Zwiers v Waipa Corporation Limited [2011] NZCA 262 (8 June 2011)

Last Updated: 14 June 2011

IN THE COURT OF APPEAL OF NEW ZEALAND

CA54/2011 [2011] NZCA 262

BETWEEN J P ZWIERS Applicant

AND WAIPA CORPORATION LIMITED Respondent

AND P A VERRY Second Respondent

Counsel: Applicant in person B Dickey for Respondent

Judgment: 8 June 2011 at 2.30 pm

JUDGMENT OF ARNOLD J

The application for review of the Registrar’s decision refusing to dispense with the payment of security for costs is declined. Security for costs of $5,560.00 must be paid into Court within 20 working days of the date of this judgment.

REASONS

Introduction

[1] The applicant, Mr Zwiers, filed an appeal and applied to the Registrar of the Court for a dispensation from the requirement to pay security for costs.[1] The Registrar declined his application. This is an application for review of that decision.

Background

[2] Mr Zwiers filed proceedings in the High Court in late 2003 against the two respondents (and a third defendant with whom he later settled) for breach of contract, breach of fiduciary duty and misleading or deceptive conduct. He alleged that they had wrongfully acquired a sawmilling business, misusing confidential information which they had obtained from him. He sought damages of $26.5 million and a declaration that Waipa Corporation Ltd held the business on trust for him.

[3] On 14 August 2008 Harrison J, on the respondents’ application, ordered that Mr Zwiers pay $125,000 (or provide an adequate substitute) by way of security for costs by 12 September 2008, or the proceeding would automatically be struck out.[2] That order was not complied with and there was no appeal against it. Accordingly, Mr Zwiers’s proceeding against the respondents was struck out by operation of the order.

[4] The respondents then applied to the High Court for a costs order. In a decision dated 17 December 2010, Venning J awarded costs in their favour on a 2B basis plus disbursements.[3] In total, Mr Zwiers was ordered to pay $165,650.54 to the first respondent (comprising costs of $77,920 plus disbursements of $87,730.54) and $41,785.00 to the second respondent (comprising costs of $41,605 plus disbursements of $180).

[5] On 4 February 2011 Mr Zwiers filed an appeal in this Court against Venning J’s costs judgment. Security for costs was set at $5,560.00. On 3 March 2011 Mr Zwiers applied for dispensation from the requirement to pay security for costs on the basis that he is dependent on a domestic purposes benefit and has no means to pay it. Counsel for the respondents sent an email opposing waiver on 7 March 2011.

The Registrar’s Decision

[6] The Registrar declined to dispense with security in a letter dated 14 April 2011. She said that impecuniosity alone is not a sufficient reason to dispense with security, and there were no exceptional circumstances justifying waiver. She noted counsel for the respondents’ point that the appeal is in respect of a costs decision “when costs following the event are somewhat inescapable”.

[7] Mr Zwiers applied for a review of the Registrar’s decision on 2 May 2011, outside the 10 working day period provided for in the Rules.[4] In his request for review Mr Zwiers raised a second ground for dispensing with security, namely that the appeal is in the public interest.

Security for Costs - General Principles

[8] In the normal course, appellants in civil proceedings in this Court are required to pay security for costs.[5] If an appellant wishes to apply to the Registrar for a waiver of security, he or she must do so within 20 days of filing the appeal.[6] The Registrar may vary or waive security “if satisfied that the circumstances warrant it”.[7]

[9] Security for costs will be waived where it is in the interests of justice to do so. There must be some exceptional circumstance to justify waiver.[8] The appellant must honestly intend to pursue the appeal and it must be arguable, as respondents should not face the threat of hopeless appeals without provision for security. The importance of the issues raised in the appeal will be significant, as will the question whether there is any public interest in having them determined.[9] Impecuniosity alone is not usually sufficient to justify a waiver, but may be reason to reduce the quantum of security.[10]

Discussion

[10] I consider that the Registrar was right to refuse to dispense with the requirement to pay security for costs in this case.

[11] Mr Zwiers has provided no evidence of his financial hardship. However, on the assumption that he is impecunious, that alone would not be a sufficient reason to dispense with security. Exceptional circumstances are required.

[12] Further, the appeal does not raise a matter of public interest. The substantive proceeding involved issues between Mr Zwiers and the respondents that were of a personal rather than public nature. Moreover, in the decision under appeal Venning J applied orthodox costs principles. Costs followed the event and were awarded on a standard basis. In this context, I note that Venning J declined the respondents’ application for increased costs and also required the first respondent to provide to the Registrar justification for some of the disbursements sought, in particular fees paid to various experts. In his notice of appeal, Mr Zwiers suggests that the respondents have not provided the appropriate detail, but that is a matter that can be addressed with the Registrar of the High Court.

[13] It follows from this that the appeal does not raise any significant issue and has little prospect of success, given that it concerns a standard award of costs.

Decision

[14] The application for review of the Registrar’s decision as to security for costs is declined. Security for costs of $5,560.00 must be paid into Court within 20 working days of the date of this judgment. There is no order for costs on this application.

Postscript

[15] Since the forgoing was written, Mr Zwiers has advised the Registry that he intends to apply for legal aid to pursue his appeal. Under r 36(3) of the Court of Appeal (Civil) Rules 2005, where an appellant has applied for legal aid, the obligation to pay security is suspended while the application is pending. The appellant must advise the Registrar and the respondent promptly of the outcome of the application.[11] Accordingly, if Mr Zwiers does decide to apply for legal aid, that will suspend the obligation to pay security until the application is determined.

Solicitors:
Meredith Connell, Auckland for First and Second Respondents

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[1] Court of Appeal (Civil) Rules 2005, r 35(6)(c).
[2] Zwiers v Waipa Corporation & Ors HC Auckland CIV-2003-404-7359, 14 August 2008.
[3] Zwiers v Waipa Corporation & Ors HC Auckland CIV-2003-404-7359, 17 December 2010.
[4] Rule 7(3).

[5] Rule 35(2).

[6] Rule 35(3) and (6).

[7] Rule 35(6).

[8] Fava v Zaghloul [2007] NZCA 498 at [9].

[9] Creser v Official Assignee CA196/05, 12 June 2006 at [29].

[10] Fava v Zaghloul at [9]; Easton v Broadcasting Commission [2009] NZCA 252 at [5].
[11] Rule 36(4).