ANZ National Bank Limited v Groves HC Auckland CIV-2011-404-114
[2011] NZHC 819
•29 July 2011
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
CIV-2011-404-114
UNDER the Insolvency Act 2006
IN THE MATTER OF the Bankruptcy of DONALD MATIU GROVES
BETWEEN ANZ NATIONAL BANK LIMITED Judgment Creditor
ANDDONALD MATIU GROVES Judgment Debtor
Hearing: 29 July 2011
Counsel: for Judgment debtor
G J Anderson/M A Fayen for Judgment Creditor
Judgment: 29 July 2011
[ORAL] JUDGMENT OF ASSOCIATE JUDGE ABBOTT
Solicitors:
Gibson Sheat (T J Anderson/M A Fayen) P O Box 2966 Wellington, for plaintiff
Email: [email protected] / [email protected]
Clive Gardner Law Office, P O Box 5386 Mount Maunganui 3150
Email: [email protected]
Copy for:
B J K Pamatatau, P O Box 2422 Auckland 1140
Email: [email protected]
R A A Weir, P O Box 46-281 Herne Bay, Auckland 1147
Email: [email protected]
Donald Matiu Groves, 13 Harris Road, Mt Wellington, Auckland 1060
Email: [email protected]
Case Officer: [email protected]
ANZ NATIONAL BANK LIMITED V DONALD MATIU GROVES HC AK CIV-2011-404-114 29 July 2011
[1] ANZ National Bank Limited (the judgment creditor) has applied to adjudicate Donald Matiu Groves (the debtor) bankrupt. The application is made on the basis that Mr Groves has failed to comply with a bankruptcy notice served on him on 26 January 2011. That bankruptcy notice sought payment of a judgment that the judgment creditor obtained against him on 5 October 2010. The judgment was for the sum of $324,138.30. The bankruptcy notice also sought further interest.
[2] The application for adjudication were served on the debtor on 24 March
2011. It had an initial hearing date of 19 April 2011. The debtor has not filed notice of intention to defend that application but, on 31 May 2011, filed an application to halt adjudication. That application was filed by a solicitor, and counsel appeared for the debtor at a hearing the same day at which the Court directed that the matter proceed today as a defended application for adjudication.
[3] Since then, counsel who appeared for the debtor on 31 May has applied for leave to withdraw, on the basis that he is without proper instructions. That application was made the day after the debtor was due to have filed affidavits in support of any defence. Counsel was given leave to withdraw on 21 July 2011. The debtor has still not filed any further documents, nor taken any other steps. He has not appeared today either through counsel or in person.
[4] Before proceeding to deal with the application for adjudication, I will address, briefly, the steps that the debtor has taken and the reasons advanced to date for seeking various adjournments and for applying to halt the proceeding. These reasons, in essence, are a contention by the debtor that he suffers from health problems which have precluded him from presenting a proper defence, both to the underlying judgment, and to the bankruptcy notice. The contention was first made, in an indirect way, ahead of the first all of the judgment creditor’s application on
19 April 2011. The debtor wrote to the Ccourt seeking an adjournment to enable him opportunity “to dispute the amount the bank is seeking to claim” and secondly to re- commence a rehabilitation programme after a major accident suffered in 2006.
[5] The debtor did not appear on 19 April. Although there was nothing in his correspondence with the Court to suggest that he was unable to instruct counsel, he was not represented that day. Nonetheless, following an indication from counsel for the judgment creditor that it would not oppose adjournment if a case was made out for a current health issue, a short adjournment was granted to allow the debtor opportunity to take some legal advice (the Court noting that this was the other basis submitted for seeking an adjournment).
[6] At the resumed hearing on 3 May 2011, the debtor appeared in person. The Court record shows that he informed the Court that he was having difficulty getting legal advice. He was granted a further adjournment to 31 May 2011, but was informed that the adjournment was an indulgence, and that any further adjournment was highly unlikely unless he put before the Court “very solid grounds”.
[7] At the third call of the matter on 31 May 2011, counsel appeared for the debtor. The debtor’s application to halt the application for adjudication was filed the same day. The application sought an order halting the application for adjudication upon the condition that a full medical report be provided to the Court “in respect of my neuro-psychological health”. The grounds of the application stated that the debtor was suffering from a post-concussion syndrome complicated by depression since July 2006, and that the debtor had no recall of signing the guarantee upon which the judgment was based, or of being served with either the summary judgment application or bankruptcy notice. The application was supported by an affidavit referring to an injury suffered in 2006, and medical assessments undertaken in 2007 and 2008 resulting in a diagnosis in March 2008 of major depression and post- concussion syndrome, and a reference to further assessment by a neuropsychologist in January 2010.
[8] No treatment notes or medical reports were produced in support of those allegations; there was no supporting affidavit by any of the medical practitioners who saw him and made the diagnosis, and perhaps more significantly there was no evidence as to how these health issues might have affected the debtor’s understanding of the loan that it appears he arranged, and the guarantee he
apparently gave. Further, there was no evidence given as to why these matters had not been advanced previously.
[9] As further support for his application, the debtor produced a letter dated the previous day, 30 June 2011, from his GP, Dr G Sewell, which supported a request for an adjournment. The letter was in the following terms:
I am Don Grove’s family doctor. I have been asked by Don’s lawyer to give evidence to the court. Don has had several head injuries over the last 5 years, one which necessitated a stay in hospital. He developed post-concussion syndrome which resulted in chronic depression, poor concentration, difficulty in making decisions and ultimately the inability to continue in his work as a self-employed property developer. As a result he has missed appointments, forgotten details, at times has been erratic in his decision- making.
In the last 2 weeks he became acutely unwell with testicular pain with an inflamed scrotum with a positive culture for epididymo-orchitis. The results are attached. This has made dealing with the current court proceedings extremely difficult for him. He would find giving evidence in court an extremely difficult task at present.
I support Don’s lawyer’s request for an adjournment to court proceedings on
medical grounds.
[10] The Court noted the GP’s letter, but commented (in a minute on the file):
... difficulty in relating medical condition with facts. Debt relates to his guarantee of lending to, I assume, his business entity – was he in control of that when loan funds received and were applied?
[11] The Court went on to allocate a one hour hearing today, and directed that it be treated as a hearing of the adjudication application. A timetable was set for the debtor to file and serve any further affidavits (this was to be done by 12 July 2011). The Court also awarded the judgment creditor costs for its appearances to date, and directed that those be paid on a 2B basis, in cleared funds, by 28 July 2011.
[12] As I have already mentioned, no further affidavits have been filed, the debtor has not appeared, and the costs have not been paid. Also as already mentioned, counsel who appeared on 31 May 2011 has been given leave to withdraw on the basis that the debtor has not provided him with any proper instructions.
[13] The debtor has been given ample opportunity to provide medical evidence either to support his inability to address this application at this time, or to support his contentions that he did not appreciate that he had given the guarantee (although there seems to be no suggestion that he was not aware of the loan or that he did not receive it). The letter from his GP indicates that he does have difficulties, but does not go so far as to say that he does not have mental capacity, or that he cannot give instructions to a lawyer (and counsel who appeared on 31 May 2011 clearly was confident enough of the debtor’s capacity that he obtained an affidavit from him to support the application to halt the adjudication).
[14] Weighing all of these matters, I am not satisfied that the debtor has put forward a case to justify any further adjournment of the judgment creditor’s application. Nor do I accept that there is any evidential basis for his contention that he did not know that he had signed the guarantee on which the judgment is based, or that he did not know or was incapable of taking advice on or instructing a lawyer to assist him with the original summary judgment proceedings or the bankruptcy notice. Whilst he may have had some difficulty coping with the implications of these documents, the evidence does not go so far as to suggest that he could not gain that legal assistance. He has had ample time in which to do so.
[15] I am satisfied that the judgment creditor has established the grounds necessary for an order for adjudication, and that the matters advanced by the judgment debtor since this matter first came before the Court, do not warrant exercise of the Court’s discretion to decline an order for adjudication.
[16] I make an order adjudicating the debtor bankrupt. He is to pay costs to the judgment creditor on a 2B basis, together with disbursements as fixed by the Registrar.
[17] These orders are made at 3:03pm today.
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ASSOCIATE JUDGE ABBOTT
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