Calian v Cassidy
[2020] NZHC 781
•21 April 2020
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IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY
I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE
CIV-2019-485-587
[2020] NZHC 781
BETWEEN ALEXANDRINA DENISA CALIAN
Applicant
AND
DARRIN HUGH CASSIDY
First Respondent
RONALD KELVIN CASSIDY
Second Respondent
Hearing: 19 March 2020 Appearances:
K R Smith and J M Greally for Applicant First Respondent in Person
C LaHatte (via AVL}
Judgment:
21 April 2020
JUDGMENT OF CLARK J (REASONS)
Introduction
[1] This judgment addresses the question whether Mr Cassidy is precluded by his bankruptcy from appearing in the hearing of Ms Calian’s originating application for orders under the Property Law Act 2007. I will refer to Ms Calian’s application as the “substantive proceeding”. Having heard from Mr Cassidy and counsel, I declined Mr Cassidy’s application to be heard for reasons to be issued in due course. These are my reasons.
CALIAN v CASSIDY [2020] NZHC 781 [21 April 2020]
Overview of the substantive proceeding
[2] Ms Calian and Mr Cassidy were once married. They separated in 2013 and, in 2014, Ms Calian applied to the Family Court for a division of relationship property. It is unnecessary to say much more about what then followed except to record matters concerning the family home at 83 Bird Grove, Stokes Valley, Lower Hutt.
(a)In May 2015 Ms Calian and Mr Cassidy agreed that the “relationship property” portion of the family home would be divided equally between them following determination of a constructive trust claim by Mr Cassidy’s parents, Marie and Ronald Cassidy.
(b)Their agreement was reflected in a High Court Order dated 28 May 2015.
(c)In a reserved decision delivered 2 February 2017, Judge O’Dwyer determined, effectively, the percentage of the property in which Ms Calian and Mr Cassidy were to share equally. Judge O’Dwyer made an order vesting 50 per cent of the family home in the parents. Judge O’Dwyer also made orders recognising the post-separation adjustments that needed to be made and the parents’ liability for mortgage debt. That included orders to the effect that Mr Cassidy was to pay his parents the sum of $77,000 to restore their equity in the property.
(d)A deed of settlement dated 29 December 2017 signed by Mr Cassidy and his parents recorded that Mr Cassidy was unable to raise the
$77,000 and that the parties agreed Mr Cassidy would transfer “all his right title and interest in the property to the Cassidys upon condition that the Cassidys indemnify him against all claims and demands in respect of the mortgage”.
(e)By June 2018 Ms Calian still did not have her entitlement to the family home. Before the Family Court she sought orders that Mr Cassidy pay her an amount representing a quarter share of the value of the property
and occupational rent; or, a vesting order for a half share of the property should Mr Cassidy fail to pay the quarter share and occupational rent. On 20 June 2018, Judge Black held the purported transfer of a half share of the property from Mr Cassidy to his parents was made “in order to defeat Ms Calian’s entitlements under the Act” and was therefore liable to be set aside pursuant to s 44 of the Property (Relationships) Act 1976.1 Judge Black ordered Mr Cassidy, by 28 July 2018, to pay Ms Calian $148,455 equating to a quarter share of the property; a further $29,380 representing five years occupational rent; and costs of
$17,825. Judge Black ordered that if those payments were not made the purported disposition recorded in the deed of settlement was to be set aside, and a half-share in the property was to vest in Ms Calian as her separate property.
(f)Evidently, Mr Cassidy did not pay. A Vesting Order dated 18 June 2019 records orders vesting a half-share of the family home in Ms Calian.
[3] Ms Calian still does not have her half-share entitlement to the relationship property. After many years of litigation, she seeks orders requiring the home to be valued and sold, and seeks compensation for loss of monies to which she says she was entitled.
[4] Mr Cassidy is named as the first respondent. As at December 2019 when the Court directed the matter to proceed by way of originating application, Mr Cassidy had gone into bankruptcy. The matter was set down for hearing but when it came before Ellis J on 12 February 2020 it was apparent to her Honour that Mr Cassidy’s status in the proceeding was unclear. The Official Assignee had advised that he did not seek to participate in the substantive proceeding as he understood Mr Cassidy had no interest in the property. Ellis J made timetable directions and directed Mr Cassidy to file and serve a memorandum setting out the basis upon which he claimed an interest in the proceeding and should be permitted to be heard given his bankruptcy.
1 Calian v Cassidy [2018] NZFC 4239.
[5] All preliminary matters, which included evidential objections, were to be argued on 19 March 2019. However, Mr LaHatte, counsel for the second respondents, found himself stranded in Auckland and unable to return to Wellington and his papers, due to the isolation measures put in place at that time in response to the Covid-19 pandemic.
[6] Accordingly, the hearing on 19 March was for the limited purpose of hearing Mr Cassidy’s “application” to be heard and the admissibility of evidence issues as between Ms Calian and Mr Cassidy.
[7] As it happened, because of the way matters proceeded on the day, the only issue argued was Mr Cassidy’s status to be heard.
Nature of Mr Cassidy’s interest?
Mr Cassidy’s position
[8] Mr Cassidy says it is necessary that he represent himself. The general nature of his position on the originating application is that Ms Calian is “reneging” on her agreement that Ronald Cassidy, the second respondent, would have a life interest in the property. Mr Cassidy maintains the lower court proceedings provide a “rocky” foundation upon which to proceed. In his written submissions Mr Cassidy alleges bias against one of the Family Court Judges and intimated a complaint is being made to the Judicial Conduct Commissioner regarding the Judge’s abuse and assaults and a similar complaint will be made against another Judge of the Family Court. Mr Cassidy asserted a partner of a large Wellington law firm and a prominent QC confirm “they back a case regarding the shenanigans in the lower courts”. Mr Cassidy submitted:
These proceedings cannot continue in the High Court to be built on top of decisions of the lower courts that are akin to a house of soiled crumbling cards littered with self-protective bias.
[9] Mr Cassidy submitted that Ms Calian joined him as first respondent but now essentially seeks to strike him out. Mr Cassidy argued that if he is unable to personally present the position as he described it, it will be very difficult for Mr LaHatte to do so.
[10] Mr Cassidy adopted a dual and conflicting position in that, while he insists he does not want to challenge the decisions or findings of the courts below, he wishes to put much information before the High Court about the conduct and bias of three Judges who he named during the hearing but who I choose not to identify in my judgment.
Applicant’s position
[11] For Ms Calian, Mr Smith agreed that s 101 of the Insolvency Act 2006 is the starting point. Mr Cassidy is an adjudicated bankrupt and has no interest at all in the property. Mr Smith submitted 99 per cent of the substantial documentation that Mr Cassidy has filed is irrelevant because the documents contain a regurgitation of matters resolved in the lower courts. The second respondent’s life interest in the property and any change of mind in that regard by Ms Calian is a point for which Mr LaHatte, as counsel, has responsibility.
[12] Mr Smith referred to a protection order included in the bundle of documents before the Court. Issued by the Family Court on 12 March 2020 the order is made in favour of Ms Calian and prohibits Mr Cassidy from contact with her. Mr Smith submitted that therefore Mr Cassidy could not cross-examine Ms Calian, as he seeks, because s 95 of the Evidence Act 2006 prevents him from doing so.
Second respondent’s position
[13] I indicated to Mr LaHatte in the course of the telephone conference on 18 March 2020 that I would be assisted by hearing from the parties between whom this legal issue existed but that I was unlikely to find it necessary to hear from a party with a bare interest in the matter. That said, I invited Mr LaHatte to make submissions which Mr LaHatte made in commendably succinct form. Mr LaHatte made three main points:
(a)In relation to the effect of s 101, to the extent Mr Cassidy has any rights in the property on bankruptcy and the Official Assignee disclaims any interest, there will be residual rights remaining with Mr Cassidy after the disclaimer.
(b)Section 27 of the New Zealand Bill of Rights Act 1990 is relevant. Everyone has the right to bring and defend civil proceedings. The prospect of removing someone as a party is to be approached through that particular lens.
(c)In response to Mr Smith’s submission about the inhibition on Mr Cassidy’s ability to cross-examine Ms Calian, Mr LaHatte submitted s 95 of the Evidence Act is not relevant.
Discussion
[14]Section 101 of the Insolvency Act provides:
101 Status of bankrupt’s property on adjudication
(1)On adjudication,—
(a)all property (whether in or outside New Zealand) belonging to the bankrupt or vested in the bankrupt vests in the Assignee without the Assignee having to intervene or take any other step in relation to the property, and any rights of the bankrupt in the property are extinguished; and
(b)the powers that the bankrupt could have exercised in, over, or in respect of any property (whether in or outside New Zealand) for the bankrupt’s own benefit vest in the Assignee.
…
[15] Accordingly, the effect of s 101 on Mr Cassidy’s position is that all property belonging to, or vested in, Mr Cassidy vests in the Assignee and Mr Cassidy’s rights in the family home are extinguished. Further, the powers Mr Cassidy could have exercised in relation to any property vest in the Assignee. Mr Cassidy seemed to slide away from the fact he is bankrupt by pointing out that he had he had gone online and “made himself” bankrupt. The point is without substance because whether by his own application, or otherwise, Mr Cassidy is adjudicated bankrupt.
[16] Some claims can be maintained against a bankrupt who will be entitled to defend them notwithstanding her or his bankruptcy. Obvious examples are actions for
defamation and assault.2 But Ms Calian’s claim to her share in the family home is proprietary in nature and Mr Cassidy is not entitled to defend it. The property rights at issue vest in the Official Assignee by virtue of s 101.
[17] In this case the Official Assignee has disclaimed any interest in the proceedings on the basis the family home at 83 Bird Grove, Stokes Valley is vested in the second respondent as to a half-share and the applicant as to the remaining half-share. Counsel for the Official Assignee, Mr Dingwall, attached to his memorandum filed in court the relevant vesting orders.
[18] In his memorandum Mr Dingwall addressed a suggestion by counsel for the second respondent that the Assignee intervene in the proceedings on a basis outlined in the memorandum but which I do not need to rehearse. The short point is that the Assignee considered there was no reason to intervene.
[19] As the Assignee noted, no creditors have filed claims in Mr Cassidy’s bankrupt estate. The two main creditors, therefore, would be the applicant and second respondent each of whom has submitted their respective positions to the Court.
[20] Mr Cassidy said he had spoken to the Official Assignee on the phone on several occasions and the Official Assignee had granted leave to Mr Cassidy to represent himself. When I pressed Mr Cassidy about that representation he reformulated his position to say the Official Assignee expressed no concern about Mr Cassidy continuing to represent his interest. The submission overlooks the fact Mr Cassidy has no interest to represent. The unappealed orders and decisions of the Family Court have determined the parties’ respective interests and Mr Cassidy has no interest in the property at 83 Bird Grove.
[21] Mr Cassidy made a series of submissions which I simply record or address briefly:
(a)Mr Cassidy said his father had appointed him under an enduring power of attorney although it was “not official”.
2 See Westlaw commentary IN101.1056.
(b)Questions about the second respondent’s mental capacity have been raised in the proceeding but put beyond doubt by a letter from his doctor to the effect that the second respondent is not in any way mentally impaired. Nevertheless, Mr Cassidy insisted the general practitioner had advised he could not assess his father and that would have to be done in hospital.
(c)Mr Cassidy alleged he had been assaulted by the Family Court Judge who issued the protection order and it was essential that he be able to address the multiple examples of bias against him to demonstrate the ‘rocky foundation’ on which the relationship property orders have been made. Mr Cassidy raised the issue of the alleged judicial assault on him in a memorandum filed the day following the hearing. In my Minute in response, dated 23 March 2020, I declined to engage with Mr Cassidy’s memorandum beyond recording that I had not made the recommendations in relation to the alleged assaults, that Mr Cassidy sought to attribute to me. Returning to the relevant point, however clothed, Mr Cassidy’s criticisms of the orders and judgments of the Courts below is a challenge which he should and could have brought by way of appeal but did not. I declined to hear from Mr Cassidy when he attempted to explain why he had not appealed. As I explained to him, this Court has before it unappealed judgments and orders entered by courts of competent jurisdiction and they are the only matters to which this Court may property have regard. It follows that Mr Cassidy’s complaints about the Judges and outcomes, does not constitute a basis for him to “appeal” and be heard on an “appeal”, in the substantive proceeding.
(d)In responding to Mr Smith’s submission that Mr Cassidy could not cross-examine Ms Calian because of the protection order, Mr Cassidy said the order had not been served on him and, in any event, it was issued by the Judge who assaulted him. When I asked Mr Cassidy if he was saying he was unaware of the order, which had been included in the bundle of documents filed on behalf of the applicant, Mr Cassidy
said he did not get those documents. But that flew in the face of counsel’s reminder to Mr Cassidy, in the courtroom, that the bundle had been handed to him the day before. To that, Mr Cassidy simply said he did not get a chance to read the bundle.
(e)Then Mr Cassidy raised the fact of a caveat on the property as being a reason for him to appear. That caveat has been lifted and is not in any event relevant to Mr Cassidy.
(f)Mr Cassidy says the interest he has is reflected in a deed of transfer under which Ms Calian is to pay Mr Cassidy a debt but this 25 per cent was “clawed back by [the Judge] and handed to Ms Calian”. Therefore, payment of the debt was disrupted and Mr Cassidy has an interest in the rights and wrongs of that.
[22] Section 27(3) of the New Zealand Bill of Rights Act does not assist Mr Cassidy. By virtue of s 101 of the Insolvency Act, Mr Cassidy lacks standing to defend Ms Calian’s claim to her unquestionable half-share in the Bird Grove family home. Section 27 does not have the effect of restoring to Mr Cassidy the standing of which he is deprived by s 101.
[23] I make a final observation. Mr Cassidy appealed to the High Court the Family Court costs order against him. Cull J dismissed the appeal. Her Honour’s decision records Mr Cassidy’s submission that he was not liable to costs because he had “no interest in the property” and his parents owned the family home outright.3
[24] For the reasons I have given, Mr Cassidy is precluded by his bankruptcy from appearing in the hearing of Ms Calian’s originating application for orders under the Property Law Act 2007.
3 Cassidy v Calian [2018] NZHC 3191 at [18](c).
Disposition
[25]Mr Cassidy’s application to be heard is dismissed.
Karen Clark J
Solicitors:
Peter C Gilbert, Wellington for Applicant
Ord Legal, Wellington for Second Respondent