Bank of New Zealand v Davey

[2021] NZHC 2390

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2021-409-409

[2021] NZHC 2390

IN THE MATTER

of the Insolvency Act 2006

AND

IN THE MATTER

of the bankruptcy of MATTHEW ROBERT DAVEY

BETWEEN

BANK OF NEW ZEALAND

Judgment Creditor

AND

MATTHEW ROBERT DAVEY

Judgment Debtor

Hearing:	(Determined on the papers)
Counsel:	K M Paterson for Judgment Creditor
Judgment:	13 September 2021

JUDGMENT OF ASSOCIATE JUDGE LESTER

[1]                  On 22 February 2021, the Bank of New Zealand (the BNZ), issued proceedings in this Court against Matthew Robert Davey (Mr Davey) seeking judgment for just over $4,200,000 under a guarantee in respect of facilities given by the BNZ to      Mr Davey’s  New Zealand-incorporated  company,  Fortress  Information  Systems Limited (in rec and in liq) (the company). Mr Davey is sole director and holds 90 per cent of the shares in the company.

[2]Judgment was entered against Mr Davey on 21 July 2021.

BANK OF NEW ZEALAND v DAVEY [2021] NZHC 2390 [13 September 2021]

[3]                  The evidence is that Mr Davey resides in Sydney, Australia. The BNZ has requested that a bankruptcy notice be issued against Mr Davey but, given he is resident in Australia, the BNZ also seeks leave to serve the bankruptcy notice outside of  New Zealand. Such leave is required by s 17(3) of the Insolvency Act 2006 (the Act), which provides a bankruptcy notice must be served on a debtor in New Zealand unless the Court has given permission for service outside of New Zealand.

[4]                  If leave is granted, the BNZ seeks a direction that the bankruptcy notice must be served within six months of the date of its issue. Such a direction would seem to be uncontroversial given Mr Davey’s Auckland-based solicitor has confirmed he is authorised to accept service of the bankruptcy notice on Mr Davey’s behalf along with any subsequent application for adjudication. Further, the BNZ seeks that the time for compliance with the bankruptcy notice be extended to 20 working days from the normal 10 working days, pursuant to s 17(4)(b) of the Act.

[5]                  Associate Judge Bell, in Westpac New Zealand Ltd v Boulton, set out his approach to considering an application for leave to serve a bankruptcy notice outside of New Zealand.1    His Honour looked ahead to whether leave would be given for     a future adjudication proceeding in reliance on non-compliance with the bankruptcy notice. The Associate Judge had regard  to  the  criteria  under  r 6.28(5)  of  the  High Court Rules 2016 (the Rules) when considering whether leave would be granted to serve an adjudication application outside of New Zealand. The Associate Judge then assessed whether it would be appropriate for the bankruptcy of the debtor to be administered in New Zealand.2 If satisfied on that issue, the Judge indicated he would generally give leave for the bankruptcy notice and the bankruptcy application to be served out of New Zealand as part of the same application.3 I adopt the Judge’s approach in relation to this application.

[6]                  Under r 6.28(5) of the Rules, the Court may grant leave for an originating document to be served out of New Zealand if the applicant establishes that the claim has a real and substantial connection with New Zealand, there is a serious issue to be

1      Westpac New Zealand Ltd v Boulton [2014] NZHC 693, (2014) 22 PRNZ 183.

2 At [14].

3 At [14].

tried on the merits, New Zealand is the appropriate forum for any trial, and any other relevant circumstances supporting an assumption of jurisdiction.

[7]                  I note Mr Davey does not, in a practical sense, dispute the leave sought as he has given instructions to his Auckland-based solicitor to accept service of the bankruptcy notice and adjudication application.

[8]                  The BNZ  relies  on  the  following  matters  as  showing  that  its  claim  has a substantial connection to New Zealand:

(i)banking facilities were advanced in New Zealand to  Mr Davey’s  New Zealand-incorporated company;

(ii)Mr Davey’s company traded in New Zealand;

(iii)the facilities granted to Mr Davey’s company and the terms of the guarantee are expressly governed by New Zealand law; and

(iv)the bankruptcy notice and foreshadowed application for adjudication relate to a Judgment of this Court.

[9]                  There has been no delay by the BNZ in making this application. The amount of its Judgment is substantial. The bankruptcy proceedings themselves are straightforward in that the BNZ has the benefit of a Judgment of this Court which has not been appealed.

[10]              In all the circumstances, I am satisfied that the orders sought by the BNZ are appropriate. The foreshadowed application for adjudication has a real and substantial connection with New Zealand for the reasons relied on by the BNZ. In terms of the merits of the bankruptcy proceeding, that is, whether there is a serious issue to be tried, as I have said, the BNZ has the benefit of a substantial Judgment. There is no reason why the adjudication application cannot be dealt with efficiently and speedily in New Zealand.

Orders

[11]              Accordingly, I make orders in terms of paras [1](a) to [1](f) of the BNZ’s application for leave dated 1 September 2021.

Associate Judge Lester

Solicitors:

Buddle Findlay, Christchurch