Complete Construction Limited v Siemer

[2020] NZHC 915

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2019-404-0423

[2020] NZHC 915

UNDER THE

Insolvency Act 2006

IN THE MATTER

Of the bankruptcy of VINCENT ROSS SIEMER

BETWEEN

COMPLETE CONSTRUCTION LIMITED

Judgment Creditor/Respondent

AND

VINCENT ROSS SIEMER

Judgment Debtor/Applicant

Hearing:	On the papers
Judgment:	5 May 2020

JUDGMENT OF ASSOCIATE JUDGE SMITH

This judgment was delivered by me on 6 May 2020 at 10am pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar

Solicitors:

Skinners Law, Auckland

Copy to:

Mr V. Siemer

Complete Construction Ltd v Siemer [2020] NZHC 915 [6 May 2020]

[1]    Mr Siemer applies for an order that I recuse myself from hearing further matters in this case. The immediate matter to be dealt with, if there is no order for recusal, is an application made by Mr Siemer to recall the judgment I gave in this matter on 12 September 2019, in which I directed that Mr Siemer’s application to set aside the relevant bankruptcy notice was to be regarded for the purposes of r 24.10 of the High Court Rules 2016 as having been determined against Mr Siemer on 14 August 2019.

Background

[2]    Mr Siemer applied informally by email for the recall of that judgment under the slip rule, and I dismissed that application in a Minute dated 13 September 2019.

[3]    The matter began in this Court with the issue of a bankruptcy notice by the judgment creditor (Complete Construction), and Mr Siemer’s application to set aside the bankruptcy notice. That application came before me in the list on 2 May 2019.

[4]    At that stage, I noted that Mr Siemer was a “banned litigant”, under an order made in 2016 under s 88B of the Judicature Act 1908 which had the effect of precluding him from commencing any litigation without the leave of a Judge. I noted at the hearing on 2 May 2019 that there appeared to be an issue, which I would need to look at further, as to whether the filing of an application to set aside a bankruptcy notice amounted to the commencement of a proceeding for the purposes of s 88B. Mr Siemer asked me to give a ruling on that issue on the spot, but I told him that I was not in a position to give a ruling that day – I would need to address the authorities. I said I would do that and then issue a Minute on the matter.

[5]    I later considered the authorities, including the judgment of Associate Judge Bell in Westpac New Zealand Ltd v Boulton,1 in which the Court held that the issue of a bankruptcy notice does constitute the commencement of a civil proceeding; the relevant proceeding is commenced when the judgment debtor applies to set aside the bankruptcy notice. I concluded that Mr Siemer needed to apply for leave to file his setting aside application, and I noted that there would be an issue as to whether the

1      Westpac New Zealand Ltd v Boulton [2014] NZHC 693.

Court could grant retrospective leave to a would-be litigant who was the subject of a banning order under s 88B Judicature Act 1908 (or its present equivalent, s 166 of the Senior Courts Act 2016). I issued a Minute on 7 May 2019, holding that Mr Siemer would need to file a formal application for retrospective leave. I directed that any such application should be referred to a Justice of the Court for determination.

[6]    Mr Siemer expresses criticism of that decision in his recusal application, but the decision to direct that any formal application for retrospective leave to file the setting aside application should be referred to a Justice of the Court was not in my view an unusual one. Where an issue of some complexity comes before an Associate Judge, the course is open to the Associate Judge under s 26(1) of the Senior Courts Act 2016. That subsection provides:

26 Transfer of proceeding to High Court Judge

(1) An Associate Judge may, on the application of a party to a proceeding before the Associate Judge or on the Associate Judge’s own initiative, refer the proceeding or a matter in the proceeding to a High Court Judge if the Associate Judge is satisfied that because of the complexity of the proceeding or matter it is desirable to do so.

…

[7]    The issue of preventing a litigant from having access to the Courts is a particularly serious one, and in this case there was also an issue as to whether a leave order could be made retrospectively. Associate Judges do not make orders banning litigants from issuing proceedings, and the issues were in my view both novel and important. I do not consider that a fair minded and fully-informed observer would have had any reasonable apprehension that the case would not be decided on its merits, simply by reason of the referral of the leave issue to a Justice of the Court.

[8]    Mr Siemer had indicated that he would be out of the country for some months from early May 2019. To accommodate that absence, a fixture for the hearing of the setting aside application was made for 29 August 2019, on the basis that Mr Siemer was to obtain any necessary leave to proceed with his application before that date.

[9]    On 17 June 2019, I issued a further Minute, drawing to the attention of Mr Siemer and counsel the judgment of Venning J in Rafiq v Whata & Ors.2 I noted that the effect of the judgment appeared to be that orders made under s 88B of the Judicature Act 1908 were to be regarded as continuing in force for a period of five years from 1 March 2017, being the date of the commencement of the Senior Courts Act 2016. I noted that the effect of the judgment in Rafiq was that the order under which Mr Siemer was required to obtain the leave of the High Court remained in force. I repeated the direction that he would need to apply for and obtain leave to continue with the proceeding in accordance with the directions given in my Minute of 7 May 2019.

[10]   Mr Siemer did appear to make a leave application at paragraph [7] and following of a memorandum he filed on 12 August 2019. When that memorandum came before me, I referred the Registrar to the directions I had given at paragraph [11] of my Minute of 7 May 2019, and requested that the memorandum be referred to a Justice of the Court for determination of the leave issue.

[11]   Jagose J then dealt with the matter on the papers. On 14 August 2019, he issued a Minute finding that there was no prima facie ground for the proceeding, and refusing the application for leave to continue with the proceeding. The Judge determined that the application was a proceeding subject to the s 88B order, as it was a civil proceeding instituted by Mr Siemer (an application to the Court for the exercise of its civil non- interlocutory jurisdiction).

[12]   The Minute of Jagose J effectively brought to an end Mr Siemer’s setting aside application. However, the Registrar referred to Associate Judge Bell the issue of whether the fixture for the hearing of the setting aside application (scheduled for 2 September 2019) was still required given the decision of Jagose J declining Mr Siemer’s leave application. In a Minute dated 22 August 2019, Associate Judge Bell directed that the fixture should be maintained. His Honour noted that procedural directions may be required, and he expressly referred to the possible need to decide whether Mr Siemer’s application was sound when it was filed. If it was sound, it would

2      Rafiq v Whata & Ors [2019] NZHC 1193.

need to be formally dismissed so that the time for commencing any bankruptcy adjudication application would begin to run under s 13 and 16 of the Insolvency Act 2006.

[13]   Mr Siemer elected not to appear at the fixture on 2 September 2019. I heard submissions from counsel for Complete Construction, and I gave my judgment on 12 September 2019. In the judgment, I treated the orders made by Jagose J on 14 August 2019 as having impliedly accepted that leave to file the setting aside application could be sought after it had been filed, and that the failure to obtain leave before the application was filed was an irregularity that did not render the application a nullity. I directed that the setting aside application was to be regarded for the purposes of r 24.10 of the High Court Rules as having been determined against Mr Siemer on 14 August 2019. I made an order for costs in favour of Complete Construction on a 2B basis, plus disbursements as fixed by the Registrar.

[14]   On 11 October 2019, Woolford J granted leave to Mr Siemer to appeal against my judgment of 12 September 2019, on the following three grounds:

(1)Was leave of the High Court required for Mr Siemer to apply to set aside the bankruptcy notice served on him by [Complete Construction] on 25 March 2019, as determined by Associate Judge Smith in his Minute dated 7 May 2019 and confirmed in his judgment dated 12 September 2019?

(2)If leave of the High Court was required, what consideration, if any, should be given to the fact that Mr Siemer was “merely responding to a step taken by the judgment creditor” as described by Associate Judge Smith in his Minute dated 2 May 2019?

(3)Was it appropriate to award costs against Mr Siemer for the hearing on 2 September 2019, or at all?

Mr Siemer’s submissions in support of the recusal application

[15]   Mr Siemer filed written submissions on 23 March 2020. He initially described the dispute between himself and Complete Construction, and he set out a number of contentions in support of a submission that the default judgment obtained by Complete Construction in the District Court should not have been entered against him.

[16]   Mr Siemer then submitted that I had made numerous procedural rulings against him which Complete Construction had not sought. He submitted that I had failed to address any motions or applications he had filed, giving the appearance that I would not permit him to be heard. He submitted that I ignored two oral applications he made for leave to continue the proceeding, without giving any reason for not giving leave.

[17]   Next, Mr Siemer submitted that on 12 September 2019 I directed the release of the transcript for the hearing of 2 May 2019, but thereafter I “failed to do so or to respond”.

[18]   Mr Siemer submitted that, having allocated a provisional fixture for the hearing of the application to set aside the bankruptcy notice, I wrongly refused to cancel the conditional hearing after Jagose J made his ruling on 14 August 2019. He submitted that I then ordered costs against him for that hearing despite having no apparent jurisdiction to do so.

[19]   Mr Siemer submitted that there was a failure to grant him a hearing in relation to the legitimacy of the alleged debt, which was said to arise from “an established pattern of unlawful practices by the claimant”. He considered the Court effectively ignored his applications, without providing sufficient reasons.

[20]   Mr Siemer’s last specific concern expressed in his submissions was that, in giving directions on 13 March 2020 that the recusal submissions would be heard first, in advance of the recall application, I failed to give sufficient reasons for deferring the recall question.

[21]   Mr Siemer referred to the following provisions from the High Court Recusal Guidelines, which require a two-stage test where the Judge must consider:

(1)First, what it is that might possibly lead to a reasonable apprehension by a fully informed observer that the Judge might decide the case other than on its merits; and

(2)Second, whether there is a “logical and sufficient connection” between those circumstances and that apprehension.

[22]   Mr Siemer submitted that it had not been a just proceeding, as he had not had a proper opportunity to be heard. He noted that Complete Construction has not opposed either the recusal application or the recall application. He submitted that the Court had been fixated on avoiding all the evidence and facts in order to award costs to Complete Construction and a substantial benefit to which it was not entitled. He generally alleged elementary breaches of natural justice.

Discussions and conclusions

[23]   I accept that Mr Siemer has fairly set out the main relevant provisions of the Recusal Guidelines. Under s 1.2 of the Guidelines, a Judge should recuse him or herself, if in the circumstances a fair minded, fully informed observer would have a reasonable apprehension that the Judge might not bring an impartial mind to the resolution of the question the Judge is required to decide. Under Guideline 1.3, the standard for recusal is said to be one of “real and not remote possibility”, rather than probability.

[24]   The first of the General guidelines states that a Judge has an obligation to sit on any case allocated to him or her unless grounds for recusal exist.

[25]   The question of recusal is for the Judge hearing the case. The Judge is to apply the principles described above firmly and fairly, and not accede too readily to suggestions of bias, and the Judge should be mindful of the burden that passes to other Judges if the Judge recuses him or herself unnecessarily.3

3      Recusal Guidelines, sections 1.5.1 and 1.5.2.

[26]   Mr Siemer’s first complaint is that I made numerous procedural rulings against him which Complete Construction had not sought. The first of those directions was presumably the direction made on 7 May 2019 that Mr Siemer would need to make formal application for leave to continue with the setting aside application.

[27]   I ascertained that Mr Siemer was a banned litigant only shortly before the 11.45am list commenced on 2 May 2019, and at that stage I had no knowledge of the terms of the orders. At the hearing, Mr Siemer confirmed that the banning order was in place, and he made an oral application for leave to continue with the setting aside application. In my view, the existence of the banning order was not simply a matter for Complete Construction to take if it wished to do so. Such orders are concerned with the proper administration of justice generally, and if a Judge becomes aware that he or she has before him a person who is a banned litigant, who has not obtained leave to commence the relevant proceeding, the Judge is in my view obliged to address the issue, regardless of the position taken (or not taken) by the opposing litigant. I do not believe any fully-informed impartial observer would take any contrary view.

[28]   If leave to commence the proceeding was required, and if that leave could not be given retrospectively, it is obvious that the setting aside application could not succeed. Quite clearly, the obtaining of any necessary leave had to be dealt with as a preliminary matter.

[29]   Mr Siemer’s oral application on 2 May 2019 was not ignored. I made it clear to him that I would consider the matters I had flagged, and issue a Minute. That was done on 7 May 2019.

[30]   I have already addressed (at [6] to [7] above) my reasons for referring the issue of retrospective leave to a Justice of the Court, under s 26(1) of the Senior Courts Act.

[31]   As for the release of the transcript of the hearing on 2 May 2019, I promptly made an order (on 13 September 2019, the day after the judgment) directing that a transcript was to be provided to Mr Siemer and counsel. It was a matter for the Registrar thereafter to provide the transcript to Mr Siemer, and I am not aware of any undue delay in the supply of the transcript to him. (If there was any undue delay, the

delay related to an administrative matter only, which Mr Siemer could have followed up with the Registrar, or if he still had concerns, drawn the matter to the Court’s attention by way of memorandum.) For those reasons, any delay in providing the transcript to Mr. Siemer could not provide any basis for a recusal order.

[32]   On Mr Siemer’s submission that I refused to cancel the 2 September 2019 fixture after Jagose J had made his ruling on 14 August 2019, Mr Siemer appears to have overlooked the fact that the issue of whether that fixture should remain was addressed by another Judge (Associate Judge Bell, on 22 August 2019), who directed that the fixture should be maintained. As the judgment made clear, there were indeed procedural issues which needed to be addressed following the decision of Jagose J on 14 August 2019.

[33]   Mr Siemer submits that there was no jurisdiction to award costs, but the fact of the matter is that in commencing the proceeding he put Complete Construction to the expense of filing a notice of opposition and an affidavit in opposition, and appearing at two hearings. Complete Construction also filed written submissions for the hearing on 23 September (apparently unaware of the orders Jagose J had made on 14 August 2019). Mr. Siemer ultimately failed to have bankruptcy notice set aside. Costs ordinarily follow the event in that sort of situation. As for the quantum of the costs award, I see nothing which would cause a fair-minded, fully-informed observer any concern about the Category 2 costs order that was made. I appreciate that Mr Siemer believes that no costs order should have been made, but that is a matter he will be able to take up on appeal. Mere dissatisfaction with a judge’s decision on one issue arising in litigation cannot provide a ground for recusal.

[34]   Next, Mr Siemer criticised my decision to direct that the recusal issue be dealt with first, in advance of his formal application to recall the judgment. I do not think there is anything in that. Recusal appeared to be the obvious issue to address first, as it raised the issue of whether I should be further involved in the case at all. Mr. Siemer will have the opportunity to make submissions on his recall application, and those submissions will be properly and fairly considered.

[35]   The fact that Complete Construction has elected not to participate in the recusal application does not affect the matter. I do not think any fair-minded and fully- informed observer could or would draw any relevant inference from Complete Construction’s stance. The party who has not sought recusal may well simply elect not to expend resources arguing an issue with which he or she is not directly concerned, or where he or she is content to leave the matter to the Judge.

[36]   In summary, there has been no issue in my conduct of the case to date of Mr Siemer not having the opportunity to be heard on the issues that arose and had to be dealt with. His real issue appears to be that I took the view that he needed to obtain leave before he could advance the setting aside application any further, and that Jagose J., taking the same view on the need for leave, refused to grant it. The leave issue had to be addressed first, before any consideration was given to the merits of the dispute between Mr Siemer and Complete Construction. Furthermore, the decision of Jagose

J. not to grant leave, and the direction of Associate Judge Bell that the fixture for 2 September 2019 should be maintained, were decisions of other Judges. As such, they could not provide a basis for me to recuse myself from further participation in this case.

[37]   Before leaving the matter, I record that the Rafiq decision, addressing the issue of whether (and if so for how long) banning orders made under s 88B of Judicature Act 1908 remained in force after the Senior Courts Act came into force, has been the subject of later, conflicting, decisions of this Court. In a judgment given on 25 November 2019, Palmer J held that Mr Siemer was no longer subject to the s 88B order imposed by the Court of Appeal on 4 March 2016.4 In a later case, again involving Mr Siemer, Downs J took a different view.5 His Honour held that Mr Siemer remained a vexatious litigant with a related prohibition on the commencement or continuation of civil proceedings. Applying the reasoning of Venning J in Rafiq, Downs J took the view that Mr Siemer’s prohibition would not end until 1 March 2022.6

4      Siemer v New Zealand Law Society [2019] NZHC 3075.

5      Siemer v Auckland High Court [2019] NZHC 3393.

6 At [11].

[38]   I do not think these decisions substantially affect the recusal issue, as both judgments were given after I gave my judgment of 12 September 2019, and they do not address the issues that I dealt with in my minute of 7 May 2019 or in my judgment of 12 September 2019. However, I think they do illustrate that the operation of the “banned litigant” regime since the Senior Courts Act came into force has not been without a degree of complexity.

[39]   For all of the foregoing reasons, Mr Siemer’s application for a recusal order is refused.

[40]   Mr Siemer should now file written submissions directed to his formal recall application. Those submissions are to be filed and served by 15 May 2020.

Associate Judge Smith