Auckland Council v Mawhinney

[2015] NZHC 437

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2013-404-4227 [2015] NZHC 437

BETWEEN

AUCKLAND COUNCIL

Judgment Creditor / Respondent

AND

PETER WILLIAM MAWHINNEY Judgment Debtor / Applicant

Hearing:	24 February 2015
Appearances:	Mr P Moodley for Respondent Mr Mawhinney in person
Judgment:	24 February 2015

JUDGMENT OF ASSOCIATE JUDGE J P DOOGUE [Stay application]

AUCKLAND COUNCIL v MAWHINNEY [2015] NZHC 437 [24 February 2015]

[1]      A fixture was allocated for the Court to hear today the application by the judgment creditor for an order adjudicating Mr Mawhinney bankrupt.

[2]      Mr  Mawhinney  had  not  filed  any  evidence  in  support  of  his  notice  of opposition.   Nonetheless he appeared and made a request for an adjournment.   I intend to treat that as an oral application for an order that the Court halt the application for reasons which appear shortly.

[3]      Mr Mawhinney told me that he has made an application for judicial review of the decision to review the order of the Environment Court dated 14 June 2012 directing him to pay costs.  The quantum of the order after the addition of interest, Mr Moodley told me, is now $475,242.25.  No hearing date has been allocated for the application for judicial review which was filed in October 2014.

[4]      The basis for the present application for a halt order is that if the costs order was set aside then the bankruptcy proceedings would not be able to proceed and Mr Mawhinney would not be adjudicated bankrupt.

[5]      Mr  Mawhinney  addressed  me  on  the  question  of  why  the  Court  should exercise its discretion to halt the proceeding.   There was a discussion concerning what would become of the judicial review proceedings if Mr Mawhinney was adjudicated bankrupt.  In the course of that discussion I was referred to the judgment of Wylie J in Mawhinney v Environment Court and Auckland Council.1   In that case Wylie J was concerned with an application for interim relief pursuant to s 8 of the Judicature   Amendment   Act   1972   and   judicial   review   proceedings   which Mr Mawhinney brought against the judgment creditor to restrain it from taking any

action to enforce the costs order made by the Environment Court until the claim in the other judicial review proceeding, which I mentioned earlier in this judgment, has been determined.  A key point that was discussed by Wylie J in his judgment was the submission that Mr Mawhinney had made to him that if he was adjudicated bankrupt it was “most unlikely” that the Official Assignee would continue with the application for judicial review or allow him to continue.  Wylie J’s conclusion was that it could

not be supposed that an adjudication in bankruptcy would bring an end to his judicial review proceeding.   At paragraph 28 of the judgment the following comment is made:

28.The difficulty from Mr Mawhinney’s perspective in the present application is that there is simply no evidence of what the Official Assignee  might  do  or  might  not  do  in  the  event  that  a  stay  is declined   and   Mr Mawhinney   is   adjudicated   bankrupt.      Mr Mawhinney has filed two affidavits.  Neither touches on the issue. Mr Mawhinney affectively asked me to take judicial notice of the approach the Official Assignee might take.  I cannot do so.  I simply have insufficient knowledge of how the Official Assignee proceeds in such cases.

[6]      I agree with the comments of Wylie J.  The same position as he summarised it applies in the present proceeding.   There was no proper ground established for making a halt order.

[7]      As well, it is relevant to the question of whether the Court ought to make such an order that the debt in question arose, as I have already noted, on 14 June

2012.  The decision has stood for over two and half years without being successfully impeached.  While the Court’s typically will allow judgment debtors time to move to set aside the judgment pursuant to which they are indebted to the judgment creditor, that is not an open ended approach.  Unless the judgment debtor can show good faith in the matter, usually by taking expeditious steps to pursue the application to set aside  the  judgment  of  the  other  Court,  the  Court  will  not  halt  bankruptcy proceedings.  The present bankruptcy proceedings were commenced in 2013 and, as I have pointed out, the debt that they are based on arose in the previous year.  In my view there is an additional discretionary reason then why the Court should decline to grant a halt and that is that more than enough time has been available to Mr Mawhinney to take the step that he now proposes to take of seeking a judicial review.  By the time that any judicial review application would be determined, it is almost certain that about three years would have gone by since the original judgment was entered.  There has to be a balance between the interests of the judgment debtor and that of the judgment creditor.  Further, as Mr Moodley pointed out, the Court in

Re Guest, Ex parte BNZ Finance Limited,2 the Court noted that time is of the essence

in  bankruptcy  proceedings  and  they  ought  to  be  brought  to  finality  within  a reasonable period.

[8]      For all of these reasons I consider that it would not be in the interests of justice for a halt order to be made and I direct that the judgment creditor is at liberty

to proceed with the application to adjudicate Mr Mawhinney today.

J.P. Doogue

Associate Judge