Dowden v Commissioner of Inland Revenue [2021] NZCA 206 (25 May 2021)

Last Updated: 1 June 2021

IN THE COURT OF APPEAL OF NEW ZEALAND I TE KŌTI PĪRA O AOTEAROA

CA624/2019 [2021] NZCA 206

	BETWEEN	JOHN ALFRED DOWDEN Appellant
	AND	COMMISSIONER OF INLAND REVENUE Respondent

Court:	Miller and Courtney JJ
Counsel:	Appellant in Person M J Bryant for Respondent
Judgment: (On the papers)	25 May 2021 at 11 am

JUDGMENT OF THE COURT

1. The Commissioner’s application for costs is granted.
2. There is an order in favour of the Commissioner for costs of $3,824, to be paid from Mr Dowden’s security for costs.

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REASONS OF THE COURT
(Given by Courtney J)

• [1] In late 2019 Mr Dowden filed an appeal against a judgment of Peters J dismissing his appeal against a decision of the Taxation Review Authority.^[1] There were delays in advancing the appeal. Eventually it was deemed to have been abandoned. Mr Dowden applied under r 43(2) of the Court of Appeal (Civil) Rules 2005 (the Rules) for an extension of time for the allocation of a hearing date and to file the case on appeal. The application was declined.^[2]
• [2] The Commissioner of Inland Revenue has applied for costs totalling $3,824 on the r 43 application, Mr Dowden’s earlier, unsuccessful, application to dispense with security for costs and the Commissioner’s successful application for increased security for costs.^[3] An order is sought that the costs be paid from the security for costs previously paid by Mr Dowden. Mr Dowden opposes the application and requests that the security for costs be repaid to him in full.
• [3] Mr Dowden submits, first, that the lack of any reference to costs in the decision declining the r 43 application suggests that the Court intended costs to lie where they fell. We do not accept this submission. The Commissioner did not raise the issue of costs in its submissions on the r 43 application and the Court accordingly made no order as to costs. However, the Commissioner’s failure to raise the issue of costs at the time of the application does not does not preclude an application for costs now.^[4] The general principle is that costs follow the event and that applies equally to interlocutory applications.^[5]
• [4] Secondly, Mr Dowden says that the figure claimed for costs is excessive given the work involved. He contends that the Commissioner “didn’t have to do much work at all and the documents they filed are pretty much the same thing”. This submission engages r 53F(a) of the Rules which provides that the Court may refuse to make an order for costs or may reduce the costs otherwise payable if “the nature of the appeal or the step in the appeal is such that the time required by the party claiming costs will be substantially less than the time allocated under band A”.
• [5] The Rules provide a formula for fixing costs as a reasonable contribution to the actual costs incurred by a successful party. The formula reflects the amount of time allowed under the Rules for the steps taken calculated on the basis of the daily allowance for those steps.^[6] Some steps are presumed to take only part of a day, in which case the allowance will reflect that.
• [6] The Commissioner has correctly calculated her costs in accordance with the band A time allocations in sch 2 of the Rules, applying the appropriate daily recovery rate as set out in r 53C(1)(a) of the Rules and sch 2 of the High Court Rules 2016.^[7] We have reviewed the steps taken on behalf of the Commissioner for which costs are now claimed.
• [7] Half a day was allowed to prepare the application for increased security for costs. This was a four-page application that set out the grounds for the application, the nature of the appeal and the relevant rules and legal principles relied on. The time allowed for that work was reasonable.
• [8] One-fifth of a day was allowed for each of the memoranda filed in relation to Mr Dowden’s application to dispense with security for costs, to the filing of a case on appeal without consent and to the application to extend time. All required consideration of the information provided by Mr Dowden and the preparation of a memorandum. Even if the documents themselves were relatively brief, the time allowed for that work was reasonable.
• [9] Half a day was allowed for the submissions in opposition to the application for an extension of time. We can see that there is overlap with the application for increased security for costs in that the description of the history of the case is essentially the same as that set out in the application for increased security for costs. But the submissions also canvassed the procedural history in this Court and the different principles applying to the application. The allowance was a reasonable one for the work required to produce the submissions.
• [10] The Commissioner’s application for costs is granted.
• [11] There is an order in favour of the Commissioner for costs of $3,824, to be paid from Mr Dowden’s security for costs.

Solicitors:
Crown Law Office, Wellington for Respondent

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^[1] Dowden v Commissioner of Inland Revenue [2019] NZHC 2729, (2019) 29 NZTC 24-025 [High Court decision].

^[2] Dowden v Commissioner of Inland Revenue [2020] NZCA 630, (2020) 29 NZTC 24-085 [Rule 43 decision].

^[3] Dowden v Commissioner of Inland Revenue [2020] NZCA 152, (2020) 29 NZTC 24-068 [Security for costs decision].

^[4] See, for example, BASF New Zealand Ltd v Brian Roberts (1998) Ltd [2020] NZCA 662.

^[5] Court of Appeal (Civil) Rules 2005, rr 53GA(1), 53G(1) and r 53A(1)(a).

^[6] Rule 53A(1)(c).

^[7] 0.5 (successful application for increased security for costs) + 0.2 (memorandum opposing application to waive security) + 0.2 (memorandum relating to case on appeal filed without consent) + 0.2 (memorandum opposing extension of time) + 0.5 (submissions on extension of time) = 1.6. 1.6 x daily recovery rate of $2,390 =$ 3,824.