In the Court Of Appeal of New Zealand
CA40/2010
[2010] NZCA 240

BETWEEN	CARL JAMES PETERSON
Applicant

AND	REX CAMERON LUCAS
First Respondent

AND	G W LUCAS & SONS PTY LTD
Second Respondent

Counsel:	Applicant in person
E Gray for Respondents

Judgment:	9 June 2010 at 3 pm 

JUDGMENT OF ARNOLD J	

The application for review of the Registrar’s refusal to dispense with security for costs is declined, but the amount to be paid by way of security is reduced to $2,000.

REASONS 

Introduction
[1]	The applicant, Mr Peterson, who is acting on his own behalf, has filed an appeal against a decision of Priestley J in which the Judge:
	(a)	Ordered the respondents to pay disbursements to Mr Peterson but refused to make a costs order in his favour as he was a litigant in person; and
	(b)	Struck out Mr Peterson’s counterclaim for damages under s 74 of the Patents Act 1953.
[2]	Mr Peterson applied to the Registrar of this Court for a dispensation from the requirement to pay security for costs.  For their part, the respondents applied for security to be increased beyond the figure normally payable ($4,740).  The Registrar declined both applications.  In respect of the application for dispensation, the Registrar accepted that Mr Peterson is impecunious but said that impecuniosity did not, on its own, justify a dispensation.  She also considered that the appeal did not raise a point of public interest.  In the result, she concluded that the respondents were entitled to some protection for their costs and fixed security at $4,740.  Mr Peterson then applied for a review of that decision.
Background
[3]	The factual background is set out in Priestley J’s judgment.  In brief, the respondents brought proceedings against the applicant and his company alleging that they had infringed the respondents’ patent.  They succeeded in the High Court.  The applicant and his company appealed to this Court but were unsuccessful, but did succeed on a further appeal to the Supreme Court.  The Supreme Court remitted the matter to the High Court for further determination in light of its judgment.
[4]	Keene J dealt with the question of costs.  By this stage, Mr Peterson’s company was in liquidation.  During the High Court trial Mr Peterson had withdrawn his instructions from counsel and acted on his own behalf (although counsel continued to act for his company).  Accordingly, Keene J made an award of costs in favour of the company but not Mr Peterson personally, even though he accepted that Mr Peterson had put all his financial resources into defending the claim as well as incurring considerable debts.
[5]	Then the respondents applied to the High Court to amend their patent.  The applicant counterclaimed for damages, relying on s 74 of the Patents Act.  Eventually the respondents discontinued these proceedings.  At that point, the applicant sought costs against the respondents in the amount of $10,000 and they applied to strike out his counter-claim.  Priestley J in the judgment under appeal refused the applicant’s costs application and granted the respondents’ strike out application.
Security for costs
[6]	In the normal course, appellants in civil proceedings in this Court are required to pay security for costs.  If an appellant wishes to apply to the Registrar for a waiver of security, he or she must do so within 20 days of filing the appeal.  The Registrar may vary or waive security “if satisfied that the circumstances warrant it”. 
[7]	Security for costs will be waived where it is in the interests of justice to do so.  Given that the normal rule is that security must be provided, there will need to be some exceptional circumstance to justify waiver.  The circumstances of the appeal are relevant, in the sense that the appellant must honestly intend to pursue it and it must be arguable – respondents should not face the threat of hopeless appeals without provision for security.  The novelty or importance of the issues raised in the appeal will be particularly significant, as will the question whether there is any public interest in having them determined.  Impecuniosity alone is not usually sufficient to justify a waiver, but may be reason to reduce the quantum of security.
Discussion
[8]	The applicant has been vindicated in the patent proceedings brought against him by the respondents.  To some extent, it has been a pyrrhic victory, however, as the lengthy course of litigation has resulted in the liquidation of his company and the exhaustion of his financial resources, for which he has received no compensation.  His desire to pursue costs and damages is understandable.  But, as Priestley J has said, he faces formidable hurdles.  It is difficult to see how he could succeed in his claim under s 74, and to succeed in his claim for costs he will have to persuade the Court to adopt a rather different approach than it has to date.  The argument may not be hopeless, but it will certainly be difficult.  That said, I accept that the question of costs claims by lay litigants has some general importance.
[9]	Given the difficulties associated with the applicant’s substantive case, I consider that the Registrar was entitled to reject his application for dispensation from the requirement to pay security.  However, it is not clear from the Registrar’s letter that she considered whether a reduced amount of security might be fixed.  In the particular circumstances of this case, especially the fact that the applicant’s impecuniosity has resulted largely from the respondents’ prolonged but ultimately unsuccessful proceedings against him, I consider that the amount of security should be reduced.  I fix it at $2,000.  The applicant is to pay this sum by way of security within 20 working days of the date of this judgment.

Solicitors: 
Simpson Grierson, Auckland for Respondent