Complete Construction Ltd v Siemer - [2019] NZHC 2273

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2019-404-0423

[2019] NZHC 2273

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: 2 September 2019

Appearances:

E W Davies for the Judgment Creditor/Respondent No appearance for the Judgment Debtor/Applicant

Judgment:

12 September 2019

JUDGMENT OF ASSOCIATE JUDGE SMITH

This judgment was delivered by me on 12 September 2019 at 3.00 pm, pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar

Solicitors / Counsel:
Skinners Law, Auckland

Copy to:
Mr V Siemer

COMPLETE CONSTRUCTION LTD v SIEMER [2019] NZHC 2273 [12 September 2019]

[1] Mr Siemer applied to set aside a bankruptcy notice served on him by the respondent (Complete) in March 2019 (the application). When he filed the application Mr Siemer was subject to an order made by the Court of Appeal under s 88B of the Judicature Act 1908 preventing him from filing any proceeding without the leave of a judge (the banning order),1 and leave to file the application was refused on 14 August 2019. The principal issue to be decided now is whether the effect of the banning order and the failure to obtain leave is that the application was a nullity, void from the moment it was filed, or whether it is to be treated as an application that remained valid until leave to file it was refused. A decision on that issue will determine whether or not the three month period within which Complete could file an application for a bankruptcy adjudication order based on Mr Siemer's failure to comply with the bankruptcy notice 2 has expired. The second issue is whether Complete is entitled to reasonable solicitor/client costs.

Background

[2] Complete obtained a default judgment against Mr Siemer in the District Court at Auckland, on 8 February 2019. The amount for which judgment was entered was
$7,676.94.

[3] On 13 March 2019 Complete issued a bankruptcy notice and served it on Mr Siemer. The effect of the bankruptcy notice was that if Mr Siemer did not either comply with the notice or apply to this Court to set it aside within 10 working days, he would commit an "act of bankruptcy", which would entitle Complete to apply immediately under the Insolvency Act 2006 (the Act) to have him adjudicated bankrupt.3

[4] Mr Siemer did apply to set the bankruptcy notice aside. On 1 April 2019 he filed a document described as "Application for Set-Off and Counterclaim", with two supporting affidavits. It was common ground between the parties that this document was, in all respects apart from Mr Siemer's failure to obtain leave to file the document, a sufficient application to set aside the bankruptcy notice.

1      Siemer v Attorney-General [2016] NZCA 43 at [48].
2      Insolvency Act 2006, s 16.
3      Insolvency Act 2006, ss 17 and 13.

[5] Complete filed a notice of…

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.

Continue reading Complete Construction Ltd v Siemer

Details

AGLC: Complete Construction Ltd v Siemer [2019] NZHC 2273
Case: [2019] NZHC 2273
Decision Date: 12 September 2019

CaseChat Overview and Summary

The High Court of New Zealand was asked to determine whether an application to set aside a bankruptcy notice was a nullity due to the applicant's failure to obtain leave to file it, as required by a banning order. The court was also asked to determine whether the judgment creditor was entitled to solicitor/client costs. The applicant, Mr Siemer, had been served with a bankruptcy notice and subsequently applied to set it aside. However, he was subject to a banning order that required him to obtain leave before instituting any proceeding in court. He failed to do so and the application was refused. The primary issue was whether the application was a nullity or if it could be treated as valid until leave was refused. The court held that the application was not a nullity and that the failure to obtain leave was an irregularity that did not render the application invalid. The second issue was whether the judgment creditor was entitled to solicitor/client costs. The court held that the judgment creditor was entitled to reasonable costs but not solicitor/client costs.

The court's reasoning was that the banning order required Mr Siemer to obtain leave before instituting any proceeding, but it was not clear whether the order continued in force following the replacement of the Judicature Act 1908 by the Senior Courts Act 2016. The court found that the banning order did continue in force for five years from 1 March 2017 and that Mr Siemer needed to apply for leave to continue with his application. However, the court held that the failure to obtain leave before filing the application was an irregularity that did not render the application a nullity. The application was filed in time and with supporting affidavits, and there was limited time for Mr Siemer to have made any ex parte leave application. The court also held that the judgment creditor was entitled to reasonable costs but not solicitor/client costs on post-judgment enforcement steps, particularly where the enforcement step involved bankruptcy adjudication proceedings. The court found that the policy drivers for full costs recovery were no longer present once there was a judgment that had not been stayed. However, the court held that the nature of the debt and the debtor's conduct could be taken into account in the exercise of the court's ordinary discretion in making a costs award. The court awarded costs to the judgment creditor on a 2B basis, plus disbursements as fixed by the Registrar.

Orders