Wilson v ANZ National Bank Limited [2012] NZHC 523 (23 March 2012)

Last Updated: 29 April 2012

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2010-404-5025 [2012] NZHC 523

BETWEEN WARREN ARTHUR WILSON Plaintiff

AND ANZ NATIONAL BANK LIMITED Defendant

Hearing: 21 March 2012

Counsel: Plaintiff in Person

D J Friar for the Defendant

Judgment: 23 March 2012

_{RESERVED JUDGMENT OF ELLIS J}

This judgment was delivered by me on 23 March 2012 at 4 pm, pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar

Solicitors: Bell Gully, PO Box 1291, Wellington 6140

Copy To: W Wilson, 72 Upper Queen St, Auckland 1010

WILSON V ANZ NATIONAL BANK LTD HC AK CIV-2010-404-5025 [23 March 2012]

[1] This judgment relates to an application by Mr Wilson to stay the summary judgment of Associate Judge Matthews dated 17 May 2011 pending his (proposed) appeal to the Court of Appeal.[1] For the reasons that will be set out below, Mr Wilson has only recently applied to the Court of Appeal for leave to appeal out of time.

[2] The background to the stay application is a little convoluted, but my attempt to summarise it follows.

[3] On 2 May 2007, Mr Wilson obtained two 30 year loans from the defendant (ANZ). The combined amount of the loans was $977,500 and they were secured by way of mortgage over a property in Queen St. Mr Wilson made repayments of the loans (the repayments comprising small amounts of principal together with interest at a rate of 8.7 per cent) until about February 2009. While the reasons that he ceased to make repayments appear to be a matter of dispute, it is not disputed that he has made no repayments of any kind since that time.

[4] In April 2009 the bank issued Mr Wilson with formal demands requiring him to pay the amounts outstanding under the loans, and on 8 June 2010 ANZ issued a notice under the Property Law Act 2007 in relation to the Queen St property.

[5] In August 2010, Mr Wilson filed the present proceedings seeking orders that the bank was prohibited from enforcing the security interest, and for statutory and exemplary damages under ss 89 and 94 of the Credit Contract and Consumer Finance Act 2003 (“the CCCFA”). His basis for doing so was that when making the loans ANZ had allegedly breached the disclosure requirements in the CCCFA.

[6] The basis for the non-disclosure allegation was essentially that Mr Wilson had in his possession further loan documents that were dated two days later than the ones in the possession of the bank and which the bank was seeking to enforce. These agreements related to the same principal amounts and the same term, but

_{which specified a different, variable and higher interest rate.}

[7] ANZ filed a statement of defence to Mr Wilson’s claim and, after seeking and obtaining further particulars of it, the bank applied to the Court for:

(a) leave to file a counterclaim relating to the remainder of the debt owing by Mr Wilson;

(b) leave (if necessary) to file a summary judgment application in relation to that part of the counterclaim that related to the principal sum owing;

(c) summary judgment in relation to that part of the counterclaim that related to the principal sum owing.

[8] The application for summary judgment was opposed by Mr Wilson (who also opposed the other applications) on the grounds of the non-disclosure, to which I have already referred.

[9] On 17 May 2011, Associate Judge Matthews:

(a) granted leave to ANZ to file a counter-claim out of time,

(b) held that leave was not required in order for ANZ to file an application for summary judgment, but

(c) granted leave in any event, out of an abundance of caution, and

(d) granted summary judgment to ANZ in relation to that part of the counter-claim that concerns the outstanding loan principal of

$833,909.71.

[10] In doing so, Judge Matthews necessarily considered and rejected Mr Wilson’s

argument under the CCCFA. He said:

[39] I am satisfied on the evidence that there is no arguable case that Mr Wilson has not had disclosure, as required, in respect of each advance and in respect of both bases upon which the loans were documented. The

documents upon which the parties proceeded with their commercial relationship were fully disclosed as required by s 17 of the Act (subject only to a minor issue in relation to a variation of the regularity of instalment payments, which I will refer to below).

[40] The view expressed by Mr Wilson that the existence of two sets of documents for each of the two advances led to an overall general lack of clarity in the commercial relationship between him and the bank has some foundation, but neither the purpose nor express provisions of the CCCFA are directed at the clarity of commercial relationships in any sense broader than the precise requirements of the Act, including s 17, require. In any event, for at least 18 months Mr Wilson was fully aware of the basis upon which the advances had been made and were being repaid, so any lack of clarity was minor.

...

[42] As recorded above, the term loans were to be repaid by fortnightly instalments. In 2008 this was changed to monthly instalments, and monthly instalments were paid thereafter. Mr Wilson argued that he had not had the required variation disclosure in respect of this change of terms (s 22). If variation disclosure was not given when this was first implemented, which is in contention on this application, it was certainly provided by letters dated 3

April 2009 and 4 September 2009 from the bank to Mr Wilson, produced in evidence by Mr Cummings. Copies of these letters were sent to Mr Wilson,

again under cover of the letter dated 21 January 2011 referred to earlier, from

the bank’s solicitors to Mr Wilson.

[43] Disclosure of the variation of the frequency of instalments was not required by s 22 if the loan terms were those in the flexible agreements, as they did not amount to changes in the contracts. Under those agreements payments can be made to the bank at any time, and advances, up to the credit limit, similarly withdrawn. Therefore all variation disclosure required by s

22 has been given.

[44] There is no arguable case that disclosure required by the Act has not been given.

[11] Mr Wilson then sought to review the decision of Judge Matthews. His application for review of the summary judgment aspect of his decision was struck out by Peters J on 22 July 2011 on the grounds that the High Court had no jurisdiction in that respect.[2] She recorded that Mr Wilson’s remedy was to appeal to the Court of Appeal. As well, she recorded (at [5]) that, when the application had first come before her in the Duty Judge list on 16 June 2011, she had pointed out to Mr Wilson that the time for bringing such an appeal was about to expire if it had not already done so. ANZ had written to Mr Wilson on 31 May 2010 also advising him

_{of the applicable time limits.}

[12] In her judgment, however, Peters J also held that a right of review did exist in relation to the ancillary or prior decisions made by Judge Matthews granting leave to file the counter-claim and leave to file the application for summary judgment out of time. But, she recorded her reservations about the effect such an application for review might have (even if successful) on the substantive summary judgment matter. She said at [16]:

... Mr Wilson will need to consider whether pursuing the application for review might be pointless. Mr Wilson should not assume that, even if he succeeds, the judgment against him necessarily will fall away.

[13] Notwithstanding these soundings of judicial caution, Mr Wilson chose not to pursue his appeal rights, but rather sought to pursue his application for review of the leave decisions. Those applications for review came before Allan J on 13 February

2012 and were dismissed by him.[3] As recorded by Allan J at [8] of his judgment

Mr Wilson had not in the interim taken any steps to file an appeal, although he did seek to stay the summary judgment as an alternative to review. In this respect, Allan J said at [33]:

It is, however, necessary to mention Mr Wilson’s application for a stay of the summary judgment proceeding. His application for review sought a stay of the summary judgment as an alternative to a successful outcome of the review application. Although he supported his stay application by reference to several partially overlapping matters, all of his arguments amounted to a collateral attack upon the summary judgment itself. To accede to the stay application would be, in effect, to uphold an appeal which Mr Wilson has never filed and which does not fall within the jurisdiction of this Court.

[14] Although not discussed by Allan J, it is apparent to me (having heard Mr Wilson’s oral submissions) that the reason that Mr Wilson’s stay application necessarily involved a collateral attack on the summary judgment is because of his reliance on, and interpretation of, a passage from Gault’s Commercial Law which states:

4C.6.01 Prohibition on Enforcement

As was the case under the 1981 legislation, the Act protects those entitled to certain types of disclosure when it has not been made. Rights cannot be exercised against them unless and until the disclosure has been made. ... Where a right is purportedly exercised in breach of one of these sections, the party affected would be able to seek an injunction or, if too late for that, be

entitled to an action in trespass or conversion. If proceedings are commenced in breach of the prohibition, then the prohibition should at least lead to a stay of those proceedings.

[15] Relying on this passage, Mr Wilson’s position appears to have been (as it continues to be) that the mere raising by him of the CCCFA non-disclosure issue operates to prevent ANZ from taking any steps to enforce the loans and requires a Court to stay any proceedings that have such enforcement as their object. This requirement endures (according to Mr Wilson) until ANZ has “settled” the disclosure matter with him.

[16] On that analysis, of course, it was not possible for Associate Judge Matthews to grant summary judgment to ANZ, regardless of the actual merits of the non- disclosure argument. The correctness of that position remains relevant to the present application and is addressed further at [25] below.

[17] Following the release of Allan J’s judgment, Mr Wilson filed in the Court of Appeal an application for leave to appeal out of time in relation to the summary judgment matter and the present application for stay in this Court. He also sought “further directions in respect of the remaining part of the CCCFA proceeding (i.e. thE part that has not been disposed of by the summary judgment) and an order consolidating the CCCFA proceedings with bankruptcy proceedings that have, in the meantime, been initiated by ANZ. I return to those two ancillary matters at the end of this judgment.

[18] The grounds on which Mr Wilson sought the stay were stated to be:

1. That an application for an extension of time to appeal under Appeal (Civil) Rules 2005, section 29, extension of time for appealing, has been lodged;

2. That it is the fair and reasonable course of action under the prevailing circumstances.

[19] In an affidavit filed in support of the application Mr Wilson refers to a decision of Fogarty J in Fung v Westpac NZ Ltd.[4] However, that decision related to

_{the stay of bankruptcy proceedings pending the determination of an application for}

extension of time to make an application for special leave to appeal. Notably in that case counsel for Westpac did not oppose the stay for reasons that are not recorded. Moreover, the judgment (which was delivered orally and whose substantive part is four paragraphs long) contains no analysis of the orthodox principles governing such applications. I do not consider it assists Mr Wilson.

[20] In the present case, ANZ did oppose the application for stay. Their notice of opposition recorded the following orthodox grounds:

(a) Mr Wilson has unduly delayed in prosecuting his appeal;

(b) Mr Wilson has been repeatedly advised that if he wished to challenge the summary judgment he needed to file a timely appeal (ANZ having informed him of this by letter dated 31 May 2011 with the same advice being reiterated by Peters J on both 16 June and 22 July 2011);

(c) Mr Wilson’s application for an extension of time to appeal is unlikely to be granted because of the delay in the absence of any satisfactory application and due to the lack of merit in his appeal;

(d) Even in the event that leave were granted, the merits of the substantive appeal itself are low;

(e) There is no evidence that Mr Wilson will be able to pay the debt owing if his application for leave or his appeal does not succeed;

(f) There is the possibility of prejudice to ANZ if the application for stay is granted in that it is more likely that any remaining assets possessed by Mr Wilson will be dissipated or lost; and

(g) Mr Wilson’s appeal will not be rendered nugatory by enforcement of the summary judgment through a bankruptcy petition because the Official Assignee may decide to continue the appeal if it is perceived

as having any merit. Alternatively, the Official Assignee may permit

Mr Wilson to continue the appeal in his own name.[5]

[21] In the hearing before me, however, Mr Friar for ANZ relied in addition (and indeed primarily) on the statement by Associate Judge Faire in Contributory Mortgage Nominees Ltd v Harris Road No 10 Ltd that, where a money judgment is appealed, the proceeding will be stayed only upon payment by the judgment debtor to the judgment creditor of the judgment sum (the judgment creditor then giving

security for repayment if the appeal succeeds).[6]

Discussion

[22] Notwithstanding Mr Wilson’s articulate, engaging and able submissions, I am of the view that the application for stay must be declined for the reasons that follow.

[23] First, there is the money judgment point. Mr Wilson made it quite clear that he will not (and possibly cannot) pay the judgment debt pending the appeal. In my view this refusal (or inability) presents a particularly acute impediment in this case because Mr Wilson accepts that he owes, and will ultimately be required to pay, the summary judgment sum (i.e. the outstanding principal under the loans) to ANZ.

[24] Moreover, the argument that ANZ is prevented from taking steps to recover money that is accepted by Mr Wilson to be owing by the operation of the CCCFA is intuitively unattractive and not supported in my view by any of the admirable policy concerns that underpin that legislation.

[25] Nor am I able to agree with Mr Wilson that the passage from Gault that I

have quoted above suggests that Judge Matthews was wrong (plainly or otherwise). As the passage that immediately follows the paragraph I have set out makes clear,

the prohibition on enforcement extends only until the requisite disclosure has been made.[7] That this is so is also apparent from the clear wording of s 99 itself.

[26] Section 99 does not preclude the court from considering the question of the adequacy of disclosure once it has been raised. So because, in Mr Wilson’s case, Associate Judge Matthews held that ANZ’s disclosure obligations had in fact been met, there can be no prohibition on enforcement. Although I necessarily accept that Mr Wilson may take issue with that analysis and with Judge Matthews’ findings on the merits, his remedy in both respects lay in his appeal rights.

[27] Secondly, and in light of Mr Wilson’s concession about the debt owing, it is difficult not to view Mr Wilson’s reliance on the CCCFA point as merely a delaying tactic. And even if that conclusion is unwarranted, Mr Wilson cannot in fairness say that he was not informed of the time limits for appealing or that his failure to act on that advice in order to protect his position was not a matter of choice on his part. Thus it seems to me that the prospects of Mr Wilson being granted leave to appeal 10 months out of time are slim.

[28] Thirdly, and for essentially the reasons I have given in [23] - [25] above, I consider that Mr Wilson’s prospects of success in any substantive appeal are also low.

[29] And lastly, I accept Mr Friar’s submission that the grant of a stay would give rise to the possibility of prejudice to ANZ. Conversely, I also accept that if leave is denied, Mr Wilson will not necessarily be precluded from pursuing his appeal. While neither point is determinative, I nonetheless take them into account.

[30] As far as the application for consolidation with the bankruptcy proceeding is concerned Mr Friar accepted that, notwithstanding ANZ’s initial opposition to it, this was a sensible course. That there were elements of synchronicity between the two

_{proceedings was, indeed, evident from aspects of Mr Friar’s submissions in the}

course of the hearing before me. In particular, he effectively asked the Court to deal pre-emptively in this judgment with any application for a stay that might later be made by Mr Wilson under s 42 of the Insolvency Act 2006.[8]

[31] While I do not consider it is appropriate formally to do that (given that an application for adjudication has not yet been made by ANZ and an appeal has not in fact been filed by Mr Wilson), I do record my understanding that there is considerable (if not total) overlap between the considerations relevant to a s 42 application and those discussed in this judgment. For that reason, it seems improbable that a Court later called upon to consider any application made under s

42 would reach a different conclusion.

[32] I propose to order that the two proceedings (CIV-2010-404-005025 and CIV-

2012-404-00317) be managed together, rather than formally consolidated. Such an order should ensure both that there is no unnecessary duplication of time and effort and that the Court is able to dispose of both matters expeditiously. Whether or not both proceedings should ultimately be heard together is a matter for another judge at another time.

[33] Mr Wilson confirmed to me that other than the applications for stay and for consolidation there were no other matters upon which he presently sought directions. I note in that respect that a conference is scheduled for this proceeding on 16 April

2012 and no doubt any matters subsequently arising in either proceeding can be dealt with at that juncture.

_{[34] Accordingly and in formal terms, I make the following orders:}

(a) Mr Wilson’s application for a stay of the summary judgment ordered

by Associate Judge Matthews on 17 May 2011 is declined;

(b) Until further order of this court, this proceeding is to be managed together with CIV-2012-404-00317.

[35] The ANZ has succeeded and is entitled to costs. Memoranda may be submitted if agreement cannot be reached.

Rebecca Ellis J

---

[1] Wilson v ANZ National Bank Ltd HC Auckland CIV-2010-404-50025, 10 May 2011. The operative date of Judge Matthews’ decision is the subject of some confusion. The date recorded on the entituling is 10 May 2011 but it is apparent that it was not delivered by the Registrar in terms of Rule

11.5 until 17 May 2011.

[2] Wilson v ANZ National Bank HC Auckland CIV-2010-404-5025, 22 July 2011.

[3] Wilson v ANZ National Bank Ltd [2012] NZHC 122

[4] Fung v Westpac NZ Ltd HC Auckland CIV-2011-404-2498, 19 December 2011.

[5] The considerations relevant to deciding whether a stay should be granted and the relevant authorities are well known and I do not repeat them here.

[6] Contributory Mortgage Nominees Ltd v Harris Road No 10 Ltd (2006) 22 NZTC 19,752.

[7] That passage states:

Creditors under consumer credit contracts are prohibited by s 99 from enforcing the contract, any rights to recover property to which the contract relates and any security interest taken in connection with the contract, before they have made initial disclosure under s 17, or variation disclosure under s 22. (emphasis added)

[8] Section 42 provides that:

(1) This section applies if the creditor's application for adjudication relies on 1 of the following acts of bankruptcy:

(a) the debtor failed to comply with a bankruptcy notice:

(b) a judgment against the debtor for non-payment of trust money is not satisfied within 5 working days after the date of the judgment.

(2) If the debtor has appealed against the judgment or order underlying the bankruptcy notice or the judgment for nonpayment of trust money, as the case may be, and the appeal is still to be decided, then the Court may -

(a) halt the creditor's application for adjudication; or

(b) refuse the application.