Mawhinney v Environment Court - [2015] NZHC 1663

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2014-404-2503 [2015] NZHC 1663

IN THE MATTER
of the Judicature Amendment Act 1972

and of the Resource Management Act
1991

BETWEEN

PETER WILLIAM MAWHINNEY Applicant

AND

ENVIRONMENT COURT First Respondent

AUCKLAND COUNCIL Second Respondent

Hearing: On the papers

Counsel:

Applicant in person
P Moodley for Second Respondent
G A D Neil for Official Assignee

Judgment:

16 July 2015

JUDGMENT OF ELLIS J

This judgment was delivered by me on 16 July 2015 at 4 pm pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date:………………………….

Counsel/Solicitors:
G A D Neil, Meredith Connell, Auckland
P Moodley, Brookfields Lawyers, Auckland

Copy to Applicant

MAWHINNEY v ENVIRONMENT COURT [2015] NZHC 1663 [16 July 2015]

[1] On 24 February 2015 Mr Mawhinney was adjudicated bankrupt on the petition of Auckland Council. The debt owed by Mr Mawhinney to the Council arose from a costs award made by the Environment Court on 14 June 2012 in proceeding ENV-2006-AKL-0005191 (the costs decision).2

[2] Mr Mawhinney says, and on the basis of the evidence he has filed, I accept, that the costs order was made against him in his capacity as the (sole) trustee of the Waitakere Forest Land Trust (the Trust), as it was in that capacity that he participated in the proceedings in the Environment Court. Mr Mawhinney is named the “appointor” of the Trust and, in turn, the appointor is said to be one of the
discretionary beneficiaries of the Trust.3

[3] The present proceeding, in which Mr Mawhinney seeks judicial review of the costs decision, was commenced in September 2014, prior to his adjudication. Mr Mawhinney’s application for a stay of execution of the costs decision pending determination of the judicial review proceeding was dismissed on
18 November 2014.4

[4] On 4 November 2014, the Council applied for security for costs against Mr Mawhinney in the judicial review proceeding. That application was scheduled for a hearing on 18 March 2015 before her Honour Justice Peters. During the hearing the Court was advised of Mr Mawhinney’s recent adjudication. Peters J then directed the Official Assignee to file and serve a memorandum setting out her position in relation to the judicial review litigation.

[5] The Assignee duly filed a memorandum advising the Court of her views:

(a) that Mr Mawhinney had no standing to pursue the present proceeding;

and

1      Formerly RMA886/98.
2      Mawhinney v Auckland Council [2012] NZEnvC 117.
3      The other discretionary beneficiaries are said to be the appointor’s spouse; his children and grandchildren or any “more remote issue”; any person related by blood, marriage, or adoption; any trust/scheme/plan established by any person for the provision of benefits to a beneficiary; or anyone the appointor appoints. There are no final beneficiaries.
4      Mawhinney v Environment Court [2014] NZHC 2872.

(b) that she did not propose to pursue the proceeding in his stead.

[6] The position expressed in [5](a) was based (inter alia) on dicta from Re

Wilson ex parte UDC Finance…

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.

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Details

Case: [2015] NZHC 1663
Decision Date: 16 July 2015

CaseChat Overview and Summary

The High Court of New Zealand heard an application by Peter William Mawhinney, who was recently adjudicated bankrupt, for judicial review of a costs decision made by the Environment Court in proceedings between him and Auckland Council. The crux of the dispute was whether Mr Mawhinney, post-bankruptcy, could still pursue the judicial review of the costs order made against him in his capacity as the trustee of the Waitakere Forest Land Trust. The Official Assignee opposed the application, asserting that Mr Mawhinney had no standing to pursue the review and that she had no intention of continuing the proceedings.

The primary legal issue was whether Mr Mawhinney, following his adjudication as bankrupt, could maintain the judicial review proceedings in his capacity as the trustee of the Trust. The court examined whether the right to bring such judicial review proceedings could be considered "property" that vests in the Official Assignee upon adjudication. It also considered whether Mr Mawhinney's bankruptcy precluded him from representing the Trust's separate interest in protecting its assets from potential indemnity obligations.

The Court held that Mr Mawhinney, in his personal capacity, could not pursue the judicial review as he no longer held any relevant interest in the outcome due to his bankruptcy. However, the court recognized that Mr Mawhinney, as the trustee of the Trust, had a distinct duty to protect the Trust's assets and potentially pursue the review to safeguard the Trust's interest. This distinct interest arose because the Official Assignee might have a right to indemnity from the Trust's assets for the costs debt. The court concluded that Mr Mawhinney's bankruptcy did not preclude him from pursuing the judicial review in his capacity as trustee and directed that the application for security for costs should proceed.

This case underscores the nuanced distinction between personal rights and fiduciary duties in the context of bankruptcy, particularly in relation to judicial review proceedings. It highlights the importance of considering the interests of beneficiaries and the potential obligations of the bankrupt's estate, even post-adjudication.

Orders