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Court of Appeal of New Zealand |
Last Updated: 26 November 2013
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IN THE COURT OF APPEAL OF NEW ZEALAND
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BETWEEN
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Applicant |
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AND
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Respondent |
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Court: |
Randerson, Stevens and French JJ |
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Counsel: |
Applicant in person
M B Couling for Respondent |
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(On the papers) |
JUDGMENT OF THE COURT
____________________________________________________________________
REASONS OF THE COURT
(Given by Stevens J)
Introduction
[1] Mr Spurr applies for an extension of time[1] to appeal the decision of Associate Judge Matthews adjudicating him bankrupt.[2] The appeal is eight days out of time – Mr Spurr was adjudicated bankrupt on 30 April 2013 and his application for an extension of time was filed in this Court on 5 June 2013.[3] Both parties have consented to the application being dealt with on the papers.[4] Mr Spurr is selfrepresented.
Background
[2] In mid 2010 CRT Fuel Ltd and Spurr Motors Ltd entered into a retail fuel agreement. Mr Spurr personally guaranteed payment of all amounts payable to CRT Fuel under that agreement. Spurr Motors experienced trading difficulties and when its debt reached approximately $160,000 in January 2012 CRT Fuel ceased supplying fuel until the outstanding amounts were repaid.
[3] CRT Fuel then applied to the High Court for a freezing order, which was granted on 20 January 2012. Spurr Motors was then put into liquidation by Associate Judge Matthews on 17 April 2012. At the same time, summary judgment proceedings were commenced by CRT Fuel against Spurr Motors and against Mr Spurr in reliance on the personal guarantee. Summary judgment was granted by Associate Judge Matthews and Mr Spurr was ordered to pay CRT Fuel $160,067.06.[5] No appeal was filed by Mr Spurr.
[4] CRT Fuel then served a bankruptcy notice on Mr Spurr. The application to set aside the bankruptcy notice was heard before Associate Judge Osborne on 3 December 2012.[6] Mr Spurr claimed that the notice should be set aside pursuant to s 17(1)(d)(ii) of the Insolvency Act 2006 because he had a cross claim based on breach of contract by CRT Fuel and a breach of the Fair Trading Act 1986. The Associate Judge found that Mr Spurr did not have a cross claim which he was entitled to maintain against CRT Fuel. Accordingly, the application was dismissed. Mr Spurr was represented by counsel and no appeal was filed.
[5] Next, CRT Fuel filed an application for adjudication orders against Mr Spurr. Following an adjournment to enable Mr Spurr to seek legal representation, the matter came before Associate Judge Matthews on 30 April 2013. The Associate Judge recorded his concern that Mr Spurr was unrepresented[7] but concluded that when the interests of the creditor were taken into account, it was appropriate to adjudicate Mr Spurr bankrupt. The Associate Judge noted that, if the summary judgment decision was set aside, application could be made under the Insolvency Act to have the bankruptcy annulled.
[6] Mr Spurr now seeks an extension of time to appeal Associate Judge Matthews’ decision of 30 April. CRT Fuel submits that the application for an extension of time has not been properly brought because the application and subsequent documents record that the respondent is “CRT Limited”.[8] We reject this challenge. This is in the nature of a minor oversight attributable to Mr Spurr being unrepresented.[9]
[7] The issue for determination in deciding whether to grant an extension of time is where the interests of justice lie. Relevant considerations include:[10]
- (a) the length of the delay and the reasons for it;
- (b) the parties’ conduct;
- (c) the extent of prejudice caused by the delay; and
- (d) the prospective merits of the appeal.
Submissions of the parties
Reasons for delay and parties’ conduct
[8] The application for an extension of time was filed eight days after the expiry of the 20 working day period for filing an appeal. Mr Spurr submits that this delay is attributable to his inexperience in legal matters. He originally understood that his appeal was to be filed in the Timaru Court. Staff at that Court only informed him of his error on the day of the deadline. In this context we note that Mr Spurr says he had problems in obtaining legal aid.
[9] Relevant to the conduct of the parties, Mr Spurr submits that his difficulties in obtaining legal aid are attributable to CRT Fuel’s non-disclosure of two critical documents, a spreadsheet of payments and the personal guarantee.
[10] Mr Couling for CRT Fuel submits that although Mr Spurr is self-represented he is still subject to the obligation to comply with the rules. Further, he submits that Mr Spurr’s own conduct is relevant because he is seeking to relitigate matters that have been previously dealt with by the High Court. The appellant has not appealed any of the substantive judgments. This application is yet another attempt to thwart CRT Fuel.
[11] Mr Couling notes that previously there was no suggestion that the appellant was seeking to apply for legal aid at the summary judgment or liquidation stage of proceedings. In any event Mr Spurr did obtain legal aid for his application to set aside the bankruptcy notice.
Extent of prejudice caused by the delay
[12] Mr Spurr does not address this factor directly. Mr Couling acknowledges that there is no real prejudice caused by the delay in bringing the application other than one of cost. However, he submits that this Court should take into account the fact that allowing the application will “draw out” what should have been a straightforward summary judgment and bankruptcy. He argues that CRT Fuel is entitled to rely on the finality of the summary judgment decision and the decision to decline to set aside the bankruptcy notice.
Prospective merits of the appeal
[13] The exact grounds on which Mr Spurr intends to appeal are difficult to discern. It appears that his main concern is that CRT Fuel has falsified certain relevant documents. This complaint is set out in his application for an extension of time as follows:[11]
5.11.1 CRT did not supply a copy of my guarantee after they signed it on 7 May 2010;
5.11.2 CRT did not supply the spreadsheet for my payments up to 10 January 2012 when requested in writing to do so as their figures were different from mine ...
5.11.3 When in mid April 2012 my (then) lawyer requested a copy of the guarantee dated 30 April 2010, CRT’s solicitor supplied a copy to him that was not passed onto me until 6 April 2013. At this point I was unaware that this copy had been altered ...
5.11.4 I requested a full copy of my personal guarantee on 26 April 2013, as I had become aware the document sent by Mr Couling in March 2012 was not the full document.
5.11.4.1 I now discovered that I had three versions of the personal guarantee - not one was the same; in particular the copy CRT attached to Mr Bayly’s affidavit of 2 March 2012 for their application of a summary judgment against me ... as –
5.11.4.2 CRT had removed the terms and conditions of the personal guarantee as dated on 30 April 2010 and attached only the “guarantee” portion of the contract, then associated the “guarantee” (as altered) to another contract (the Retailer Supply Contract dated 12 May 2010).
[14] Mr Spurr also contends that CRT Fuel falsified the “Terms of Trading” agreement. This argument is set out in the application for an extension of time as follows:[12]
5.14 ... I did not discover until sometime in March 2013 that CRT in Mr Bayly’s affidavit of 11 October 2012 had also falsified the Terms of Trading in second affidavit. This false statement was the basis of Associate Judge Osborne’s decision at the 3 December 2012 hearing;
5.14.1 Mr Bayly has added one word to my trading terms that altered the complete definition of them – he added the word “within” – this went unnoticed until I noted the change when preparing for the 5 March hearing;
5.14.2 I now had three definitions of my terms of trading:
5.14.2.1 The first, dated 30 April 2010, in my personal guarantee, states “All payments shall be made on the 20th of the month following delivery”;
5.14.2.2 The second, dated 12 May 2010, in the Spurr Motors Ltd Retailer Supply Agreement, states, “Payments by direct debit 5 days following delivery day”; and
5.14.2.3 The third, dated 11 October 2012, in Mr Bayly’s sworn affidavit, states “CRT Fuel made an exception to his trading terms and agreed that payment was required within 5 days following delivery”.
[15] Mr Spurr says that when he attempted to raise these matters with Associate Judge Matthews in the course of the adjudication hearing on 30 April 2013 he was informed that he could not raise it as it was “new evidence”.
[16] Finally, Mr Spurr submits that CRT Fuel’s decision to cease supply was not due to his inability to pay but rather a reaction to his decision to discount prices. It is suggested that this was in breach of the Fair Trading Act and the Commerce Act 1986.
[17] Mr Couling notes that the personal guarantee is unequivocal: Mr Spurr guaranteed all present and future financial obligations of Spurr Motors without limitation. He submits that the proposed appeal is devoid of merit. Mr Spurr remains dissatisfied with the loss of his business and as a result he perceives an injustice that is simply not borne out by the facts.
[18] Mr Couling also submits that the remaining grounds identified by Mr Spurr are also without merit. For example, the suggestion that CRT Fuel had conflated the guarantee and the Retail Fuel Supply Agreement is simply not true. When the relevant affidavit is examined it is clear the CRT Fuel representative was aware that the guarantee was a separate document signed on a separate date.
[19] Finally, Mr Couling submits that none of these allegations are new – they were all raised in the original application to set aside the bankruptcy notice, but were subsequently withdrawn when Mr Spurr was represented by counsel at the hearing of that application. Accordingly the passing of time has not increased Mr Spurr’s prospects of success on any of the above arguments.
Discussion
[20] We consider that it is now too late for Mr Spurr to raise the arguments described above. Although the delay following the adjudication was limited, we conclude that the application for an extension should be declined. Any appeal is without merit.
[21] Mr Spurr’s bankruptcy was the result of a series of steps[13] as described at [3]–[5] above. First, the summary judgment decision determined that the effect of the guarantee was that Mr Spurr was liable to CRT Fuel for the sum of $160,067.06. That decision was not appealed by Mr Spurr. Then CRT Fuel served a bankruptcy notice on Mr Spurr in accordance with s 29 of the Insolvency Act. Mr Spurr applied to set aside the notice on the basis that he had a cross claim against CRT Fuel pursuant to s 17(1)(d)(ii). Associate Judge Osborne dismissed the application, and held that Mr Spurr did not have any cross claim which he was entitled to maintain against CRT Fuel. Once again, Mr Spurr did not appeal this decision.
[22] On 30 April 2013 Associate Judge Matthews was called upon to exercise his power under s 36 to adjudicate Mr Spurr bankrupt. That section provides that the Court may adjudicate a debtor bankrupt if the creditor has established the requirements set out in s 13.[14] Those requirements are:
(a) the debtor owes the creditor $1,000 or more or, if 2 or more creditors join in the application, the debtor owes a total of $1,000 or more to those creditors between them; and
(b) the debtor has committed an act of bankruptcy within the period of 3 months before the filing of the application; and
(c) the debt is a certain amount; and
(d) the debt is payable either immediately or at a date in the future that is certain.
[23] We are satisfied that Associate Judge Matthews was presented with an application that met all of the requirements of s 13. It was not appropriate at that stage to reevaluate the summary judgment decision or the decision declining to set aside the bankruptcy notice. We consider it was open to the Judge to make an order adjudicating Mr Spurr bankrupt.
[24] Mr Spurr has not identified any error in Associate Judge Matthews’ evaluation under ss 36 and 13. Rather, he has identified challenges that go back to CRT Fuel’s original claim against him, the judgment in respect of which was not appealed. Neither was the unsuccessful application to set aside the bankruptcy notice appealed. Hence there has been considerable delay in raising the issues now sought to be advanced in support of the present application.
[25] We are satisfied that such issues cannot be considered on appeal at this stage. Instead, the correct method of raising these issues would have been to seek to commence an appeal against either the summary judgment decision or the decision declining to set aside the bankruptcy notice.
[26] With respect to the factors identified at [7] above, those weighing in favour of granting an extension of time are that the delay was not extensive and it could be said to relate to Mr Spurr’s legal inexperience. Factors weighing against the granting of an extension include that CRT Fuel could face considerable prejudice if now required to address arguments which ought to have been raised at a much earlier stage. In addition, the appeal appears to lack merit.
[27] When these factors are weighed in the balance, the interests of justice require that the application is dismissed.
Result
[28] The application to extend the time to appeal is dismissed.
[29] The applicant must pay the respondent costs on a standard application on a band A basis and usual disbursements.
Solicitors:
Anderson
Lloyd, Dunedin for Respondent
[1] Pursuant to Court of Appeal (Civil) Rules 2005, r 29A.
[2] CRT Fuel Ltd v Spurr HC Timaru CIV-2012-476-237, 30 April 2013.
[3] Under r 29 of the Civil Rules Mr Spurr had 20 working days, or until 28 May 2013, to file his appeal. The time between 28 May 2013 and 5 June 2013 is eight days.
[4] As recorded in the minute of Ellen France J dated 4 October 2013.
[5] CRT Fuel Ltd v Spurr Motors Ltd HC Timaru CIV-2012-476-9, 17 April 2012.
[6] Spurr v CRT Fuel Ltd [2012] NZHC 3307.
[7] Mr Spurr’s efforts to obtain legal aid had been unsuccessful.
[8] The party that had the contractual relationship with Mr Spurr was CRT Fuel.
[9] Rule 6 of the Civil Rules provides that non-compliance with the rules does not render void any application or appeal. In any event, Mr Spurr has indicated he is willing to change the name of the respondent to CRT Fuel: see minute of Ellen France J dated 4 October 2013.
[10] Robertson v Gilbert [2010] NZCA 429; My Noodle Ltd v Queenstown-Lakes District Council [2009] NZCA 224, (2009) 19 PRNZ 518.
[11] The submissions filed on 20 June and 8 and 30 October 2013 essentially repeat these claims.
[12] And is repeated in later submissions.
[13] Under the Insolvency Act.
[14] Relevant acts of bankruptcy are set out in ss 16–28. Here, the relevant act was the failure to comply with a bankruptcy notice (s 17).
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URL: http://www.nzlii.org/nz/cases/NZCA/2013/567.html