Liguori v Golden Fund Limited [2013] NZCA 52 (14 March 2013)

Last Updated: 21 March 2013

IN THE COURT OF APPEAL OF NEW ZEALAND

CA770/2012 [2013] NZCA 52

BETWEEN ALFONSO LIGUORI Applicant

AND GOLDEN FUND LIMITED AND ORS Respondents

Counsel: Applicant in person G Bogiatto for thirteenth Respondent Bartoli

Judgment: 14 March 2013 at 10.00 am

(On the papers)

JUDGMENT OF STEVENS J
(Review of Registrar’s decision refusing to dispense with security for costs)

1. The application to review the Registrar’s decision refusing to dispense with security for costs is dismissed.
2. The applicant is to pay the sum of $5,880.00 by way of security for costs by Friday 12 April 2013.

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REASONS

Background

[1] The applicant, Mr Liguori, who is insolvent (his creditors are owed in excess of $3 million) has filed an appeal against a decision of Associate Judge Abbott in which the Judge declined an application for approval of a compromise accepted by all but one of his creditors.[1] In conjunction with this appeal Mr Liguori applied under r 35(6) of the Court of Appeal (Civil) Rules 2005 to the Registrar for dispensation from the obligation to pay security for costs.
[2] In a letter dated 13 February 2013 the Registrar declined Mr Liguori’s application for dispensation. In reaching her decision the Registrar stated:

It must be in the interests of justice for security for costs to be dispensed with and there must be exceptional circumstances to justify dispensation. Impecuniosity alone does not mean that security for costs should be dispensed with. I do not consider the circumstances of this appeal to be exceptional or that there is anything in this appeal of public importance or significance.

[3] Mr Liguori now seeks a review of the Registrar’s decision.
[4] This is the second appeal which Mr Liguori has brought against a decision of an Associate Judge on the question of failure to approve a creditor’s compromise. The first appeal involved an appeal against the decision of Associate Judge Doogue refusing to approve a compromise that Mr Liguori had entered into with all but one of his creditors.[2] In that case Mr Liguori’s application for approval of a compromise was opposed by one creditor, Mr Bartoli.
[5] Mr Liguori applied for dispensation from the requirement to pay security for costs. Mr Bartoli opposed that application. On a review of the Acting Registrar’s decision refusing to dispense with security for costs, Arnold J allowed the review to the extent that the amount of security required to be paid was reduced to $2,500.00.[3]
[6] Mr Bartoli also opposed the compromise before Judge Abbott and similarly has opposed the application for dispensation from the obligation to pay security for costs. Through his solicitor, Mr Bogiatto, Mr Bartoli has filed submissions in opposition before the Registrar and also in relation to this review.
[7] Mr Bartoli has pointed out that the amount of security for costs in the sum of $2,500.00 was not paid. It transpires that Mr Liguori withdrew the first appeal shortly before the hearing leaving the respondent Mr Bartoli without a source from which to recover his costs.

Submissions

[8] In support of his application for a dispensation, Mr Liguori has stated that he genuinely intends to pursue this appeal. He explains that the reason for abandoning the previous appeal was clearly addressed in his memorandum to the Registrar dated 22 January 2013. It related, he said, to the fact that at the last minute a lender retracted his loan offer and that this was the source from which he was intending to pay the amount of the security for costs. I have read the full content of that memorandum.
[9] Mr Liguori says that since he filed the last appeal his financial position has deteriorated somewhat. He adds that he has incurred huge legal and other costs in pursuing his creditors’ proposal. I accept that Mr Liguori’s financial position is not strong. He says that he is wholly dependent for the payment of living expenses on New Zealand superannuation payments.
[10] In opposing the present application, Mr Bartoli submits that Mr Liguori clearly has the ability to pay his security for costs. Moreover, he invites consideration of the fact that this is a second appeal in respect of which the circumstances caused him, as a respondent, considerable costs.

Discussion

[11] The general position is that an appellant must provide security for costs in order to protect the respondent should the appeal fail.[4] Impecuniosity alone is not a sufficient reason to dispense with security, although as the earlier appeal demonstrates it may justify a reduction in the amount of security required.[5] Security for costs will be waived where it is in the interests of justice to do so. Generally, exceptional circumstances are required. The appellant must honestly intend to pursue the appeal and the appeal must be arguable as respondents should not face the threat of hopeless appeals without the provision of security. The importance of the issues raised in the appeal will be significant as will the question of whether there is any public interest in having them determined.[6]
[12] Dealing with the present case, I agree with the Registrar that the requirement to pay security should not be dispensed with. It is true that Mr Liguori has limited financial resources available to him. However his proposed compromise depended upon his receiving substantial financial support from others.
[13] In his judgment on security for costs, Arnold J stated that he had “no doubt that Mr Liguori [was] genuine in wishing to pursue his appeal ...”.[7] However, this did not prove to be the case. The appeal was withdrawn shortly before the hearing date in circumstances where the amount of security ordered had not been paid.
[14] Mr Liguori has stated that this time the position is different and he genuinely intends to pursue his appeal. That may be so. But I am satisfied that it does not raise any novel or significant issue, nor does it engage the public interest. In terms of the merits, having considered the judgment under appeal and the grounds of appeal, I consider that the appeal will not be an easy one to argue.

I also take into account the fact that Mr Bartoli as the respondent in the earlier appeal was prejudiced in terms of costs by virtue of the non-payment of the security for costs ordered in the earlier appeal and the subsequent abandonment of that appeal. While, as a matter of general principle, the payment of security for costs and the consequence of non-payment should be kept separate for discrete appeals,[8] I consider that Mr Liguori’s past failure to pay security for costs is relevant to this application to the extent that it increases the importance that Mr Bartoli is not made to face a second appeal without the provision of security.

[15] Overall Mr Liguori has not shown that the Registrar was in error in declining to grant dispensation from the requirement to pay security for costs. Therefore, for the reasons given above the application for review of the Registrar’s decision must be dismissed.
[16] I direct that Mr Liguori is to provide security for costs in the sum of $5,880.00 by Friday 12 April 2013.

Solicitors:
George Bogiatto, Auckland for thirteenth Respondent

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[1] Liguori v Golden Fund Ltd [2012] NZHC 2840.
[2] Liguori v Bartoli HC Auckland CIV-2010-404-2668, 6 September 2010.
[3] Liguori v Bartoli [2011] NZCA 315.
[4] Rule 35(2) of the Court of Appeal (Civil) Rules 2005.
[5] Fava v Zaghloul [2007] NZCA 498, (2007) 18 PRNZ 943 at [9].
[6] Creser v Official Assignee CA196/05, 12 June 2006 at [29].

[7] At [7].
[8] Erwood v Maxted [2009] NZCA 542.