McCready v Green Cabs Limited
[2013] NZCA 646
•18 December 2013 at 3.00 pm
| IN THE COURT OF APPEAL OF NEW ZEALAND |
| CA698/2013 [2013] NZCA 646 |
| BETWEEN | GRAHAM EDWARD MCCREADY |
| AND | GREEN CABS LIMITED AND CALLUM BROWN |
| Counsel: | Applicant in person |
Judgment: (On the papers) | 18 December 2013 at 3.00 pm |
JUDGMENT OF STEVENS J
(Review of Registrar’s decision refusing to dispense with security for costs)
AThe application to review the Registrar’s decision refusing to dispense with security for costs is dismissed.
BMr McCready is to pay the sum of $5,880 by way of security for costs within 20 working days of the date of this judgment.
____________________________________________________________________
REASONS
Introduction
The applicant Graham Edward McCready appeals against a decision of Ronald Young J in the High Court adjudicating Mr McCready bankrupt on 4 October 2013.[1] The reasons for the decision were given in a comprehensive judgment following a hearing in which Mr McCready opposed the making of any bankruptcy order.[2] The first-named respondent, Green Cabs Ltd, sought the order when Mr McCready failed to pay a judgment debt of $10,230.80.
[1]McCready v Green Cabs Ltd [2013] NZHC 2594.
[2]Mr McCready argued, relying on s 37(c) and (d) of the Insolvency Act 2006, that it was just and equitable that no order of adjudication be made or that there were other reasons why an order of adjudication should not be made. In particular Mr McCready submitted that he had a realistic plan to pay off his debts through a summary instalment order (pursuant to subpart 3 of the Insolvency Act) and had applied to the Trustee and Insolvency Service. However, no such order had been made by the time of the hearing.
Mr McCready has filed a notice of appeal on 11 October 2013 in which he sets out some 10 grounds of appeal which, he says, amount to a substantial miscarriage of justice.
On 1 November 2013 Mr McCready applied to the Registrar under r 35(6) of the Court of Appeal (Civil) Rules 2005 (the Rules) to dispense with security. In a decision dated 19 November 2013 the Registrar declined Mr McCready’s application to dispense with security. Mr McCready has now sought a review of the Registrar’s decision.[3]
The Registrar’s decision
[3]Under r 7(2) of the Court of Appeal (Civil) Rules 2005.
The Registrar’s reasons for refusing to dispense with security included the following:
On 1 November 2013 the Registry received your application to waive security for costs on the grounds that if you had the amount required it would be unlikely you would have been bankrupted, you would be committing [an] offence … under the Insolvency Act and that if you paid and lost your appeal the amount would go to the Official Assignee not the judgment creditor. You also state that the appeal raises substantive issues which mean it is in the public interest and the administration of justice for security for costs to be waived.
I note you also state in your application that security for costs was set at $58,880.00. As stated above security was set at $5,880.00 and I can confirm that this is the figure set out in the letter to you of 14 October 2013.
On 18 November 2013, the respondent’s solicitor responded advising they oppose your application to dispense with security as impecuniosity is not in itself a ground for dispensation and also that your case has no merit.
It must be in the interests of justice for security for costs to be waived and there must be exceptional circumstances to justify dispensation. Impecuniosity alone does not mean that security for costs should be dispensed with. Although you have been adjudicated bankrupt that does not necessarily mean there are not funds, either being held by the Official Assignee or elsewhere that could be available to meet this cost. No financial information has been provided in support of your application.
While I can’t comment on the merits of the appeal, the circumstances of this appeal can’t be considered exceptional. There is also nothing in this appeal of public importance or significance.
Security for costs – principles
In the normal course, appellants in civil proceedings in this Court are required to pay security for costs. The Registrar may vary, defer or waive security “if satisfied that the circumstances warrant it”.[4]
[4]Rule 35(6).
Security for costs will be waived, varied or deferred where it is in the interests of justice to do so. There must be some exceptional circumstance to justify departing from the normal position.[5] The appellant must honestly intend to pursue the appeal and it must be arguable, as respondents should not face the threat of hopeless appeals without provision for security. The importance of the issues raised in the appeal will be relevant, as will the question of whether there is any public interest in having them determined.[6] Impecuniosity alone is not usually sufficient alone to justify a waiver, but may be reason to reduce the quantum of security.[7]
[5]Fava v Zaghloul [2007] NZCA 498, (2007) 18 PRNZ 943 at [9]; Orlov v National Standards Committee (No 1) [2013] NZCA 96 at [7] and [11].
[6]Creser v Official Assignee CA196/05, 12 June 2006 at [29].
[7]Fava v Zaghloul at [9]; and Easton v Broadcasting Commission [2009] NZCA 252, (2009) 19 PRNZ 675 at [5].
In his application for review of the Registrar’s decision Mr McCready referred to the reasons given by the Registrar including the statement that: “No financial information has been provided in support of your application.” Mr McCready says that this is factually incorrect because he had earlier completed the declaration of financial means and, more importantly, the Registrar had accepted that this declaration was sufficient to meet the financial qualification for waiver of the much lower filing fee on the grounds of impecuniosity.
While this may be correct, as the principles referred to above make plain, impecuniosity alone is not usually sufficient to justify a waiver. The principles for waiving the whole or part of a filing fee are different to those concerning dispensing with security for costs.[8] This is because a respondent should not normally be called upon to face the threat of hopeless appeals without provision for security.
[8]As stated in Koroniadis v Bank of New Zealand [2013] NZCA 524 at [4].
The main focus of Mr McCready’s appeal seems to be on the fact that the High Court judgment under appeal “unlawfully contravened a summary instalment order which had been accepted and was awaiting grant within two days”.[9] Mr McCready submits further that the adjudication of bankruptcy on its face was made without jurisdiction in the circumstances or at least amounted to an abuse of judicial discretion which was unprecedented given the advanced stage of the summary instalment legal process.
[9]Once the Assignee has made a summary instalment order, a person must not begin or continue a proceeding against the debtor without the permission of the Assignee: ss 343 and 352. However, as noted above, at the time the adjudication application came before Ronald Young J no such order had been made.
This submission may well amount to a significant mischaracterisation of the approach taken by the Judge. On the face of the High Court judgment the Judge properly referred to s 37 of the Insolvency Act 2006 and identified the two relevant subsections, s 37(c) and (d) which had been the subject of submissions before him. The balance of the judgment appears to be a careful examination as to whether, in the Court’s discretion, an adjudication should be refused on the basis of one or other of those grounds. My preliminary view is that it is doubtful whether any of the arguments raised by Mr McCready would result in a successful challenge to the exercise of the Judge’s discretion under s 37 of the Insolvency Act.[10] The merits of the appeal therefore appear to be limited.
[10]The criteria for a successful appeal against the exercise of a discretion are strict: (1) error of law or principle; (2) taking account of irrelevant considerations; (3) failing to take account of a relevant consideration; or (4) the decision is plainly wrong: Kacem v Bashir [2010] NZSC 112, [2011] 2 NZLR 1 at [32].
The appeal does not seem to raise issues of public importance or contain any matter of significant legal principle or public interest that requires reconsideration by this Court. It is not immediately apparent from the extensive material set out in the notice of appeal that Mr McCready has identified any significant specific error of law.
In the light of these factors I am satisfied that Mr McCready has not shown any exceptional circumstance warranting a departure from the normal position. Therefore I decline to depart from the usual position that Mr McCready is required to pay security for costs to protect the respondents if he wishes to pursue this appeal.
Result
The application for review of the Registrar’s decision refusing to dispense with security for costs is dismissed. Mr McCready is to pay the sum of $5,880 by way of security for costs within 20 working days of the date of this judgment.
Solicitors:
Duncan Cotterill, Wellington for Respondents
5
0