Mills v Dalzell - [2023] NZCA 68

IN THE COURT OF APPEAL OF NEW ZEALAND

I TE KŌTI PĪRA O AOTEAROA

CA557/2022
[2023] NZCA 68

BETWEEN	LYNETTE JOY MILLS First Appellant CARL JAMES PETERSON Second Appellant THE PETERSON/MILLS PARTNERSHIP Third Appellant
AND	KELLY DALZELL First Respondent TRACY LEVENBACH Second Respondent (deceased) ASB BANK LIMITED Third Respondent GRAHAM HOWARD MILLS Fourth Respondent JOHN LEVENBACH Fifth Respondent CAROL KRAMMER Sixth Respondent

Counsel:	Appellants in person SCDA Gollin and S L Michelsen for First and Third Respondents No appearance for Second Respondent J R Sparrow and S T Hartley for Fourth Respondent B R Webster and K B Perrett for Fifth and Sixth Respondents
Judgment: (On the papers)	21 March 2023 at 11 am

JUDGMENT OF COURTNEY J

The application for review of the Deputy Registrar’s decision declining to dispense with security for costs and requiring increased security is declined.
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REASONS

The appellants have sought a review of a Deputy Registrar’s decision dated 29 November 2022 to decline their application under r 35(6)(c) of the Court of Appeal (Civil) Rules 2005 for a dispensation of security for costs, and to increase the level of security they must provide under r 35(6)(a) of the Rules.

Background

The first appellant, Ms Mills, and the fourth respondent, Mr Mills are former business and domestic partners. They owned two properties together which secured a joint current account in the form of a revolving credit account with the third respondent, ASB Bank Ltd (ASB), referred to as the overdraft facility. After the relationship ended, Ms Mills formed a relationship with the second appellant, Mr Peterson. It was agreed that Mr Peterson would buy Mr Mills’ interest in the properties and assume his obligations in respect of the mortgage and the overdraft facility. However, ASB declined to release Mr Mills from his obligations. A dispute arose between the three parties which escalated when, after finding that Ms Mills had increased the overdraft facility, Mr Mills withdrew funds from it without Ms Mills’ consent.
The appellants brought proceedings against Mr Mills, ASB, employees of ASB, a solicitor, and a legal executive. The proceedings included allegations of fraud. Those proceedings were eventually settled by way of a settlement agreement dated 21 December 2021. Notwithstanding the settlement agreement, the appellants brought fresh proceedings, making similar allegations. They did not consider that the settlement agreement precluded them from doing so. Associate Judge Johnston granted the respondents’ applications to strike out the proceeding.[1] The decision regarding security for costs relates to the appellants’ appeal against that decision.
[1]Mills v Dalzell [2022] NZHC 2439 at [85].
The appellants relied on two broad grounds as justifying dispensation. First, that Mr Mills and ASB hold security by way of an existing mortgage and/or caveat over the two properties owned by the appellants, which were the subject of the original dispute. They are said to be worth approximately $1.2 million, with debt of approximately $260,000 plus interest secured against them. In addition, the appellants have carbon credits which they value at slightly over…

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 Mills v Dalzell

Details

AGLC: Mills v Dalzell [2023] NZCA 68
Case: [2023] NZCA 68
Decision Date: 21 March 2023 at 11 am

CaseChat Overview and Summary

In the Court of Appeal of New Zealand, Lynette Joy Mills, Carl James Peterson, and the Peterson/Mills Partnership sought to challenge a decision by the Deputy Registrar, who declined to dispense with their obligation to provide security for costs and increased the level of security required. The respondents, Kelly Dalzell, ASB Bank Limited, Graham Howard Mills, John Levenbach, and Carol Krammer, opposed the application. The appeal related to proceedings initiated by the appellants following the termination of their relationship with Mr Mills and the subsequent refusal by ASB Bank to release Mr Mills from his obligations under a joint account.

The central legal issues in this case were whether the appellants were entitled to a dispensation from providing security for costs and, if not, whether the security required should be increased. The appellants argued that there was no risk to the respondents if the appeal failed due to the security held over their properties and that they had a prima facie case that the respondents were involved in fraud, making it unfair to require them to liquidate assets for security for costs. The respondents countered that the security held over the properties was insufficient to protect against the costs of enforcing it and that it was reasonable to expect the appellants to liquidate assets if they wished to proceed with the appeal.

The Court of Appeal held that the Deputy Registrar's decision was correct. The court reviewed the legal principles governing the dispensation of security for costs and noted that such dispensation should only occur if it is right to require the respondent to defend the judgment without the protection of security. The Deputy Registrar correctly identified the relevant principles and applied them, concluding that the appeal was likely to be vexatious and without merit. The appellants' arguments regarding the sufficiency of the mortgage security and the unfairness of requiring them to liquidate assets were rejected as the court found that the appellants had not demonstrated that the appeal was one a solvent litigant would sensibly pursue. The court also upheld the requirement for increased security, noting the slim prospects of the appeal succeeding.

The Court of Appeal declined the appellants' application for review of the Deputy Registrar's decision. The appeal against the substantive judgment remained subject to the requirement to provide security for costs.

Orders