Erwood v Maxted [2013] NZCA 573 (22 November 2013)

Last Updated: 26 November 2013

IN THE COURT OF APPEAL OF NEW ZEALAND
CA567/2007 [2013] NZCA 573
BETWEEN	ROBERT ERWOOD Applicant
AND	JANET MAXTED AND JANET MAXTED AND ALEXANDER JAMES JEREMY GLASGOW AS TRUSTEES OF THE ESTATE OF EDWARD ERWOOD First Respondents
AND	THE OFFICIAL ASSIGNEE Second Respondent

Court:	O'Regan P, Ellen France and Stevens JJ
Counsel:	Applicant in person C R Carruthers QC and R P Harley for First Respondents P R W Chisnall and D Slevin for Second Respondent P D McKenzie QC as counsel assisting the Court
Judgment: (On the papers)	22 November 2013 at 2 pm

JUDGMENT OF THE COURT

1. The applicant’s application for costs in CA567/2007 is dismissed.
2. Orders are made that:

(i) The judgment of 27 March 2012 ([2012] NZCA 110) be sealed.

(ii) The $4,740 held as security for costs in relation to CA567/2007 and any accumulated interest be released to the first respondents as soon as the costs owed to the first respondents and the disbursements of the first respondents that relate to CA567/2007 have been calculated.
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REASONS OF THE COURT

(Given by O’Regan P)

Application for costs

[1] In this judgment, we deal with an application by Mr Erwood, the applicant, for an award of costs and release to him of security for costs held for this appeal (CA567/2007).

Panel

[2] The panel that dealt with the applicant’s substantive appeal comprised O’Regan P, Glazebrook and Arnold JJ. As Glazebrook and Arnold JJ have now been appointed to the Supreme Court, the President has constituted the present panel to deal with the application.

Background

[3] The applicant was issued with a bankruptcy notice by Ms Maxted and Mr Glasgow (the first respondents). He applied to set aside the bankruptcy notice. Associate Judge Christiansen dismissed that application on 27 September 2007.^[1] The applicant appealed against that decision to this Court, which is appeal CA567/2007 (the “bankruptcy notice appeal”).
[4] On 22 November 2007 Associate Judge Christiansen adjudicated the applicant bankrupt.^[2] The applicant appealed the adjudication order. That was appeal CA631/2007 (the “adjudication appeal”).
[5] It emerged some time later that a notice of abandonment of the adjudication appeal dated 17 December 2007 was on the Court file but had not been acted upon and was not drawn to the attention of the Judges dealing with the appeal.
[6] Security for costs was set for the bankruptcy notice appeal at $4,740. On 21 December 2007 an extension of time was given for the giving of security in the adjudication appeal. The existence of the notice of abandonment was not drawn to the Court’s attention after the extension of time was granted.
[7] Both appeals were called on 17 March 2008 to determine whether they should be struck out for failure to provide security. The applicant was not present at that hearing but was represented by Mr Soondram. The Court delivered its judgment on 19 March 2008.^[3] The Court noted that security had been set at $4,740 in the bankruptcy notice appeal, and fixed security at $20,000 for the adjudication appeal. It made an unless order, providing that unless the applicant paid the security of $20,000 in relation to the adjudication appeal by 5 pm on 20 March 2008 both appeals would be struck out. The Court also ordered that the applicant was to pay the costs associated with the security for costs issues to date in relation to both appeals, which was fixed at $3,000. The Court was unaware of the abandonment of the adjudication appeal.
[8] Payment was made of the $4,740 security fixed for the bankruptcy notice appeal immediately after the hearing. On 7 April 2008 both of the appeals were struck out in terms of the unless order because security had not been paid on the adjudication appeal.
[9] The applicant made an application seeking recall of the Court’s judgment of 19 March 2008 ([2008] NZCA 74). The abandonment of the adjudication appeal was not drawn to the Court’s attention. The recall application was dismissed on 18 November 2009.^[4]
[10] The applicant then sought leave to appeal out of time to the Supreme Court against the order striking out the bankruptcy notice appeal on 7 July 2010. At this point the existence of the notice of abandonment of the adjudication appeal emerged.
[11] The Supreme Court allowed the appeal against the order striking out the bankruptcy notice appeal on 18 March 2011.^[5] The Supreme Court said it was clear that the bankruptcy notice appeal should not have been struck out for non-payment of security for costs. The security ordered on the bankruptcy notice appeal had been duly paid. The strike out order had been made only because security had not been paid on the adjudication appeal, but the notice of abandonment of that appeal predated the security for costs order. The Supreme Court reinstated the bankruptcy notice appeal and remitted the proceeding to this Court for hearing.
[12] The Supreme Court also set aside the costs order made by this Court. It stated:

[20] Accordingly, we allow the appeal, reinstate the bankruptcy notice appeal and remit the proceeding to the Court of Appeal for hearing. In consequence, the costs order made by the Court of Appeal is also set aside. ...

[13] In a minute of 19 May 2011, Randerson J set a fixture date for the bankruptcy notice appeal and indicated that “any outstanding costs issues with regard to this appeal can be dealt with at the hearing”.
[14] The appeal was heard by this Court on 28 July 2011, and judgment delivered on 27 March 2012.^[6] The bankruptcy notice appeal was dismissed, and the applicant was ordered to pay the first respondents costs on a band A basis plus disbursements. No order was made in respect of costs relating to the strike out issues.
[15] That judgment was filed for sealing but had not been sealed to date. The security for costs of $4,740 remains with the Court.

Application in relation to costs

[16] On 18 September 2013 Mr McKenzie QC (counsel appointed by the Court to assist the applicant) filed a memorandum in relation to costs. Mr McKenzie stated that the “one outstanding matter that remains to be addressed in relation to this litigation” is the issue of the applicant’s costs in this Court with respect to the 19 March 2008 judgment (the Supreme Court having set aside the order of costs made in favour of the respondents in that judgment). Mr McKenzie submitted that the applicant, having succeeded in the Supreme Court, and having had the costs order made against him in this Court set aside, is entitled to costs in this Court in his favour.
[17] Mr McKenzie submitted that the appropriate course is for the Court to allow costs in the applicant’s favour plus reasonable disbursements. He submitted that an award of $5,000 together with disbursements to be fixed by the Registrar would be appropriate.
[18] Mr Carruthers QC, for the first respondents, opposed any award of costs to the applicant. He referred to this Court’s judgment of 27 March 2012 ordering the applicant to pay the first respondents costs on a band A basis and usual disbursements in respect of the bankruptcy notice appeal. He said it was not open to the applicant to apply for a costs order in respect of the bankruptcy notice proceedings, the judgment of 27 March 2012 having dealt with all costs issues in relation to that appeal. Mr Carruthers also noted that Randerson J’s minute of 19 May 2011 stated that there were outstanding costs issues in relation to several other appeals relating to the applicant. Mr Carruthers stated that costs in respect of those matters requires fixing as soon as practicable.^[7]
[19] The Official Assignee, the second respondent, has indicated that she does not seek costs against the applicant or the first respondents. The Official Assignee notes that while the applicant was successful in the Supreme Court, he ultimately failed overall in the bankruptcy notice appeal. Accordingly, the Official Assignee’s position is that there is “no issue as to costs” arising between the applicant and the first respondents in the bankruptcy notice appeal.

Analysis

[20] It is by no means clear that the Court can now address this issue: its role was completed when its judgment was issued on 27 March 2012. But we will assume, without deciding, that we can act on the application for costs made by Mr McKenzie on the applicant’s behalf, either by recalling that judgment or otherwise, so that the substantive merits of the application are dealt with.
[21] While the applicant was successful in resisting the strike out of his bankruptcy notice appeal, ultimately his appeal was unsuccessful. The judgment of 27 March 2012 dealt with the issue of costs in CA567/2007 by ordering the applicant to pay the first respondents costs for a standard appeal on a band A basis, plus usual disbursements.
[22] We see that order as resolving costs in CA567/2007. We do not consider it appropriate to award the applicant costs in relation to the judgment of 19 March 2008. That interlocutory judgment has now been overtaken by the judgment of 27 March 2012, which finally resolved the bankruptcy notice appeal and made a costs order in relation to the appeal. The applicant has the benefit of the Supreme Court’s decision setting aside the costs order made against him in the 19 March 2008 judgment. It is notable that the Supreme Court did not see fit to order that costs be paid to the applicant, but rather just reversed the costs order that had been made against him.

Result

[23] We therefore dismiss the application for costs.

Order

[24] In light of this, we order that:

• (a) The judgment of 27 March 2012 be sealed.
• (b) Security for costs of $4,740 held in relation to CA567/2007 and any accumulated interest be released to the first respondents as soon as the costs owed to the first respondents and the disbursements of the first respondents that relate to CA567/07 have been calculated.^[8]

Solicitors:
McFadden McMeeken Phillips, Nelson for First Respondents

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^[1] Erwood v Maxted HC Nelson CIV-2007-442-331, 27 September 2007.

^[2] Maxted v Erwood HC Nelson CIV-2007-442-331, 22 November 2007.

^[3] Erwood v Maxted [2008] NZCA 74.

^[4] Erwood v Maxted [2009] NZCA 542.

^[5] Erwood v Maxted [2011] NZSC 23.

^[6] Erwood v Maxted [2012] NZCA 110.

^[7] The matters listed by Randerson J are CA485/2007, CA260/2010 and CA261/2010. The last two are, in fact, CA260/2009 and CA261/2009. Mr Carruthers also listed CA631/2010 as a matter with unresolved costs issues. A minute dealing with those matters is being issued at the same time as this judgment.

^[8] This assumes the costs and disbursements will exceed the amount held as security. If that is not correct, any excess would be refunded to the applicant.