Home | Databases | WorldLII | Search | Feedback Court of Appeal of New Zealand

Guy v Bank of New Zealand [2013] NZCA 238 (18 June 2013)

Last Updated: 26 June 2013

JUDGMENT OF STEVENS J
(Review of Registrar’s decision declining to waive filing fee)

The application to review the Registrar’s decision declining to waive the filing fee is dismissed.
____________________________________________________________________

REASONS

Introduction

[1] The appellant, Richard Hugh Cleveland Guy, has applied to review the Registrar’s decision declining to waive the filing fee of $1,087.50. The appeal itself is against a decision of Associate Judge Doogue in the High Court granting the respondent’s application to adjudicate the appellant bankrupt in terms of s 13 of the Insolvency Act 2006.^[1] The appellant seeks to show that the order was granted in error because he had a reasonably arguable cross-claim. That claim, rejected in the High Court, is that the respondent had agreed to a settlement of the debt owed to it.^[2]
[2] The application to the Registrar was made under reg 5 of the Court of Appeal Fees Regulations 2001 (the Regulations). I have personally considered the application to review the Registrar’s decision under s 100B of the Judicature Act 1908. I may confirm, modify or revoke the decision of the Registrar as I see fit.^[3]

The Registrar’s decision

[3] The application to the Registrar was filed with the appeal on 16 May 2013. Under reg 5 the Registrar may waive a fee connected with a proceeding if satisfied that the appellant is unable to pay the filing fee or the proceeding concerns a matter of genuine public interest and is unlikely to progress unless the fee is waived.^[4] The appellant applied for a waiver of the fee on both grounds.
[4] In a decision of the Registrar dated 20 May 2013 the Registrar advised the appellant of her conclusion that:

... your situation does not meet either criteria to have the fee waived. Although financially stretched, you have valuable assets to which you would be able to secure the ability to pay the court filing fee. I am also of the view that, on the material that has been supplied, there is not a question of law that is of significant interest to the public, or to a substantial section of the public, rather the judgment relates to a particular set of facts relating only to the appellant.

Grounds of review

[5] The appellant seeks to challenge the Registrar’s decision on two grounds. First, regarding his inability to pay, he contends that his status as an undischarged bankrupt means he is unable to pay the filing fee. This is because that status is axiomatically conclusive proof that he would suffer undue financial hardship if he paid the fee.^[5] The appellant has also provided some further information regarding his financial position in support of his applications. Second, the appellant states that the appeal raises an issue of genuine public interest, namely, the legal issue of the meaning of a “bill of exchange” in the Bills of Exchange Act 1908.

The fee waiver regime

[6] The payment of court fees is of importance to the operation of the courts system. Those who make use of the courts are asked to contribute a proportion of the cost of proceedings, so that the burden does not fall entirely on the taxpayer. The mechanism of review by the Registrar and review by a Judge ensures that fees are not set at such a level that access to justice is denied to litigants. Two of the review criteria are raised by this review.
[7] First, the criterion in reg 5(3)(b)(iii) provides that payment of the fee may be waived on the ground of financial hardship only where it would cause financial hardship which is of such a degree that it is “undue”, namely, beyond the ordinary or greater than what is just and right.^[6] This is for the appellant to show.^[7]
[8] Second, reg 5(4)(a) and (b) provide that a proceeding of “genuine public interest” is one which raises a question of law or issue which is of significant interest to the public or a section of the public. 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”.^[8] The reg 5(4) criterion may be met only in the latter case, which should arise only comparatively rarely.^[9] Under reg 5(2)(b)(ii) the Registrar must additionally be satisfied that the proceeding is unlikely to be commenced or continued unless the fee is waived.

The appellant’s case

[9] The appellant contends that his bankruptcy is conclusive proof of his inability to pay. Leaving aside any inconsistency with his argument on appeal that he was adjudicated bankrupt in error, his claim is contrary to precedent and does not necessarily follow.^[10] What matters is whether the appellant would suffer undue financial hardship by having to pay the fee. The fact that he is bankrupt says nothing of his ability to access financial resources or other forms of material support.
[10] As to the question of law relied on, the appellant describes the point as follows:

... whether a bill of exchange that complies with the [Bills of Exchange Act 1908] is able to be used by a Bank to create credit or money to satisfy a bank’s internal processes governed by the Reserve bank of NZ and the international banking code... and the international bill of exchange acts. The High Court Associate Judge made a ruling on his “confusion” (the Judge’s word) over the Bill[s] of exchange act 1908 to which needs to be appealing in the Court of Appeal to clarify the question of law when using a Bill of Exchange to settle a contract between a Bank and the public. The public will have enormous interest in this clarification as one can reasonab[ly] expect.

Discussion

Undue financial hardship

[11] The appellant’s application is supported by two documents: a letter from Inland Revenue seeking confirmation of his family circumstances and income for the purposes of a Working for Families tax credit (the WFF letter) and a statement of affairs prepared by the appellant (the SoA letter). I have examined these documents. The WFF letter is of limited assistance, as it does not purport to be evidence of anything.
[12] I am not satisfied that the appellant has provided sufficient information about his present situation to establish either of the claimed grounds on review. As to financial hardship, the information provided does not establish that he will suffer any financial hardship at all if he pays the filing fee, let alone financial hardship to a degree which would be undue. A properly supported fee waiver application would comprehensively disclose information regarding the appellant’s financial position in the round (including family circumstances) with particular regard to three things: assets, income and outgoings. The applicant has not done this.
[13] First, I consider the evidence of the net asset position. The SoA letter refers to two assets: a residential property and a 2001 model “Audi A1” automobile (the Audi). The property is said to be held in trust by the trustees of the “Cleveland Trust” and the Audi by the “Cleveland Trust No2”. The appellant is listed as a trustee of the “Cleveland Trust”. The GV of the property is stated as $800,000. The value of the Audi is estimated at $5000. The evidence does not properly address the implications of these assets. The application is silent about whether the appellant is also a beneficiary of the trust and regarding the identity of the trust property. No trust documentation accompanies the appellant’s applications. I consider that these aspects are relevant because the possible equitable interests of the appellant or his spouse are relevant to the question of financial hardship.^[11]
[14] The SoA letter also suggests that the appellant currently lives with his spouse. Companies Office records show that she is a shareholder or director (sometimes the sole director) of several companies. Neither the fact of the spouse’s company involvement nor the value of her shareholdings was disclosed in the application. “Cleveland Trust No2” and “Cleveland Trust No3” are also listed as “shareholders” of the companies. The SoA letter lists “family trust” under the “household income” heading. The space in which value derived from the trust would be indicated is blank.
[15] Having raised information about possible equitable entitlements, it is for the appellant to show that he does not have the benefit of equitable support to alleviate any prospective financial hardship. The same is true of any other form of familial support. The full picture has not been provided.
[16] Second, in terms of income, the SoA letter states that the appellant’s total income per week after tax is $720. It states that the appellant receives $220 of this total per week from a Working for Families child support payment. Further income of $500 is listed under “other income”. There is no explanation for the source of this income. The appellant is said to be “retired”, although he is 52 years old. The income of the appellant’s spouse’s is listed as nil. This is surprising in light of her directorial appointments.
[17] Third, the SoA letter lists the total household and family costs of the Guy family as $1295 per week. The SoA letter, prepared on 30 April this year, indicates that the appellant has three children (then) aged 8, 11 and 17. The youngest two are noted in the WFF letter. The two largest items are rent of $580 per week and groceries costing $300 per week. No evidence has been provided to show these costs. It is possible that the property is trust property and that the appellant is therefore paying rent into a family trust.
[18] This ground of review must fail.

Genuine public interest

[19] I have considered the background to Mr Guy’s ground of appeal which was unsuccessfully argued in the High Court. Before the High Court application was made the appellant had a document headed “Bill of Exchange” couriered to the respondent. The document set out extraordinary terms by which the respondent agreed that the debt would be satisfied by the payment of $40,852.06 on 20 November 2062. The Associate Judge found that the respondent’s receipt of the courier package could not be construed as acceptance of the settlement offer.^[12]
[20] The Judge concluded, after referring to the definition of “bill of exchange” in the Laws of New Zealand, that the use of the term made no sense in the case. This conclusion appears to have merit. Even if that were not the case, the appeal does not raise a question of general public interest of the type covered by reg 5(4). Moreover, the issues sought to be raised on appeal are essentially questions of fact.
[21] Neither do I consider there is evidence to support the contention that the appeal is unlikely to be commenced or continued unless the fee was waived.
[22] This ground of review must also fail.

Result

[23] For the reasons set out above, I am satisfied that the Registrar’s decision to decline to waive payment of the setting down fee of $1,087.50 was correct. I therefore dismiss the application under s 100B of the Judicature Act. The appellant must pay the filing fee to the Registrar in relation to the present appeal if he wishes the appeal to proceed.

Solicitors:
Turner Hopkins, Auckland for Respondent

^[1] Guy v Bank of New Zealand [2013] NZHC 836.

^[2] The appellant may appeal against the decision of the High Court: Insolvency Act 2006, s 414. There has been no application for suspension order in terms of s 416, however, an order is not necessary for an appeal to proceed (Lindsay v Vaucluse Holdings Ltd CA272/99, 13 December 1999). The Official Assignee generally awaits the outcome of the appeal.

^[3] Judicature Act 1908, ss 61A(3) and 100B(5).

^[4] Court of Appeal Fees Regulations 2001, reg 5(2)(a) and (b) [the Regulations].

^[5] Regulation 5(3)(b)(iii) of the Regulations provides that undue financial hardship amounts to an inability to pay under reg (5)(2)(a).

^[6] Boswell v Millar [2013] NZCA 219 at [6].

^[7] Ibid; New Zealand Cards Ltd v Ramsay [2013] NZCA 72.

^[8] Hosking v Runting [2005] 1 NZLR 1 (CA) at [133].

^[9] New Zealand Cards Ltd v Ramsay at [16]–[18].

^[10] Re Siemer HC Auckland CIV-2008-404-8059, 11 September 2009 at [15]–[22] dealing with a similarly worded reg 6 of the High Court Fees Regulations 2001, which sets out when fees may be waived on impecuniosity grounds.

^[11] In the context of a legal aid the Legal Aid Review Panel has held that the Legal Services Agency was entitled to take into account assets held in a family trust for the purposes of determining an appellant’s “resources” in assessing his entitlement to legal aid: Petricevic v Legal Services Agency [2011] 2 NZLR 802 (HC) (dismissing the appellant’s appeal). Similar considerations apply here.

^[12] The issue of the part payment of a pre-existing debt (Foakes v Beer (1883-84) LR 9 App Cas 605 (HL); HBF Dalgety v Morton [1987] 1 NZLR 411 (HC)) might have raised an additional hurdle if the Associate Judge had considered evidence of an agreement tenable.