Carters Building Supplies Limited v Leighton

[2024] NZHC 1263

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2024-404-778

[2024] NZHC 1263

IN THE MATTER

of the Insolvency Act 2006

AND IN THE MATTER

of the bankruptcy (or poposal, as the case may be) of GRANT DAVID LEIGHTON

BETWEEN

CARTERS BUILDING SUPPLIES LIMITED

Judgment Creditor/Applicant

AND

GRANT DAVID LEIGHTON

Judgment Debtor/Respondent

CIV-2024-404-779

IN THE MATTER

of the Insolvency Act 2006

AND IN THE MATTER

of the bankruptcy (or proposal, as the case may be) of KIM JOSEPHINE LEIGHTON

BETWEEN

CARTERS BUILDING SUPPLIES LIMITED

Judgment Creditor/Applicant

AND

KIM JOSEPHINE LEIGHTON

Judgment Debtor/Respondent

Hearing:	(On the papers)
Counsel:	D J D van Hout and R F Selby for the Judgment Creditor/Applicant
Judgment:	21 May 2024

JUDGMENT OF ASSOCIATE JUDGE LESTER

(substituted service)

SUPPLIES v LEIGHTON [2024] NZHC 1263 [21 May 2024]

[1]        Carters Building Supplies Limited (Carters) seeks orders for substituted service against Grant and Kim Leighton (the Leightons).

[2]        When the without notice application first came before me, I sought further information. Carters sought orders that service of the bankruptcy notice and other bankruptcy papers be achieved by them being provided to third parties who in turn would be requested to email them to the Leightons. Given the passage of time, I was concerned whether those third parties still had active email addresses for the Leightons. In order for me to make an order for substituted service, I have to be satisfied that the method of service proposed by Carters means I can be confident the documents will come to the attention of the Leightons.

[3]        In July 2023, the Leightons had counsel acting for them. Counsel was requested to accept service of a letter of demand in respect of a debt owed by the Leightons to Carters, and counsel responsibly obtained instructions to accept service of the letter of demand. However, within a few weeks, counsel advised they no longer had instructions from the Leightons — that advice being sent on 24 July 2023.

[4]        On 11 August 2023, Carters was informed by its process server that it appeared the Leightons had moved overseas.

[5]        On 22 August 2023, the liquidator of the Leightons’ company advised she was prepared to pass on correspondence to the Leightons. Orders for substituted service were made in the District Court on the basis the pleadings could be served at the Leightons’ former counsel and the liquidator.

[6]        I requested an update as to whether the Leightons’ former counsel and the liquidator were still in contact with the Leightons given that substituted service is sought approximately 10 months after the first round of service, but using the same means of service.

[7]        Former counsel for the Leightons’ has reported that, while she still has email addresses for the Leightons (as she would for any past client), she does not know whether the email addresses are current and is concerned as to her situation vis a vis

her duty of confidentiality to her clients. This is not a confirmation that counsel is in contact with the Leightons.

[8]        The liquidator has now advised she is not in current contact with the Leightons and has not been advised of any updated email addresses since the beginning of the liquidation in November 2022.

[9]        I am not prepared to make an order for substituted service on former counsel or the liquidator.

[10]      However, counsel for Carters have proposed a further means of substituted service, that is a direction that the documents be served at the offices of a chartered accountant who were instructed by the Leightons to arrange the removal of a company from the Register. The evidence shows the have received instructions from the Leightons and so must have current contact details for both of them. The accountants filed an annual return for the Leightons on 1 March 2024.

[11]      Orders for substituted service are made as sought in terms of para 1(b) of the applications,  save  that  the  reference  to  the  Leightons’  prior  counsel  and  to   the liquidator are to be replaced  with  the accountants  named in  the affidavit  of  Ms McCollum of 9 May 2024 — the intent being that only the accountant will be served.

[12]      Carters also seek leave to serve its bankruptcy notice out of New Zealand. Leave is granted. Orders are also made in terms of para 1(c) of the applications (now to read as referring to service on the accountants), and paras 1(d) and (e) of each application.

Associate Judge Lester

Solicitors:

Russell Legal, Auckland (for Judgment Creditor/Applicant)