SISSON v COMMISSIONER OF INLAND REVENUE [2017] NZHC 575

SISSON v COMMISSIONER OF INLAND REVENUE [2017] NZHC 575 [28 March 2017]IN THE HIGH COURT OF NEW ZEALANDCHRISTCHURCH REGISTRYCIV-2016-409-000637[2017] NZHC 575BETWEEN THERESE ANNE SISSONPlaintiffAND COMMISSIONER OF INLANDREVENUEDefendantHearing: 17 March 2017Appearances: T A Sisson - Plaintiff Appears In PersonS Kinsler and P J Shamy for DefendantJudgment: 28 March 2017JUDGMENT OF GENDALL J[As to Costs]Introduction[1] This judgment relates to costs on this proceeding CIV-2016-409-637. This proceeding was brought by the plaintiff (Ms Sisson) on 27 July 2016 seeking an order to set aside an earlier judgment of this Court which placed a company, Chesterfields Preschools Limited (the company) into liquidation.[2] On 3 October 2016 in this Court Associate Judge Osborne delivered a decision striking out the present proceeding CIV-2016-409-637.[3] Ms Sisson sought to review that decision of Associate Judge Osborne. I heard the matter on 13 February 2017 at which time I declined the application for review. My reasons for that decision were given on 16 February 2017.[4] The hearing of the substantive review application in this proceeding, as I have noted, commenced before me on 13 February 2017. This was along with several other matters involving Ms Sisson, the company, and the defendant Commissioner of Inland Revenue (the Commissioner). There was also an intervener in related proceedings, the Official Assignee. IAG New Zealand Limited was also involved in one proceeding brought by Ms Sisson.[5] That 13 February 2017 hearing continued until 16 February 2017 (the fourth day of the hearing). On that date all matters, including the present proceeding, were concluded. As I have noted, judgment was given declining Ms Sisson's applicationfor review in the present proceeding. Ms Sisson as defendant consented to orders against her sought by the company as plaintiff in proceeding CIV-2016-409-40 and she discontinued related proceedings which were the subject of hearing being CIV- 2016-409-185 and CIV-2016-409-304.Decision in the substantive and review proceedings[6] As I have noted, the substantive proceeding was brought by Ms Sisson on 27 July 2016 seeking an order to set aside the earlier judgment of this Court placing the company into liquidation.[7] The Commissioner applied to strike out that claim on the grounds that it disclosed no reasonably arguable cause of action and was otherwise frivolous, vexatious and an abuse of process. This was on the basis that Ms Sisson had no standing to seek the order sought and, further, that the proceeding concerned matters already considered and determined by the Court.[8] As I have noted, Associate Judge Osborne in this Court struck out Ms Sisson's substantive claim on 3 October 2016. In doing so, at the time he awarded costs to the Commissioner on a category 2B basis with an uplift of 50 per cent due to what he noted was the lack of merit in the proceeding.[9] Ms Sisson then sought to file an appeal against that strike out decision in the Court of Appeal. This was rejected on the basis that an application for review of the Associate Judge's decision was the correct procedure. Ms Sisson then filed thepresent application for review of the strike out decision. This occurred on 31 October 2016.[10] I heard that application for review in this Court, as I have noted, on 13 February 2017 and declined it. This was on the basis that Ms Sisson had failed todischarge the onus on her of persuading the Court that Associate Judge Osborne'sjudgment was wrong in the sense that it rested on unsupportable findings of fact and/or applied the wrong principles of law. I went on to find that Ms Sisson had advanced no reasonable basis to show that her claim might succeed, and in addition, there was a reasonable argument that the claim itself was a collateral attack and an abuse of process.[11] As I noted at paras [8] and [9] of my reasons for decision in dismissing Ms Sisson's application for review, I noted the following:[8] It is also correct to say that in other proceedings, Ms Sisson, who was joined by Associate Judge Osborne to the original liquidation judgment proceeding precisely for appeal purposes, has brought an appeal to the Court of Appeal against that judgment placing Chesterfields Preschools Limitedinto liquidation. Ms Sisson's original appeal against the liquidationjudgment was abandoned but sometime later it was accepted by the Court of Appeal and is due to be heard there at some time in the future.[9] This appeal to the Court of Appeal, in my view, is the only appropriate way here for Ms Sisson to set aside the original liquidation judgment. The hearing and the outcome of that appeal, of course, is awaited.Commissioner's costs claim against Ms Sisson as plaintiff[12] The Commissioner here seeks an order for costs against Ms Sisson on theCommissioner's successful opposition to her review application on a category 2B scale basis together with an uplift of 50 per cent. A modest amount for disbursements is also sought. The amounts in question are said to be category 2B costs totalling $1561, a 50 per cent uplift of $780.50 making a total for uplifted 2B costs of $2341.50, plus a $42.50 filing fee disbursement. Overall, therefore total costs and disbursements of $2384 are sought. Counsel for the Commissioner has set out at Schedule 4 to his costs submissions filed on 27 February 2017 a breakdown of these costs and disbursements.[13] At this point it is useful to note that, so far as the category 2B costs sought in this proceeding are concerned, the Commissioner does not make a claim forcounsel's appearance at this review hearing. This is on the basis that this appearance (which occurred during the 13 – 16 February 2017 hearing) was only claimed by the Commissioner in the related proceeding, CIV-2016-409-40 (and not in other costs claims by the Commissioner for attendances and work involved in related proceedings, including the present -637 proceeding). This was in order to ensure that there was no double recovery.[14] As best I can tell from the lengthy submissions filed in opposition to the various costs applications by Ms Sisson (and Mr Hampton as her McKenzie Friend) the present costs application is opposed.Costs entitlement and quantum issues[15] The primary starting point in any consideration of costs questions, as set out in r 14.2(a) High Court Rules, is that the unsuccessful party should pay the costs of the party who has succeeded. This notion that costs should follow the event clearly applies in this case. No reasons that were in any way relevant were advanced before me to suggest otherwise. From the lengthy written and oral submissions stated to bein opposition to the various costs claims, Ms Sisson and Mr Hampton have entered into considerable detail questioning the validity of general claims involving Ms Sisson, the company and other parties. Essentially however, these submissions are generally irrelevant to the costs claim here. The substantive issues were determined some time ago and the present review application was meritless.[16] That said, the only further question for consideration therefore relates to the quantum of costs sought by the Commissioner in this proceeding.[17] On this aspect also, despite the fact as I have noted that Ms Sisson (and her McKenzie Friend, Mr Hampton) filed lengthy memoranda on costs and advanced further oral submissions on costs at the hearing on 17 March 2017, little if anythingwas said about the Commissioner's request for a 50 per cent uplift of category 2Bcosts here or, indeed, on the specific amounts set out in Schedule 4 of the 27 February 2017 written costs submissions from counsel for the Commissioner. As to the issue of the 50 per cent uplift in category 2B costs sought here, r 14.6(3) High Court Rules addresses the issue of increased costs. This rule states:(3) The court may order a party to pay increased costs if—(a) the nature of the proceeding or the step in it is such that the time required by the party claiming costs would substantially exceed the time allocated under band C; or(b) the party opposing costs has contributed unnecessarily to the time or expense of the proceeding or step in it by—(i) failing to comply with these rules or with a direction of the court; or(ii) taking or pursuing an unnecessary step or an argument that lacks merit; or(iii) failing, without reasonable justification, to admit facts, evidence, documents, or accept a legal argument; or(iv) failing, without reasonable justification, to comply with an order for discovery, a notice for further particulars, a notice for interrogatories, or other similar requirement under these rules; or(v) failing, without reasonable justification, to accept an offer of settlement whether in theform of an offer under rule 14.10 or some other offer to settle or dispose of the proceeding; or(c) the proceeding is of general importance to persons other than just the parties and it was reasonably necessary for the party claiming costs to bring it or participate in it in the interests of those affected; or(d) some other reason exists which justifies the court making an order for increased costs despite the principle that the determination of costs should be predictable and expeditious.[18] On this question, there can be no doubt, as I see it, that in bringing and pursuing this proceeding, it was entirely clear that her actions were without merit and unreasonable, and from an early point this must have been apparent to Ms Sisson.[19] As noted above, her appeal against the original decision placing the company into liquidation remains before the Court of Appeal for consideration. Her entire review application in this Court lacked any merit. Her failure therefore, to act reasonably without question contributed to the time and expense the Commissioner was put to in opposing the review application.[20] In addition, as I see the position, Ms Sisson throughout pursued the current proceeding -637 in spite of warnings that it lacked merit, such that the 50 per cent uplift from scale which the Commissioner seeks is reasonable in all the circumstances of this case.[21] I reach the conclusion therefore, in terms of r 14.6(3)(b)(ii) High Court Rules, that in bringing and pursuing this proceeding -637, Ms Sisson acted unreasonably in that her claim in this review application lacked merit and had no chance of success. In my view, the Commissioner is entitled to the 50 per cent uplift of category 2B costs which she seeks. An order to this effect is to follow.[22] I turn lastly to the quantum of the costs and disbursements sought here as setout in Schedule 4 of counsel's submissions. This quantum has not been the subjectof any significant comment or question here on the part of Ms Sisson or indeedMr Hampton. Their lengthy submissions to me said to be on costs issues simply ignored quantum.[23] In any event, however, as I see the position, the total itemised category 2B costs sought which come to some $1561, and the 50 per cent uplift of $780.50, are reasonable and appropriate for the work done under all the circumstances prevailing in this case. The disbursement (being a Court filing/sealing order fee of $42.50) is unobjectionable. An award of costs and disbursements at these levels is to follow.Result[24] The Commissioner's costs application on this proceeding -637 succeeds in its entirety.[25] An order is now made that Ms Sisson is to pay to the Commissioner costs on this proceeding CIV-2016-409-637 on a category 2B basis with a 50 per cent uplift totalling $2341.50 plus disbursements totalling $42.50....................................................Gendall JSolicitors:Lane Neave, ChristchurchPhillip Shamy, ChristchurchMeredith Connell, ChristchurchCopy to Ms Sisson