Busch v Pepper New Zealand (Custodians) Limited [2014] NZCA 1 (16 January 2014)

Last Updated: 20 February 2014

IN THE COURT OF APPEAL OF NEW ZEALAND
CA97/2013 [2014] NZCA 1
BETWEEN	PATRICIA ELAINE BUSCH Appellant
AND	PEPPER NEW ZEALAND (CUSTODIANS) LIMITED Respondent

Counsel:	Appellant in person K Lee for Respondent
Judgment: (On the papers)	16 January 2014 at 10:00am

JUDGMENT OF WHITE J
(Review of Registrar’s decision)

The application to review the Registrar’s decision refusing to dispense with security for costs is dismissed.
____________________________________________________________________

REASONS

Introduction

[1] The appellant, Ms Patricia Busch, appeals against a decision of Associate Judge Faire in the High Court. The High Court granted the application by the respondent, Pepper New Zealand (Custodians) Ltd (Pepper), for summary judgment against Ms Busch and her daughter for an order for vacant possession of the Cambridge property mortgaged to it.^[1]
[2] The Associate Judge found that Ms Busch had defaulted in mid2012 under a 2006 mortgage and loan agreement assigned to Pepper in August 2011 and that, accordingly, Pepper had a right to possession under s 106 of the Land Transfer Act 1952 (the Act). The Associate Judge rejected the defendants’ ground of opposition that Pepper had no right to possession after Ms Busch entered into a purported transaction to lease the property for a 99-year term at a purchase price of $1.
[3] Putting aside the question of whether the transaction was a sham, the Associate Judge found that the Pepper’s registered mortgage conferred on it indefeasible title by virtue of s 62 of the Act. The registered first mortgage and its interests therefore took priority over any interest asserted by Ms Busch and her daughter. Pursuant to s 119 of the Act, the purported lease of the mortgaged land could not affect the Pepper’s rights without its consent. The Associate Judge recorded that it was not suggested Ms Busch had obtained Pepper’s consent to enter into the lease or that there had been any accord and satisfaction of the mortgage debt.

Application to dispense with security for costs

[4] Ms Busch’s appeal against Associate Judge Faire’s decision was accepted for filing on 18 February 2013. Ms Busch applied on 14 March 2013 under r 35(6) of the Court of Appeal (Civil) Rules 2005 (the Rules) to dispense with security for costs, set at $5880. The application was opposed by Pepper. It submitted that Ms Busch’s impecuniosity was not necessarily sufficient ground to dispense with security for costs where, as it submitted was true in the present case, the appeal is devoid of merit.

The Registrar’s decision

[5] In a decision of 12 April 2013 the Registrar declined Ms Busch’s application to dispense with security for costs. The Registrar accepted Pepper’s position that Ms Busch’s impecuniosity, which the Registrar noted as the only ground for the application, did not justify dispensing with security for costs in the present case, because the appeal raises no exceptional circumstances or any matter of significant public interest.

Application to review

[6] Unfortunately, as a result of a registry error, Ms Busch’s application to review the Registrar’s decision, although filed on 22 April 2013, was not raised with a Judge of the Court until late 2013. Ms Busch’s application repeats the ground that security for costs should be dispensed with due to her impecuniosity. Further, Ms Busch’s primary submissions are that:

• (a) Pepper has adequate security for costs by virtue of being the registered mortgagee of the disputed property.
• (b) There is merit in the substantive appeal.
• (c) Ms Busch’s position is exceptional because she has little control over the events that have caused the situation.
• (d) Events concerning her situation have been wellreported in news media (and accordingly there is significant public interest in this appeal).

[7] The application to the Registrar was made under r 35(6) of the Rules. I have personally considered the application to review the Registrar’s decision under r 7(2) of the Rules and s 61A(3) of the Judicature Act 1908.

Security for costs – principles

[8] In the normal course, appellants in civil proceedings in this Court are required to pay security for costs. The Registrar may vary, defer or waive security “if satisfied that the circumstances warrant it”.^[2]
[9] Security for costs will be waived, varied or deferred where it is in the

interests of justice to do so. There must be some exceptional circumstance to justify departing from the normal position.^[3] The appellant must honestly intend to pursue the appeal and it must be arguable, as respondents should not face the threat of hopeless appeals without provision for 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.^[4] Impecuniosity, although often necessary to meet the “interests of justice” threshold, is not usually sufficient alone to justify dispensing with security for costs, although it may be a reason to reduce the quantum of security.^[5]

Discussion

[10] I do not consider that there are any exceptional circumstances which make it appropriate to dispense with security for costs in this case. As is typically the case in a dispute between a mortgagee and mortgagor, the dispute in this case is essentially a private one.
[11] Concerning the suggested relevance of media attention, there is a difference between material that is “merely interesting” to the public and material “properly within the public interest, in the sense of being of legitimate concern to the public”.^[6] Any significant media reporting, the fact of which Pepper disputes, would in any event fall into the former category. It accordingly would not assist Ms Busch in this context.
[12] The fact that events may have in a broader sense got out of control is not exceptional. Ms Busch’s failure to leave the property after the default and her purported grant of a lease were ordinary and voluntary, if improper, actions.
[13] In terms of the merits of the appeal, there is nothing which indicates to me that the High Court was wrong to conclude that Ms Busch had no defence to the Pepper’s application.^[7] Rather, the High Court has now refused an application by Ms Busch for a stay of enforcement of the judgment under appeal.^[8] At the stay hearing it was acknowledged that if the application for stay was refused, Ms Busch’s existing appeal to this Court would be “rendered largely nugatory”.^[9]
[14] Ms Busch’s notice of appeal and amended notice of appeal appear principally to argue that Associate Judge improperly held that Pepper’s statutory right to possession under s 106 of the Act arose, despite the fact that Ms Busch was not in default and that there was no evidence in the High Court that the mortgage agreement provided for a right of possession. It appears clear, however, that the Associate Judge did find that Ms Busch was in default and based his reasoning on that conclusion.
[15] There is no substance to the suggestion that Pepper’s status as registered mortgagee in respect of the disputed property means it has adequate security for costs. Pepper points out that it has not been receiving any payment from Ms Busch since early 2012. Any monetary obligations owed or which may accrue to Pepper are in any case independent of the costs it would have to incur in defending Ms Busch’s appeal.
[16] It is also not clearly established that Ms Busch would actually be unable to pay security for costs. Her status as a superannuitant justified waiver of the filing fee, but she has provided no further evidence of her impecuniosity in support of her application to dispense with security for costs. Pepper submits that Ms Busch is the owner of significant numbers of livestock including horses and cattle which grazed on the disputed property.
[17] Accordingly, for the above reasons, I consider that the Registrar was right to refuse to dispense with the requirement to pay security for costs in this case.

Result

[18] The application to review the Registrar's decision refusing to dispense with security for costs is dismissed.
[19] Ms Busch’s appeal is now deemed abandoned by the operation of r 43 of the Rules. If she still wishes to pursue the appeal, it will be necessary for her to apply under s 29A of the Rules for an extension of time in which to do so. Leave under r 29A is given only in exceptional cases.

Solicitors:
McVeagh Fleming, Auckland for Respondent

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^[1] Pepper New Zealand (Custodians) Ltd v Busch [2013] NZHC 187.

^[2] Court of Appeal (Civil) Rules, r 35(3) and (6).

^[3] Fava v Zaghloul [2007] NZCA 498, (2008) PRNZ 943 at [9] and Orlov v National Standards Committee (No 1) [2013] NZCA 96 at [7] and [11].

^[4] Creser v Official Assignee CA196/05, 12 June 2006 at [29].

^[5] Fava v Zaghloul at [9] and Easton v Broadcasting Commission [2009] NZCA 252, (2009) 19 PRNZ 675 at [5].

^[6] Hosking v Runting [2005] 1 NZLR 1 (CA) at [133]. See also R v H [1996] 2 NZLR 487 (HC) at 489.

^[7] See also Pepper New Zealand (Custodians) Ltd v Busch [2013] NZHC 1335 at [10] where the Associate Judge restated his view of the “the lack of any real merit in the appeal and any real prospect of success”.

^[8] Pepper New Zealand (Custodians) Ltd v Busch, above n 7.

^[9] At [10].