Bank of New Zealand v Cowe

[2016] NZHC 2845

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

CIV-2016-409-000974 [2016] NZHC 2845

UNDER	the Insolvency Act 2006
IN THE MATTER	the bankruptcy of LISA JANE MARY COWE
BETWEEN	BANK OF NEW ZEALAND Judgment Creditor
AND	LISA JANE MARY COWE Judgment Debtor

Hearing:	24 November 2016
Appearances:	L J M Cowe (Judgment Debtor/Applicant) in person A M Hutton for Judgment Creditor/Respondent
Judgment:	28 November 2016

JUDGMENT OF ASSOCIATE JUDGE OSBORNE

on application to set aside bankruptcy notice

Introduction

[1]      Ms Cowe incurred debts to the Bank of New Zealand on her credit card. When she raised a dispute, the Bank made a claim in the Disputes Tribunal pursuant to which the Referee made an order that Ms Cowe pay the Bank $6,273.52.

[2]      Following the sealing of that Order in the District Court, the Bank had a bankruptcy notice issued.

The application

[3]      Ms Cowe applies to set aside the bankruptcy notice.

BANK OF NEW ZEALAND v COWE [2016] NZHC 2845 [28 November 2016]

[4]      She cites four grounds of application.  The most important discussion at the hearing centred on the ground which I will deal with first, namely assignment.

Ground 1 – assignment of the debt

[5]      In pursuing the debt, the Bank has retained EC Credit Control (NZ) Ltd (ECCC), which has in turn used its Napier solicitors.   They are the instructing solicitors for the Bank in this proceeding.  It is common ground that the contractual relationship existed between the Bank and Ms Cowe in relation to the credit card.

[6]      In her affidavit evidence, Ms Cowe has raised the possibility that the Bank may have sold its debt to ECCC although no notice of any assignment has been given to her.

[7]      Ms Cowe’s evidence led the Bank to file an affidavit of Mark Austin, a litigation manager of ECCC, who has acted as the agent of the Bank in relation to the debt.  Mr Austin deposes:

The legal owner of the debt is [the Bank], in whose name the Disputes

Tribunal Order was issued

[8]      There is no basis in evidence for challenging the right of the Bank to enforce or take other steps in relation to the order made in the Disputes Tribunal.  Ms Cowe may have a suspicion that an assignment took place but there is no evidence of such an assignment.  The evidence of Mr Austin, as a person with direct knowledge of matters, stands in the way of the suspicion.

[9]      Ms Cowe’s first ground of application therefore fails.

[10]     I add this as Ms Cowe raised a concern as to the entity to whom she should now make payment.  It is the Bank which has the benefit of the Order and is entitled to enforce it.  Even if ECCC had, strictly speaking, acquired some right to enforce the debt (of which there is no evidence) it would be precluded from asserting such a right in any later proceedings given that Mr Austin has sworn that it is the Bank which is the legal owner of the debt. Any payment Ms Cowe makes to the Bank will be a proper discharge of the debt or the portion of the debt which is paid.

Ground 2 – Bank’s failure to explore settlement

[11]     Ms Cowe indicates that she has become frustrated with what appears to have been the decision of the Bank to leave all settlement discussions to ECCC (or its solicitors).

[12]     For its part, the Bank’s evidence (through Mr Austin) identifies the fact that the matters of dispute were litigated before the Disputes Tribunal where agreement was reached that $6,273.52 was the base amount owing.  The Bank made an offer in settlement, involving the abandonment of other claims to collection costs and compounding interest, which Ms Cowe accepted.   The Bank views the issues subsequently raised by Ms Cowe as being an attempt to re-litgate disputes which were already resolved by agreement in the outcome of the Disputes Tribunal hearing.

[13]     Ms  Cowe’s  concerns  and  her  perception  that  the  Bank  has  failed  to adequately engage in resolution discussions do not in the circumstances constitute a valid ground for setting aside the bankruptcy notice.  It is always open to Ms Cowe to settle the debt by full payment if she can.  If, as her evidence indicates, there may be a range of other creditors and it is not possible to satisfy all her debts at once, then I have encouraged Ms Cowe to promptly (within the next few days) write to the solicitors acting for the Bank with a detailed statement as to her circumstances and her payment proposals, explaining how those fit into the overall debt position and payment arrangements with other creditors (which apparently include the Inland Revenue Department).  The very statement of those matters suggests that unless Ms Cowe can put a straightforward and acceptable proposal to the Bank then the usual reasons for making an order of adjudication (so that the Assignee can investigate assets and liabilities) will arise.

Ground 3 – potential disadvantage to other creditors

[14]     Ms Cowe has referred, as I have noted, to the existence of other creditors with whom she either has payment arrangements or is at present negotiating arrangements.

[15]     This  does  not  constitute  a  valid  ground  of  application  to  set  aside  the bankruptcy notice.   Rather, it reinforces the inference of insolvency and makes it appropriate that the creditor have the opportunity to seek an order for adjudication if it is unsatisfied with any other arrangements proposed in the meantime.

Ground 4 – the overall interest of justice and the public interest

[16]     Ms Cowe cited as a catch-all consideration an overall interest of justice and the public interest.

[17]     In her submissions to me, Ms Cowe referred to what she considers to be matters of public importance in that the creditor is a bank and matters of banking practice and the like have a significance for the public.

[18]     I am not satisfied that any matters of general public importance arise.  This is a matter of debt as between a creditor and debtor arising in a common commercial context.  There are no factors of public interest which should cut across the right of the creditor to act upon its judgment debt, especially when the judgment debt came about as a result of agreement reached at the Disputes Tribunal.

Overall conclusion

[19]     None of the grounds advanced by Ms Cowe constitutes a substantial ground on which to set aside the bankruptcy notice.

Costs

[20]      Ms Cowe accepted that, in the event she was unsuccessful in her application, costs would follow the event.

[21]     I order:

(a)       the application dated 25 October 2016 is dismissed;

(b)the bankruptcy notice is to be read as amended to identify as its total sum required for payment, $7,223.63 (making allowance for one further payment of $10);

(c)      the time for payment of the bankruptcy notice is extended to 4.00 pm, Friday 23 December 2016 and, in the event of non-payment of the debt, the judgment creditor will be entitled to present an application for adjudication; and

(d)the judgment debtor is to pay to the judgment creditor the costs of this application on a 2B1 basis together with disbursements to be fixed by the Registrar.

Associate Judge Osborne

Solicitors:

Carlile Dowling, Napier

Copy to : L Cowe, Christchurch

1      High Court Rules, Category 2 under r 14.3(1) and band B under r 14.5(2).