Geary v Accident Compensation Corporation [2014] NZHC 1037 (16 May 2014)

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BETWEEN	IAN RUSSELL GEARY Appellant
AND	ACCIDENT COMPENSATION CORPORATION _Respondent

Hearing:	6 May 2014
Appearances:	A Beck for Appellant I Hunt for Respondent Memoranda filed by Counsel: Respondent: 9 and 14 May 2014 Appellant: 14 May 2014
_Judgment:	_{16 May 2014}

[1] Before the Court are two appeals against decisions of Judge Maze in the District Court, the first dated 23 July 2013 (the substantive decision) and the second, a subsequent costs decision dated 10 August 2013 (the costs decision).

[2] The substantive decision related to a claim against the respondent by the appellant, who until 5 December 2002 was a psychologist providing treatment services to ACC claimants of the respondent, for historical service charges and travel costs.

[3] In the substantive decision Judge Maze awarded judgment in favour of the appellant for what were said to be unpaid treatment services accounts of $8493.75

(GST inclusive) together with interest on this of $3416.14 totalling in all $11,909.89, but she declined any award for travel costs.

[4] In the costs decision, Judge Maze however awarded costs against the appellant in favour of the respondent amounting to $70,000 (GST inclusive) together with disbursements totalling $6606.40.

[5] In addition, Judge Maze decided the respondent was to be liable for and to pay $1577 in respect of the costs of an expert witness accountant called by the Court in this matter Mr Craig Copland, and the appellant was to pay $10,599 with respect to Mr Copland’s expenses.

(a) In placing the onus on the appellant in all matters in this proceeding when it belonged on the respondent;

(c) By failing to enforce discovery orders the Court had made against the respondent with the result that the appellant was said to be materially prejudiced in the conduct of the case; and

[7] With regard to the appellant’s appeal against the costs decision, he says that the District Court erred:

(a) By departing from the rule that a party who succeeds in obtaining judgment is entitled to costs and by treating the appellant as having failed in his claim;

(b) By awarding increased costs in the nature of indemnity costs to the respondent; and

[8] As I have noted, until 5 December 2002 the appellant a psychologist provided treatment services to ACC claimants of the respondent. On that date the respondent terminated the appellant’s registration.

[9] From March 2003, for the first time as I understand it, the appellant submitted new treatment claims to the respondent for reimbursement and new claims for travel expenses incurred in respect of prior travel said to have been undertaken by him in seeing ACC claimants.

[10] In April 2004, the appellant brought Dispute Tribunal proceedings seeking payment of $6440 with respect to the travel payment claims. These claims however were struck out by the Disputes Tribunal for want of jurisdiction.

[11] On 7 July 2005, the appellant issued proceedings against the respondent in the Timaru District Court. As to the service claims, these alleged that between 1999 and 2003 the appellant had provided treatment to ACC clients of the respondent for which fee invoices had been rendered totalling $15,562.65 which had not been paid. And, as to the travel expense claims, the appellant alleged that he had travelled between his clinic and other places to provide treatment to the respondent’s clients and that he had rendered invoices for this travel totalling $32,115 but this sum had not been paid.

[13] Considerable correspondence and discussions between the parties ensued. In addition a number of Court conferences took place, and a range of memoranda were filed in the District Court and directions given by various Judges.

5 April 2006 Judge Green in the District Court made directions requiring the appellant to prepare his schedule of claims incorporating details of ACC claimant’s name, date of service provided, amount and ACC reference number. At no time however does it seem this was properly complied with.

[15] Two judicial settlement conferences then took place between the parties in the District Court, neither of which was successful.

[16] Amended pleadings were filed on 10 June 2008 and this was followed later by a number of interlocutory applications. The material before the Court mounted.

[17] Throughout, the District Court endeavoured to apply intense management to this proceeding, but finally, early in 2009, Mr Copland a chartered accountant was appointed by the Court as an expert to provide an accounting and an analysis report to the Court on the appellant’s claims.

[18] Further detailed involvement by the District Court. A second amended statement of claim was filed by the appellant on 28 November 2012 which increased the appellant’s total claim to $63,173.06 a statement of defence provided on

[19] The matter was then set down for hearing before Judge Maze to commence on 13 May 2013. On 18 April 2013 however, the respondent made a formal Calderbank offer to the appellant (an offer without prejudice save as to costs) to settle this entire matter with a payment of $15,000. This was rejected by the appellant. His claims proceeded to trial in the District Court, a trial which occupied a number of days being 13, 14 and 15 May, 27 and 28 May and 9 July 2013.

[20] Judge Maze gave her decisions on the substantive matter on 23 July 2013 and on the costs question on 10 September 2013.

[21] Section 75 of the District Courts Act 1947 provides that all appeals are by way of re-hearing.

[22] The approach on appeals has been discussed by the Supreme Court in Austin Nichols & Co Inc v Stichting Lodestar.¹That approach can be summarised in the judgment of the Chief Justice who said:

Those exercising general rights of appeal are entitled to judgment in accordance with the opinion of the appellate court, even where that opinion is an assessment of fact and degree and entails a value judgment. If the appellate court’s opinion is different from the conclusion of the tribunal appealed from, then the decision under appeal is wrong in the only sense that matters, even if it was a conclusion on which minds might reasonably differ. In such circumstances it is an error for the High Court to defer to the lower Court’s assessment of the acceptability and weight to be accorded to the evidence, rather than forming its own opinion.

[23] And it is clear too that where a decision of the lower Court involves the exercise of a discretion, this Court should only interfere if there is an error of law or principle, or if the Judge took into account an irrelevant consideration, or failed to take account of a relevant consideration, or if the decision is plainly wrong – Kacem

[24] On all of this, the Supreme Court in Kacem v Bashir at paras [31] and [32]

[31] The Court of Appeal discussed the application of the decision of this Court in Austin Nichols & Co Inc v Stichting Lodestar to the present kind of appeal. The Court correctly observed that on a general appeal of the present kind the appellate court has the responsibility of considering the merits of the case afresh. The weight it gives to the reasoning of the court or courts below is a matter for the appellate court’s assessment. We should add here that if the appellate court admits further evidence, that evidence will necessarily require de novo assessment and consideration of how it affects the correctness of the decision under appeal. The Court of Appeal was right to say that Courtney J had rather overstated the effect of Austin, Nichols

when she indicated she should approach the appeal to the High Court uninfluenced by the reasoning of the Family Court. The High Court was required to reach its own conclusion, but this did not imply that it should disregard the Family Court’s decision. What, if any, influence the Family Court’s reasoning should have was for the High Court’s assessment.

[32] But, for present purposes, the important point arising from Austin, Nichols is that those exercising general rights of appeal are entitled to judgment in accordance with the opinion of the appellate court, even where that opinion involves an assessment of fact and degree and entails a value judgment. In this context a general appeal is to be distinguished from an appeal against a decision made in the exercise of a discretion. In that kind of case the criteria for a successful appeal are stricter: (1) error of law or principle; (2) taking account of irrelevant considerations; (3) failing to take account of a relevant consideration; or (4) the decision is plainly wrong. The distinction between a general appeal and an appeal from a discretion is not altogether easy to describe in the abstract. But the fact that the case involves factual evaluation and a value judgment does not of itself mean the decision is discretionary...

[26] With these principles in mind, it is useful now to consider the appellant’s

appeal relating to the substantive decision in the District Court first. [27] This appeal effectively relates to four separate matters:

(a) The decision that the appellant was entitled to only $8493.75 by way of additional treatment service claims from the respondent.

(b) The decision that there was insufficient evidence to substantiate any travel claims made by the appellant.

(c) The decision that the appellant was not entitled to interest at the prescribed rate and the period for which interest was granted.

(d) An ancillary issue concerning a complaint by the appellant about discovery and the late provision of documents to him.

[28] Shortly, I will turn to consider each of these matters. But, before doing so, I need to address a general question linked to this and raised by Mr Beck for the appellant here.

[29] This was a contention advanced for the appellant that, in her decision Judge Maze in the District Court, misapplied the law regarding onus of proof. Mr Beck complained that in that decision Judge Maze wrongly found that in particular the appellant alone bore the onus of proof throughout. This included an onus to negative any suggestion that payments had been made to him even in situations where the respondent had admitted liability but claimed that the payment had already been made.

[30] Dealing with this aspect first, generally in my view this contention does not assist the appellant here. It cannot be questioned that, as he was the claimant under what was said to be a contractual entitlement to payment of fees for services and travel, the appellant had the initial onus to establish on the balance of probabilities that his claims were valid. That is, it was incumbent on the appellant first, to show his contractual entitlement to these payments, secondly, that he had carried out the work and undertaken the travel concerned in accordance with his contractual obligations, thirdly, that he had rendered proper claims for those services, and fourthly, that he had shown to an appropriate standard that he had not been paid his legal entitlements.

[31] Although I will deal with particular matters of onus as they arise later in this judgment, suffice to say at this point that in general terms these complaints advanced by Mr Beck in my view make little difference to the overall outcome of this appeal. The decision of Judge Maze here on all major matters in my view is not open to attack on onus of proof grounds and must stand. I will address these issues further as this judgment progresses.

[32] In this aspect of his District Court claim, the appellant advanced 54 separate claims for treatment services he said were rendered and invoiced but not paid. After much discussion and consideration of the lengthy and detailed accounting analysis

that had been carefully undertaken by the independent accountant, Mr Copland, appointed by the Court, the respondent did accept a number of these claims.

[33] In her judgment, Judge Maze at paragraph [70] noted this and said that, of the

54 treatment claims, 28 were dismissed entirely and 26 were admitted and succeeded either in whole or in part. This gave a total award to the appellant of $8493.75 (GST inclusive).

[34] As I understand the appellant’s appeal before me, it relates only to three of the remaining 28 dismissed claims which he says are in issue. These are the claims for JM amounting to $281.25 dealt with by Judge Maze at paragraph [11] of her decision, the claim for K M for $112.50 dealt with by Judge Maze at paragraph [22] of her decision and the claim for G S for $393.75 dealt with by Judge Maze at paragraph [32] of her decision.

[35] As to the J M claim and the G S claim, in her decision Judge Maze had noted that there were no exhibits before her and that the respondent’s position was in each case that, as ACC had paid for all approved sessions, it had no further liability. In addition she noted that the appellant had failed to show that he had delivered any additional sessions for these claimants for which the respondent was liable and the bare claim from the appellant that he could not confirm he had received all due payments was simply insufficient.

[36] So far as the K M claim was concerned, again according to Judge Maze the appellant claimed here that he did not know whether this $112.50 payment had been received, although the respondent’s records showed that this claim made around

29 July 2002 was paid on 21 August 2002. Accordingly, this particular claim was also dismissed.

[37] In general submissions he made on this appeal, Mr Beck for the appellant began by stating that in the District Court Judge Maze was very critical of the appellant. Mr Hunt for the respondent seemed to accept that this was the case although, given the circumstances surrounding this whole matter, he said this was hardly surprising.

[38] Mr Beck went further however and submitted that, as an unrepresented litigant, the appellant could not be judged against standards which might apply to a legal practitioner appearing before this Court and that he should not be punished here for doing things in a naïve or clumsy way. Whilst there is something in that contention advanced by Mr Beck, nevertheless in the broad interests of justice a proper balance must always be reached. This balance is between the rights of an unrepresented litigant to receive some assistance in bringing his or her claim on the one hand, and the rights of the opposing party to a fair trial on the other. In addition, however, the interests of the broader community in having our system of justice properly and fairly applied and of all other litigants in receiving a timely opportunity for their cases to be heard, must also feature in this.

[39] Turning now to the specific appeal against Judge Maze’s decision to refuse these three substantive treatment claims (which total in all about $787.50) the appellant has placed nothing before this Court which might in any way suggest that Judge Maze was wrong to reach the conclusion she did on these claims.

[40] There is no question in my mind that the appeal with respect to these treatment service claims must be dismissed. The appellant did not in any way establish either that the work he was claiming for was properly done and invoiced or that, even if a proper invoice was justified and supplied, it had remained unpaid. He has not established on the balance of probabilities his claim regarding these aspects. The appeal with respect to these treatment claims is dismissed.

[41] Before the District Court the appellant made 535 separate claims for historic travel allowances which he says were invoiced but not paid by the respondent. As already noted, the Court had appointed an independent accountant Mr Copland as an expert to assist it and the parties in analysing the accounting evidence including these travel claims. Indeed, it seems the whole situation otherwise was entirely confused and there was certainly no reliable evidence before the Court from the appellant which in any way assisted.

[42] A detailed spreadsheet report from Mr Copland was before the District Court and is before this Court on appeal. That report at volume 2 of the evidence exhibits in its final page (page 11) notes that, of these 535 separate claims, the respondent did agree to meet a number which totalled $5455 (GST inclusive). The spreadsheet report went on to show that, of the remaining travel claims, I understand 394 in number totalling $25,170 (GST inclusive), these were all still in dispute before the District Court.

[43] Notwithstanding this, in her judgment Judge Maze dismissed the appellant’s claim for the entire 535 separate travel claims. It seems she may not have had drawn to her attention and may have overlooked Mr Copland’s conclusion that of the total travel claims, a number representing $5455 in total were accepted by the respondent on the basis of the final detailed analysis he had undertaken, and should be paid.

[44] In his post-hearing memoranda of 9 and 14 May 2014 filed in this matter, Mr Hunt for the respondent confirmed that ACC had accepted liability for this $5455 for travel claims. Accordingly Judge Maze was in error in refusing the appellant’s claim insofar as that amount was concerned.

[46] Insofar as the remaining travel claims are concerned, there can be no doubt that it was incumbent on the appellant to prove that he was contractually entitled to the travel claim payments he had invoiced, that the travel was indeed undertaken and that the payments in question had not been received. On this the appellant appears to take issue with Judge Maze’s approach to his travel claims, focusing in detail on certain passages of her reasoning within her decision, for example paragraphs [57] and [58].

[47] In response, Mr Hunt for the respondent contends this fails to do justice to the whole of the evidence before Judge Maze over this seven day trial, including her assessment of the integrity of the appellant’s records and accounting system. On this aspect Judge Maze noted the appellant’s own acknowledgement that his records were

“wanting” or “in error” and that it seems either he had no means of checking, or alternatively he elected not to check, whether payments had or had not been made by the respondent in respect of invoices rendered by him.

[48] Issues clearly arose as well as to whether travel claims were time-barred or alternatively could be made for multiple appointments on the same occasion and whether payments were due for travel to single claimants.

[49] Amidst all of these claims advanced by the appellant, which I agree can only be described as “chaotic”, in my view Judge Maze did not err in making the comment she did at paragraph [59] of her judgment that:

...again I rely heavily upon the schedule as did Mr Geary (page 79 notes of evidence) and Mr Hunt...In most instances Mr Geary has relied entirely upon the schedule as listing what he wanted to say. The only additional evidence-in-chief starts at page 79 notes of evidence, ending at page 81. It relates to claiming GST largely. Therefore Mr Geary has provided me with almost nothing by way of additional evidence or evidence contradicting what ACC has said.

[50] Nothing which has been placed before this Court on appeal in any way questions these conclusions reached by Judge Maze (with the sole exception of the

$5455 agreed travel claim accepted by the respondent noted at paragraph [44] above which it seems she has overlooked).

[51] Her decision therefore to dismiss the remainder of the total 535 travel claims advanced by the appellant generally long after the events in question was not a decision made in error.

[52] I therefore dismiss this appeal with respect to the travel claims other than as to those covered by the $5455 error noted above.

Interest is awarded at the current applicable rate of 5% per annum from the date of filing the proceedings (7 July 2005). If in fact he might be

considered for any higher rates that might have applied had the matter been determined earlier, I exercise discretion in fixing the appropriate rate at 5%. It is a fair reflection of the outcome and the considerable inconvenience and expense to which ACC has been put by the way in which Mr Geary has presented his claims to them and conducted these proceedings. Interest will be awarded for a period of eight years and 16 days calculated at $424.69 per annum. I calculate the interest entitlement at $3416.14.

(1) Subject to subsection (2), in a proceeding for the recovery of any debt or damages, the court may, if it thinks fit, order that there shall be included in the sum for which judgment is given interest at such rate, not exceeding the prescribed rate, as it thinks fit on the whole or any part of the debt or damages for the whole or any part of the period between the date when the cause of action arose and the date of the judgment.

(b) apply in relation to any debt upon which interest is payable as of right, whether by virtue of any agreement, enactment, or rule of law, or otherwise; or

(3) In any proceedings for the recovery of any debt upon which interest is payable as of right, and in respect of which the rate of interest is not agreed upon, prescribed, or ascertained under any agreement, enactment, or rule of law, or otherwise, there shall be included in the sum for which judgment is given interest at such rate, not exceeding the prescribed rate, as the court thinks fit for the period between the date as from which the interest became payable and the date of the judgment.

(4) In this section the term the prescribed rate means the rate of 11% per annum, (altered to a rate now of 5.0% pursuant to Regn 4 of

2011/176) or such other rate as may from time to time be prescribed for the purposes of this section by the Governor-General by Order in Council.

[55] It is clear that whilst the power to award interest is in all cases discretionary, it is a discretion to be exercised properly. On this, although there are no rules or mandatory principles to be applied in awarding interest, the general purpose of the power to award interest is to enable a Court to ensure that proper compensation is

given to a plaintiff – see QBE Insurance (International) Limited v Steward Motor

[56] In the present case, Judge Maze held that it was appropriate to award interest no doubt on the basis that this provided to the appellant fair compensation for the fact that, following the detailed accounting analysis which had been undertaken, he was found to have been entitled to certain monies which in the meantime had been available for use solely by the respondent instead of the appellant.

[57] Although it is clear that in contract claims it is often the case that interest is awarded from the date a cause of action arose, (Blackley v National Mutual Life Association of Australasia Limited (No 2)⁴this is always discretionary. In the present case Judge Maze awarded interest to commence from the date of filing of the proceeding.

[58] On all of this, Mr Beck for the appellant noted that the prescribed rates of interest for what he said were the respective periods in question were:

[59] Mr Beck contended that to provide proper compensation to the appellant here, interest needed to be awarded at these rates.

[60] But it is clear that, in her decision, Judge Maze stated she was exercising her discretion to apply a lower rate of interest because she described this first, as being a “fair reflection of the outcome” and secondly, to bear in mind “the considerable inconvenience and experience to which ACC has been put by the way in which

_{Mr Geary has presented his claims to them and conducted these
proceedings.”}

³QBE Insurance (International) Limited v Steward Motor Sports European Limited [2012] NZHC

⁴Blackley v National Mutual Life Association of Australasia Limited (No 2) [1973] 1 NZLR 668.

[61] Mr Beck argued that Judge Maze appears to have lost sight of the purpose of s 62B, which is to provide fair compensation for the use of money. Inconvenience and expense he suggested is not to be taken into account. The fact here is that the respondent owed money to the appellant and the appellant had to institute proceedings to obtain it. Interest at the prescribed rate should therefore have followed as a matter of course.

[62] Whilst there is some substance in these arguments advanced by Mr Beck, in my view they overlook one critical factor. This is the unquestioned acknowledgment by both Mr Beck and Mr Hunt that, without the expert and independent accounting assistance of Mr Copland, it is likely that any assessment verifying the amounts claimed by the appellant as properly due from the respondent would have been quite impossible. All the appellant’s claims were entirely historical coming some time after his service contract with the respondent had terminated. As best I can tell, the appellant presented no evidence of any useful kind to substantiate his claims. It was entirely through the assistance of the respondent therefore, in making available all its files and material, that the Court appointed expert Mr Copland was able to reconstruct something from the mire and reach the conclusions he did, all of which were largely accepted by all parties. This has clearly been a mammoth exercise for all and in particular the respondent. Without the respondent’s undoubted contributions and the huge amount of time and work it has committed through this whole process, it seems to me that the appellant’s claims are likely to have foundered at the first hurdle.

[63] All this I accept presents rather different and unusual circumstances from those prevailing in a normal case involving a simple debt recovery. In light of this, in my view Judge Maze was entitled to exercise her discretion in awarding interest in the way she did. No real error of law or principle occurred. Nor as I see it did Judge Maze take into account irrelevant considerations or fail to take account of a relevant consideration. And finally, I am satisfied that her decision on this aspect could not be said to be plainly wrong.

[64] I dismiss the appellant’s appeal relating to the basis for this interest claim.

[65] Notwithstanding this, as I have noted at para [3] above, Judge Maze in her decision awarded interest to the appellant of $3416.14, calculated at the rate of 5% per annum but only on the amount she assessed was due for unpaid treatment service accounts due to the appellant being $8493.75. Interest was calculated for the period of eight years and 16 days from the date of filing the proceeding 7 July 2005 and I am satisfied under all the circumstances here that this was an appropriate period.

[66] Given the fact I have noted at para [44] above that Judge Maze was in error in failing to award to the appellant the sum of $5455 for travel claims agreed to by the respondent, the basic amount now properly due to the appellant has changed. The correct amount represents his original unpaid treatment services claim of

$8493.75 plus this agreed travel claim of $5455 totalling in all $13,948.75. Interest on this amount at 5% per annum on an annual basis totals $697.44. For the period of eight years and 16 days, for which I am satisfied this interest is to be properly calculated, the sum due from the respondent is $5610.09. This amount is to be substituted for the $3416.14 interest entitlement contained in the judgment of Judge Maze.

[67] Before me Mr Beck indicated that the appellant had raised concerns regarding discovery of documents by the respondent on a number of occasions throughout this proceeding. An order in the nature of a discovery order appears to have been made by Judge Neave in the District Court on 3 November 2011.

[68] Mr Beck’s submissions referred to an application said to be made by the appellant on 23 December 2011 complaining of a failure on the part of the respondent to provide proper discovery to the appellant in a timely way. In reply the respondent says this was a non-compliant application unsupported by any evidence and it was never addressed by the Court or resolved in a meaningful way.

[69] Notwithstanding this, the appellant’s essential complaint here as I understand it relates to what is said to be the late provision of documents by way of discovery on the part of the respondent. The appellant says that it has been prejudiced by the fact that the respondent only provided to him a range of documents immediately prior to

the commencement of the District Court hearing and thus he had insufficient time to properly address these.

[70] The respondent takes issue with this. Mr Hunt maintains that throughout it was the respondent alone who had conducted a huge number of enquiries, going back to obtain longstanding historical records and that it was the respondent who had effectively provided all the information required by Mr Copland for him to carry out his critical work here. The respondent suggests it is rather rich for the appellant to now suggest that he has some valid complaint concerning discovery.

[71] In my view there is substance in this contention advanced by the respondent. Although a number of documents in question were only provided to the appellant on the first day of the hearing of this matter, 13 May 2013, that hearing proceeded with adjournments through to 27 and 28 May and 9 July 2013.

[72] Again, much of the material provided by the respondent would have represented copies of documents that would be expected to be on professional files retained by the appellant as a psychologist for his various clients and much therefore should have come as no surprise to him.

[73] In my view in reality there is nothing in this discovery complaint the appellant has endeavoured to advance. The claims here were brought by him and yet it does seem that without the substantial assistance to the process provided throughout by the respondent, none of these claims would have even got off the ground.

[75] Here the appellant appeals against the decision of Judge Maze in the District

(a) Although the appellant had succeeded in his claim, the District Court had erred by holding that the respondent was nevertheless entitled to a costs award. There was no basis for departing from the general rule that the successful party is entitled to costs.

(b) The respondent, again an unsuccessful party, was not entitled to increased costs and there was no justification for increased costs.

(c) The approach of the District Court in requiring the appellant to pay the bulk of Mr Copland’s costs was unprincipled and not in accordance with the rules, Mr Copland’s costs were reasonably and necessarily incurred in order to prove the appellant’s claim here.

[77] Mr Copland was appointed as an expert to assist the Court. The appellant’s position is that, although he was appointed by the Court, his fees are properly to be regarded as being a disbursement in the proceeding and that, as the appellant has been largely successful in his claim, the respondent should pay Mr Copland’s fees in full.

[78] In response, Mr Hunt for the respondent contended that Mr Copland’s costs should not be regarded as a disbursement in the normal way. He noted that Judge Maze in a minute she issued in this proceeding on 22 November 2012 said that the Court was to call Mr Copland as an expert to assist it and that his costs in the first instance would be paid by the Court but:

[79] Mr Hunt notes that Mr Copland’s involvement was necessary essentially because of inadequacies in the manner in which the appellant had presented his claims and that no grounds existed for interfering with the exercise by Judge Maze of her discretion in her decision apportioning Mr Copland’s costs between the parties as she did.

[80] On that aspect, Mr Beck for the appellant recorded that Judge Maze in her decision had made this apportionment simply on the basis that the appellant succeeded as to 13% of his original claim but failed as to 87%. Accordingly she divided liability for Mr Copland’s costs as to 13% to be paid by the respondent and

[81] Whilst it might be suggested that at one level this 13%/87% apportionment should be reconsidered, given that as a result of the present appeal the appellant in his claims has succeeded to a greater proportionate extent, in my view no such adjustment is reasonably required or appropriate here. As I see the position, the need for the Court to appoint Mr Copland to assist in this case resulted principally from the complete failure by the appellant to put any material before the Court from appropriate records to justify his claims. As I have noted above, it has been in large measure only because of the efforts of Mr Copland, assisted by the voluntary provision of much information by the respondent, that the appellant’s claim has to an extent been successful. The work undertaken by Mr Copland arguably should not have been necessary and the information and conclusions he has provided should have been available from the appellant’s own material. But that was not the case.

[82] As a result, in my judgment Judge Maze in her decision could well have ordered that the entire costs of Mr Copland should be met by the appellant alone but she chose in her discretion not to do so.

[83] I conclude that there are no proper grounds for interfering with this exercise by Judge Maze of her discretion in her decision with respect to Mr Copland’s costs.

[85] The starting point in any costs enquiry must be the general principle that the unsuccessful party in any litigation should pay the costs of the successful party.

[86] In this case Judge Maze concluded that the appellant had not been the successful party. According to the respondent she was entitled to reach this conclusion. With respect, to an extent I disagree. It is undeniable that Judge Maze did grant judgment in favour of the appellant with the total award she made of

$11,909.89 noted at [3] above (plus the order for the respondent to pay $1577 towards Mr Copland’s fees as the expert witness). This could not be seen simply as a nominal damages award. The total claim which the appellant had advanced in his second amended statement of claim in this proceeding was $63,173.06. This award of $13,486.89 ($11,909.89 plus $1577.00) represented 21% of the total claim. For Judge Maze to describe the appellant as an unsuccessful plaintiff in these circumstances is wrong. What is clear, however, is that the success which the appellant had in this proceeding was very largely if not entirely due to the efforts and co-operation of the respondent and the independent accountant appointed by the Court Mr Copland. The information made available to Mr Copland which provided the basis for his conclusions as I understand it came virtually entirely from the respondent and not the appellant. As such, although the appellant here did succeed for part of the amount he had originally claimed, he can scarcely claim credit of any kind for that.

[87] Further, virtually throughout this proceeding the appellant was a self represented litigant. As such, it is wrong for him to state that in these circumstances he incurred significant legal costs for which he should be reimbursed.

[88] The upshot of these matters is that this is one of those cases in my view where, subject to what will follow in this judgment, the proper starting point must be that costs should simply lie where they fall. Although the appellant is a partially successful claimant here, under all the circumstances which were before the District Court as I see the position he is clearly not entitled to any award of costs himself.

[89] That leaves for consideration the issue as to whether costs should have been awarded to the respondent in this case as Judge Maze did.

[90] A first aspect of this enquiry must be to consider a Calderbank offer which the respondent made to the appellant on 18 April 2013. This Calderbank offer, being an offer without prejudice except as to costs, offered to settle this litigation with a payment of $15,000 to the appellant.

[91] It will be immediately apparent that this $15,000 offer, made a little over one month before the commencement of the hearing in the District Court, in fact exceeded the final amount actually awarded to the appellant by Judge Maze. That amount noted at [86] above effectively totalled $13,486.89 and meant the total sum the respondent was ultimately required to pay was less than the $15,000 Calderbank offer it had made.

[92] On this aspect there can be no question that the Calderbank offer made by the respondent’s counsel was in writing and was clear and unambiguous. It was made a little over one month before commencement of the hearing of this matter. In my view this could not be said to be an offer made very much at the last minute and thus be an offer the Court was required to disregard.

[93] I am satisfied therefore that the Calderbank offer was one properly made in terms of r 47G District Courts Rules 1992 (equivalent to r 14.10 High Court Rules). Thus, in terms of r 47H (or r 14.11(3)), as the $15,000 offer exceeded the amount of the original judgment obtained by the appellant here, (although the effect of that offer is always “at the discretion of the Court” in terms of r 47H (or r 14.11(1)), on its face the unsuccessful party respondent, would have been entitled to its costs on all steps taken in this proceeding after the date the offer was made.

[94] And, as to those costs, the respondent says that from the date of the Calderbank offer, 18 April 2013, its actual costs totalled $42,500.00 (and its disbursements were $6606.40). This of course is less than the costs order made in favour of the respondent by Judge Maze in her decision of $70,000 (GST inclusive) plus disbursements.

[95] All of this, however, to an extent must be affected by the decision I am now making in this judgment to allow the appellant’s claim both for part of his travel costs, being the $5455 agreed to by the respondent noted at [44] above, and also for the resulting increased interest award outlined at [66] above. Adding these amounts to the awards made by Judge Maze means that the appellant is now successful to the extent of $21,135.84. This represents the treatment services claim award of

$8493.75, and the agreed travel costs claim of $5455 plus interest on those amounts of $5610.09 plus the respondent’s contribution to Mr Copland’s costs of $1577.00. Obviously, these amounts together exceed the $15,000 Calderbank offer made. This necessarily means that r 47H or r 14.11(3) is not triggered. This is not the end of the matter however.

[96] The equivalent of r 14.11(4) High Court Rules (effectively r 47H(5)) does apply in this case. Rule 14.11(4) provides:

(4) The Calderbank offer may be taken into account, if party A the unsuccessful party makes an offer that—

(b) is close to the value or benefit of the judgment obtained by party B the successful party.

[97] In my view, the present case is precisely the type of situation where it was envisaged that r 14.11(4) or r 47H(5)would apply. I repeat that the Calderbank offer made was for $15,000. As I have noted above, as a result of this appeal the total award which the appellant would now receive is $21,135.84. As I see it there is a possible argument here that the $15,000 Calderbank offer might be seen as being sufficiently close to the value or benefit of this judgment award obtained by the appellant, particularly being in mind the overall magnitude of his claims here, such that in terms of r 14.11(4) or r 47H(5) the Court might take into account this offer.

(1) Any effect of an offer under r 14.10 is in the Court’s discretion. It does not afford automatic protection from costs in the event of a lower recovery, nor necessarily result in exposure to full costs if a higher sum is recovered. An offer is not the sole consideration, because all relevant circumstances are to be considered: McDonald v FAI (NZ) General Insurance Co Ltd (2002) 16 PRNZ 298 (HC) at [17]; PGG Wrightson Ltd v Wai Shing Ltd HC Auckland CIV-2003-

(2) Subject to those points, r 14.11 secures to the maker of a r 14.10 offer, if it has a higher dollar value or is more beneficial for the recipient than a judgment subsequently obtained, a right to costs from the time of the offer.

(3) An offer close to the value or benefit of the judgment may be taken into account in fixing costs. In Craig v Donaldson [2012] NZHC

[99] Here, Mr Beck contends that Judge Maze reached her conclusion on costs on an unprincipled basis given that the appellant was successful in part in his claim in that Court. In Shirley v Wairarapa District Health Board⁵the Supreme Court said at para [19]:

[19] Rule 47(a) reflects the longstanding principle that, unless there are exceptional reasons, costs should follow the result. That is, the loser, and only the loser, pays.

[100] Turning to the issue with respect to the Calderbank offer, the decision of this Court in Craig v Donaldson⁶addressing r 14.11(4)(b) reinforces the view that a defendant’s Calderbank offer may be taken into account for costs purposes where the offer is close to the value or benefit of the ultimate judgment obtained by a plaintiff. That case went on to note, however, that the critical issue in this is whether or not it may be taken into account such that a defendant should get costs. In Craig, Fogarty J stated in part at paras [16], [17] and [18]:

[16] There is, however, no similar judicial interpretation to r 14.11 as there is to r 14.1. The limited case law that exists is directed to cases as to whether or not the plaintiff’s successful costs should be reduced in the event of a lower recovery. There is no doubt that there is a policy decision embedded in 14.11(3)(a) not to entitle party A, the defendant, to costs if it offers a sum of money to party B that equals the amount of the judgment

obtained by party B against party A. I treat the higher threshold exceeds as deliberate. That must reflect thinking that when it comes to fixing costs against party B recovering only the amount offered, but nonetheless recovering that sum, that party B, the plaintiff, is not disentitled to costs.

[17] Sub-rule 3 defines when an unsuccessful defendant can obtain costs and limits it to the two sets of circumstances specified in clauses (a) and (b). Sub-rule 4 enables the Court to take into account when awarding costs to the plaintiff the fact that the plaintiff has obtained judgment close to the value or the benefit of the offer made by the defendant. The costs that the plaintiff would otherwise be entitled to under the costs regime can be discounted to reflect this fact, or may even be cancelled out by the offer.

[18] Such a construction of r 14.11 gives full effect to the language in sub-rules 3 and 4 and downplays the more general discretion in sub-rule 1. Such an interpretation is, I think, consistent with the Court of Appeal’s interpretation in Glaister v Amalgamated Dairies of the similar r 14.1(2)

[101] In Craig, the Calderbank offer was for $7230 which was the exact amount recovered by the plaintiff.

[102] Applying these principles here, it does seem that the Court is unlikely to be in a position where it should directly take into account and apply the April 2013

Calderbank offer made by the respondent in reaching a decision to award costs to the respondent, as the amount of that offer did not exceed the final recovery the appellant is now to achieve. But in my view the true benefit or value of that offer is close to the ultimate judgment the applicant will obtain here.

[104] A further offer, said to be without prejudice, was made by the respondent during the District Court hearing before commencement of the fifth hearing day on

28 May 2013. This offer was for a payment to be made to the appellant of $25,000 in full settlement with costs (if any) then to be determined by the Court. It was rejected by the appellant.

[105] Counsel for both parties accept that this 28 May 2013 offer was not a true Calderbank offer in terms of the High Court Rules. Nevertheless, given its timing and its expressed purpose to avoid the further costs of hearing, I am of the view that it is properly a matter to be weighed in the balance in this case when considering whether or not the respondent is entitled to an award of costs against the appellant.

Had this 28 May 2013 offer been accepted, both additional costs of all parties including Mr Copland and further hearing fees would have been avoided.

[106] And, on these issues generally Sims Court Practice at para HCR14.1.13 although relating to the High Court Rules addresses the situation of whether a successful party should be liable to pay costs to the unsuccessful party and states:⁷

The principle now stated in r 14.2(a) is that a successful party should have costs, although subject to r 14.7 (refusal of costs), and to the court’s overriding discretion in r 14.1. An award of costs against a successful party in favour of an unsuccessful party should only be in extreme cases. A successful party who raises issues or makes allegations which are neither improper nor unreasonable, but on which he fails, should not have to pay costs to the unsuccessful party: Body Corporate 97010 v Auckland City Council [2001] NZCA 345; (2001) 15 PRNZ 372.

In Rintoul v Corbett (High Court, Whangarei CP 45/89, 16 August 1990, Hillyer J) the successful defendant was ordered to pay costs, having put forward the defence at a very late stage. In Mirelle Pty Ltd v Attorney- General (1993) 2 NZPC 139; (1993) 7 PRNZ 107 the successful applicant in judicial review proceedings was ordered to pay costs to respondents who had unwittingly been brought into the proceedings as the result of the applicant’s actions. In Inglis & Co Ltd v Campbell (HC, Wellington CIV 2008-485-

summary judgment was not appropriate until the last minute, and costs were awarded against the defendant even though the plaintiff withdrew its application.

[107] Although generally it will be only in extreme cases that a successful party will be required to pay costs to the other party, and in large measure most of the cases noted at para [106] above will not apply directly in the circumstances prevailing here, in my view this is one of those unusual cases where the appellant although successful to a degree in his claim should be required to pay something towards the costs of the respondent. This is because the appellant has raised issues and made claims here which have been entirely unsupportable and unreasonable, his claim it seems without question would have failed at the first hurdle had not the Court appointed Mr Copland the independent accountant to carry out the detailed and extensive enquiry he undertook and given too that the respondent also has

_{chosen to assist the process by providing virtually all the information
required by Mr}

Copland. On all of this, it seems the appellant really provided little assistance at all, and, as I have noted above, could at the very least have been required to pay the entire costs rendered by Mr Copland. The appellant’s claim for service charges and travel costs here failed as to nearly 80%. The work involved on the part of the respondent and Mr Copland to analyse and properly consider the myriad of claims advanced by the appellant it seems was in no way assisted by the efforts of the appellant. The hearing of these claims occupied some six hearing days on what should essentially have been a simple debt recovery exercise. There can be little doubt that the real responsibility for this extended hearing time, and the mammoth task required to be undertaken by Mr Copland and the respondent in the lead up to this hearing, must rest largely with the appellant.

[108] Under all these circumstances, and bearing in mind all the material features of this case which I have outlined above, in an endeavour to do justice to both sides in this case, I take the view that Judge Maze was correct to determine finally that the appellant should be liable to some extent to contribute towards the respondent’s costs here.

[109] That leaves the question of the extent of that liability, however. The costs award Judge Maze made was for $70,000 which represented almost all of the actual costs incurred by the respondent. The presence of the Calderbank offer and the later offer noted above in my view do provide some assistance here and need to be taken into account to an extent. They have the result as I see it in allowing the Court to conclude that a contribution of one half of the costs of the $42,000 costs incurred by the respondent from the date of the original Calderbank offer should be met by the appellant. In my view this will do justice to the parties here in a proper way.

[110] I conclude therefore that, although Judge Maze was wrong to award costs of

$70,000 to the respondent here, a costs award of $21,000 is appropriate plus the disbursements award made earlier.

[111] To this extent the appellant’s appeal with respect to this costs award succeeds in the sense that the $70,000 costs award is replaced by an award of $21,000 plus disbursements. An order to this effect is to follow.

[112] For all the reasons outlined above this appeal succeeds in part only. [113] The appellant has succeeded in establishing the following:

(a) That he is entitled to the amount agreed by the respondent for travel expenses totalling $5455.

[114] As a result, the appellant is now entitled by way of his partly successful claim against the respondent to the following:

(a)	Original claims for treatment services awarded by the District Court	$8,493.75
(b)	Claims for travel costs awarded in this appeal	$5,455.00
(d)	Amended amount for interest on these amounts at 5% per annum	$5,610.09
(e)	Original contribution from the respondent towards the Copland expert costs	$1,577.00
	_Total	_$21,335.84

[115] So far as the $70,000 costs award ordered against the appellant in the District Court is concerned, the appellant’s appeal against this order succeeds to a certain extent. This District Court order is quashed. In its place as I have noted at para [111] above, the appellant is to pay to the respondent costs in this matter totalling $21,000 together with disbursements as properly approved by the Registrar.

[116] Subject to these conclusions, in all other respects the appellant’s appeal here

[117] So far as costs on this present appeal are concerned, at counsel’s request these are reserved. Counsel may file memoranda (sequentially) if they are unable to agree on this question

High Court of New Zealand Decisions

Geary v Accident Compensation Corporation [2014] NZHC 1037 (16 May 2014)