Sgargetta v ASB Bank Limited - [2018] NZCA 451

IN THE COURT OF APPEAL OF NEW ZEALAND

I TE KŌTI PĪRA O AOTEAROA

CA85/2018
[2018] NZCA 451

BETWEEN	ELLIOT DANIEL SGARGETTA Appellant
AND	ASB BANK LIMITED Respondent

Counsel:	Appellant in person A E Simkiss and J J K Spring for Respondent
Judgment: (On the papers)	25 October 2018 at 11 am

JUDGMENT OF GILBERT J

A The application for review of the Registrar’s decision is granted.

BSecurity for costs is reduced to $1,000. This sum is to be paid within 20 working days of the date of this judgment.

___________________________________________________________________

REASONS

Mr Sgargetta appeals against a summary judgment entered against him by Woodhouse J on 13 December 2017.[1] The Judge found Mr Sgargetta liable as guarantor to pay the sum of $598,340.15 to ASB Bank Ltd. This was the balance outstanding under loans made by ASB to Sleep Overs Ltd and two associated companies, Evergreen Lodge Ltd and Remarkables Lodge Ltd. Mr Sgargetta was a director of each of these companies. The Judge was satisfied that Mr Sgargetta had no arguable defence to ASB’s claim.
[1]ASB Bank Ltd v Sgargetta [2017] NZHC 3097.
Mr Sgargetta, who lives in Victoria, Australia, applied for legal aid for his appeal but this was declined. Mr Sgargetta sought reconsideration of that decision but this was unsuccessful. He then applied to the Legal Aid Tribunal. Mr Sgargetta received notification from the Tribunal on 30 July 2018 that his application had been refused.
Mr Sgargetta then applied to the Registrar for an order dispensing with security for costs or reducing the amount of security. This application was declined by the Registrar in a decision given on 19 September 2018. The Registrar proceeded on the assumption that Mr Sgargetta is impecunious. However, she concluded that the appeal had little merit and accordingly it would not be right to require ASB to defend the judgment under appeal without the usual protection provided by security for costs.
Mr Sgargetta now applies for a review of this decision under r 7(2) of the Court of Appeal (Civil) Rules 2005. A single judge of the Court of Appeal may review the decision in exercise of the powers conferred under s 49(6) of the Senior Courts Act 2016. The principles to be applied were set out by the Supreme Court in Reekie v Attorney‑General.[2] Access to the Court of Appeal by an impecunious appellant should be preserved where the appeal is one that a solvent appellant would reasonably wish to prosecute.[3]
[2]Reekie v Attorney-General [2014] NZSC 63, [2014] 1 NZLR 737.
[3]At [35].
Mr Sgargetta’s companies are in liquidation and the secured properties have now been sold by ASB. Mr Sgargetta says that he borrowed against his family home and personal assets to fund these companies and underwrite the secured properties that have now been sold. He says he has no remaining avenues available to raise the money required for security for costs. Mr Sgargetta, who is in poor health, says he has no income…

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: [2018] NZCA 451
Decision Date: 25 October 2018 at 11 am

CaseChat Overview and Summary

In Sgargetta v ASB Bank Limited, Mr. Elliot Daniel Sgargetta appeals against a summary judgment entered against him by Woodhouse J on 13 December 2017. The High Court found Mr. Sgargetta liable as a guarantor to pay ASB Bank Ltd the sum of $598,340.15, representing the balance outstanding on loans made by ASB to Sleep Overs Ltd and two associated companies, Evergreen Lodge Ltd and Remarkables Lodge Ltd, of which Mr. Sgargetta was a director. The Judge was satisfied that Mr. Sgargetta had no arguable defence to ASB’s claim. Mr. Sgargetta, who lives in Victoria, Australia, applied for legal aid for his appeal but this was declined. He then applied to the Registrar for an order dispensing with security for costs or reducing the amount of security. This application was declined by the Registrar in a decision given on 19 September 2018.

The legal issues before the Court of Appeal were whether the appeal had any realistic prospect of success and whether it would be an injustice to deny Mr. Sgargetta access to the Court to pursue his appeal by setting security for costs at a level he cannot pay. The Court considered the principles set out by the Supreme Court in Reekie v Attorney-General, which emphasise that access to the Court of Appeal by an impecunious appellant should be preserved where the appeal is one that a solvent appellant would reasonably wish to prosecute. The Court accepted that Mr. Sgargetta is impecunious but could afford to pay a modest sum by way of security. The amount in issue is clearly not disproportionate to the costs of pursuing the appeal and Mr. Sgargetta faces the prospect of bankruptcy if the judgment is not overturned. The Court considered that a reasonable and solvent appellant would pursue the appeal subject only to it having a reasonable prospect of success. Despite the lack of specificity in Mr. Sgargetta's grounds of appeal, the Court was unable to exclude with confidence the possibility that there may be some meritorious basis for the appeal.

The Court of Appeal granted the application for review of the Registrar’s decision and reduced security for costs to $1,000. This sum is to be paid within 20 working days of the date of this judgment. The Court of Appeal considered it would be to risk an injustice to deny Mr. Sgargetta access to the Court to pursue his appeal by setting security for costs at a level he cannot pay. However, the Court did not consider that security should be dispensed with altogether. Mr. Sgargetta has proposed paying $1,000 if security is not dispensed with. The Court accepted this proposal and reduced security for costs to this amount.

Orders