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Erwood v Maxted

Erwood v Maxted

Case [2012] NZCA 110 27 March 2012

Bankruptcy Notice

Act of Bankruptcy

Adjudication of Bankruptcy

Insolvency Law

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IN THE COURT OF APPEAL OF NEW ZEALAND

CA567/2007
[2012] NZCA 110

BETWEEN ROBERT ERWOOD
Appellant

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

AND THE OFFICIAL ASSIGNEE
Second Respondent

Hearing: 28 July 2011

Court: O'Regan P, Glazebrook and Arnold JJ

Counsel: Appellant in person
C R Carruthers QC and R P Harley for First Respondents
P R W Chisnall and D Slevin for Second Respondent
P D McKenzie QC as counsel assisting the Court

Judgment: 27 March 2012 at 10 a.m.

JUDGMENT OF THE COURT

AThe appellant is granted leave to amend his grounds of appeal.
BThe appeal is dismissed.
CThe appellant must pay the first respondents costs for a standard appeal on a band A basis, together with usual disbursements.

REASONS OF THE COURT
(Given by Arnold J)

Table of Contents

Para No
An adjudication of bankruptcy is made  [1]
The background to the bankruptcy adjudication  [5]
         The family home proceedings  [6]
         The fee proceedings  [16]
The course of the bankruptcy proceedings  [25]
Basis of appeal  [34]
Analysis  [40]
         Was the bankruptcy notice issued out of the wrong registry?          [42]
         Should a litigation guardian have been appointed?  [51]
         A bankruptcy notice against a person known to be solvent?           [56]
         Other points raised by Mr Erwood  [59]        Conclusion     [70]
Decision  [72]

An adjudication of bankruptcy is made

In a decision dated 22 November 2007, Associate Judge Christiansen adjudicated the appellant, Mr Erwood, bankrupt.[1] The bankruptcy petition was brought by Mr Erwood’s sister, Janet Maxted (Mrs Maxted), in her personal capacity and as a trustee with a solicitor, Mr Glasgow, of their brother Edward’s estate (the trustees). The debt which was the subject of the petition was an award of costs made against Mr Erwood in some unsuccessful proceedings that he brought against Mrs Maxted and the trustees in relation to the Erwood family home in Nelson.[2]
[1] Maxted v Erwood HC Nelson CIV-2007-442-331, 22 November 2007.
[2] Erwood v Maxted HC Nelson CIV-2003-442-363, 26 May 2006.
When the bankruptcy notice was issued, Mr Erwood applied to set it aside. Associate Judge Christiansen dismissed his application.[3] Mr Erwood then brought the present appeal against that decision (the bankruptcy notice appeal). Later, when the Associate Judge adjudicated him bankrupt, Mr Erwood filed a separate appeal against that decision, CA631/2007 (the adjudication appeal). The Supreme Court has held that Mr Erwood abandoned the adjudication appeal by a notice filed on 17 December 2007.[4] As will become apparent, this creates some difficulty for us in dealing with the bankruptcy notice appeal.
[3] Maxted v Erwood HC Nelson CIV-2007-442-331, 28 September 2007.
[4] Erwood v Maxted [2011] NZSC 23.
Mr Erwood has long been active in litigation, much of it involving members of his family. He appears to be an intelligent man, with an excellent recall of the details of the various proceedings in which he has been involved over the years and a good understanding of procedural and legal…

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] NZCA 110
Case: [2012] NZCA 110
Decision Date: 27 March 2012

CaseChat Overview and Summary

In Erwood v Maxted, the Court of Appeal of New Zealand heard an appeal against the issuance of a bankruptcy notice and the subsequent adjudication of bankruptcy. Robert Erwood, the appellant, sought to challenge the bankruptcy notice issued against him by his sister, Janet Maxted, and the trustees of their deceased brother's estate. The main issues were whether the bankruptcy notice was issued out of the wrong registry, if a litigation guardian should have been appointed, and if a bankruptcy notice could be issued against a person known to be solvent. The court found that the bankruptcy notice was correctly issued out of the Nelson registry of the High Court, as the trustees did not know the appellant's place of residence. Furthermore, the court held that the Associate Judge was not wrong in declining to appoint a litigation guardian, as the appellant was capable of understanding the issues and articulating his arguments. Lastly, the court ruled that a bankruptcy notice may be justified where a debtor unreasonably refuses to pay a debt that is plainly owed, and the debtor's solvency is not a ground on which the bankruptcy notice must necessarily be set aside. The appeal was dismissed, and the appellant was ordered to pay the first respondents' costs for a standard appeal on a band A basis, together with usual disbursements.

Orders