Burgess v Beaven

JurisdictionNew Zealand
CourtHigh Court
JudgeNation J
Judgment Date21 April 2015
Neutral Citation[2015] NZHC 789
Date21 April 2015
Docket NumberCIV 2014-409-000622

[2015] NZHC 789

IN THE HIGH COURT OF NEW ZEALAND

CHRISTCHURCH REGISTRY

CIV 2014-409-000622

Between
Gary Owen Burgess
Applicant
and
Susan Natalie Beaven
Respondent
Appearances:

Plaintiff in person

A Corry for Respondent

Application for a waiver of security for costs — the applicant wished to appeal a decision of the Family Court (FC) to strike out his application to have an agreement declared void for non-compliance with the Property (Relationships) Act 1976 (PRA) — parties had been involved in litigation since 2007 — Supreme Court (SC) had issued judgment and various other matters had been considered by both FC and High Court — whether security for costs should be waived as there was merit in the appeal — whether the substantive application was an abuse of process as it sought to relitigate matters determined in other court proceedings and issue estoppel applied.

Held: It appeared that the Judge had not given the applicant notice that he was considering a strikeout. There was therefore some prospect that on appeal the applicant would be able to persuade the court that the striking out of the proceedings in this manner was wrong. However the respondent's position appeared to have been that the FC proceedings were an abuse of process as all issues between the parties had in substance been determined through a judgment of the SC.

In considering the application to dispense with security, the court had to be concerned not just with the issue of whether or not the appeal might succeed. It also had to consider whether or not, the potential benefits of the appeal were disproportionate to the burden which would be imposed on the respondent in having to deal with the appeal. Protecting respondents from vexatious appeals was a legitimate purpose of the security for costs regime.

If the applicant was successful on his appeal, and the striking out of was reversed, there was every prospect that the FC would give notice that it was considering striking out the proceedings for the reasons articulated in its original decision. It was also possible that if the appeal continued, the HC might decide to uphold the FC's decision. The prospect of such outcomes were so high that the HC had to signal to the applicant that this appeal might well be seen as part of a continuing pursuit of litigation, which was “unreasonable and tendentious” ( Reekie v Attorney-General).

The applicant was trying to continue with court proceedings on issues which had either been determined by the courts, or in respect of which at the very least he had the benefit of a range of judicial opinion. To the extent that any issues had not already been determined by the Court so as to create problems for him by reason of res judicata or issue estoppel, those opinions suggested the potential benefits to him of continuing litigation were disproportionate to the burden which the respondent and the courts had to bear in dealing with that litigation.

The applicant hoped that a declaration of invalidity/non-compliance in respect of the agreement would enable him to revisit the way in which property was apportioned between the parties in earlier proceedings. The applicant said to that he wanted a court to look at the “total picture”. He accepted, however, that this is what the SC had done in expressing a view as to whether he would be entitled to compensation arising out of the mortgagee sale of Medbury.

The agreement had also been considered by the HC on appeal when hearing an appeal against the dismissal of an application to remove the notice of claim which had been registered over the title to Medbury in favour of the respondent. It considered the argument that the agreement was void due to non-compliance with the procedural requirements of the PRA. In further and separate proceedings, TSB Bank Ltd v Burgess, the respondent faced a claim by TSB Bank for a judgment for the shortfall of $23,000. The applicant joined the respondent. The third party notice was set aside because of the prejudice that would be caused to the plaintiff as the court would become the arena for the claim for compensation which the applicant had not, to date, been able to obtain in other jurisdictions. Again in proceedings against his former solicitors, the HC had again considered the agreement.

Against the background of those decisions it was reasonable to proceed on the basis that the applicant was seeking to continue with a claim which had little prospect of success, and which was likely to produce no tangible benefit to him.

The amount which the applicant might be required to pay as security for costs was relatively modest. It would not be just to require the respondent to defend the judgment without security for costs. Accordingly, the requirement for security for costs would not be waived.

Security was fixed at $1990.

JUDGMENT OF Nation J

Introduction
1

On 5 August 2014, Judge Somerville in the Family Court at Christchurch issued a decision striking out an application which Mr Burgess had filed with the Family Court on 9 September 2011. 1 He also ordered that Mr Burgess must pay full solicitor and client costs to the respondent in relation to those proceedings.

2

Mr Burgess filed a notice of appeal on 2 September 2014. In a memorandum for the first case management conference on 22 October 2014, Mr Burgess asked that security for costs be dispensed with. The Court was also advised that Mr Burgess had applied to the Family Court for a rehearing of the application which had been struck out.

3

After the initial conference, Mander J adjourned the appeal proceedings to await the outcome of the application for rehearing. 2

4

There was a further conference with Mander J on 3 December 2014. Because there had been no progress in the Family Court on the rehearing application, Mr Burgess wished to proceed with his appeal. In order for the appeal to proceed to a hearing, his application to dispense with security for costs on the appeal had to be dealt with.

5

The application for waiver of security for costs was accordingly set down for hearing on 11 March 2015. Mr Burgess represented himself. Ms Corry appeared for the respondent. Mr Burgess filed lengthy written submissions in relation to his application.

6

Mr Burgess argued that security for costs should be dispensed with because:

  • (a) there was considerable merit in his appeal because he had not been put on notice in the proceedings that there was any risk of strike-out;

  • (b) there was merit in the application he was seeking to pursue in the Family Court;

  • (c) he was not financially able to provide security for costs; and

  • (d) this impecuniosity was the result of wrongs he had suffered in the relationship property proceedings, wrongs which he was seeking to rectify through the proceedings which had been struck out.

7

Ms Corry did not file submissions in opposition. However, in a memorandum for the first case management conference, Ms Corry contended that the proceedings were struck out on the grounds that they were vexatious and an abuse of the Court's process, that there was little merit in Mr Burgess proceeding with his appeal when he was endeavouring to obtain a rehearing in the Family Court, and that the appeal should be struck out. In oral submissions she said that the application for waiver had to be considered against the background of all the previous litigation in which the parties and the Courts had been involved. Against that background, the respondent would not consent to a waiver of costs.

8

As a result of the discussions I had with Mr Burgess and Ms Corry, I deal with the current application on the basis that this appeal would be categorised as a category 2 proceeding, the hearing of which would take one day. In terms of r 20.13 the amount that would be payable as security, unless I direct otherwise, will be $1990.

The legal principles
9

The way in which the Court should consider whether or not security for costs should be required on an appeal has been considered comprehensively by the Supreme Court in Reekie v Attorney-General. 3 The Supreme Court was concerned with an appeal to the Court of Appeal from the High Court. Its judgment is relevant here, as this Court is concerned with an appeal that can be brought from an inferior Court without leave.

10

The following particular statements from the Court's judgment are relevant:

[31] As we have indicated, the Registrar should dispense with security if of the view that it is right to require the respondent to defend the judgment under challenge without the usual protection as to costs provided by security.

[33] Although an order dispensing with security is therefore, in itself, of limited economic significance, the costs regime, including the usual requirement for appellants to provide security for costs, imposes some discipline on litigants. The liability to pay costs if unsuccessful is a disincentive to the commencement of frivolous proceedings. As well, most litigants will not commence proceedings if the costs of the exercise, including those they must pay if unsuccessful, exceed the likely benefits. So the costs system discourages litigation which is disproportionate to the occasion. Increased costs may be ordered where proceedings have been conducted vexatiously, and this serves as a disincentive to vexatious conduct. An appellant who will not be able to meet a subsequent order for costs is free of constraints that affect other litigants and this freedom carries with it the potential for injustice to the respondent.

[34] … a litigant whose opponent is legally aided is usually unable to obtain an order for costs if successful. … But a grant of legal aid is subject to independent merits and cost/benefit assessments of the proceedings for which legal aid is sought and legal aid can be withdrawn

if the legally aided person acts unreasonably. … These mechanisms … in the case of the legal aid
...

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