Commissioner of Inland Revenue v Hyde

[2024] NZHC 1362

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2023-409-505

[2024] NZHC 1362

UNDER

the Insolvency Act 2006

IN THE MATTER

of the bankruptcy of BRENDAN FRANCIS HYDE

BETWEEN

COMMISSIONER OF INLAND REVENUE

Judgment Creditor

AND

BRENDAN FRANCIS HYDE

Judgment Debtor

Hearing:	On the papers
Counsel:	A McAvoy for Judgment Creditor
Judgment:	28 May 2024

JUDGMENT OF ASSOCIATE JUDGE PAULSEN

This judgment was delivered by me on 28 May 2024 at 3.30 pm pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar Date:

COMMISSIONER OF INLAND REVENUE v HYDE [2024] NZHC 1362 [28 May 2024]

[1]        The Commissioner of Inland Revenue (the Commissioner) has filed an application for orders:

(a)extending the period for service of a bankruptcy notice;

(b)dispensing with personal service of a bankruptcy notice upon the judgment debtor; and

(c)for substituted service of the bankruptcy notice:

(i)by way of email to the judgment debtor; and

(ii)by sending a text message to the judgment debtor on his mobile telephone number.

[2]        The applications are made under rr 6.8 and 24.9(2) of the High Court Rules 2016.

[3]        The Commissioner obtained a default judgment against the judgment debtor in the District Court at Christchurch on 3 November 2022 in the amount of $84,867.29.

[4]        The Christchurch High Court issued a bankruptcy notice on the application of the Commissioner in respect of the judgment on 28 February 2023. Efforts were made to personally serve the bankruptcy notice on the judgment debtor, but he could not be served and the bankruptcy notice lapsed.

[5]        The Commissioner applied for the issue of a second bankruptcy notice which was issued on 14 September 2023. A process server was instructed to serve the second bankruptcy notice and an attempt was made to do so at a Rangiora property, but the judgment debtor no longer lives at that address and had not done so for some time.

[6]        The process server, however, did have a mobile telephone number for the judgment debtor and spoke to the judgment debtor who would not provide any further details or his current address. Subsequent calls to the judgment debtor’s mobile

telephone have not been answered. A text message sent to the same mobile telephone number was not responded to.

[7]        The Commissioner has, as recently as 11 March 2024, received information confirming the judgment debtor’s email address and mobile telephone number. No physical address has, however, been obtained for him.

[8]        The Commissioner says that the bankruptcy notice will come to the judgment debtor’s attention if service is effected by:

(a)emailing the bankruptcy notice to him at his email address; and

(b)sending a text message to the judgment debtor.

[9]        I am satisfied the Commissioner has made reasonable efforts to effect personal service upon the judgment debtor but without success. There have been attempts to obtain a residential address for the judgment debtor but these have proved unsuccessful. I consider the bankruptcy notice cannot be promptly served upon the judgment debtor. Contact has been made with the judgment debtor on his mobile telephone number and I am satisfied that mobile telephone number is still active. I am also satisfied on what is before me that the judgment debtor has an active email address.

[10]      I am satisfied the bankruptcy notice will come to the judgment debtor’s attention if substituted service is effected in the manner set out below and that it is appropriate to make an order for substituted service of the bankruptcy notice.

[11]      The bankruptcy notice was not served within six months of the date of its issue as required by r 24.9(1) of the High Court Rules. I am satisfied the judgment creditor made reasonable efforts to effect service of the bankruptcy notice and that the period for service should be extended.

Result

[12]      There shall be an order under r 24.9(2) of the High Court Rules extending time for service of the bankruptcy notice for three months from 18 March 2024.

[13]      There shall be an order under r 6.8 of the High Court Rules dispensing with personal service of the bankruptcy notice upon the judgment debtor and directing substituted service of the bankruptcy notice in the following manner:

(a)by emailing the bankruptcy notice to the judgment debtor at the email address referred to in paragraph [1(c)(i)] of the without notice of application for substituted service;

(b)by sending the following text message to the judgment debtor on the mobile telephone number referred in paragraph [1(c)(ii)] of the without notice application for substituted service:

TO: Brendan Francis Hyde.  The High Court has made an order that a bankruptcy notice issued by the High Court in respect of a judgment obtained by the Commissioner  of  Inland  Revenue  against  you on 3 November 2022 in the District Court at Christchurch for an amount of $84,867.29 shall be served by emailing the bankruptcy notice to your email address [email address to be inserted] and by sending this text message to you. A copy of the bankruptcy notice can be obtained from the High Court at Christchurch or from the Solicitor acting for the Commissioner of Inland Revenue, Arna McAvoy at [email address to be inserted] telephone [telephone number to be inserted]. If you do not comply with the terms of the bankruptcy notice, then you will have committed an act of bankruptcy in respect of which the Commissioner of Inland Revenue may apply to the High Court to have you adjudicated bankrupt.

[14]      The Commissioner may apply for orders for substituted service of further documents that must be served upon the judgment debtor in this proceeding by way of memorandum with details of any contact received from the judgment debtor or on his behalf in response to the bankruptcy notice, efforts made to locate the judgment debtor since these orders were made, and any matters that might have a bearing on whether it is appropriate for further orders for substituted service to be made.

[15]The costs on this application are reserved.

O G Paulsen Associate Judge

Solicitors:

Inland Revenue Legal Services, Christchurch