Quilter v Kidd HC Hamilton M 234/00

[2001] NZHC 734

IN THE HIGH COURT OF NEW ZEALAND
HAMILTON REGISTRY M 234/00

UNDER the Family Protection Act 1955

IN THE MATTER of the estate of LJ Northcott

BETWEEN BM QUILTER
Plaintiff

AND REJ KIDD and JV IMPERATRICE
Defendants

Hearing: 9 August 2001

Counsel: BM Quilter, plaintiff in person
TR Ingram for defendants

Judgment: 10 August 2001

JUDGMENT OF MASTER FAIRE

Solicitors.
B Quilter, 10 Rowe Place, Shirley, Christchurch, plaintiff
King Gerard & Partners, PO Box 327, Pukekohe for defendants

[1] The defendants apply to strike this proceeding out pursuant to Rule 477 of the High Court Rules.

[2] The defendants are the trustees of the estate of the late Leslie James Northcott. He died on 4 March 1995. Probate was granted to the defendants on 6 April 1995.

[3] The plaintiff filed this proceeding on 5 September 2000. In it she pleads that she is the daughter of the late Mr Northcott. She seeks provision from his estate pursuant to the provisions of the Family Protection Act 1955.

[4] This is the second set of proceedings issued by the plaintiff seeking provision Under the Family Protection Act 1955. Her first proceedings were filed on 4 April 1996. Those proceedings were discontinued on 2 August 2000.

[5] The ground relied upon by the defendants in seeking an order striking out this proceeding is that no cause of action is vested in this plaintiff based on the Family Protection Act 1955. That is because the plaintiff was adjudicated a bankrupt on 23 August 1995. By virtue of s 42 of the Insolvency Act 1967 the plaintiff’s right to make an application for provision under the Family Protection Act 1955 was vested in the Official Assignee. That position is analysed by Barker J in Re LL Meller (High Court, Auckland, A 1247/84, 3 February 1987).

[6] It is appropriate that I record that that position in fact was identified in a judgment I delivered in the first proceeding, that is M 79/96 and given on 6 December 2000. That judgment related to an application for costs.

[7] The defendants rely on two affidavits filed in support of the application. The first is an affidavit by one of the defendant trustees, Mr Imperatrice, which briefly outlines the background. The second is an affidavit by Mr GF Caro, a senior solicitor to the Official Assignee in Bankruptcy at Auckland. He confirmed that there had been no abandonment, disclaimer or assignment by the Official Assignee to the plaintiff or to anyone else since the date of her adjudication in bankruptcy on 23 August 1995 of a right of action under the Family Protection Act 1955.

[8] This is an application to stay or strike out proceedings. The applicable principles were confirmed by the Court of Appeal in Attorney-General v Prince Gardner [1998] 1 NZLR 262, 267 where the Court said:

“A striking-out application proceeds on the assumption that the facts pleaded in the statement of claim are true. That is so even although they are not or may not be admitted. It is well settled that before the Court may strike out proceedings the causes of action must be so clearly untenable that they cannot possibly succeed. (R Lucas & Son (Nelson Mail) Ltd v O’Brien [1978] 2 NZLR 289 at pp 294-295; Takaro Properties Ltd (in receivership) v Rowling [1978] 2 NZLR 314 at pp 316-317); the jurisdiction is one to be exercised sparingly, and only in a clear case where the Court is satisfied it has the requisite material (Gartside v Sheffield, Young & Ellis [1983] NZLR 37 at p 45; Electricity Corporation Ltd v Geotherm Energy Ltd [1992] 2 NZLR 641); but the fact that applications to strike out raise difficult questions of law, and require extensive argument does not exclude jurisdiction (Gartside v Sheffield, Young & Ellis).”

[9] In Marshall Futures Ltd v Marshall [1992] 1 NZLR 316, 323 Tipping J emphasised that such applications are determined primarily on the pleadings but added:

“the Court may have regard not only to the pleadings but also to affidavits filed for and against the application; see also Peerless Bakery Ltd v Watts [1955] NZLR 339 and Abrahams Wool Exchange Ltd v Norlake Wool Ltd (1986) 1 PRNZ 101 per Quilliam J.

The reason why the Court allows affidavits to be read for and against such an application is that although the pleadings as they stand may not for one reason or another disclose a cause of action, the Court may be able to discern from the affidavits that properly pleaded an arguable cause of action could be raised. If that is so the Court may, instead of striking out the pleading, give the plaintiff an opportunity to amend so as to plead his tenable cause of action properly. There may of course be circumstances where the plaintiff’s pleading is so bad that the Court should not allow this opportunity and simply strike out the relevant pleading leaving it to the plaintiff to come again if within time and capable of putting his house in order”

[10] Mr Ingram submitted that as no cause of action is vested in this plaintiff the current proceeding meets all the alternatives referred to in Rule 477 and should accordingly be dismissed. He submitted that this was particularly so where the plaintiff has knowledge of the Official Assignee’s claim. In this respect he relies on Mr Caro’s affidavit which confirms that the Official Assignee has asserted, and continues to assert, the right of ownership to it. He drew attention to Read v Brown (1888) 22 QB 128, 132 as authority for the proposition that where an assignment has taken place, the right of action no longer remains in the former holder. In this case, Mr Caro’s evidence has not been contradicted. The plaintiff knew at all material times that the cause of action had vested in the Official Assignee. That was the reason for the discontinuance of the previous proceeding.

[11] Mrs Quilter raised two additional matters. The first concerned the possibility of a disclaimer by the Official Assignee and the second the possibility of the abandonment of the cause of action by the Official Assignee. In the case of disclaimer, the Court of Appeal in Auckland City Council v Glucina [1997] 2 NZLR 1 made it clear that the bankrupt was not able to claim an interest in the disclaimed property pursuant to s 75(4)(b) of the Insolvency Act 1967. That is because the Official Assignee’s disclaimer determined the bankrupt’s legal interest in the property from the point of the disclaimer.

[12] In Edmonds Judd v Official Assignee [2000] 2 NZLR 135, 143 the Court of Appeal reached the same conclusion in the case of an abandonment by holding that the effect of an abandonment corresponds to the statutory effect of the disclaimer as operating to determine the particular interest. It follows that neither claim could justify a resumption of the cause of action in the hands of Mrs Quilter in relation to the claim under the Family Protection Act 1955.

[13] Mrs Quilter also raised the possibility of an appeal against a decision of the Official Assignee pursuant to s 86 of the Insolvency Act 1967. That is not appropriate in this proceeding. It would have to be prosecuted as a separate proceeding.

Conclusion

[14] I reach the conclusion, then, that this is an appropriate case to dismiss the proceeding and I so order.

Costs

[15] Mr Ingram, in my view, quite properly indicated that no application for costs would be made on the defendants’ part. The plaintiff in her previous proceeding was legally aided and it is plain from the circumstances that she revealed to me that she is in no position to pay costs. In view of Mr Ingram’s advice, and having regard to the plaintiff’s circumstances there will be no order for costs.