ROBERT JOHN ERWOOD V JANET MAXTED AND JANET MAXTED AND ALEXANDER JAMES JEREMY GLASGOW AS TRUSTEES OF THE ESTATE OF EDWARD ERWOOD AND ANOR CA CA631/07

ROBERT JOHN ERWOOD V JANET MAXTED AND JANET MAXTED AND ALEXANDER JAMES JEREMY GLASGOW AS TRUSTEES OF THE ESTATE OF EDWARD ERWOOD AND ANOR CA CA631/07 23 December 2008IN THE COURT OF APPEAL OF NEW ZEALAND CA631/07 [2008] NZCA 571BETWEEN ROBERT JOHN ERWOOD Applicant AND JANET MAXTED AND JANET MAXTED AND ALEXANDER JAMES JEREMY GLASGOW AS TRUSTEES OF THE ESTATE OF EDWARD ERWOOD First Respondents AND THE OFFICIAL ASSIGNEE Second Respondent Hearing: 9 September 2008 Court: William Young P, Robertson and Arnold JJ Counsel: R J Erwood via video-link C R Carruthers QC for Mrs Harley P R W Chisnall for Second Respondent N Levy as amicus curiae Judgment: 23 December 2008 at 3 pmJUDGMENT OF THE COURT A The proceedings are to be called on 17 February 2009, pending which the stay on public advertising is to remain in place. B If the creditors have been paid (or are satisfied with arrangements for resolution of any remaining dispute and payment) by that time, the bankruptcy will be annulled.C If not, the remaining applications will be adjourned for a fixture but on the basis that the stay will then be lifted. D We reserve all questions of costs.____________________________________________________________________REASONS OF THE COURT(Given by William Young P) [1] Mr Robert Erwood currently has a number of "unresolved" appeals before this Court in relation to his bankruptcy: (a) In CA567/07 Mr Erwood appeals against the decision of Associate Judge Christiansen declining his application to set aside a bankruptcy notice issued by the first respondents; (b) In CA631/07 Mr Erwood appeals against Associate Judge Christiansen's order of adjudication in bankruptcy made on the first respondents' application; and (c) In CA545/2008 Mr Erwood appeals against a judgment of Associate Judge Christiansen in which his bankruptcy was annulled provided he pay, inter alia, the judgment debt ($28,891.09) owed to the first respondents as well as an unrelated sum ($185,685.19) to Mrs Harley. The first two of these appeals have been struck out because of Mr Erwood's failure to comply with a number of procedural orders contained in a judgment delivered on 19 March 2008: [2008] NZCA 74. This strike-out decision was confirmed by way of a minute dated 7 April 2008. Mr Erwood has applied to have the judgment recalled. His application was to be heard on 23 April 2008 but was adjourned and is not yet determined: [2008] NZCA 139. It is because of the recall application that we have left these two appeals in the "unresolved" category.[2] For the moment Mr Erwood's bankruptcy adjudication stands. [3] At an early stage in the proceedings this Court ordered, pending the hearing of CA631/07 and CA567/07 or the abandonment or striking out of those appeals, a stay in respect of public advertising and the calling of a creditors' meeting: see [2007] NZCA 572. Given the recall applications, this stay has remained in place despite the striking out of CA631/07 and CA567/07: see [2008] NZCA 139 at [41]. [4] The Official Assignee now applies to have the stay lifted. [5] The current situation is unusual to say the least. The Official Assignee has located and frozen money totalling almost $900,000 which he believes to belong to Mr Erwood. These funds far exceed the value of the two claims that have been proved (around $220,000). Mr Erwood allowed himself to be adjudicated by reason of his obdurate refusal to pay the comparatively small sum he owed the first respondents despite this debt being well and truly past the point of challenge. His equally obdurate refusal to comply with court orders resulted in the striking out of CA631/07 and CA567/07. In these respects he has again exemplified his apparent inability to see the wood for the trees: see Erwood v Glasgow Harley [2008] NZCA 572 at [38](a), which is being delivered at the same time as this judgment. [6] We have deferred issuing this judgment pending the determination of that appeal because in those proceedings Mr Erwood was seeking to impeach the debt of Ms Harley which is much the larger of his two debts. Had Mr Erwood been successful, that would have introduced a significant element of complexity in relation to the bankruptcy. As it turns out, Mr Erwood was unsuccessful. [7] We see the situation as it now obtains as straight-forward. Mr Erwood can either voluntarily pay his creditors (or put in place a mechanism which ensures that they will be paid) or he can continue to resist doing so. If he takes the former course (which is what he should have done a long time ago), we see no need for advertising and any other formalities. We have no doubt that anyone else with a claim against Mr Erwood and an associated interest in his affairs would have surfaced by now. So if Mr Erwood ensures that his creditors are paid, we see no reason why thebankruptcy should not be annulled. If, however, he adopts the latter course, the adjudication must continue in the ordinary way, with advertising and meetings of creditors. As to payment, we note that conceivably there may still be unresolved issues associated with details of the amount owed to Mrs Harley as at 17 February 2009. If so, it may be that an annulment could still proceed, providing sufficient funds are preserved to cover the extent of any disputed claim and the parties are satisfied with arrangements as to how the unresolved dispute is to be resolved. But if the parties (by which we mean Mr Erwood, Mrs Harley and the first respondents) are not in agreement on this, we consider that the usual statutory processes will have to continue. [8] Accordingly: (a) The proceedings are to be called on 17 February 2009, pending which the stay on public advertising is to remain in place. (b) If the creditors have been paid (or are satisfied with arrangements for resolution of any remaining dispute and payment) by that time, the bankruptcy will be annulled. (c) If not, the remaining applications will be adjourned for a fixture but on the basis that the stay will be lifted. (d) We reserve all questions of costs.Solicitors: McFadden McMeeken Phillips, Nelson for First Respondents Russell McVeagh, Wellington for Mrs Harley Gibson Sheat, Wellington for Second Respondent