Erwood v Maxted

[2008] NZCA 139

IN THE COURT OF APPEAL OF NEW ZEALAND

CA567/07
[2008] NZCA 74

BETWEENROBERT ERWOOD

Appellant

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

Respondents

CA631/07

AND BETWEEN             ROBERT ERWOOD

Appellant

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

First Respondents

ANDTHE OFFICIAL ASSIGNEE

Second Respondent

Hearing:17 March 2008

Court:William Young  P, Ellen France and Baragwanath JJ

Counsel:J Soondram via videolink for Appellant

G M Downing via videolink for Respondents
P R W Chisnall for Official Assignee

Judgment:19 March 2008 at 4.30 pm 

JUDGMENT OF THE COURT

A        THE APPLICATION TO STRIKE OUT THE APPEALS IS DISMISSED.

BSECURITY FOR COSTS IN CA567/07 IN THE SUM OF $4,740 IS TO BE PAID BY THE OFFICIAL ASSIGNEE FORTHWITH TO THE REGISTRAR OF THIS COURT OUT OF THE FROZEN FUNDS PURSUANT TO THE APPELLANT’S AUTHORITY ADVISED TO THE COURT BY HIS COUNSEL ON 18 MARCH 2008.

CSECURITY FOR COSTS IN CA631/07 IS FIXED AT $20,000.  UNLESS THE APPELLANT NO LATER THAN 5 PM ON 20 MARCH 2008 AUTHORISES THE OFFICIAL ASSIGNEE TO MAKE PAYMENT OF THAT SUM TO THE REGISTRAR OF THIS COURT THE APPEALS IN BOTH CA567/07 AND CA631/07 WILL BE STRUCK OUT.  IF THE APPELLANT GIVES SUCH AUTHORITY TO THE OFFICIAL ASSIGNEE WITHIN SUCH TIME, THE FURTHER SUM OF $20,000 IS TO BE PAID BY THE OFFICIAL ASSIGNEE FORTHWITH TO THE REGISTRAR OF THIS COURT OUT OF THE FROZEN FUNDS PURSUANT TO THE APPELLANT’S AUTHORITY.

DUNLESS THE APPELLANT NO LATER THAN 5 PM ON 9 APRIL 2008 FILES FOUR COPIES OF THE CASE ON APPEAL IN A FORM COMPLYING WITH THE COURT OF APPEAL RULES THE APPEALS IN BOTH CA567/07 AND CA631/07 WILL BE STRUCK OUT.

EUNLESS THE APPELLANT NO LATER THAN 5 PM ON 9 APRIL 2008 FILES AND SERVES ON THE RESPONDENTS FOUR COPIES OF HIS WRITTEN SUBMISSIONS AND CHRONOLOGY IN A FORM COMPLYING WITH THE COURT OF APPEAL RULES THE APPEALS IN BOTH CA567/07 AND CA631/07 WILL BE STRUCK OUT.

FIF THE APPEALS HAVE NOT PREVIOUSLY BEEN STRUCK OUT, THE RESPONDENT’S SUBMISSIONS ARE TO BE FILED AND SERVED ON THE APPELLANT AT THE OFFICES OF MR ROPATI BY 19 APRIL 2008.

GThe appellant is to pay the costs associated with the security for costs issues to date in relation to both appeals including the hearing of 17 March 2008 which we fix at $3,000 and order to be paid forthwith. Unless the appellant no later than 5 pm on 20 March 2008 authorises the Official Assignee to make payment of that sum to the Registrar of this Court the appeals in both CA567/07 and CA631/07 will be struck out.  If the appellant gives such authority to the Official Assignee within such time, that sum is to be paid by the Official Assignee forthwith to the respondents out of the frozen funds pursuant to the appellant’s authority.

____________________________________________________________________

REASONS OF THE COURT

(Given by Baragwanath J)

[1]       Mr Erwood is appellant in two appeals which are listed for hearing on 23 April 2008.  One, CA567/07, is against a decision of Associate Judge Christiansen declining Mr Maxted’s application to set aside a bankruptcy notice issued by the respondents and dated 11 July 2007.  The other, CA631/07, is against an order of adjudication in bankruptcy made by the same Judge on 22 November 2007.  The respondents seek an order striking out the appeals because of the appellant’s breach of an order for security for costs.

[2]       The bankruptcy notice relied on three judgment debts.  The first judgment was against the appellant for costs of $21,026.95 together with interest and disbursements in a proceeding brought by him against the respondents.  The appellant sought to enforce as binding a supposed trust to permit him by right to occupy his late mother’s home.  Because, it seems, of concerns about the appellant’s fitness to represent himself, Queen’s Counsel was appointed as amicus curiae, albeit with a limited role.  Wild J, in giving reasons for dismissing the claim brought by the appellant in person, recounted successive delays attributable to the appellant.  Some concerned a settlement conference sought by him and ordered despite opposition from the respondents.  There was a succession of unsuccessful attempts by the appellant to widen the brief of amicus.  There was also a succession of attempts by the appellant to adjourn the trial.  An appeal against refusal of adjournment was unsuccessful.  Wild J observed:

[15]     In all, I have counted some 140 pages of memoranda from the plaintiff on the Court file, variously addressed to the Registrars at Nelson and Wellington, to Miller J, then to MacKenzie J, and latterly to me, as well as to counsel for the defendants. Had the plaintiff put, into preparation for hearing today, the effort he has put into trying to avoid having his case heard, then the result would be a well prepared case for the plaintiff.

[3]       The second judgment was for the costs of the unsuccessful appeal to the Court of Appeal of $1735.94 and interest.  The third judgment was for the costs of an unsuccessful application for leave to appeal to the Supreme Court.

[4]       The application to set aside the bankruptcy notice was heard by Associate Judge Christiansen on 27 September 2007 and dismissed with reasons given the following day.  The grounds relied on by the appellant were:

a)the combination of judgment debts is impermissible in terms of the decision of Stout CJ in Re Mills, a debtor (1913) 32 NZLR 801 (SC) following In re Low, ex parte Argentine Goldfields Ltd [1891] 1 QB 147 in which Lord Esher MR said at 148:

Another reason for coming to the same conclusion is that otherwise there would be taken away from the debtor a right that he undoubtedly has to satisfy one of the notices, or to raise a counterclaim, set-off, or cross-demand to it, and so prevent its being used for the presentation of a bankruptcy petition.

b)the appellant lived in Wellington and the bankruptcy application had been wrongly commenced by a notice intituled in the Nelson registry of the High Court;

c)one of the respondents had said she would not pursue the claim against him;

d)he had a counterclaim against her;

e)he was under a disability and required a litigation guardian.

[5]       The Associate Judge rejected each ground. 

a)He distinguished Re Mills as irrelevant to a case where the second and third judgments are for the costs of unsuccessful appeals against the first judgment. 

b)He noted that the appellant had described himself as of no fixed abode and had supplied a post office address and that of a solicitor who no longer acted for him as his address for service.  He considered the Nelson Court to be the most convenient registry for commencement of the bankruptcy proceeding. 

c)and (d) He noted that no cross-claim or counter-claim had been signalled in the proceedings to date. 

(e)Having considered the history of the litigation to date he was not persuaded that the appellant needed a litigation guardian.

[6]       On 27 September 2007 the appellant filed application for stay of the decision of the Associate Judge.  On 18 October he filed notice of appeal in CA567/07 and asked that security be dispensed with, stating “I believe that assets are frozen”.  On 5 November 2007 the Registrar of this Court declined the application to dispense with security and fixed security in CA567/07 at $4,740, to be paid within 20 working days.  A similar order was made in an unrelated appeal CA485/07 involving a different respondent.

[7]       On 22 November 2007 a single Judge of this Court dismissed an application for review of the Registrar’s decisions.

[8]       Also on 22 November, Associate Judge Christiansen made the order of adjudication, challenged by the appellant by notice of appeal filed on 26 November 2007 in CA631/07.

[9]       On 21 December 2007, the President extended the time for giving security in CA631/07.  He noted that funds in excess of $300,000 were held to Mr Erwood’s credit in frozen bank accounts and that the proofs of debt were for only  $215,76.28.  He observed that Mr Erwood would be well advised not to seek dispensation without having first taken all practical steps to pay security, including seeking a release from funds currently held under order of the Court.   

[10]     On 21 January 2008 the Official Assignee wrote two letters to Mr Erwood, the first stating that his bank accounts were frozen and could not be used to provide security; the second advising that the Official Assignee was prepared upon request to supply the security for costs required by this Court. 

[11]     By affidavit sworn on 14 March 2008 Mr Marshall of the office of the Official Assignee has deposed that on 21 January he had twice spoken to the appellant by telephone.  On the second occasion, he said, he told the appellant that the first letter had been superseded by the second.  The appellant asked him to resend the first letter which therefore bore a fax time at the end of the day.  When on 30 January the appellant applied to this Court for dispensation from the requirement to provide security in CA631/07 he attached the first of the two letters dated 21 January from the Official Assignee.  He did not supply the second. 

[12]     Since the appellant has not been heard on the point we make no finding upon it.  But we invite the appellant to respond by affidavit so that the matter can be considered at the forthcoming hearing.  Should a finding be made that the appellant misled the Court the consequences could include an increased costs order against him.  The sum fixed for security in CA631/07 by our formal order ([20(b)] below) allows for that contingency. 

[13]     The foregoing paragraph was prepared before we received today the appellant’s affidavit sworn on 18 March 2008.  He may or may not wish to augment it by a further affidavit.

[14]     On 21 February 2008 Associate Judge Christiansen annulled the bankruptcy upon conditions requiring payment of the sums claimed by creditors who proved in Mr Erwood’s bankruptcy together with costs and disbursements of the petitioning creditor $4,200 and those of the Official Assignee $1,500.  The conditions are obviously unacceptable to the appellant, who has elected to continue the appeals.

[15]     On 25 February 2008 the President directed that appeals CA567/07 and CA631/07 be called on 17 March to determine whether they should be struck out for failure to provide security.  He sought explanation from the Official Assignee for the apparently inconsistent letters of 21 January.  It was at this point that the Official Assignee advised by affidavit and confirmed orally by counsel that the second superseded the first and represents the Official Assignee’s position. 

[16]     When this Court gave judgment on 13 December 2007, ordering stay of advertising or calling a meeting of creditors, it recognised that there were “two substantive matters” relating to the bankruptcy.  One related to the proper venue for the proceedings; the other to Mr Erwood’s mental health and whether he required a litigation guardian.  Neither is raised by CA567/07; the points sought to be advanced are ones that may well lack merit.  Those advanced in CA631/07 may or may not succeed but they are not assisted by the annulment.

[17]     It was not until newly appointed counsel was pressed by the Court at the hearing on 17 March that the appellant gave, by his counsel, authority to the Official Assignee to pay the sum of $4,740 fixed in CA567/07.  He advised that the appellant’s solicitor is Mr John Ropati, solicitor, Auckland.

[18]     We have given careful thought to whether the appellant’s delay since 21 January in providing security should, in the light of the previous history of the case, lead us to accept the respondents’ submission that the appeals should be struck out at this stage.

[19]     We have decided against that course but that any breach by the appellant of the conditions now imposed will result in a strike out of both CA567/07 and CA631/07.

[20]     Because of the appellant’s default to date our declining the respondents’ application to strike out is a dispensation in the appellant’s favour.  He must pay the costs of the application for dispensation and the respondents’ application to strike out. 

[21]     We add that we have further received today a medical certificate referring to the appellant’s health and proposing the appointment of a guardian ad litem.  Since the appellant was represented before us by counsel we do not consider such appointment appropriate.  But we have decided to appoint amicus curiae to be selected by the Registrar to assist the Court at the hearing of the appeal on 23 April.  We reserve the question of liability for the costs of amicus.

[22]     We order:

a)Security for costs in CA567/07 in the sum of $4,740 is to be paid by the Official Assignee forthwith to the Registrar of this Court out of the frozen funds pursuant to the appellant’s authority advised to the Court by his counsel on 18 March 2008.

b)Security for costs in CA631/07 is fixed at $20,000.  Unless the appellant no later than 5 pm on 20 March 2008 authorises the Official Assignee to make payment of that sum to the Registrar of this Court the appeals in both CA567/07 and CA631/07 will be struck out.  If the appellant gives such authority to the Official Assignee within such time, the further sum of $20,000 is to be paid by the Official Assignee forthwith to the Registrar of this Court out of the frozen funds pursuant to the appellant’s authority.

c)The appellant is already in breach of Rule 40 of the Court of Appeal Rules which requires the appellant to file the case on appeal no later than 30 working days before the fixture. Unless the appellant no later than 5 pm on 9 April 2008 files four copies of the case on appeal in a form complying with the Court of Appeal Rules the appeals in both CA567/07 and CA631/07 will be struck out.

d)Unless the appellant no later than 5 pm on 9 April 2008 files and serves on the respondents four copies of his written submissions and chronology in a form complying with the Court of Appeal Rules the appeals in both CA567/07 and CA631/07 will be struck out.

e)If the appeals have not previously been struck out, the respondent’s submissions are to be filed and served on the appellant at the offices of Mr Ropati by 19 April 2008.

f)The appellant is to pay the costs associated with the security for costs issues to date in relation to both appeals including the hearing of 17 March 2008 which we fix at $3,000 and order to be paid forthwith. Unless the appellant no later than 5 pm on 20 March 2008 authorises the Official Assignee to make payment of that sum to the Registrar of this Court the appeals in both CA567/07 and CA631/07 will be struck out.  If the appellant gives such authority to the Official Assignee within such time, that sum is to be paid by the Official Assignee forthwith to the respondents out of the frozen funds pursuant to the appellant’s authority.

Solicitors:
John Ropati, Auckland for Appellant
McFadden McMeeken Phillips, Nelson for Respondents
Gibson Sheat, Wellington for Official Assignee