Ward v Ward - [2021] NZCA 115

IN THE COURT OF APPEAL OF NEW ZEALAND

I TE KŌTI PĪRA O AOTEAROA

CA160/2021
[2021] NZCA 115

BETWEEN	RUSSELL STUART WARD Appellant
AND	CHRISTOPHER ALLAN WARD AND DIANE LORRAINE JAMES Respondents

Hearing:	1 April 2021
Court:	Courtney and Goddard JJ
Counsel:	Appellant in person A M Kalinowski for Respondents
Judgment:	14 April 2021 at 2.00 pm

JUDGMENT OF THE COURT

AThe application for an order suspending the appellant’s adjudication as a bankrupt is declined.
BThe appellant must pay costs to the respondents for a standard application on a band A basis, with usual disbursements.

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REASONS OF THE COURT

(Given by Goddard J)

Background

On 15 March 2021, Associate Judge Andrew made an order that if the appellant, Mr Russell Ward, did not pay to the respondents the sum of $13,145 together with costs of $2,084 (total $15,229) by 4.00 pm on 30 March 2021, then Mr Russell Ward would be adjudicated bankrupt (High Court bankruptcy judgment).[1] In the event that payment was not made, the order of adjudication would take effect on 31 March 2021 at 3.00 pm.[2] The sum of $13,145 referred to in that order was a judgment debt payable under an order for costs made in the High Court on 30 April 2020 (High Court costs judgment),[3] which Mr Russell Ward had not paid.
[1]Ward v Ward [2021] NZHC 510 [High Court bankruptcy judgment] at [32].
[2]At [33].
[3]Ward v Ward [2020] NZHC 844.
Mr Russell Ward did not make the required payment. So with effect from 3.00 pm on 31 March 2021, he was adjudicated bankrupt.

Application for stay/suspension of adjudication

Mr Russell Ward has filed an appeal to this Court from the High Court bankruptcy judgment.[4] He filed an application in the High Court for an order suspending his adjudication until the appeal is decided. That application was declined.[5] He then filed an application in this Court for a stay of the High Court bankruptcy judgment, pending the appeal of that judgment. That application is opposed by the respondents.
[4]This appeal has not yet been set down for hearing.
[5]Ward v Ward [2021] NZHC 649.
Section 416 of the Insolvency Act 2006 governs the suspension of adjudication pending appeal. It provides:
416 Suspension of adjudication pending appeal
(1)If an appeal has been filed against an order of adjudication, the bankrupt or any other interested person may apply to the court or the Court of Appeal for an order suspending the adjudication until the appeal is decided.
(2)The court or Court of Appeal may suspend the adjudication on the conditions that it thinks appropriate, including conditions as to anything done or decided, or that ought to have been done or decided, by any person in the period between the adjudication and the order suspending adjudication.
(3)The court or the Court of Appeal may at any time make an order as it thinks appropriate as to anything done or decided, or that ought to have been done or decided, by…

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 Ward v Ward

Details

AGLC: Ward v Ward [2021] NZCA 115
Case: [2021] NZCA 115
Decision Date: 14 April 2021 at 2.00 pm

CaseChat Overview and Summary

This appeal concerns an order of adjudication made against the appellant, Russell Stuart Ward, by the High Court, which declared him bankrupt. The respondents, Christopher Allan Ward and Diane Lorraine James, are creditors who obtained the High Court order against the appellant after he failed to pay a judgment debt of $13,145, along with costs of $2,084. The appellant appealed against the High Court order and applied for a stay of the adjudication to be suspended pending the appeal. The Court of Appeal dismissed the application for a stay, which the Court treated as an application for suspension of the adjudication under s 416 of the Insolvency Act 2006. The Court of Appeal found that suspension of adjudication is not necessary to enable the appellant to pursue his appeal against the High Court order, nor is it necessary to enable an appeal to be pursued in relation to the High Court costs judgment that resulted in the appellant's adjudication. The Court further found that the appellant had not identified any special prejudice to him if a suspension was not granted, over and above the normal consequences of adjudication. Therefore, the application for a suspension must be declined.

The Court of Appeal held that suspension of adjudication is not an automatic consequence of filing an appeal, and the appellant must identify some additional factors that would result in irreversible prejudice or unfairness to him if the bankruptcy proceeds in the normal way pending determination of the appeal. The Court noted that the appellant's application for a stay and the affidavit he filed in support of that application focused on the grounds for his challenge to the High Court order. Those grounds include a claim that he has a set-off against the judgment debt owed to the respondents, and various concerns he has expressed about the hearing of the bankruptcy proceedings before the Associate Judge. However, the Court held that these grounds were not sufficient to justify a suspension of adjudication. The Court held that the appellant will have the opportunity to argue those points at the hearing of his substantive appeal, but they are not grounds for suspending his adjudication pending the hearing of his appeal.

The Court of Appeal held that the appellant's application for a stay and the affidavit he filed in support of that application did not identify any special prejudice to him if a suspension was not granted, over and above the normal consequences of adjudication. The Court held that the appellant had not identified any other factors supporting a suspension. At the hearing of this application, the Court asked the appellant if he could identify any such factors, but he was not able to do so, apart from reiterating his grounds for appealing against the High Court order. The Court held that in the absence of any good reason for a suspension of the appellant's adjudication pending appeal, the application for a suspension must be declined. The Court also held that the appellant must pay costs to the respondents for a standard application on a band A basis, with usual disbursements.

Orders