Animal Welfare Institute of New Zealand v Wells [2014] NZHC 2441 (6 October 2014)

Last Updated: 15 October 2014

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2014-404-2327 [2014] NZHC 2441

BETWEEN	ANIMAL WELFARE INSTITUTE OF NEW ZEALAND known as THE ANIMAL OWNERS SUPPORT TRUST Appellant
AND	NEIL EDWARDS WELLS, WINIFRED NORIEN HOADLEY, GRAEME JOHN COUTTS Respondents

Hearing:	30 September 2014
Appearances:	G Haden on behalf of the Appellant D J Neutze for the Respondents
Judgment:	6 October 2014

_{JUDGMENT OF WOODHOUSE J}

This judgment was delivered by me on 6 October 2014 at 2:00 p.m. pursuant to r 11.5 of the High Court Rules 1985.

Registrar/Deputy Registrar

..........................................

Parties / Solicitors:

Mrs G Haden, Auckland

Mr D J Neutze, Brookfields, Solicitors, Auckland

ANIMAL WELFARE INSTITUTE OF NEW ZEALAND v WELLS, HOADLEY and COUTTS [2014] NZHC

2441 [6 October 2014]

[1] Two preliminary issues have arisen on this appeal. One arises on an application by the appellant for waiver of security for costs. The second is an application by Mrs Grace Haden, who has appeared at this point on behalf of the appellant, for leave to represent the appellant, which is an incorporated body. The respondents oppose both applications.

[2] For convenience I will refer to the appellant as “the Institute”. The Institute has brought an appeal against a District Court decision declining an application by the Institute to take a further step in the proceeding.¹ The Institute is a defendant. There had been two other defendants; Mrs Haden and Mrs Haden’s company, Verisure Investigations Ltd (Verisure). The District Court proceeding had been commenced in 2006. Judgment was entered against Mrs Haden and Verisure in July

2008. I will come back to other aspects of the proceeding against Mrs Haden and Verisure. The District Court plaintiffs are the respondents in this proceeding, Mr Wells, Mrs Hoadley and Mr Coutts. As plaintiffs they did not proceed with their substantive claim against the Institute. No step appears to have been taken in the proceeding by the Institute at least since the entry of judgment against the other defendants in July 2008. A chronology in the judgment under appeal suggests that the last active step taken by the Institute may have been in pursuing an application to strike out the plaintiffs’ claim. That application was dismissed in March 2007.

Security for costs on appeal: High Court Rules

[3] Rule 20.13(2) requires the Court to fix security for costs, to be paid by the appellant, at the first case management conference relating to the appeal, “unless the Judge considers that in the interests of justice no security is required”.

[4] The default rule is that the provision of security for costs is mandatory unless the appellant establishes, on whatever grounds are advanced, that the interests of justice require that there be no security. The commentary in McGechan on

_{Procedure summarises the broad principles as follows:}²

¹ Wells and Ors v Animal Welfare Institute of New Zealand DC Auckland CIV-2006-004-1784, 11

_{August 2014.}

² Andrew Beck and Others McGechan on Procedure (looseleaf edition, Brookers) at

[HR20.13.03].

The general broad test of “interests of justice” must be satisfied. In G v Chief Executive of the Ministry of Social Development [2010] NZSC 141, the Supreme Court endorsed the Court of Appeal’s general principles regarding security. Security is the norm, and exceptional circumstances are required to justify a waiver. The importance of the issues raised and the public interest in determining them should be taken into account. Impecuniosity by itself does not justify a waiver, although it may be a reason to reduce the quantum of security: RIG v Chief Executive of the Ministry of Social Development [2010] NZCA 370.

In Chatha v Wanganui Gas Ltd (2004) 17 PRNZ 736 (HC), the Court considered that it would have to be shown that the case was “deserving of a consideration on appeal”. The Court was prepared to grant waiver to an impecunious litigant because it had already been decided that there was an arguable case on appeal.

Representation in Court of corporations

[5] The Institute is an incorporated body. Mrs Haden in fact gave some emphasis to that point. Mrs Haden was alert to the implications of this so far as representation is concerned: in her first memorandum for the case management conference she sought leave that she be permitted to represent the Institute.

[6] As Mrs Haden recognised, the general rule is that a corporation has no right to be represented in Court in legal proceedings except by a barrister or a solicitor. The leading authority in New Zealand is the Court of Appeal’s decision in Re G J Mannix Ltd.³

[7] The reasons for the rule, and its general application, as fully explained in the Mannix decision, do not need to be summarised in this case. The one point that requires noting relates to the circumstances in which the Court may exercise a discretion to permit a corporation to be represented by a person who is not a barrister or solicitor. On this Cooke J said in Mannix:⁴

In general, and without attempting to work out hard-and-fast rules, discretionary audience should be regarded, in my opinion, as a reserve or occasional expedient, for use primarily in emergency situations when counsel is not available or in straightforward matters where the assistance of counsel is not needed by the Court or where it would be unduly technical or burdensome to insist on counsel. Especially in minor matters, cost-saving could also be a relevant factor. A “one-man” company might be allowed to be represented by its owner if the Judge saw fit in a particular case. But it

could not be right, for instance, to issue some sort of tacit continuing or general licence to an unqualified agent to appear in winding up or any other class of proceedings.

McMullin J said:⁵

Individual cases can be met, as they have been met in the past, by the exercise of a discretion to allow representation by company officers, or possibly agents, in the particular circumstances of the case: O’Toole v Scott [1965] AC 939; Hubbard Association of Scientologists International v Anderson. I would hesitate to place any fetter on the exercise of this discretion, leaving it for the exercise of the individual Judge. The nature of the litigation, the complexities of the case, the extent of the dispute and the points upon which audience is sought are some of the matters that may then be relevant. But representation of that kind is likely to be the exception rather than the rule.

Somers J said:⁶

... I consider the superior Courts have a residual discretion in this matter arising from the inherent power to regulate their own proceedings. Cases will arise where the due administration of justice may require some relaxation of the general rule. Their occurrence is likely to be rare, their circumstances exceptional or at least unusual, and their content modest. Such cases can confidently be left to the good sense of the Judges.

Discussion

Security for costs: threshold onus

[8] Mrs Haden, in addition to her initial memorandum for the conference, in which she briefly addressed the questions of waiver of security and representation, prepared a written submission on both points and addressed me on these matters. Mrs Haden’s further memorandum was in response to one for the respondents setting out its grounds for opposing the applications. I also heard orally from Mr Neutze in opposition.

[9] On the question of security for costs Mrs Haden submitted that the Institute cannot pay and if security is required the Institute will not be in a position to continue with the appeal. She submitted that costs orders already made against the Institute and, as I apprehend it, against her personally, in various proceedings with

the respondents on the other side, have imposed a financial burden resulting in the inability to provide security for costs. She invoked the first Statute of Westminster, of 1275, providing that “common right be done to all, as well poor as rich, without respect of persons”. Further submissions were directed, in substantial measure, to what Mrs Haden submitted was the clear merit of the Institute’s arguments and the lack of merit of the position adopted by the respondents, notwithstanding the respondents’ success in various proceedings up to this point. (The various proceedings are outlined below.)

[10] The onus is on the Institute to establish that the interests of justice do require waiver of security for costs. Having considered the range of arguments advanced by Mrs Haden I am not persuaded that the onus on the Institute has been met. However, if I am wrong in my assessment of the threshold question, and it is appropriate to consider whether a discretion to waive security should be granted, there are further matters to be taken into account. These apply equally to the representation application. I will therefore defer consideration of those discretionary matters until after consideration of the threshold question on representation.

Representation: threshold onus

[11] So far as representation is concerned, no substantial argument was advanced to justify departure from what may be described as the general rule. Mrs Haden said that in earlier High Court proceedings involving her company, Verisure, she had represented the company. She said that she had been a police prosecutor and that she has, from experience, acquired competence in legal matters and in advocacy. She stated that on one occasion when she engaged a qualified lawyer this lawyer “did enormous damage”. She pointed to the impecuniosity of the Institute. She submitted that the issues arising are straightforward and the merits demonstrably in favour of the Institute. Her arguments under this heading extended to an argument that Mr Neutze is not acting in the interests of the Court or justice. I have recorded that last submission for the purpose of indicating the scope of Mrs Haden’s submissions. The submission has no merit. It is plainly unsustainable having regard to the grounds that are advanced in purported support. It is a proposition made without evidence.

[12] As with the application to waive security for costs, the onus was on the Institute, provisionally acting through Mrs Haden, to persuade me that consideration should be given to exercise of the discretion to set aside the general rule relating to representation of corporations. I am satisfied that none of the grounds advanced by Mrs Haden supports that result.

Further considerations: exercise of a discretion

[13] If sufficient grounds were advanced to consider exercise of the discretion to waive the normal requirement that security for costs be paid, or setting aside the general rule of representation, there are further considerations which in my judgment mean that the discretion should not be exercised on either application. These considerations arise in large measure from the history of proceedings between the present respondents, on the one hand, and the Institute, Mrs Haden, and Verisure on the other.

[14] For present purposes at least, the starting point is the commencement of this proceeding in the District Court by Mr Wells, Mrs Hoadley and Mr Coutts against Mrs Haden, Verisure and the Institute. As earlier noted, the claim did not proceed to a substantive hearing of the claim against the Institute. As against Mrs Haden and Verisure, on 30 July 2008 judgment was entered against Mrs Haden and Verisure in a sum of $50,000 for damages for defamation, including aggravated damages, and for

a further sum of $7,500 as exemplary damages against Mrs Haden only.⁷ Injunctive

relief was also granted. I will refer to this as the judgment of Judge Joyce QC.

[15] In 2012 Mrs Haden and Verisure commenced a proceeding in the District Court against Mr Wells, Mrs Hoadley and Mr Coutts. Mrs Haden and Verisure claimed that the defamation judgment had been obtained by fraud and sought an order setting aside the judgment.

[16] Mr Wells, Mrs Hoadley and Mr Coutts applied for an order striking out the claim on the grounds that it was frivolous, vexatious and an abuse of the Court’s

_{process as a collateral challenge to a final judgment of the Court which had been}

⁷ Wells and Ors v Animal Welfare Institute of New Zealand DC Auckland CIV-2006-004-1784, 30

July 2008.

upheld on appeal. By judgment dated 10 May 2013 Judge Gibson granted the strike out application.⁸ Mrs Haden appealed against Judge Gibson’s decision. The appeal was dismissed.⁹

[17] The judgment of this Court on the appeal from the decision of Judge Gibson contains a chronology of relevance to the exercise of my discretion.¹⁰ The judgment under appeal also contains a fuller chronology.¹¹

[18] There are now a number of original judgments in the District Court which are binding on Mrs Haden and on Verisure, coupled with further judgments of this Court and the Court of Appeal either affirming relevant judgments of the District Court, or declining leave to Mrs Haden to appeal against decisions of this Court on appeal.¹²

[19] Amongst the decisions binding on Mrs Haden (as well as Verisure) are findings that proceedings brought by her or other steps sought to be taken by her have been vexatious or an abuse of process. I am leaving out of consideration, in that regard, the judgment presently under appeal because, given the appeal, it is not a final decision of a Court. However, given that I am being asked to exercise discretions, it is appropriate to record, as a provisional observation, that the present appeal does not appear to have much prospect of success.

[20] Against that background, set out very broadly in spite of its relative length, I record the reasons why I would not exercise a discretion to grant either of the applications made by Mrs Haden:

(a) Although the Institute is, it appears, a legal entity distinct from Mrs

Haden and from Verisure, in substance the Institute is Mrs Haden’s

_vehicle.¹³

⁸ _{Haden v Wells DC Auckland CIV-2012-004-696, 10 May 2013.}

⁹ _{Haden v Wells [2013] NZHC 2753.}

¹⁰ _{Haden v Wells, above n 9, at [2]-[5].}

¹¹ _{Wells and Ors v Animal Welfare Institute of New Zealand, above n 1, at [3]-[6].}

¹² _{As to the latter see Haden v Wells, above n 9, at [5].}

¹³ Mrs Haden, following the hearing, forwarded a copy of a decision of this Court in Wallis v Sutton HC Whangarei CP15/93, 9 November 1993. Mrs Haden had referred to the decision in her submissions. The discussion in the judgment given emphasis by Mrs Haden is at pp 23-24. It is directed to unincorporated associations. The discussion does not appear to bear on the matters presently in issue given Mrs Haden’s advice that the Institute is an incorporated body.

(b) What Mrs Haden is seeking, in terms of representation, is in substance to advance arguments which she personally can no longer advance.

(c) The Institute, in the application which is the subject of this appeal, sought leave to take a further step in order to challenge orders made in March and May 2007 on the grounds that they were obtained by fraud. These are orders dismissing the application by Mrs Haden, Verisure and the Institute to strike out the claim of Mr Wells, Mrs Hoadley and Mr Coutts (being, of course, the claim which led to the substantive judgment of Judge Joyce QC as against Mrs Haden and Verisure). The application to rescind the 2007 orders is advanced on grounds which in substantial measure are similar to those rejected in the decision of Judge Gibson, and being the decision affirmed on appeal to this Court.

(d) In the Mannix decision McMullin J noted that one reason for the general rule against lay persons representing corporations was:¹⁴

Litigants in person through their lack of expertise in conducting legal proceedings often pursue irrelevant matters ad nauseum, unduly prolong proceedings and require indulgences from the Court and from their opponents to meet their non-professional approach.

The evidence before me, contained in judgments binding on Mrs Haden, indicate that this is what has occurred in litigation conducted by Mrs Haden and that this will continue if Mrs Haden is granted leave to represent the Institute.

(e) The memorandum for the respondents on these matters records that Mrs Haden owes the present respondents $20,538.25 for costs awarded in, or confirmed by, three separate High Court judgments.¹⁵

The third of the judgments referred to in the footnote is a decision of

_{this Court on an application by Mrs Haden to represent Verisure on a}

¹⁴ _{Re G J Mannix Ltd, above n 3, at 315.}

¹⁵ Haden v Wells [2013] NZHC 2946 ($4,140); Haden v Wells [2013] NZHC 3421 ($15,074.25);

Wells v Verisure Investigations Ltd [2014] NZHC 121 ($1,324).

liquidation application by Mr Wells against Verisure. Applying Mannix, Associate Judge Doogue declined the application. The liquidation application arises out of the defamation judgment of Judge Joyce QC.

(f) In Judge Joyce QC’s decision in the defamation proceeding, binding

on Mrs Haden and Verisure, if not on the Institute, the Judge stated:¹⁶

... Mrs Haden has offered no evidence that her ‘legal aid WINZ charity’ [the Institute] has ever actually pursued any charitable purpose – indeed ever functioned at all; nor, for that matter, that she herself has, or ever had, any special interest in animal welfare.

[21] Having regard to these various matters I am satisfied that the discretion to waive security for costs and the separate discretion to grant Mrs Haden leave to represent the Institute, should not be exercised in favour of either application.

Respondents’ application for increased security

[22] High Court r 20.13(3) sets out a formula for what may be described as standard security sums. These are to be calculated by reference to the prescribed daily recovery rates under r 14.4 and schedule 2 of the High Court Rules. Mrs Haden submitted that category 1 should apply, being a rate of $1,320 a day. Mr Neutze submitted that it should be category 2, a rate of $1,990 a day.

[23] The respondents applied for additional security which is permitted if the Judge directs that security be provided in a sum other than that calculated pursuant to the formula.¹⁷

[24] The grounds on which the respondents sought increased costs were as follows:

_{(a) “The appeal has no merit.”}

¹⁶ _{Wells and Ors v Animal Welfare Institute of New Zealand, above n 8, at [51].}

¹⁷ Clearwater Cove Apartments Body Corporation No. 170989 v Auckland Council [2012] NZHC

1870.

(b) “The appellant has a history of bringing meritless claims and appeals which have all failed.” I apprehend that this ground is directed more to Mrs Haden than to the Institute, but for reasons earlier recorded I am satisfied that in substance the actions of the Institute can be treated as those of Mrs Haden and, to the extent necessary, vice versa.

(c) The third ground was that Mrs Haden owes the respondents

$20,538.25 for costs awarded in this Court, as recorded earlier.

[25] I am satisfied that each of the grounds has substance and together justify an increase in the amount of security to be provided. Definitive conclusions cannot be made about the likely outcome of the appeal if it proceeds and the costs consequences that would follow. Nevertheless, the Court is bound to make some assessment and I have already noted my provisional assessment that the appeal does not appear to have much prospect of success. Weighing the specific grounds advanced by the respondents, coupled with the matters dealt with when considering exercise of the discretions, I am satisfied that the respondents require greater protection by way of security than would be afforded by a standard order. The respondents sought security at least in a sum of $5,000. I am satisfied that that is an appropriate sum.

Result

[26] The applications for waiver of security for costs and that Mrs Haden represent the appellant are dismissed.

[27] There is an order that the appellant provide security for costs in a sum of

$5,000. This sum is to be paid into Court. Security must be paid to the Registrar no later than 4:00 pm on Tuesday, 21 October 2014. If the security is not paid by then, the respondents may apply for an order dismissing the appeal in accordance with r 20.13(5).

[28] Leave is reserved to the respondents to apply for additional security for costs in the event that steps are not taken in the appeal in accordance with timetable directions that follow.

Standard appeal directions

[29] The following directions are in addition to the particular directions recorded above:

(a) Estimate of time for the hearing: 1 day. (b) Costs category: category 2.

(c) Points on appeal: Mrs Haden in her first memorandum submitted that points on appeal were included in the notice of appeal and repeated those points in her memorandum. Points on appeal need to be directed with clarity and specificity directly to the decision under appeal. The points made by Mrs Haden do not do this. They range far more widely than they should. The appellant must file and serve, not later than 4:00 pm on Tuesday, 21 October 2014, points on appeal that clearly state the issues on appeal directed to the matters just identified.

(d) Any significant issues in terms of schedule 6, paragraph 7: I am satisfied that there are none, notwithstanding the submission in the memorandum for the Institute at paragraph 7.

(e) Standard directions: the standard directions recorded in paragraphs 8-

14 of schedule 6 to the High Court Rules shall apply.

(f) Amicus curiae: Mrs Haden submitted for the Institute that if there was not a direction that the notice of appeal be served on the Solicitor- General, pursuant to paragraph 7 of schedule 6, an amicus curiae be

_{appointed. There are no grounds for appointing an amicus curiae.}

Woodhouse J