Terry Wayne W Grant v Derek Philip Aplin
[2000] NZCA 256
•30 August 2000
| IN THE COURT OF APPEAL OF NEW ZEALAND | CA45/00 |
| BETWEEN | LIONEL ANDREW WEST |
| Appellant |
| AND | JULIA ELIZABETH MARTIN AND RITA MARGARET WEST |
| Respondents |
| Hearing: | 23 August 2000 |
| Coram: | Richardson P Heron J Goddard J |
| Appearances: | Appellant in person with D P Coles (McKenzie friend) R M Goldsbury for the Respondents |
| Judgment: | 30 August 2000 |
| JUDGMENT OF THE COURT DELIVERED BY GODDARD J |
Background
The background facts to this case are not in issue. William John West, the father of the parties, died on 16 January 1984 leaving a will. Probate was granted to the appellant, as executor and trustee, on 13 March 1984. The will provided for the residue of the estate to be divided equally among the deceased’s three surviving children (the parties) in equal shares. Part of the estate was a piece of land of 4.1885 hectares in Raetihi. That property is the subject of this appeal. The appellant had the property transmitted to himself as executor on 9 July 1984 but at no stage has he, as trustee, registered any transfer to give effect to the will.
On 6 July 1991, the appellant was adjudicated bankrupt in the High Court at Wanganui. As a result his beneficial interest in the property vested in the Official Assignee pursuant to s 42 of the Insolvency Act 1967. That did not however relieve him of his responsibilities as trustee. The Official Assignee subsequently sought to dispose of the appellant’s interest in the property and obtained an independent valuation of it. The independent valuation valued the property at $32,000, which was less than the Government Valuation but considered to be a more realistic figure given the existing real estate market and poor condition of the property. The respondents, who had expressed an interest in purchasing the appellant’s one-third share, were unable to meet one-third of that valuation figure but after negotiations with the Official Assignee agreed on 1 August 1994 to purchase the appellant’s share of the property for $8000. The appellant was discharged from bankruptcy on
13 June 1994 under s 107(1) of the Insolvency Act and subsequently made an offer for his share of the property. By then it had been sold to the respondents for $8000, paid to the Official Assignee on 10 March 1995. The appellant refused to transfer to the respondents the share they had purchased. Accordingly they applied to the High Court to have the land vested in them as tenants in common in equal shares under
s 52 of the Trustee Act 1956.
The High Court proceedings
The hearing came before Doogue J in the High Court at Wanganui on 8 February 2000. The appellant, who had applied for an adjournment, was not present at the hearing. Doogue J prefaced his judgment by observing that the case had already been adjourned twice on the appellant’s application, so that he could take legal advice, and that he had been notified of the date of the hearing well in advance. After standing the matter down until 2.15pm, Doogue J declined to further adjourn the case. After hearing from Mr Goldsbury for the respondents and after considering the appellant’s statement of defence, his affidavit and the written submissions he had filed, Doogue J gave judgment in favour of the respondents. The essence of his reasoning for declining to grant a further adjournment and for finding in favour of the respondents is as follows:
If there was some apparent defence to the claim which would justify a further adjournment, I would have considered it, but nothing has been put before the Court to indicate that the defendant has a substantial defence to the claim. For the matter to be further adjourned would be to assist in procrastination. It is apparent from what the defendant has admitted that his sisters have been entitled for some fifteen years to be shown as part owners of the property upon the title independently of any dispute relating to the defendant’s interest in the land. The defendant has done nothing to meet their proper interests.
… … … … … …
When there is clear evidence before the Court that the [respondents] have from the time of proof of the will of their father been entitled to a one-third share of the property, and when it is clear that the Official Assignee has sold to them the [appellant]’s one-third share in the property, it follows that the [respondents] are each entitled to a one-half share of the property. There is nothing put before the Court by or on behalf of the [appellant] which would justify the Court refraining from making the order sought. If the [appellant] has any rights or remedies in the matter, they must be, as indicated by Gendall J in November of last year, against the Official Assignee. That is not to say or suggest that the [appellant] has any such rights. It is simply to indicate that if he has rights they do not relate to the [respondents] but to the Official Assignee.
Grounds of Appeal
The appellant advanced a number of grounds on appeal.
First, that he had been denied “the absolute most basic of our democratic rights predating Magna Carta 1215 AD” by not being present at the hearing before Doogue J when judgment was delivered.
Secondly, that the “…reserved fundamental property rights that pertain to citizens by common law and immemorial custom” had been overlooked by Doogue J. In support of this submission, the appellant cited Magna Carta 1297 (25 Edw.1, c.29):
NO Freeman shall be taken or imprisoned, or be disseised of his Freehold or Liberties or free Customs, or be outlawed or exiled, or any other wise destroyed; nor will We not pass upon him, nor [condemn him] but by lawful judgment of his Peers, or by the Law of the Land. We will sell to no man, we will not deny or defer to any man either Justice or Right.
In particular, the appellant submitted that Doogue J had not considered the application of s 42(3) of the Insolvency Act to his right to his interest in the property, which he submitted was protected by “the presumption against uncompensated taking”.
He further submitted that the actions of the Official Assignee in relation to the property, in particular selling his one-third share to the respondents at “such a low price” without his permission and not accepting his offer to buy back his share, were actions ultra vires s 42(3) of the Insolvency Act.
The appellant also submitted, by reference to his whakapapa, that a proper application of the principles of the Treaty of Waitangi guaranteed him full, exclusive and undisturbed possession of his lands and estates, notwithstanding that the property in question is not ancestral land. He argued that it was nevertheless contrary to the spirit and concept of “partnership” between the Crown and Maori, as envisaged in NZ Maori Council v Attorney-General [1987] 1 NZLR 641, for the law to have deprived him of his share of the property bequeathed to him by his father.
By way of remedy, the appellant sought an annulment of the vesting order and a return of his one-third share of the property, so as to give effect to his father’s will.
Magna Carta
The appellant referred to five passages from Magna Carta, all of which are expressly preserved by the Imperial Laws Application Act 1988, 1st schedule. The relevant excerpts from those passages, for the purposes of this case, are:
(1275) 3 Edw 1, c. 1
FIRST the King willeth and commandeth … that common Right be done to all … without respect of Persons.
(1297) 25 Edw 1. c. 29
NO Freeman shall be …disseised of his Freehold …We will sell to no man, we will not deny or defer to any man either justice or right.
(1351) 25 Edw 3. St. 5, c. 4
… none be out of his Franchises, nor of his Freeholds, unless he be duly brought to answer, and forejudged of the same by due course of the law; and if any thing be done against the same, it shall be redressed and holden for none.
(1354) 28 Edw 3, c. 3
That no man of what Estate or Condition that he be, shall be put out of Land or Tenement … nor disinherited … without being brought in answer by due Process of the Law.
(1368) 42 Edw 3, c. 3
That no man be put to answer without Presentment before Justices, or Matter of Record, or by due Process and Writ original, according to the old Law of the Land: And if any thing from henceforth be done to the contrary, it shall be void in the Law, and holden for Error.
Other Statutory and Common Law Authorities Referred To
The appellant also referred to a number of other statutes and cases in support of his appeal.
On the issue of Doogue J proceeding to hear the case in the absence of the appellant or his counsel, he referred to the “rules of natural justice”. Section 27(1) of the New Zealand Bill of Rights Act 1990 provides:
Every person has the right to the observance of the principles of natural justice by any tribunal or other public authority which has the power to make a determination in respect of that person's rights, obligations, or interests protected or recognised by law.
The appellant also cited the decision in Chester v Bateson [1920] 1 KB 829 in support. In Chester v Bateson, the Minister of Munitions had by regulation ordered that no person was to begin certain types of court proceedings without ministerial consent. Failure to get such consent was deemed a criminal offence. The Court held that the regulation was not authorised by statute, and was thus invalid. By way of obiter comment, Sankey J suggested that if the question had to be decided he would have found the regulation also breached the Magna Carta and citizens’ right of access to the courts.
The Appellant’s Absence at the High Court Hearing and the Refusal to Grant Him an Adjournment.
The appellant’s argument is that he was unfairly denied the right to be represented at the High Court hearing which resulted in a determination that affected his legal rights and interests. This complaint is also at the root of his associated submission that he was denied due process of law, as provided in Magna Carta, by the High Court’s refusal to grant him an adjournment.
Doogue J’s reasons for proceeding with the hearing have been set out above. A final adjournment had already been granted to the appellant on 16 November 1999, at which time it was made clear to him by the Court that there would be no further adjournments.
Rule 480 of the High Court Rules gives the Court discretion to grant (or refuse to grant) an adjournment. The Court is required to conduct a balancing exercise, with the ultimate issue being the need to do justice as between the parties. An adjournment will only be granted for good reason. The reasonableness of the attitude of the party seeking the adjournment is a relevant factor, as is the public interest in the efficient administration of justice, although the latter is subservient to the proper determination of the proceeding. The late unavailability of counsel may, in certain circumstances, provide a proper ground for adjournment.
In the present case the appellant had consulted Mr Ruthe but Mr Ruthe’s acceptance of instructions was dependent upon legal aid being granted. Mr Ruthe had expressly confirmed this advice in a facsimile to the appellant on 7 February, a copy of which he also sent to the Registrar of the High Court at Wanganui. Mr Ruthe’s facsimile was in response to a facsimile from the appellant on 5 February, enquiring as to Mr Ruthe’s availability to represent him in Wanganui on 8 February. The appellant then wrote to the Court requesting an adjournment on the grounds of Mr Ruthe’s unavailability. He also outlined a number of submissions about the conduct of the Official Assignee, citing in support the Magna Carta, Blackstone, the Treaty of Waitangi, and the decisions in Central Control Board v Cannon Brewery Limited [1919] AC 744; [1918] 2 Ch 101 and ex parte Walsh v Johnson: in re Yates (1925) 37 CLR 36; (1926) 32 ALR 46 per Isaacs J.
The issue in this case is whether Doogue J, in conducting the required balancing exercise with regard to justice between the parties, accorded sufficient weight to the right of the appellant to be represented at the hearing. In determining this, it is important to emphasise that the requirements of natural justice are just as applicable to the respondents in this case as they are to the appellant; particularly the respondents’ right not to have proceedings drawn out unnecessarily.
We are satisfied that Doogue J gave careful consideration to the competing interests of the parties and accorded due weight to the appellant’s right of audience. However, after two adjournments and a final warning, it would have been contrary to the interests of justice to have granted by a further adjournment. Furthermore, the appellant was advised by the Registrar that he would need to make a formal application to Doogue J for an adjournment and he elected not to appear and do so.
In terms of whether the appellant was actually accorded a hearing, his affidavit and written submissions were before the Court and were read and considered by Doogue J. In any event, the issues that were before the High Court are just as effectively dealt with on appeal, and it is for that reason that the appellant was given the opportunity of fully arguing his case on appeal in this Court.
The Insolvency Act, Magna Carta and the Treaty of Waitangi
Pursuant to s 42 of the Insolvency Act, all the property and powers of a bankrupt person vest in the Official Assignee for division amongst the bankrupt person’s creditors. Section 42(3), however, provides protection for any property held by a bankrupt person in trust for another person:
(3) Subject to section 43 of this Act, but notwithstanding anything else in this Act, property held by the bankrupt in trust for any other person shall not pass to the Assignee.
The appellant argued that the vesting provisions of s 42 were not applicable to his interest in the land, because that interest came within the protection of s 42(3). His submission rested on the premise that, although the property held in his capacity as trustee vested in the Official Assignee, his interest as a beneficiary did not pass and was protected. In other words, the appellant contended that he had two persona for the purposes of s 42, one of whom was subject to the vesting provisions of that section and the other of whom was entitled to the protection of s 42(3). As he put it “… at law I am two different people – trustee and legatee”.
That argument misconstrues the plain meaning of s 42(3) and the context of the Insolvency Act as a whole. The Act provides for all of the property of a bankrupt, including his or her beneficial interests, to be available for distribution amongst creditors, and the definition of “property” in the Act is wide. The Act also contains protections, such as s 42(3), to ensure that the property of others under the control or in the name of a bankrupt person does not pass for distribution in the bankrupt’s estate. The Official Assignee’s entitlement to any interest in the property at Raetihi is limited (by s 42(3)) to the appellant’s beneficial undivided one-third share and the Assignee has no interest in any property held by him in his capacity as trustee for others. His responsibilities as trustee of his sisters’ interests continue and are not affected by his bankruptcy or by the vesting of his interest in the Assignee. On the plain meaning of s 42(3), which is clear and unequivocal, the appellant’s argument cannot succeed.
The appellant also invited the Court to apply the principles of Magna Carta and the Treaty of Waitangi to the interpretation of s 42(3). He submitted that the high principles of Magna Carta provide an enduring constitutional safeguard for property rights and have sovereignty over statute law where fundamental freedoms and rights are concerned. He invited the Court to review the actions of the Official Assignee, in taking and disposing of his beneficial interest in the property, on the grounds of unreasonableness and ultra vires due process.
Section 15(1) of the Constitution Act 1986 states that “[t]he Parliament of New Zealand continues to have full power to make laws”, reinforcing Parliamentary supremacy. In 1967, when the Insolvency Act came into force, the situation was governed by the equivalent provision in the New Zealand Constitution Act 1852, which allowed the New Zealand Parliament to make laws for the “peace, order, and good government of New Zealand”. The laws relating to insolvency, as provided in the Insolvency Act, come within this description.
A similar application of principle, as contended for by the appellant, was considered in Shaw v Commissioner of Inland Revenue [1999] 3 NZLR 154; and in R v Creser (CA 38/98, 21 May 1998). In both of those cases, the respective appellants challenged the validity of the statutory provisions in point as inconsistent with the Magna Carta. The Court held that the supremacy of Parliament foreclosed the argument, just as it must in the present case. Whilst the Magna Carta is indeed part of the law of New Zealand, by virtue of the Imperial Laws Application Act 1988, it cannot override the clearly expressed will of Parliament in the Insolvency Act or any other Act of Parliament.
The appellant’s argument relating to the application of the principles of the Treaty of Waitangi in the interpretation of s 42(3) of the Insolvency Act was in similar vein. Although not submitting that the Treaty was sovereign law, the appellant referred to his Maori ancestry and to the guarantees in the Treaty of “full, exclusive and undisturbed possession” of lands and estates. Whilst conceding the Raetihi land was not ancestral land, the appellant submitted that it was contrary to the concept of Treaty partnership for the Official Assignee, as the agent of one partner, to sell the interest of another partner.
The supremacy of Parliament however must again prevail in relation to this argument. As this Court said in R v Knowles (CA146/98, 12 October 1998), at p 3:
… the general law of the land can and sometimes does provide for or recognise the role of customary law, and in particular the customary rights of Maori. It has done that since the earliest days of government following the signing of the Treaty of Waitangi; … see also the Maori Community Development Act 1962 s36. Many other examples could be given. But the critical point in the present case is that the Misuse of Drugs Act contains no such limitation. By its absolute prohibitory terms, in particular the provision under which Mrs Knowles was convicted, it leaves no room at all for the operation of any relevant customary law.
As with the Misuse of Drugs Act, the Insolvency Act by its words does not allow for the application of customary law. Therefore, this ground of appeal must similarly fail.
The Official Assignee
The appellant raised some further matters on appeal. These related to the price at which the Official Assignee disposed of his share in the property and whether he should have been permitted to work through the bankruptcy rather than having all his assets disposed of. Doogue J in his judgment made it clear that any complaint against the Official Assignee must be pursued against the Official Assignee and not against the respondents in this appeal. Gendall J also referred to this in a pre-trial Minute.
Administration of Estate
The appellant also raised the issue of unequal distribution of his father’s estate as between the respondents and himself. That is not a matter which is properly before this Court. It was only raised on appeal and then as an ancillary matter. It does not affect the operation of the vesting order.
Conclusion
The appeal is dismissed. The respondents are entitled to costs on the appeal which we fix in the sum of $3,000. We have no jurisdiction in relation to the costs issue in the High Court referred to by Mr Goldsbury in paragraph 36 of his submissions.
Solicitors:
Harris Harvey Nash, Raetihi, for the Respondents
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