Order Prohibiting Publication of the Names of the Appellant and the Respondent for 10 Working Days from Date of Judgment Or Further Order of This Court
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ORDER PROHIBITING PUBLICATION OF THE NAMES OF THE APPELLANT AND THE RESPONDENT FOR 10 WORKING DAYS FROM DATE OF JUDGMENT OR FURTHER ORDER OF THIS COURT. IN THE COURT OF APPEAL OF NEW ZEALAND CA155/2016 [2017] NZCA 249 BETWEEN JOINT ACTION FUNDING LIMITED Appellant AND JOHN REVANS EICHELBAUM Respondent Hearing: 14 March 2017 Court: Brown, S France and J Williams JJ Counsel: A R Gilchrist and G Abdale-Weir for Appellant Respondent in person Judgment: 14 June 2017 at 11.30 am JUDGMENT OF THE COURT A The appeal is allowed in part. B The award of costs in favour of the respondent in the High Court is set aside. C The respondent must pay the appellant costs for a standard appeal on a band A basis and usual disbursements. D Order prohibiting publication of the names of the appellant and the respondent for 10 working days from date of judgment or further order of this Court. ____________________________________________________________________ REASONS OF THE COURT (Given by Brown J) JOINT ACTION FUNDING LIMITED v EICHELBAUM [2017] NZCA 249 [14 June 2017] Table of Contents Para No. Introduction [1] The origin of the lawyer-litigant exception [4] The Australian position [10] The English position [16] The position in New Zealand [20] The former costs rules [21] The current costs rules [22] Text [24] The purpose of the costs rules [46] The objective of the costs rules: the exception contrasted [49] Conclusion [57] Does the exception apply to a self-represented barrister sole? [58] Quantum [66] Result [75] Introduction [1] Mr Eichelbaum is a practising barrister. He was successful in a claim, which he conducted in person, for an order under s 91 of the Companies Act 1993 rectifying the share register of the appellant, Joint Action Funding Limited (JAFL), to record a transfer to him of a 10 per cent shareholding in JAFL.1 Thomas J awarded Mr Eichelbaum costs in the sum of $16,688 and disbursements of $2,630 and awarded JAFL indemnity costs in the sum of $1,375.50.2 JAFL appeals against that costs judgment. [2] Although a litigant in person in New Zealand is not entitled to recover costs except in exceptional cases,3 there is a long recognised exception that a practising barrister and solicitor who brings or defends a proceeding in person4 is entitled to the same costs as when acting on behalf of a client (the lawyer-litigant exception). [3] JAFL invites this Court to reconsider that exception. Its appeal raises three issues, namely: 1 Eichelbaum v Joint Action Funding Limited [2015] NZHC 2163. 2 E v J [2016] NZHC 419. 3 Commissioner of Inland Revenue v Chesterfields Preschools Ltd [2010] NZCA 400, (2010) 24 NZTC 24,500 at [162]; and Re Collier (A Bankrupt) [1996] 2 NZLR 438 (CA) at 441–442. 4 Or by a partner or employee of the firm. (a) whether the lawyer-litigant exception should be maintained in New Zealand in view of the doubt expressed by the High Court of Australia in Cachia v Hanes;5 (b) whether the lawyer-litigant exception applies to a barrister appearing in court without an instructing solicitor; and (c) as to quantum: (i) whether the costs awarded to Mr Eichelbaum were excessive; and (ii) whether the indemnity costs awarded to JAFL should be increased. The origin of the lawyer-litigant exception [4] The point of departure is the summary of this Court in Brownie Wills v Shrimpton:6 The long-established rule is that, as an exception to the general rule denying costs to a litigant in person, a practising barrister and solicitor who brings or defends a proceeding in person or by a partner or employee of the firm is entitled to the same costs as when acting on behalf of a client. So the lawyer litigant may have the same costs as if another lawyer had been instructed but cannot, of course, charge for consulting, instructing, or attending upon him or herself: London Scottish Benefit Society v Chorley … . In New Zealand the exception is discussed or referred to in Hanna v Ranger … , Lysnar v National Bank of New Zealand Ltd (No 2) … and Re Collier (A Bankrupt) … . The High Court of Australia has cast some doubt on this exception (Cachia v Haynes … ) but, not having been asked to reconsider the question, we do not depart from the practice of allowing costs to a solicitor/litigant. [5] In London Scottish Benefit Society v Chorley a solicitor who successfully acted for himself in litigation was held to be entitled to the same costs as if he had employed a solicitor, except for items, such as obtaining instructions or attendances, 5 Cachia v Hanes (1994) 179 CLR 403 at 412. 6 Brownie Wills v Shrimpton [1998] 2 NZLR 320 (CA) at 327 (citations omitted). that were unnecessary because he was his own client.7 On appeal Brett MR contrasted the position of a solicitor with that of an ordinary litigant:8 When an ordinary litigant appears in person, he is paid only for costs out of pocket. He cannot himself take every step, and very often employs a solicitor to assist him: the remuneration to the solicitor is money paid out of pocket. He has to pay the fees of the court, that is money paid out of pocket; but for loss of time the law will not indemnify him. When, however, we come to the case of a solicitor, the question must be viewed from a different aspect. There are things which a solicitor can do for himself, but also he can employ another solicitor to do them for him; and it would be unadvisable to lay down that he shall not be entitled to ordinary costs if he appears in person, because in that case he would always employ another solicitor. [6] Bowen LJ analysed the matter by reference to measurement of expenditure. After noting that costs are the creature of statute and referring to passages in Coke’s Institutes, he said:9 Professional skill and labour are recognised and can be measured by the law; private expenditure of labour and trouble by a layman cannot be measured. It depends on the zeal, the assiduity, or the nervousness of the individual. Professional skill, when it is bestowed, is accordingly allowed for in taxing a bill of costs; and it would be absurd to permit a solicitor to charge for the same work when it is done by another solicitor, and not to permit him to charge for it when it is done by his own clerk. [7] Fry LJ perceived that the practice of allowing the lawyer-litigant exception had a public benefit:10 I think that the conclusion at which we have arrived will be beneficial to the public, because if the rule were otherwise a solicitor who is party to an action would always employ another solicitor, and whenever he is successful he would recover full costs; whereas under the rule of practice laid down by us, a solicitor who sues or defends in person will be entitled, if he is successful, to full costs, subject to certain deductions, of which his unsuccessful opponent will get the benefit. [8] Although the general principle and the exception are often referred to as a rule of practice, nevertheless, as Bowen LJ observed, costs are a creature of statute. Significantly in Re Collier (A Bankrupt) this Court remarked:11 7 London Scottish Benefit Society v Chorley (1884) 13 QBD 872 (CA). 8 At 875. 9 At 877. 10 At 877–878. 11 Re Collier (A Bankrupt), above n 3, at 441. The general question as to whether a litigant in person should be paid for his time and trouble raises many important considerations of both policy and practice, and as the High Court of Australia has observed, is not really a matter that can be solved by a Court. In our view the retention or otherwise of the exception to the general principle is not truly a matter of practice but turns on the proper construction of the rules relating to costs as set out in the High Court Rules. [9] However, reflecting the fact that the appellant’s invitation to reconsider the exception was sparked by the dicta in Cachia v Hanes, the submissions of both parties focussed primarily on the several decisions in Australia and England delivered since Brownie Wills. In those circumstances, before turning to consider the interpretation of the current costs rules, we briefly review developments in Australia and England which reveal significantly different positions prevail. The Australian position [10] Both the general principle of denying costs to litigants in person and the lawyer-litigant exception were adopted by the High Court of Australia in Guss v Veenhuizen [No 2].12 The majority, citing Chorley,13 said of a solicitor who acts for himself:14 Those authorities establish that the litigant in person does not recover such costs in such circumstances in the capacity of a solicitor, but because, he happening to be a solicitor, his costs are able to be quantified by the Court and its officers. The Court went on to refer with approval to the passages from the judgments of Brett MR and Bowen LJ in Chorley.15 12 Guss v Veenhuizen [No 2] (1976) 136 CLR 47. 13 And H Tolputt & Co Ltd v Mole [1911] 1 KB 836. 14 Guss v Veenhuizen [No 2], above n 12, at 51. Although Mr Guss was a solicitor, his name was not entered on the court’s register. Nevertheless he was allowed his professional costs, the majority making it clear that that was wholly because the absence of his name from the register was due to an error on the part of an officer of the court when Mr Guss had attempted to enrol himself.