DeMarco v Anderson
[2022] NZCA 57
•15 March 2022 at 10 am
| IN THE COURT OF APPEAL OF NEW ZEALAND I TE KŌTI PĪRA O AOTEAROA |
| CA438/2021 [2022] NZCA 57 |
| BETWEEN | EUGENE JOHN DEMARCO |
| AND | NORMAN HUGH ANDERSON AND REBECCA ALICE CARRASCO |
| Counsel: | Applicant in Person |
Judgment: | 15 March 2022 at 10 am |
JUDGMENT OF COURTNEY J
[Review of Registrar’s Decision]
The application for review is declined.
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REASONS
Introduction
Mr Anderson and Ms Carrasco brought proceedings to recover the deposit they had paid on a sale and purchase agreement that was later cancelled. They obtained judgments against Mr DeMarco for (1) costs on an interlocutory application ($6,811.50)[1] and (2) further damages and costs on the substantive claim ($323,441.53).[2] Mr DeMarco appealed the substantive judgment only. That appeal was later deemed abandoned as a result of Mr DeMarco failing to file the case on appeal and seek a hearing date.
[1]Anderson v DeMarco [2020] NZHC 1349.
[2]Anderson v DeMarco [2020] NZHC 2979, (2020) 21 NZCPR 758; and Anderson v DeMarco [2020] NZHC 3490.
Mr Anderson and Ms Carrasco issued bankruptcy notices against Mr DeMarco, which he failed to comply with. They began bankruptcy proceedings, which he opposed. In a judgment delivered on 14 July 2021 Associate Judge Johnston declined Mr DeMarco’s application to halt the bankruptcy proceedings and granted the application by Mr Anderson and Ms Carrasco to adjudicate Mr DeMarco bankrupt.[3]
[3]Insolvency Act 2006, s 42; and Anderson v DeMarco [2021] NZHC 1757.
Mr DeMarco has appealed the Associate Judge’s decision. Security for costs was fixed at $7,060. Mr DeMarco applied for dispensation of the security for costs, citing impecuniosity and public interest.
A Deputy Registrar of this Court advised Mr DeMarco of the legal basis on which security for costs might be dispensed with, namely that the discretion to dispense with security should be exercised so as to both preserve access to this Court by an impecunious appellant in a case that a solvent appellant would reasonably wish to prosecute and also to prevent the use of impecuniosity to secure the advantage of prosecuting an appeal that would not sensibly be pursued by a solvent litigant.[4]
[4]Reekie v Attorney-General [2014] NZSC 63, [2014] 1 NZLR 737 at [35].
The Deputy Registrar requested details of Mr DeMarco’s assets, liabilities, all sources of funding including full disclosure of any family trust that might provide funding and confirmation as to whether Mr DeMarco had applied for legal aid.
Mr DeMarco provided some of the information sought, including some bank statements, confirmation as to the income status of his partner (who is on a job seeker benefit) and advised that an application for legal aid had been forwarded to prospective counsel and “a decision is still pending”.
On 3 November 2021 the Deputy Registrar declined to dispense with security for costs. Mr DeMarco seeks a review of that decision.
The Deputy Registrar’s decision
The Deputy Registrar accepted that the information Mr DeMarco had provided largely supported his claim to impecuniosity. She was, however, concerned that Mr DeMarco had not confirmed whether a family trust existed that might assist him or provide information about his partner’s assets (the job seeker benefit being income rather than asset tested). Moreover, Mr DeMarco had not provided any information to support his claim that a legal aid application had been made and Legal Aid Services had confirmed that they did not hold an active file for the matter.
In considering the potential costs and benefits of the appeal, the Deputy Registrar accepted that if Mr DeMarco were successful, he would regain control over his assets, that being a benefit which would outweigh the potential costs to him of the appeal. However, as to the merits of the appeal, the Deputy Registrar noted that the Associate Judge’s decision represented the exercise of a statutory discretion and, to succeed on appeal, Mr DeMarco would need to show that the Associate Judge made an error of law, took into account irrelevant considerations, failed to take relevant considerations into account or was plainly wrong.[5] The Deputy Registrar did not accept that any of the asserted errors by the Associate Judge were likely to satisfy these requirements. Nor did the Deputy Registrar consider that any issue of public interest arose.
Review
[5]Kacem v Bashir [2010] NZSC 112, [2011] 2 NZLR 1 at [32], citing May v May (1982) 1 NZFLR 165 (CA) at 170.
I see no public interest aspect in this appeal. The Deputy Registrar was therefore correct on that point. Any dispensation of security for costs could only be justified on the grounds of impecuniosity.
Furthermore, I see no error in the Deputy-Registrar’s approach to the question of impecuniosity. Mr DeMarco was expressly asked for disclosure of any family trust that might provide funding. He did not provide that information. He was specifically asked for confirmation that he had applied for legal aid and conveyed, by his advice that “a decision is still pending”, that he had done so. But the available information indicates that he had not. In these circumstances, the Deputy-Registrar was right to conclude that Mr DeMarco had not demonstrated that he was impecunious.
Nor do I see error in the Deputy-Registrar’s assessment as to the merits of Mr DeMarco’s appeal. Mr DeMarco has identified five grounds of appeal. The first is a non-specific assertion of errors of fact and law and does not provide any actual ground of appeal. The second ground is that the Associate Judge was wrong to conclude that Mr DeMarco was unable to pay his debts. The Associate Judge based this finding on Mr DeMarco’s own failure to disclose his full financial position. That makes the conclusion difficult to impugn.
The third ground of appeal asserts that the Associate Judge erred by stating the likelihood of success in other unrelated proceedings. The Associate Judge perceived the basis for Mr DeMarco’s application to halt the bankruptcy proceedings to be his challenge to the substantive judgment which underlay the bankruptcy proceeding. But given that the appeal had been deemed abandoned, the Associate Judge’s assessment as to Mr DeMarco’s bona fides in prosecuting that appeal, the fact that there was no appeal in respect of the initial costs judgment and that his appeal against the substantive judgment had been deemed to be abandoned were all matters that the Associate Judge was entitled to take into account. The merits of this ground must be viewed as very slight.
The fourth ground of appeal is that (unspecified) facts stated in the judgment are wrong. Without knowing exactly what statements of fact are challenged it is impossible to make any assessment of this ground. The last ground of appeal is that that the Associate Judge failed to have regard to Mr Anderson and Ms Carrasco’s obstruction of his ability to value his assets and take other steps to address his creditors. It is true that the matters in the last ground of appeal do not appear to be considered on the face of the judgment. However, looking at the circumstances overall – the nature of the claim against Mr DeMarco and the fact that he has neither paid the first costs judgment debt nor appealed against – I consider that the prospects of success in the current appeal are very limited.
In the circumstances I am satisfied that this is not a case that a solvent appellant would reasonably wish to prosecute. Rather, it seems to be a further step in a very long drawn out effort to deprive the judgment creditors of the fruits of their judgment.
The application for review is declined.
Solicitors:
Parker & Associates, Wellington for First Respondents
Meredith Connell, Auckland for Second Respondent
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