Chesterfields Preschools Ltd (in liq) v Sisson - [2017] NZHC 1410

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

CIV-2017-409-000125 [2017] NZHC 1410

BETWEEN
CHESTERFIELDS PRESCHOOLS LTD

(IN LIQ)
Judgment Creditor

AND

THERESE ANNE SISSON Judgment Debtor

Hearing: 12 June 2017

Appearances:

B M Russell and K E Barry for Judgment Creditor
T A Sisson (in person)

Judgment:

23 June 2017

JUDGMENT OF ASSOCIATE JUDGE OSBORNE [in bankruptcy proceedings]

Introduction

[1] The judgment creditor (Chesterfields) by its liquidator applies for Ms Sisson’s adjudication in bankruptcy. She committed an act of bankruptcy when she did not comply with a bankruptcy notice issued in February 2017. The debt is an interlocutory costs and disbursements order of this Court made on 20 October 2016.

[2] The Court has heard two applications.

[3] First, Ms Sisson applied for an order under s 38 Insolvency Act 2006 (the Act) halting Chesterfields’ application for an adjudication order. I heard that application first. I orally dismissed the application with reasons to follow. Those
reasons are contained in this judgment.

CHESTERFIELDS PRESCHOOLS LTD (IN LIQ) v SISSON [2017] NZHC 1410 [23 June 2017]

[4] Secondly, Chesterfields applies for Ms Sisson’s adjudication in bankruptcy. Ms Sisson opposes that application. This is my reserved judgment in relation to that application.

Recusal

[5] At the first call of the adjudication application and again at the commencement of this hearing, Ms Sisson orally requested that I recuse myself from hearing her application and the adjudication application. She referred to the fact that I have previously conducted numerous hearings involving her and associated entities. She stated that she had “lost confidence in the Court”.

[6] On 19 May 2017, I ruled on that request in the following terms:

I decline to recuse myself from hearing matters relating to Ms Sisson. I have been involved in numerous matters involving case management and interlocutory and substantive hearings related to Ms Sisson and associated entities. The various rulings and judgments, while numerous and for the most part against Ms Sisson’s position, have simply required the Court to apply relevant statutes and well settled principles. There is no basis to suggest that there might be actual or apparent bias in my continuing to deal with matters involving Ms Sisson if they again arise.

[7] As it happened, the first available hearing date was before Associate Judge Matthews (on 12 June 2017). The applications were adjourned to that date for hearing. Ms Sisson at that point indicated that she also objected to Associate Judge Matthews’ hearing any case involving her and asked that he be recused. I indicated to her that that was a matter she would have to take up with Associate Judge Matthews.

[8] It transpired that by reason of other subsequent commitments of Associate Judge Matthews, the hearing was re-allocated to me. When Ms Sisson appeared at the hearing, she expressed her surprise that I and not Associate Judge Matthews was presiding. She renewed her request that I recuse myself. I again declined, referring to the reasons set out in my earlier refusal of her…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2017] NZHC 1410
Decision Date: 23 June 2017

CaseChat Overview and Summary

The case involved Chesterfields Preschools Ltd, a company in liquidation, represented by its liquidator, seeking an adjudication of bankruptcy against Therese Anne Sisson. Sisson, the sole director of Chesterfields, opposed the application. Sisson had failed to comply with a bankruptcy notice issued by Chesterfields, leading to the application for her adjudication in bankruptcy. The dispute arose from an interlocutory costs and disbursements order of the High Court of New Zealand, made on 20 October 2016, which Sisson had failed to satisfy. The legal issues involved the validity of the costs order, Sisson's standing in the appeal against the liquidation of Chesterfields, and whether the Court should halt the adjudication application. The Court dismissed Sisson's application for a halt and ruled in favour of Chesterfields, ordering Sisson to be adjudicated bankrupt and directing her to pay costs and disbursements. The Court held that Sisson's appeal against the liquidation of Chesterfields did not affect her standing to pursue the appeal, nor did it prevent Chesterfields from pursuing her bankruptcy. Sisson's concerns regarding maladministration by the Commissioner of Inland Revenue were found to have no bearing on the validity of the costs order or Chesterfields' right to pursue her bankruptcy. The Court concluded that Sisson's adjudication in bankruptcy would not affect her standing to pursue her appeal and that the merits of her opposition to the adjudication application were lacking. The final orders included the adjudication of Sisson as bankrupt and the direction for her to pay costs and disbursements to Chesterfields.

Orders