Wilfred v Lexington Legal Limited

[2017] NZCA 158

IN THE COURT OF APPEAL OF NEW ZEALAND

CA31/2017
[2017] NZCA 158

BETWEEN	HARMON LYNN WILFRED Appellant
AND	LEXINGTON LEGAL LIMITED Respondent

Counsel:

D J Ballantyne for Appellant
D M Lester for Respondent

Judgment:

(On the papers)

3 May 2017 at 2.30 pm

JUDGMENT OF HARRISON J
(Application to review Registrar’s decision)

The application to review the Registrar’s decision is declined.  Security for costs must be paid on or before 17 May 2017.  

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REASONS

1. The appellant, Harmon Wilfred, has filed an appeal in this Court against a decision of Associate Judge Matthews in the High Court at Christchurch on 15 December 2016 adjudicating him bankrupt.[1]  His act of bankruptcy arose from a failure to pay a judgment in favour of the respondent, Lexington Legal Ltd, for $38,000 delivered in the Christchurch District Court on 9 February 2016.[2]  The High Court dismissed Mr Wilfred’s appeal against that judgment.[3]

   [1]Lexington Legal Ltd v Wilfred HC Christchurch CIV-2016-409-335, 15 December 2016.

   [2]Lexington Legal Ltd v Wilfred DC Christchurch CIV-2014-009-1257, 9 February 2016.

   [3]Wilfred v Lexington Legal Ltd [2016] NZHC 1469.

2. On 30 January 2017 the Registrar fixed security for costs on Mr Wilfred’s appeal at $6,600.  On 17 February Mr Wilfred applied to the Registrar to dispense with security.[4]  The Registrar sought further particulars from Mr Wilfred before dismissing his application on 12 April.

   [4]Court of Appeal (Civil) Rules 2005, r 35(6)(c).

3. Mr Wilfred applied for dispensation on numerous grounds, namely that he was bankrupt and unable to pay security; he would not be able to proceed with the appeal if security was required; justice would miscarry if the appeal did not proceed; and the appeal had merit.  The Registrar carefully examined each of these grounds in the light of the Supreme Court’s decision in Reekie v Attorney-General.[5]  She gave weight to the principles that: (a) security should only be dispensed with if it is appropriate to require a respondent to defend a judgment without the usual protection provided by security for costs; and (b) determination of this requirement required an assessment of the merits and any issues of public interest.  Despite his bankruptcy, the Registrar was not satisfied that Mr Wilfred was unable to pay security and in any event the appeal was without merit and raised no issue of significant public interest. 

   [5]Reekie v Attorney-General [2014] NZSC 63, [2014] 1 NZLR 737.

4. Mr Wilfred takes issue with each of the Registrar’s findings on his financial circumstances.  However, I am not satisfied that he has shown any material error.  In particular, the Registrar had an evidential basis for concluding that Mr Wilfred may have had access through his wife to the funds necessary to meet the security fixed. 

5. More importantly, Mr Wilfred is unable to point to any material error in the Registrar’s careful analysis of the merits and her conclusion that his appeal has little prospect of success.  Mr Wilfred does not challenge the Registrar’s findings that an act of insolvency has occurred; that he is insolvent with debts of $87,000 owing to parties other than the judgment creditor; and that there is a public interest in controlling an insolvent debtor.  He simply asserts that the effect of the refusal to grant dispensation will extinguish his rights and be contrary to natural justice.  That does not establish an error.  I am independently satisfied that Mr Wilfred’s appeal has no prospects of success.  He cannot possibly challenge the underlying act of bankruptcy. 

6. In these circumstances Mr Wilfred has failed to establish that the Registrar erred in refusing to dispense with payment of security for costs.  The obligation to give security exists for a compelling reason.  A dispensation is an indulgence, not a right.  Mr Wilfred has fallen well short of showing grounds for exercising the discretion in his favour. 

7. His application to review the Registrar’s decision is declined.  Mr Wilfred is ordered to give security in accordance with the original direction on or before 17 May 2017. 

Solicitors:
Canterbury Legal Ltd, Christchurch for Appellant
Lexington Legal Ltd, Christchurch for Respondent