In Erwood v Official Assignee  NZCA 478 an application was made to review a decision declining to dispense with security for costs. The applicant, Mr Erwood, argued that he had demonstrated impecuniosity, and that the Registrar had erred in finding to the contrary.
Mr Erwood held nearly $800,000 on deposit with a bank. His account had been frozen by the bank on the basis that Mr Erwood lacked the capacity to give the bank authority for the account. The bank had formed this view on information provided to them by Mr Erwood.
The Court noted that in taking this approach, the bank had effectively appointed itself manager of the monies Mr Erwood had deposited with them, and in doing so usurped the jurisdiction of the Family Court under the Protection of Personal and Property Rights Act 1988 (Act).
The Court concluded that Mr Erwood had a large amount of money on deposit with the bank and was easily able to give security for costs. If Mr Erwood lacked the capacity to give proper instructions in relation to his account, the proper course should have been to apply to the Family Court under the Act for an order appointing a suitable person to act as manager of the money Mr Erwood had with the bank. The Court would not accept a 'halfway house' where Mr Erwood could claim he had no access to the substantial sum of money deposited with the bank, while not making an application under the Act. Impecuniosity could not be claimed in these circumstances and the original decision was upheld.
See Court decision here.