Worksafe New Zealand Limited v Thompson [2018] NZDC 3295 (23 February 2018)

Last Updated: 14 December 2018

IN THE DISTRICT COURT AT GISBORNE

CRI-2014-016-001807 [2018] NZDC 3295

WORKSAFE NEW ZEALAND LIMITED

Prosecutor v

JAMES WALTER BEAU THOMPSON

_Defendant

Hearing:	On the papers
Counsel:	S A H Bishop for the Applicant P N White for the Defendant
Judgment:	23 February 2018

ORAL JUDGMENT OF JUDGE W P CATHCART [COSTS]

Background

[1] On 12 July 2016, I ruled on the prosecutor’s application for an order for costs under s 4(1) Costs in Criminal Cases Act 1967 (the Act). The prosecutor sought an order for costs more than the scale. In that judgment, I reached the point that the following sum of costs was just and reasonable for legal fees and disbursements properly incurred by the prosecutor: $46,000 for prosecution and legal fees;

$11,073.93 for travel and accommodation; and $3003.32 for disbursements. In total, the sum of $60,077.25.

[2] As noted in my judgment, I reserved my view as to whether I should exercise my residual discretion under the Act to make an award of costs because

WORKSAFE NEW ZEALAND LIMITED v JAMES WALTER BEAU THOMPSON [2018] NZDC 3295 [23

February 2018]

Mr Thompson’s ability to pay it, or part of it, needed to be determined. I invited the parties to make further submissions on that point. And Mr Thompson to advise how he had arranged his financial affairs to pay the outstanding reparation and fine. This later point requires further explanation.

[3] At his sentencing on 10 May 2016 Mr Thompson claimed he could not pay the level of reparation and fine finally imposed, which was reparation in the sum of

$100,000 and a fine in the sum of $80,000.

Mr Thompson’s claimed inability to pay

[4] For ease of reference, I set out again [33]-[36] of my judgment dated

12 July 2016:

[33] At the sentencing hearing on 10 May 2016, I dealt with the issue relating to Mr Thompson’s ability to pay reparation and a fine. For ease of reference, I set out below my findings on that point:

[45] At this point, I deal with the issue surrounding your ability to pay for reparation and for the fine. I have to hand your declaration as to financial capacity, dated 29 April 2016. Also, I have a declaration as to income, dated

2 May 2016, from his partner.

[46] In that declaration by Mr Thompson, there is reference to the financial position of Beau Thompson Limited. When one looks at the assets and liabilities, it is clear from the accountant’s analysis that the shareholder advance account is presently propping up the company. That is the money that you owe to the company. It is in the order of $1.2 million. On that evidence, it is clear that Beau Thompson Limited is only solvent as a result of that current account.

[47] However, Mr Thompson, in your assets there is a reference to livestock on hand worth $18,500, a Custom Cruiser worth $15,000, a Harley bike valued at $10,000, a boat worth $5000, sundry farming plant at $15,000, and sundry farming machinery at $10,500.

[48] In addressing those matters, Mr White sensibly faced up to the contention that you would not need a number of those items in order to continue living. Mr White’s point was those assets may need to be sold in order for funds to become available for living expenses. However, it is clear that, if you are in the process of winding up the company—as you say you are—then you will inevitably need to find an alternative source of income. I take into account your age. I take into account the fact that you have stated in an affidavit that Beau Thompson Ltd is in the process of being wound up. Nevertheless, in my view, these assets are available to be sold. The availability of those assets thus affects your ability to pay the reparation and fine.

[34] I found that Mr Thompson had the ability to pay reparation in the sum of $100,000. Mr Thompson had already earmarked the sum of $80,000 to pay

reparation comprising of $50,000 from the insurer and $30,000 from him personally. I also found Mr Thompson had the ability to pay the final fine in the sum of $80,000.

[35] As noted above, I was informed by Mr Thompson’s counsel that

Mr Thompson intended to wind up Beau Thompson Limited. It is not clear whether that course of action has been undertaken since 10 May 2016. If, in fact, Mr Thompson is continuing to trade, then the ability to pay any costs award becomes highly relevant. Also, if he has chosen to continue to trade and pay off the fine that way then an issue arises as to whether Mr Thompson has sold any of the assets referred to in his declaration to meet the reparation and fine. If those assets have not been realised then Mr Thompson’s ability to pay costs remains unsettled.

[36] At the very least the level of costs if awarded would have to take into account the fact that Mr Thompson needed to find financial sources to pay the balance of reparation in the sum of $20,000 and the fine of $80,000.

[5] As noted in my judgment the registrar advised on 26 May 2016 Mr Thompson had filed an application for an approved instalment plan to pay the fine and reparation over a five-year period. That development called for further inquiry because as noted in my judgment Mr Thompson can pay the award especially if the assets referred to in his Declaration as to Financial Capacity dated 29 April 2016 have not been realised.

[6] I received further submissions from the parties on the issue.

Should I exercise my residual discretion in favour of the costs award? And if so, in whole or in part?

[7] Ms Bishop, on behalf of WorkSafe, argued that for several reasons

Mr Thompson can pay a costs award in whole or in part. First, while the activities of Beau Thompson Limited had been scaled down, it has not ceased trading altogether. Second, Mr Thompson continued to hold personal assets that were mentioned in his declaration of financial capacity. Third, Mr Thompson was investigating further income sources from growing maize. Fourth, Mr Thompson was in a position to make monthly payments of the amount owing and continues to look for opportunities for deriving income.

[8] Accordingly, Ms Bishop submitted that while Mr Thompson’s financial circumstances may mean he is not able to pay an award of costs immediately, this does not prevent him paying costs by instalments. Finally, Ms Bishop argued that the

ability-to-pay factor ought not present a barrier to the Court exercising its residual discretion to award costs.

[9] On behalf of Mr Thompson, Mr White argued his client’s financial circumstances had not improved since the declaration dated 29 April 2016. He said that Beau Thompson Limited had been scaled down with a view to winding up the company. He had received instructions that Beau Thompson Limited’s assets were being sold gradually. And that the nature of the assets was not such that they could be quickly realised.

[10] Mr White confirmed that a long-term instalment arrangement has been made by Mr Thompson with the registrar to pay off the remainder of the fine and reparation. Also, Mr White confirmed Mr Thompson continued to hold those personal assets mentioned in the declaration and attempts were being made to sell those assets.

[11] Mr White argued Mr Thompson could not pay the costs indicated in the Court’s judgment dated 12 July 2016.

Decision

[12] On the information before me from both parties, Mr Thompson has chosen not to immediately realise any of the private assets stated in his declaration. Those assets included livestock, a Custom Cruiser, a Harley Davidson bike, a boat and sundry farm plant and machinery. As at 29 April 2016, those private assets totalled $74,000. There is no suggestion Mr Thompson has sold any of those assets. I am not persuaded

Mr Thompson needs to avoid selling them now until he considers the price can be maximised. To hold otherwise would mean Mr Thompson could continuously manipulate the Court process by claiming he cannot sell until he determines the price is right.

[13] Moreover, Mr Thompson entered an arrangement with the registrar to pay the outstanding fine and reparation by way of instalments. Through that instalment arrangement, Mr Thompson has avoided the need to realise those private assets. He

now seeks to adopt the same tactic to avoid a costs award on the spurious grounds noted above.

[14] In my view, Mr Thompson retains the ability to pay an award of costs through the realisation of all or some of those assets. The value of those assets clearly exceeds the notional award of costs. Mr Thompson can pay the sum of costs I considered to be just and reasonable for legal fees and disbursements.

[15] Mr Thompson is therefore ordered to pay the total sum of $60,077.25 and I

exercise my residual discretion in favour of that award of costs.

WP Cathcart

District Court Judge