs.[41] In determining whether to grant a stay, the Court must balance two factors.Firstly, that a successful litigant has the rights to the fruits of a judgment and secondly,that there is "the need to preserve the position in case the appeal is successful".1514 Dai v Professional Conduct Committee of the New Zealand Institute of Chartered Accountants[2023] NZHC 465 [Name suppression judgment] at [26(b)] (footnote omitted).15 Keung v GBR Investment Ltd [2010] NZCA 396 at [11], citing Duncan v Osborne Buildings Ltd(1992) 6 PRNZ 85 (CA) at 87.[42] Factors the Court should consider when undertaking this balancing exerciseinclude:16(a) whether the appeal may be rendered nugatory if a stay is not ordered;(b) the bona fides of the applicant as to the prosecution of the appeal;(c) whether the successful party will be injuriously affected by the stay;(d) the effect on third parties;(e) the novelty and importance of questions involved;(f) the public interest in the proceeding; and(g) the overall balance of convenience.[43] The apparent strength of the appeal has also been treated as an additional factorthat may merit consideration.17(a) Will the appeal be rendered nugatory if a stay is not ordered?[44] Ms Dai has submitted that if the respondent seeks to enforce the costs awardedby the High Court of $20,000 and the costs order made by the NZICA of $118,367.94,she will not be able to proceed with her appeal.[45] When considering this appeal (being the appeal of the High Court judgment)in isolation from the NZICA proceeding, it is not reasonable to conclude that theappeal would be rendered nugatory if costs in the sum of $20,000 were enforcedagainst Ms Dai. Additionally, as submitted by the PCC, there is no information,financial or otherwise, to support Ms Dai's assertion that she would be unable toproceed.16 Keung v GBR Investment Ltd, above n 15, at [11], citing Dymocks Franchise Systems (NSW) PtyLtd v Bilgola Enterprises Ltd (1999) 13 PRNZ 48 (HC) at [9].17 Keung v GBR Investment Ltd, above n 15, at [11].(b) The bona fides of the applicant as to the prosecution of the appeal[46] During these proceedings, Ms Dai's claims have been considered an abuse ofprocess, evident from them being struck out in the High Court judgment. In thatjudgment, Churchman J said Ms Dai's claims were baseless, filed for an improperpurpose, and were intended to frustrate the disciplinary proceedings against her byasking the High Court to relitigate matters that were determined in that process.18Churchman J said that the decision to file the judicial review proceedings was"essentially a continuation of the improper conduct of which Ms Dai has been foundto be guilty of".19[47] In the Costs judgment, Churchman J noted that it was appropriate that "Ms Daibe liable for costs where she has abusively pursued litigation that had no chance ofsuccess".20[48] Ms Dai's applications for stay mirror this approach. Her applications could beseen as an attempt to escape the penalties imposed on her, both for her unsatisfactoryconduct as an accountant, and in response to her pursuit of vexatious litigation. Even ifMs Dai's appeals are meritorious, her conduct throughout the proceedings is unlikelyto be deemed as being in "good faith". The consideration of the bona fides of Ms Daiweighs against a stay being granted.(c) Effect on the PCC and the interests of third parties[49] The PCC is unlikely to be injuriously affected by a stay, as they are fundedthrough the NZICA. However, related parties are likely to be affected, as the costs oflitigation are funded by the NZICA members. Enforcement of costs would replenishthe NZICA's finances.(d) Novelty and importance of the questions involved in this case[50] There is no novel issue involved in this case. The appeal will determinewhether Churchman J was correct to strike out Ms Dai's claim. As such, the appeal18 High Court judgment, above n 1, at [31]–[32].19 At [32].20 Costs judgment, above n 11, at [6(h)].involves the application of well settled principles in the context of a strike out underr 15.1 of the High Court Rules 2016.(e) Public interest in the appeal[51] As the appeal will concern the application of strike out principles, there is littlepublic interest in this appeal. It is likely any analysis will be confined to the facts.(f) Strength of case on appeal[52] Ms Dai's appeal is far from strong. As discussed by Churchman J, her claimsappear to be vexatious and for an improper purpose. Additionally, Ms Dai'ssubmissions are unclear and appear to conflate the substantive judicial review claimswith the strike out appeal.(g) The overall balance of convenience[53] The balance of convenience favours the refusal of a stay. There is no evidencethe appeal would be rendered nugatory if costs of $20,000 are enforced, and it isunclear whether Ms Dai is seeking separate stays for each costs order she faces.The appeal is unlikely to have public interest given it is confined to the application ofstrike out principles to this particular case. Furthermore, Ms Dai's claims have beenassessed as improper, misconceived, and an abuse of process. As a result of Ms Dai'sclaims, the PCC have been exposed to unnecessary cost in having to defend theirposition.Analysis[54] The following observation of Churchman J in the Costs judgment is apposite:21I do not consider that it is in the interest of justice for costs to be refused inthis [proceeding], rather, it is appropriate that Ms Dai be liable for costswhere she has abusively pursued litigation that had no chance of success, andput the PCC to significant cost in doing so, while being aware of the likelycosts implications [55] The application to stay the execution of the Costs judgment is declined.21 Costs judgment, above n 11 at [6(h)]. (Emphasis added).Result[56] The application to review the Deputy Registrar's decision declining anapplication for waiver of the filing fee is declined.[57] The application to review the Deputy Registrar's decision not to dispense withsecurity for costs is declined.[58] The application to stay execution of the Costs judgment made by theHigh Court is declined.[59] The PCC is entitled to costs for a standard appeal on a band A basis with usualdisbursements.[60] The Registry is not to accept for filing any further documentation in relation tothe matters dealt with in this judgment.Solicitors:Richard Moon, Barrister & Solicitor, Wellington for First Respondent