Bank of New Zealand v Liddle HC Auckland CIV 2010-404-1988

[2010] NZHC 909

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2010-404-001988

UNDER  The Insolvency Act 2006

IN THE MATTER OF     the bankruptcy of WESLEY JOHN LIDDLE

BETWEEN  BANK OF NEW ZEALAND Creditor

ANDWESLEY JOHN LIDDLE Debtor

Hearing:         31 May 2010

Appearances:  R J Gordon for Creditor

G P Denholm for Debtor

Judgment:      31 May 2010

ORAL JUDGMENT OF ASSOCIATE JUDGE BELL

Solicitors/Counsel:

Buddle Findlay, PO Box 2694, Wellington

Foy & Halse (J Boyce), PO Box 26218, Epsom, Auckland

G P Denholm, PO Box 5080, Wellesley Street, Auckland

BANK OF NEW ZEALAND V W J LIDDLE HC AK CIV-2010-404-001988  31 May 2010

[1]      On 11 May 2010, I heard argument whether the Bank of New Zealand had established the act of bankruptcy it relied on in its application.  That was under s 22 of the Insolvency Act 2006.  The case was called during the bankruptcy list.  I heard argument later on the morning of 11 May 2010.  Mr Liddle appeared in person and the Bank was represented by counsel.   I indicated to counsel at the time that I considered that the case Ex Parte Oastler re Friedlander (1884) 13 QBD 471 might have some bearing on the same and also the case of Re Connor, ex parte Carter Holt Harvey Ltd [1996] 1 NZLR 244.

[2]      After  hearing  argument  I decided  that  this  case  had  to  follow  Ex  Parte Oastler re Friedlander and I dismissed the application because no act of bankruptcy had been established.

[3]      Promptly after that, on 13 May 2010, the Bank of New Zealand applied for a recall of the judgment.  That did not come to my attention until 25 May 2010 but once  I  saw  that  application  I  directed  that  the  matter  was  to  be  called  today. Mr Gordon  for  the  Bank  of  New Zealand  has  appeared  and  Mr  Denholm  has appeared on instructions from Mr Liddle.  Mr Denholm has received only very short instructions and is still at an early stage of trying to obtain a full brief on the matter. He has explained that Mr Liddle is out of the country, temporarily – he hastened to add – and has an intention to return.  For the moment it is accepted that he does not have an intention to depart with intent to defeat or delay his creditors.

[4]      On the recall application, the matter falls to be determined under s 414 of the Insolvency Act 2006 which gives the Court the power to review earlier decisions.  A decision  to  dismiss  an  application  is  within  the  power  of  review  under  s  414. Re Timu  (1994)  7  PRNZ  678  holds  that  an  Associate  Judge  who  has  earlier dismissed an application has jurisdiction to review the decision under s 414.

[5]      In this case, there has been a determination on the merits after the parties had been heard.  In that case the normal rule is that the finality of decisions applies.  That means that when there is an application for recall that comes within the principles stated by Wild CJ in Horowhenua County v Nash (No. 2) [1968] NZLR 632, and I recite the normal passage in that judgment which is referred to on recall applications:

Generally speaking,  a judgment  once  delivered  must  stand for better  or worse subject, of course, to appeal.  Were it otherwise, there would be great inconvenience and uncertainty.  There are, I think, three categories of cases in which a judgment not perfected may be recalled – first, where since the hearing there has been an amendment to a relevant statute or regulation or a new judicial decision of relevance and high authority;   secondly, where counsel have failed to direct the Court’s attention to a legislative provision or authoritative decision of plain relevance;   and thirdly, where for some other very special reason justice requires that the judgment be recalled.

[6]      There  is  normally  a  judicial  reluctance  to  recall  decisions  after  a  final decision on the merits has been given.  But in this case I am satisfied that the Bank has made out the second ground within the dictum of Wild CJ.  There has been a failure to direct the Court’s attention to authoritative decisions of plain relevance.  In saying that, counsel are not to be criticised for not drawing my attention to relevant authorities because counsel realistically did not have a proper opportunity to do so. The  Bank  has  now  furnished  a  memorandum  and  has  set  out  10 authorities  of relevance to this question which were not the subject of my decision on 11 May

2010.   To put it neutrally and without intending to pre-determine matters, I can simply indicate that if these cases had been drawn to my attention on 11 May 2010, I would have had to give them serious consideration and it cannot be taken for granted that my decision would still have been the same.  The authorities in question cited by the Bank of New Zealand are:

a)        Re Wolstenholme, ex parte Wolstenholme (1885) 2 Morrell BR 213 b)          Re Lamb, ex parte Gibson & Bollard (1887) 4 Morr BC 25 (CA)

c)       Crook v Morley [1891] AC 316 (HL)

d)       Re Scott, ex parte Scott [1896] 1 QB 619

e)        Re Dagnall, ex parte Soan & Morley [1896) 2 QB 406 f) Clough v Samuel & Ors [1905] AC 442 (HL)

g)       Re   Morrison,   ex   parte   National   Cash   Register   Company   of

Australasia Ltd (1913) 33 NZLR 186

h)        Re Bailey (1927) GLR 470

i)         Re Stephens (1928) GLR 192

j)         Official Assignee of Simon v Arnold & Wright Ltd [1967] NZLR 554 [7] Some of those cases contain dicta critical of the decision Ex Parte Oastler re

Friedlander which I relied on in my earlier decision.

[8]      So the course I need to take is to set aside my earlier order dismissing the application.  I make no order for adjudication today.  Instead, I direct a fresh hearing. At that hearing, matters in issue will include the question whether there is an act of bankruptcy under s 22 of the Insolvency Act.   All other matters relevant to the decision whether Mr Liddle should be adjudicated bankrupt will be in issue, especially with relevance to the matters he has raised in his notice of opposition.

[9]      I give these timetabling directions:

a)        There is to be a half-day fixture at 10:00 am on 16 August 2010;

b)Within  five  working  days  the  Bank  of  New Zealand  is  to  file  a further affidavit in support of its claim that there has been an act of bankruptcy under s 22;

c)       Mr Liddle has the opportunity within 15 working days to file an amended notice of opposition and any further affidavits in support of his notice of opposition.  I make that direction because Mr Denholm has appeared and Mr Denholm may, after consideration, decide that there are further matters that need to be raised that are relevant to this case.

d)If Mr Liddle takes that opportunity to amend his opposition and file an  affidavit,  the  Bank  of  New Zealand  will  have  a  further  five working days to file any further affidavits in reply.

[10]     There are the usual directions under r 7.39 and in particular the Bank is to file and serve its synopsis of submissions five working days before the hearing, and Mr Liddle is to file his synopsis of submissions three working days before the hearing.   As usual, the Bank of New Zealand will have to file a case book and a bundle of its authorities.

[11]     Costs for today are reserved.

R M Bell

Associate Judge