Wardell v ASB Bank Limited [2016] NZCA 89 (5 April 2016)

Last Updated: 18 April 2016

IN THE COURT OF APPEAL OF NEW ZEALAND
CA97/2015 [2016] NZCA 89
BETWEEN	AMANDA JOSEPHINE WARDELL Appellant
AND	ASB BANK LIMITED Respondent

Counsel:	Appellant in person NFD Moffatt for Respondent
Judgment: (On the papers)	5 April 2016 at 11.30 am

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

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

REASONS

[1] The appellant, Ms Wardell, seeks to review the Registrar’s decision of 10 November 2015 declining an application under r 35(6) of the Court of Appeal (Civil) Rules 2005 to dispense with security for the costs of an appeal. Her application is opposed by the respondent, ASB Bank Limited (the ASB).
[2] As a preliminary matter I record that in written material she has filed, Ms Wardell has asked for the review to be undertaken by three Judges of this Court. However, the process envisaged by r 7(2) is for the review to be undertaken by a single Judge.
[3] The appeal is against a summary judgment entered on 5 February 2015 by Associate Judge Osborne in the sum of $362,009.51 together with interest and costs.^[1] That judgment was entered after Ms Wardell failed to appear at the first call of the summary judgment application filed against her by the ASB. The claim was for sums allegedly owing on loans secured by a mortgage registered over a property in Ms Wardell’s name.
[4] There was an issue as to whether the appeal had been properly brought. Ms Wardell had filed her appeal within time, but failed to serve it on the ASB or its solicitors. On 31 July 2015, over the ASB’s opposition, this Court delivered a judgment extending the time for appealing, noting that Ms Wardell had promptly served a copy of the notice of appeal when the matter was brought to her attention, and there had been no prejudice caused to the ASB.^[2]
[5] The Court also briefly referred to the merits of the appeal, recording its view that there might be arguable grounds to resist “at least the quantum” of the judgment entered against Ms Wardell.^[3] However, it accepted the submission of Mr Moffatt, counsel for the ASB, that Ms Wardell had not placed any affidavit evidence before the Court to support her proposed grounds of appeal.^[4] The Court further observed that she would need to apply promptly for leave to file affidavits in this Court if she wished to pursue the appeal^[5] while noting there was “considerable merit” in the suggestion made by Mr Moffatt that the better course would be for her to file an application in the High Court to set aside the judgment entered against her by default.^[6]
[6] Subsequently, on 24 August 2015, Ellen France P directed the Registrar to again advise Ms Wardell that she would need to file and serve affidavits on which she sought to rely for the purposes of her appeal; the Court would then decide how to determine an application for leave to admit those affidavits. No such affidavits have been filed.
[7] Ms Wardell applied for dispensation of security for costs in a letter dated 9 April 2015. In her letter she referred to her husband’s bankruptcy, her obligations to care for three young children aged between four and eight years, and claimed that her income was limited to $281 per week received from the Working for Families Tax Credit. Receipt of that income, however, implies that other income must be being earned, although it is not clear on the material available to the Court what the source or amount of that income might be.
[8] By a letter dated 11 September 2015, the Registrar sought further information in relation to Ms Wardell’s application. In her decision giving rise to the present application, the Registrar recorded that Ms Wardell had provided the Registrar with Inland Revenue statements, bank statements, a letter from a solicitor she had approached to seek legal aid, and various documents relating to debts and expenses. The Registrar also noted that not all of the requested information had been received. The Registrar referred to income of $2,582.02 having been received between June and September 2015, and also a statement that showed Ms Wardell had a mutual fund account containing over $11,500. She concluded:

While I accept on the information before me that your financial resources are stretched I do not believe I have all the information before me to ascertain your true financial position. In any event, impecuniosity alone does not warrant dispensation from the requirement to pay security for costs.

[9] The Registrar noted that Ms Wardell was not legally aided. The solicitor whom Ms Wardell had approached to represent her on legal aid had responded amongst other things by stating that in order to apply for legal aid the solicitor would need to certify that Ms Wardell had a reasonable case with a likely chance of success. The solicitor was unable to do. The solicitor also referred to advice previously given that Ms Wardell would face “a lot of difficulty” in making a claim against the ASB.
[10] The Registrar acknowledged the statements made by this Court that there might be arguable grounds to resist at least the quantum of the judgment entered against her. She contrasts the Court’s observations by noting that Ms Wardell had not provided the solicitor whom she consulted with sufficient information for her to advance the legal aid application. She also recorded a concern that Ms Wardell had not filed any affidavits despite directions by the Court.^[7] She concluded that the benefits to be gained by the appeal were not outweighed by the costs of pursuing it and, applying the Supreme Court’s judgment in Reekie v Attorney-General,^[8] she concluded it would not be right to require the respondent to defend the appeal without the usual protection of security for costs.
[11] I agree with the Registrar that the information provided by Ms Wardell is insufficient to ascertain Ms Wardell’s true financial position. The suggestion she received $281 per week in the form of a Working for Families Tax Credit is suggestive of some regular source of income. She also apparently has access to other funds as set out above.^[9] However, assuming in her favour that she would find it very difficult to provide security for costs, that is not necessarily decisive and I do not think it is decisive in this case.
[12] As the Supreme Court explained in Reekie, impecuniosity of itself does not warrant an order dispensing with security.^[10] As a general rule, the Registrar should only dispense with security if it appears that it is right to require the respondent to defend the judgment under challenge without the usual protection for costs provided by the provision of security.^[11] As the Supreme Court further observed, the discretion to dispense with security should be exercised so as to preserve access to the Court of Appeal by an impecunious appellant whose appeal is one that a solvent appellant would reasonably wish to prosecute, and as a corollary, to prevent the use of impecuniosity to secure the advantage of being able to prosecute an appeal which would not be sensibly pursued by a solvent litigant.^[12]
[13] The real difficulty with the present application is forming a judgment as to whether or not a reasonable and solvent litigant would reasonably wish to proceed with the appeal. The difficulty is essentially of Ms Wardell’s own making. The summary judgment application was dealt with in the High Court without any evidence being filed by Ms Wardell. She explains that she thought she had taken the necessary steps to secure an adjournment. However, she did not implement this Court’s suggestion that she should apply to the High Court to set aside the judgment entered against her by default,^[13] apparently on the basis that she is concerned that she would not obtain a fair hearing of such an application in that Court, a view she claims is based on past experience. Although she has filed written material in this Court in which she asserts she did not agree to the full amount of the loan the ASB sought to recover, none of her material has been provided in affidavit form. That is despite the fact that this Court observed that if she wished to advance the appeal it would be necessary to apply promptly for leave to file affidavits in this Court.^[14] Nor has she filed affidavits in response to Ellen France P’s subsequent direction of 24 August 2015. Consequently, there is no evidentiary foundation on which to base a conclusion that the present appeal is one that would be sensibly pursued by a solvent litigant.
[14] It is appropriate in this case also to note that the Supreme Court referred to the relevance in this setting of the legal aid regime:^[15]

[38] Where the appellant is a litigant in person, it may be legitimate to inquire into whether legal aid has been sought. If legal aid has been sought and declined on the basis of merits or cost/benefit assessments, the appellant may not be well placed to obtain dispensation. The same may be true of an appellant who is not prepared to submit the proposed appeal to such assessment.

Security for costs is not required where legal aid is granted.^[16]

[15] The fact that Ms Wardell evidently approached a solicitor without putting the solicitor in a position to make the necessary certification as to the likely chance of success for legal aid is an added consideration that weighs against waiving the requirement that security be paid.

[16] In these circumstances there is no basis upon which I could properly reach a decision different to that made by the Registrar. The application to review the Registrar’s decision declining to dispense with security for costs is dismissed.

Solicitors:
Bell Gully, Auckland for Respondent

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^[1] ASB Bank Ltd v Wardell [2015] NZHC 108 at [2].

^[2] Wardell v ASB Bank Ltd [2015] NZCA 344.

^[3] At [14].

^[4] At [14].

^[5] At [16].

^[6] At [17].

^[7] Wardell v ASB Bank Ltd, above n 2, at [16].

^[8] Reekie v Attorney-General [2014] NZSC 63, [2014] 1 NZLR 737.

^[9] At [8].

^[10] At [20].

^[11] At [21].

^[12] At [35].

^[13] Wardell v ASB Ltd, above n 2, at [17].

^[14] At [16].

^[15] Reekie, above n 8.

^[16] Court of Appeal (Civil) Rules 2005, r 36.