Boyce v Turner

[2013] NZHC 3222

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

CIV-2013-409-001483 [2013] NZHC 3222

IN THE MATTER OF       the Insolvency Act 2006 and

IN THE MATTER OF       the bankruptcy of  RODERICK BRYAN TURNER

BETWEEN  CLARK BOYCE Judgment Creditor

ANDRODERICK BRYAN TURNER Judgment Debtor

Hearing:                   3 December 2013

Appearances:           A J Davis for Creditor

Debtor (R B Turner) in person

Judgment:                3 December 2013

JUDGMENT OF ASSOCIATE JUDGE OSBORNE

on application for adjudication in bankruptcy

Introduction

[1]      The debtor (Mr Turner) owes a judgment debt of $11,388.71 (plus judgment interest) to the creditor (Clark Boyce).

[2]      Clark Boyce had a bankruptcy notice served on Mr Turner on 12 September

2013.

[3]      Mr Turner committed an act of bankruptcy when he failed to pay the debt on or before 27 September 2013.

CLARK BOYCE v RODERICK BRYAN TURNER [2013] NZHC 3222 [3 December 2013]

The application

[4]      Clark Boyce applies for an adjudication order upon the basis that Mr Turner is bankrupt.

The opposition

[5]      Mr Turner appears for himself.  He has been conducting his opposition to two separate bankruptcy proceedings, namely this and a parallel proceeding brought by another judgment creditor, James Rapley, for a judgment debt (obtained in the same civil proceeding) of $8,527.10 (plus interest).

[6]      Mr Turner did not file a compliant notice of opposition but rather filed in both proceedings (that is the Rapley and the Clark Boyce proceedings) a single affidavit which he described as being “in support of notice of opposition and to dismiss creditors’ petition”.

[7]      At a conference on 29 November 2013, Mr Turner confirmed that the matters contained in his affidavit were all the matters he wished to present in opposition. Having  regard  to  the  fact  that  Mr  Turner  appears  for  himself,  I  waived  the irregularity in the form of opposition and proceeded upon the basis that the affidavit was to be treated as both his notice of opposition and his evidence in opposition.

Adjudication in bankruptcy – the jurisdiction

[8]      Section 13 Insolvency Act 2006 provides for a creditor’s application for a debtor’s adjudication.  It provides:

13 When creditor may apply for debtor's adjudication

A creditor may apply for a debtor to be adjudicated bankrupt if—

(a)       the debtor owes the creditor $1,000 or more or, if 2 or more creditors join in the application, the debtor owes a total of $1,000 or more to those creditors between them; and

(b)       the debtor has committed an act of bankruptcy within the period of 3 months before the filing of the application; and

(c)       the debt is a certain amount; and

(d)       the debt is payable either immediately or at a date in the future that is certain.

Mr Turner’s grounds of opposition

Absence of a final judgment

[9]      Mr  Turner  first  indicates  that  he  does  not  accept  that  Clark  Boyce’s underlying judgment can constitute the debt required under s 13(a) of the Act.  Mr Turner  then  makes  a  number  of  assertions  concerning  the  underlying  judgment which call for a summary of certain judgments of this Court and of the Court of Appeal and of the Supreme Court.

The Turner v Davis, Clark Boyce and Rapley proceedings

[10]     Mr Turner sued Mr Davis (and his firm, Clark Boyce) and Mr Rapley in

2011.  The defendants’ summary judgment application was heard by Whata J, and granted.1

[11]     His Honour explained the nature of the proceeding in this way –

[I]       Mr Turner has a dim view of two lawyers, Mr Davis and Mr Rapley.

Mr Turner says that Mr Davis maliciously alleged that Mr Turner had fraudulently altered documents. It transpires that Mr Turner was charged and convicted for such offending. Mr Turner also says that Mr Rapley, his defence counsel at his jury trial, failed to discharge his duties to him by not putting certain defences to the Court.

[2]       Mr  Davis  and  Mr  Rapley  (together  with  Mr  Davis'  firm)  seek summary judgment  against  Mr Turner  and/or  striking out  of  Mr Turner's statement of claim on the basis that the alleged claims have no prospect of success.

[12]     Given  the  nature  of  a  defendant’s  summary  judgment  application,  the outcome was that the proceeding came to an end with summary judgment in favour of the defendants, with costs reserved.

[13]     It is the costs judgment which provides Clark Boyce with the judgment debt relied on in this proceeding.

1      Turner v Davis [2012] NZHC 841.

[14]     In the costs judgment, Whata J proceeded upon the basis of a 2B award, giving judgment  for costs  to  Mr Davis  and  Clark  Boyce  jointly in  the sum  of

$11,388.71 (including disbursements).2

[15]     Mr Turner filed an appeal in the Court of Appeal in relation to all three defendants.   He did not provide security for costs, leading the Court of Appeal to strike out the proceeding upon the basis that Mr Turner had failed to pay security within the required allowed time and that the appeal had no realistic prospect of success.3

[16]     The Court of Appeal noted:4

We are satisfied for the reasons given by Whata J that this appeal has no prospect of success.  The relevant issues of fact have been comprehensively determined against Mr Turner in the prior civil and criminal proceedings.

[17]     Mr Turner then made application to the Supreme Court for leave to appeal

against the Court of Appeal’s decision to strike out his appeal to that Court.

[18]     The Supreme Court dismissed the leave application.5    The Supreme Court found that the issue raised by Mr Turner for appeal did not meet the requirements for leave. The Court described what Mr Turner was seeking in these terms:

… he seeks to relitigate whether he did fraudulently alter the documents …

Mr Turner does not submit that the issue of whether he fraudulently altered the document is a question of “general or public importance”.  He was right in not so submitting.

[19]     In the Supreme Court, Clark Boyce and Mr Davis (jointly) were awarded additional costs of $2,500.  In the Court of Appeal they were (jointly) awarded costs as for a standard application to strike out together with usual disbursements.  Those two sets of costs and disbursements are in addition to the judgment debt on which

this bankruptcy proceeding is based.

2      Turner v Davis [2012] NZHC 1539.

3      Turner v Davis [2012] NZCA 576 per Randerson J delivering the reasons of the Court at [15].

4 At [13].

5      Turner v Davis [2013] NZSC 30.

Mr Turner’s detailed assertions

[20]     As in the Supreme Court (and other Courts which have previously received evidence as to the alteration of documents by Mr Turner), Mr Turner again in this Court seeks to relitigate whether he fraudulently altered documents.  In his affidavit, Mr Turner states that:

My substantive claim against both Creditors does indeed contain a seriously disputed material fact – that is whether an alteration made on one of my documents was fraudulent or not fraudulent.

[21]     Upon this basis, Mr Turner submits that summary judgment should not have been awarded as there were disputed material facts between the parties.

[22]     Mr Turner submits that as a consequence all the previous judgments to which I have referred (being judgments of the High Court, Court of Appeal and Supreme Court) proceed incorrectly to give judgment or to recognise a judgment given on disputed material fact.

[23]     Mr Turner further records that his statement of claim against the creditors has not been struck out.  This is a reference to the fact that in the High Court Whata J had chosen to enter summary judgment for the defendants rather than to give judgment striking out the claims pursuant to the alternative application of the defendants.

[24]     Against the background of the judgments as I have recorded them, it is plain that Mr Turner has failed to comprehend the final nature of the orders which have been obtained against him.   The summary judgment for the defendants and the resulting costs order stand as final judgments.  Appeal rights have been exhausted. The wish to re-litigate the issue as to the fraudulent alteration of documents, which has been finally determined against Mr Turner, is not an issue which Mr Turner can reopen as against these creditors.

[25]     Finally, Mr Turner submits that one of the key points under the Insolvency Act 2006 was to make it clear that bankruptcy procedures are not to be used as a means of collecting debts or enforcing orders of the Court.  Mr Turner referred me to

the  commentary by the  authors  of  McGechan  on  Procedure  at  HRPt16.Intro.04 (relating to the High Court Rules as they stood in 2000) where the authors identified such a key point of bankruptcy proceedings.

[26]     There may be cases where the use of bankruptcy procedures is found by the Court to be abusive, notwithstanding that the creditor is proceeding in a situation where the debtor has committed an act of bankruptcy within the required three month period.   Such a situation may arise where a creditor is blatantly putting pressure  on  a  debtor  whose  net  assets  are  substantial  but  who  has  temporary cashflow difficulties.   In such a situation the Court’s discretion conferred by s 36

Insolvency Act may lead the Court to refuse an application outright or to halt an application for a period under s 38 of the Act.

[27]     This  is  not  a case  which  comes  close  to  attracting the  exercise  of such discretion in favour of the debtor.   The debtor has not presented any evidence of solvency.  The evidence suggests that the debtor has deliberately chosen a course of expending time and money on further challenges to findings made against him rather than facing up to his obligation to pay in the meantime the costs and disbursements he has been ordered to pay.

[28]     An adjudication in bankruptcy is clearly the appropriate course.

Costs

[29]     In the circumstances, costs must follow the event.

[30]     This  is  a  case  for  an  order  that  the  debtor  pay  increased  costs.    Rule

14.6(3)(b)(ii) High Court Rules provides that the Court may order a party to pay increased costs if the party opposing costs has contributed unnecessarily to the time or the expense of a proceeding by pursuing an argument which lacks merit.  There has been no merit in Mr Turner’s opposition.  His attempt to relitigate the underlying issues has been expressly noted and rejected by the Supreme Court when Mr Turner previously sought to embark on such a course.

[31]     Mr Turner has debts not only to this creditor but to at least one other creditor. There is an interest for creditors in the investigation of Mr Turner’s affairs by the Assignee to ascertain whether any assets are available to meet or reduce such debts. The creditors as a whole will get the benefit of the adjudication order obtained by Clark Boyce.  That is an additional reason justifying (under r 14.6(3)(d)) the Court making an order for increased costs.

Orders

[32]     I order:

(a)       The debtor is adjudicated bankrupt;

(b)The debtor is to pay the costs of this proceeding on the basis of a 50 percent uplift on a 2B scale award together with disbursements to be fixed by the Registrar;

(c)       This order is timed at 2.51 pm.

Solicitors:

Clark Boyce, Christchurch for Creditor

R B Turner (Debtor) in Person

Associate Judge Osborne