Rule in 'Mannix' upheld
2013 case note - upheld rule established by the Court of Appeal in Mannix but waived security for costs where company provided an undertaking to pay costs.
The judgment upheld the rule established in the Court of Appeal decision Re GJ Mannix Ltd  1 NZLR 309, but waived security for costs where the director of the appellant company provided an undertaking to pay costs.
Impact of decision
The rule in Mannix will only be departed from in exceptional circumstances. Security for costs may be waived where an undertaking is given.
The appellant company, EngineerOnline Limited, lost a challenge in the Taxation Review Authority ("TRA") in respect of the Commissioner's assessment to disallow the zero-rating, for goods and services tax ("GST") purposes, of supplies manufactured by the company.
The company appealed to the High Court. Preliminary to the substantive appeal, the Court was asked to decide the company's applications to be represented by its director, Mr MJ Elmes, and to have security for costs waived.
The Court found that there were no exceptional circumstances justifying the departure from the Mannix rule. In fact the Court was persuaded that it was in the appellant company's own interests, as well as those of the Court and the respondent, that it should be represented by a lawyer. The Court found this on the basis that:
- Mr Elmes had failed to put into evidence financial statements the appellant wished to rely upon to show impecuniosity;
- Mr Elmes' oral submissions ranged well beyond the relevant issues;
- Mr Elmes himself acknowledged that he required guidance on matters of procedure, this was not something the Court could provide;
- While Mr Elmes had submitted that he should represent the company because of his knowledge of the factual background, this knowledge was not relevant in relation to the Mannix rule.
Security for costs
The Court found that the particular circumstances of the case merited waiving security for costs, for two reasons:
- The Court noted the financial burden imposed on the company to engage a lawyer and that if security was waived, that money could be applied to obtaining legal advice or representation.
- Mr Elmes gave a personal undertaking to the Court to meet an order for costs made against the appellant in the event that it was ordered to pay the respondent's costs, if an appeal was unsuccessful.
Costs were reserved.
High Court Rules