FINLAY v SNEDDEN SOLICITORS NOMINEE CO LTD CA107/2014 [2014] NZCA 425

FINLAY v SNEDDEN SOLICITORS NOMINEE CO LTD CA107/2014 [2014] NZCA 425 [29 August 2014]IN THE COURT OF APPEAL OF NEW ZEALANDCA107/2014[2014] NZCA 425BETWEEN PETER FINLAYAppellantAND SNEDDEN SOLICITORS NOMINEECOMPANY LIMITEDRespondentCounsel: Appellant in personJ M Keating for RespondentJudgment:(On the papers)29 August 2014 at 10.30 amJUDGMENT OF FRENCH J(Review of Registrar's Decision)A The application for review of the Registrar's decision refusing todispense with security for costs is dismissed.B Security for costs in the sum of $5,880 must be paid into Court within 20 working days of the date of this judgment.____________________________________________________________________REASONSIntroduction[1] Mr Finlay has filed a notice of appeal against a decision of Courtney J.1 In her decision, the Judge dismissed Mr Finlay's application to set aside a bankruptcynotice served on him by the respondent.1 Snedden Solicitors Nominee Co Ltd v Finlay [2014] NZHC 87.[2] On 12 March 2014 security for costs on the appeal was set at $5,880.[3] Mr Finlay then applied for security to be dispensed with under r 35(6)(c) of the Court of Appeal (Civil) Rules 2005 on the grounds that he is impecunious and that his appeal rights will be rendered nugatory if dispensation is not granted. The Registrar declined the application and advised Mr Finlay of her decision by letter dated 2 May 2014.[4] Mr Finlay then filed an application for a review of that decision. The application is opposed by the respondent.[5] After the review application was referred to me for determination, the Supreme Court delivered its decision in Reekie v Attorney-General.2 I therefore directed that the parties be given an opportunity to make further submissions in light of the Reekie decision. The respondent advised the Court it did not wish to avail itself of that opportunity. Mr Finlay indicated through counsel Mr Beck that he did wish to file additional submissions.[6] Since then, Mr Finlay's application for legal aid in respect of the appeal has been declined. Mr Beck is therefore no longer acting for him. The deadline for filing the submissions was 11 August 2014. Mr Finlay was aware of the deadline but no submissions have been forthcoming. I have therefore proceeded to deal with the application.Grounds for review[7] Mr Finlay contends that the Registrar has misunderstood his financial position and that justice in this case is of public importance and significance.Decision[8] In her decision letter the Registrar noted that Mr Finlay, who says he is self-employed, had not provided any details of his regular income or outgoings. Those details have still not been provided.2 Reekie v Attorney-General [2014] NZSC 63.[9] However for the purposes of this review, I am prepared to accept Mr Finlay is impecunious.[10] As stated in Reekie, the discretion to dispense with security should be exercised so as to:3(a) preserve access to the Court of Appeal by an impecunious appellant in the case of an appeal that a solvent appellant would reasonably wish to prosecute; and(b) prevent the use of impecuniosity to secure the advantage of being able to prosecute an appeal that would not be sensibly pursued by a reasonable solvent litigant, such as an appeal that is hopeless.[11] Although there is no issue of general public importance raised by this appeal, the stakes for Mr Finlay personally are high.[12] However I am satisfied that his appeal falls into the category of hopeless.[13] The bankruptcy notice was issued in reliance on a judgment debt of $739,695.06 obtained by the respondent against Mr Finlay under a guarantee. A development company with which Mr Finlay was associated had borrowed money from the respondent to develop a subdivision from two pieces of land near Kaitaia. The respondent took security for the loan in the form of a mortgage over the two sites and a personal guarantee from Mr Finlay.[14] The main ground of the appeal is that Courtney J erred in finding that the two sites were worth in total only $326,000, which is well short of the judgment debt.4Mr Finlay submits that the Judge should have accepted the valuation evidence he adduced, which was based on a hypothetical subdivision methodology. However, asthe respondent points out, even if Mr Finlay's valuation evidence were accepted,there would still be a shortfall of more than $1,000 once the costs of sale were taken into account.3 At [35].4 At [22].[15] Counsel for the respondent further advises that since the High Court decision, a mortgagee sale of the two properties has been unsuccessful, there being no bids at all despite the reserve being set at $250,000 and the mortgagee being prepared to negotiate with any potential buyer. That information has not been put before the Court by way of affidavit evidence, but it is not disputed.[16] The other ground of appeal is that the Judge was wrong to reject Mr Finlay'scontention that there was a valid cross claim equal to or greater than the judgment debt. However, the purported cross claim is not a claim against the respondent and therefore cannot qualify as a cross claim for the purposes of s 17(1)(d)(ii) of the Insolvency Act 2006. Further, on the evidence before the Judge, the prospects of recovering anything from the cross claim are remote.Outcome[17] The application for review is dismissed. Security for costs in the sum of $5,880 must be paid into Court within 20 working days of the date of this judgment.Solicitors:Kennedys Law, Auckland for Respondent