Bank of New Zealand v Guy
[2014] NZHC 445
•7 March 2014
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
CIV-2013-404-4568 [2014] NZHC 445
UNDER the Insolvency Act 2006
IN THE MATTER OF the bankruptcy of MICHAELA ANNE GUY and an application by the debtor to set aside a bankruptcy notice.
BETWEEN BANK OF NEW ZEALAND Judgment Creditor
ANDMICHAELA ANNE GUY Judgment Debtor
Hearing: 6 and 7 March 2014
Appearances: M Green for Judgment Creditor
M A Guy in person
(with husband Richard Guy as McKenzie Friend) Judgment: 7 March 2014
ORAL JUDGMENT OF ASSOCIATE JUDGE R M BELL
Solicitors:
Turner Hopkins, Auckland for Judgment Creditor
BANK OF NEW ZEALAND v GUY [2014] NZHC 445 [7 March 2014]
[1] Mrs Guy has applied to set aside a bankruptcy notice. At the start of the hearing I discussed with the parties the differences between a hearing in chambers and a hearing in court. Applications to set aside bankruptcy notices may be heard either in open court or in chambers. An Associate Judge has jurisdiction to hear such applications in either chambers or in open court. Given the ambiguity, I have ruled that this hearing is in open court and not in chambers. The effect is that if there is to be any challenge to my decision it is to be by way of appeal to the Court of Appeal rather than an application for review in this court.
[2] Mrs Guy’s application to set aside the bankruptcy notice was first called on
6 March 2014. It seemed to raise two broad issues
(a) whether Mrs Guy had filed her setting-aside application and served it within the time allowed, and
(b) whether there was any merit in her application.
It seemed to me that it would be useful to decide the first question early, so that the status of her application could be cleared up. It is important to make an early determination of that because, if there is a valid application to set aside the bankruptcy notice, the time for complying with the bankruptcy notice is extended until the application is determined.1 On the other hand, if the application has not been filed in time, an act of bankruptcy will have occurred already. That circumstance in my judgment requires the court to give early attention to the question whether the application is in time or not.
[3] The hearing of the matter began on 6 March 2014. As the hearing developed, it seemed to me that Mrs Guy was under some difficulty from having received some materials very late from the bank. I accordingly adjourned the matter to 7 March. Mrs Guy has used that time well to consider materials provided by the bank.
[4] The bankruptcy notice in this case is in the form required by s 29 of the Insolvency Act and by r 24.8(3) of the High Court Rules. The bankruptcy notice advises the debtor of the requirements for applying to set aside a bankruptcy notice. It says:
Procedure for counterclaiming, etc
If you consider you have a counterclaim, set-off, cross-demand against the judgment creditor, that comes within paragraph 1(c), or wish to seek the Court’s approval of terms of payment, you must, within 10 working days from the date of receiving this notice, apply to the High Court. The application must be supported by affidavit.
You must, within the same time, also serve a copy of the application and a supporting affidavit on the judgment creditor.
[5] Mrs Guy was served on 28 January 2014. The affidavit of service says that the bankruptcy notice had been renewed in November and December and January. In fact, the High Court Rules changed in November 2013 so that a bankruptcy notice could be validly served within six months of issue.2 The bankruptcy notice was originally issued on 22 October 2013. It had been renewed for service during that period and it was served within six months of issue. There cannot be any question as to the validity of the service of the notice.
[6] The question here is whether Mrs Guy filed her application to set aside within time. She filed it in this court on 13 February 2014. That is the date she has put on the document. It is also the date the court has put on the document when it was passed over the counter. There is also evidence that the application was served on the bank’s lawyers at a later date, 17 February 2014.
[7] An affidavit from the bank in opposition sets out at paragraph 10 a table which shows what days after 28 January 2014 were working days and which were not. The table excludes Saturday 1 February, Sunday 2 February, Thursday 6
February, Saturday 8 February and Sunday 9 February as not being working days. On the calculation in the table, the last working day for complying with the notice or for filing an application to set aside was 12 February 2014. According to the table, Mrs Guy was one day late. Mrs Guy notes that the table has not taken account of the
Auckland Anniversary Day which was 29 January 2014. As we all know in Auckland, Anniversary Day is a public holiday, it is celebrated as such and is treated as much a public holiday as other public holidays such as Christmas and Boxing Day, New Year, Easter and Anzac Day. Mrs Guy would be just as surprised as many other Aucklanders to hear that Auckland Anniversary Day could not be considered a public holiday but in fact counts as a working day.
[8] Notwithstanding that the relevant statutory definitions do not allow provincial anniversary days to count as public holidays. They are working days. That is clear from the definition of working day in s 29 of the Interpretation Act 1999:
working day means a day of the week other than—
[a] a Saturday, a Sunday, Waitangi Day, Good Friday, Easter Monday, Anzac Day, the Sovereign's Birthday, and Labour Day; and
[b] a day in the period commencing with 25 December in a year and ending with 2 January in the following year; and
[c] if 1 January falls on a Friday, the following Monday; and
[d] if 1 January falls on a Saturday or a Sunday, the following Monday and Tuesday; and
[e] if Waitangi Day or Anzac Day falls on a Saturday or a Sunday, the following Monday.
[9] In the High Court Rules working day means:
[a] Saturday, Sunday, Good Friday, Easter Monday, Anzac Day, Labour
Day, the Sovereign’s birthday and Waitangi Day; and
[b] a day in the period commencing with 25 December in any year and ending with 15 January in the following year.
[10] The unfortunate matter for Mrs Guy is that her mistake in believing that the Anniversary Day could not be a working day is readily understandable. But the statute, particularly the definition in the Interpretation Act, does not allow any leeway.
[11] For the hearing today Mrs Guy did some overnight research. She found that there are proposals under consideration to alter the definition of “working day” so that provincial anniversary days are excluded. However, that seems to be no more
than a proposal. There is a draft bill which may be presented to the Parliament, but there is no evidence at all that it has been enacted. It is not for me to comment on whether that is a good legislative proposal or not. I instead have to apply the law as it is presently enacted by Parliament. I cannot apply the law differently on the basis that there is a proposal to change the law.
[12] The upshot is that Mrs Guy has filed her application out of time. As it happens, she has also served it out of time as well. The Court does not have any discretion to extend the time for complying with a bankruptcy notice or for applying to set it aside if the application is filed out of time. Ms Green for the bank has cited
relevant authority to that effect. The first case is Alexander v S H Locke (NZ) Ltd.3
Master Gambrill’s decision recorded that once the time for complying with an act of bankruptcy has expired, the court has no discretion to extend the time for filing an application to set aside. Her decision is also treated as standard authority that once the time for complying with the bankruptcy notice has expired, and it has not been complied with, there is an act of bankruptcy and it is not possible to undo that act of bankruptcy. That decision of Master Gambrill was given under the Insolvency Act
1967. The law as to bankruptcy has changed under the Insolvency Act 2006, but the approach taken by Master Gambrill in Alexander v SH Locke has been followed in a number of cases under the current Insolvency Act. Cases cited by Ms Green were: McDowell v TV Works New Zealand Ltd,4 and Pinehurst School Inc v Virgo.5
[13] This means –unfortunately for Mrs Guy – that her application was both filed and served outside of time. That means that her application cannot continue. I need to rule that it is ineffective. That means is that the act of bankruptcy has already occurred. The date of the act of bankruptcy is 12 February 2014.
[14] I mention another matter. In submissions, Mrs Guy said that she was still keen to see if she could resolve matters with the Bank of New Zealand. She has apparently got some funds together to tender payment to the bank. It is not for me to
rule one way or the other on the merits of that offer but I invite the parties to
3 Alexander v S H Locke Ltd HC Auckland, B1612/97, 4 April 1998, Master Gambrill.
4 McDowell v TVWorks New Zealand Ltd HC Auckland, CIV-2008-404-8532, 2 April 2009, Associate Judge Christiansen.
5 Pinehurst School v Virgo [2013] NZHC 1194, Associate Judge Faire.
continue discussions to see if they can resolve the matter. This has been a very long- standing matter and it is obviously desirable for both sides if they could resolve the matter without needing to come back to court. I can take the matter no further than that.
Costs
[15] For the bank, Ms Green seeks costs. The bank is entitled to costs as it succeeded in opposing the application. This is a category 1 proceeding. While I do not describe Ms Green as a junior, the skills required are those of a junior lawyer only. Costs are fixed under steps 23, 24 and 46 at Category 1A. That makes a total of 1 day at the rate of $1,320.00 per day.
[16] I make an order for costs against Mrs Guy in favour of the bank in the sum of
$1,320.00.
Associate Judge R M Bell
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