Erwood v Maxted - [2012] NZSC 81

IN THE SUPREME COURT OF NEW ZEALAND

SC 28/2012 [2012] NZSC 81

BETWEEN ROBERT ERWOOD Appellant

ANDJANET MAXTED AND JANET MAXTED AND ALEXANDER JAMES JEREMY GLASGOW AS TRUSTEES OF THE ESTATE OF EDWARD ERWOOD Respondents

Court: McGrath, William Young and Chambers JJ Counsel: Applicant in person
C R Carruthers QC and R P Harley for Respondents

Judgment: 3 October 2012

JUDGMENT OF THE COURT

A The application for leave to appeal is dismissed.

BThe applicant is to pay costs of $5,000 to the respondents, plus all reasonable disbursements, to be fixed if necessary by the Registrar.

REASONS

[1] Robert Erwood, the applicant, brought proceedings against his sister, Janet Maxted, in her personal capacity and against her and Alexander Glasgow as trustees of Edward Erwood’s estate. The proceedings being unsuccessful, Mr Erwood was required to pay costs to the defendants, the current respondents.[1]
[1] Erwood v Maxted HC Nelson CIV-2003-442-363, 26 May 2006.
When Mr Erwood failed to pay them, the respondents brought bankruptcy

proceedings. Mr Erwood applied to set aside these proceedings, but was

ERWOOD v MAXTED & ORS SC 28/2012 [3 October 2012]

unsuccessful.[2] Mr Erwood brought an appeal against that decision (the bankruptcy notice appeal). Before that appeal was heard, Mr Erwood was adjudicated bankrupt. He filed a separate appeal against that decision (the adjudication appeal). Mr Erwood failed to pay security for costs with respect to the two appeals, as a consequence of which both appeals were struck out.

[2] Maxted v Erwood HC Nelson CIV-2007-442-331, 27 September 2007.

[2] This Court subsequently allowed an appeal from that strike-out, because it held that the Court of Appeal had overlooked the fact Mr Erwood had abandoned the adjudication appeal.[3] Because the adjudication appeal had been abandoned, Mr Erwood should not have been required to pay security for costs in respect of it and it followed that it was wrong to strike out the bankruptcy notice appeal on the ground of non-payment of security for costs.[4] This Court expressly noted, however, that, in reinstating the bankruptcy notice appeal and remitting it to the Court of Appeal for hearing, the Court was saying nothing about “the merits of the bankruptcy notice appeal or its efficacy in circumstances where there is now no challenge by way of appeal against the adjudication”.[5]

[3] Erwood v Maxted [2011] NZSC 23. A full history of the tangled procedural course followed is contained in that judgment.

[4] At [19].

[5] At [20].

[3] The Court of Appeal duly heard the bankruptcy notice appeal and dismissed it.[6] It is from that decision Mr Erwood now seeks leave to appeal.

[6] Erwood v Maxted [2012] NZCA 110.

[4] Although Mr Erwood is acting for himself on this application, he tells us that Mr McKenzie QC, who appeared as amicus curiae in the Court of Appeal, prepared the detailed notice of application for leave. We are grateful to Mr McKenzie for assisting Mr Erwood in that regard. We note also that Mr Erwood has prepared additional…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Erwood v Maxted

Details

AGLC: Erwood v Maxted [2012] NZSC 81
Case: [2012] NZSC 81
Decision Date: 3 October 2012

CaseChat Overview and Summary

Robert Erwood, the appellant, brought proceedings against his sister, Janet Maxted, in her personal capacity and against her and Alexander Glasgow as trustees of Edward Erwood's estate. After the proceedings were unsuccessful, Mr Erwood was required to pay costs to the respondents. When he failed to do so, the respondents brought bankruptcy proceedings against him. Mr Erwood applied to set aside the proceedings, but was unsuccessful. The Court of Appeal dismissed Mr Erwood's appeal against that decision.

Mr Erwood applied for leave to appeal to the Supreme Court, arguing that two issues were of general and public importance. Firstly, whether someone with a history of incapacity and known difficulties in understanding the full implications of legal process should have been provided with legal assistance when that person is the subject of bankruptcy proceedings. Secondly, whether the Court can set aside a bankruptcy notice when the debtor is clearly solvent and there are means of execution readily available and known to the judgment creditors.

The Supreme Court found that the first issue could not arise because the Court of Appeal had concluded that Mr Erwood was not incapacitated and had a good understanding of the issues and the nature of the proceedings. The Court also found that the second issue did not meet the statutory test as it was unclear what Mr Erwood's financial position was due to his attempts to hide his assets, and a debtor's solvency is not a ground on which a bankruptcy notice must necessarily be set aside if a debtor unreasonably refuses to pay a debt plainly owed.

The Supreme Court dismissed the application for leave to appeal and ordered Mr Erwood to pay costs of $5,000 to the respondents, plus all reasonable disbursements.

Orders