Creser v Creser
[2014] NZHC 3267
•16 December 2014
IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY
CIV-2003-485-2225 [2014] NZHC 3267
UNDER The Insolvency Act 1967 IN THE MATTER OF
The bankruptcy of Richard John Creser
BETWEEN
RICHARD JOHN CRESER Applicant (Judgment Debtor)
AND
JANINE CRESER
Respondent (Judgment Creditor)
Hearing: 11 November 2014 Counsel:
Q Haines for Applicant
No appearance for Respondent or Official AssigneeJudgment:
16 December 2014
JUDGMENT OF ASSOCIATE JUDGE SMITH
[1] Mr Creser was adjudicated bankrupt on 8 March 2004.
[2] On 8 August 2014, Mr Creser, acting on his own behalf, filed a lengthy document described as an “interlocutory application on notice”, in which he sought an order that his bankruptcy should be annulled upon the grounds that it never should have occurred. In that application, he also sought other relief, including an order that the Official Assignee refund a total of $139,343.63 in costs and disbursements. Monetary relief was also sought against Mr Creser’s two sisters, one of whom is the above named respondent.
[3] Mr Creser then retained counsel to assist him, and Mr Haines subsequently filed an amended application on Mr Creser’s behalf. The amended application seeks
RICHARD JOHN CRESER v JANINE CRESER [2014] NZHC 3267 [16 December 2014]
only an annulment of Mr Creser’s bankruptcy under s 119(1)(a) of the Insolvency
Act 1967.1
[4] Section 119 of the Insolvency Act 1967 (the 1967 Act) provides:
119 When Court may annul adjudication
(1) In any of the following cases the Court may by order, on the application of the Assignee or any person interested, annul the adjudication—
(a) Where the Court is of the opinion that the order of adjudication should not have been made:
(b) Where the Court is satisfied that the debts of the bankrupt have been fully paid or satisfied:
…
(2) If an application is made on any ground specified in paragraphs (a) to (c) of subsection (1) of this section by any person other than the Assignee, a copy of the application shall be served on the Assignee in such manner and within such time as the Court may direct.
(3) The Assignee may appear on the hearing of any application made on any ground specified in paragraphs (a) to (c) of subsection (1) of this section as if the Assignee were a party to the proceeding.
(4) If the order of annulment is made on the ground specified in paragraph (a) of subsection (1) of this section, the adjudication shall be annulled from and after the date of the adjudication.
(5) If the order of annulment is made on any ground specified in paragraphs (b) to (d) of subsection (1) of this section, the adjudication shall be annulled as from the date of the order.
(6) Where application is made to the Court to annul any order of adjudication on the ground that the order ought not to have been made by reason of a defect in form or procedure, subject to section
11 of this Act, the Court may, in addition to annulling the order, exercise its powers to correct the defect and order that the petition be reheard as if no order of adjudication had been made.
…
[5] Although the 1967 Act was repealed by the Insolvency Act 2006, the 1967
Act continues to apply to “any step or proceeding … following, or relating to, the
issue of a bankruptcy notice or the filing of a petition for adjudication in bankruptcy”
taken under the 1967 Act.2
[6] In the amended application, Mr Creser focuses on the bankruptcy notice which was issued by the respondent, Ms Janine Creser, on 16 October 2003. This notice formed the basis for the adjudication order made against Mr Creser in March
2004. Mr Creser submits that that bankruptcy notice was deficient and invalid, for the following three reasons:
(1)The bankruptcy notice was for more than one final judgment, being a final judgment of $5,843.50 for costs given in the High Court at Wellington on 2 September 2003, and a final judgment for $2,000 for costs given in the Court of Appeal on 8 October 2003.
(2)The bankruptcy notice reported the judgment creditor as being the respondent, Ms Janine Creser. Mr Creser submits that the notice should have recorded the judgment creditor as being Ms Janine Creser and her sister Marion Ngaire Creser, who were the trustees and executors of the estate which Mr Creser says ultimately obtained the costs orders against him.
(3)The bankruptcy notice was silent as to any security held by the judgment creditor. Mr Creser says that the respondent did hold security, in the form of a deed of assignment of his interest in his late mother’s estate, executed by Mr Creser on 6 October 2003.
[7] Mr Creser contends that those three deficiencies in the bankruptcy notice were sufficiently serious that they could not have been saved by the operation of s 11 of the 1967 Act (which in general terms provided for the rectification of errors or omissions in bankruptcy proceedings), and as a result the proceeding in which he was adjudicated bankrupt was fatally flawed. He says that the situation falls squarely within s 119(1)(a) of the 1967 Act.
[8] Ms Janine Creser filed a notice of opposition to the annulment application, and she also provided written submissions in opposition. However she elected not to attend the hearing.
[9] The Official Assignee was released from office by order of the Court made in
August 2007, and did not participate in the hearing.
Background
[10] Mr Creser and Ms Janine Creser are siblings. They have a sister Marion.
[11] By her last will, their late mother Jessie Cresser appointed her two daughters executors and trustees in her estate. After making various other provisions, she provided that a one third share of the residuary estate was to be vested in an independent trust, to be established with an institutional trustee or trustee company approved by the trustees, for the maintenance and support of Mr Creser during his lifetime.
[12] Mrs Jessie Cresser died on 20 March 2003. Mr Creser filed a caveat against the grant of probate to his two sisters, and he also filed a separate proceeding against his sister Janine, in which he sought an order revoking her appointment as executor of their mother’s estate. Mr Creser also sought a temporary order under s 7 of the Administration Act 1969, appointing an administrator of his mother’s estate. There were subsequent amendments to his claims, including an amendment to seek an order that Janine be removed as administrator or trustee under s 21(1) of the Administration Act.
[13] Ms Marion Creser, the other executor named in the will, was not named as a defendant in Mr Creser’s 2003 proceedings.
[14] Ms Janine Creser applied to strike out Mr Creser’s claim. In a judgment delivered on 2 September 2003 Gendall J struck out Mr Creser’s claims, and awarded costs of $5,843.50 against him. The Judge directed Janine and Marion, as the executors named in their late mother’s will, to apply for a grant of probate in solemn form if, within 14 days of the order, Mr Creser provided in writing, and in a
form suitable to the Registrar, security for costs by way of a charge against his interest in his late mother’s estate in the sum of $20,000, should costs be awarded against him in the proceedings. In the event of failure to provide the security within the 14 day period, Mr Creser’s caveat would be discharged.
[15] Mr Creser sought special leave to appeal out of time against that judgment, including the costs award. In a judgment delivered on 8 October 2003, the Court of Appeal declined his application. The Court of Appeal made an order for additional costs against Mr Creser, in the sum of $2,000.
[16] These two costs orders are the orders referred to in the bankruptcy notice issued by Ms Janine Creser against Mr Creser on 16 October 2003.
[17] The security for costs which Mr Creser was to provide if his caveat against the grant of probate to his two sisters was not to lapse, was provided in the form of a deed of assignment of Mr Creser’s interest in his mother’s estate, dated
6 October 2003. The deed was signed by Mr Creser as assignor. The assignees were Janine and Marion. The deed recited that Janine and Marion were the nominated executors of their mother’s will, and that Mr Creser was entitled to a share in the residuary estate on the terms set out in the will. In the operative part of the deed, Mr Creser assigned to his two sisters, by way of charge, all of his interest in the estate, as security for any costs which might be awarded against him, up to an aggregate of the $20,000 figure referred to in the judgment of Gendall J.
[18] The costs order made by Gendall J on 2 September 2003, was made in Mr Creser’s proceeding against his sister Janine.3 The named defendant in that case was Janine Creser alone. She and her sister Marion had not at that point in time been granted probate of their late mother’s last will.
[19] The costs subsequently ordered against Mr Creser in the Court of Appeal were awarded in favour of “the executors”.
3 Creser v Creser HC Wellington CIV-2003-485-893, 2 September 2003.
[20] When Mr Creser did not pay the costs awards referred to in the bankruptcy notice, Ms Janine Creser filed her adjudication application. It appears that Mr Creser made no application to set aside the bankruptcy notice (at least none was produced in evidence or referred to in Mr Haines’ submissions). However Mr Creser vigorously opposed the adjudication application.
[21] In an affidavit sworn by Mr Creser on 1 March 2004, he appears to have raised one of the very issues on which he now relies in seeking to have the adjudication order annulled. At paragraph [3] of that affidavit, Mr Creser said:
I believe the fact that Janine is acting alone provides sufficient cause to dismiss her petition upon the grounds that the trustees have a duty to act in unison, in particular, the costs sought were awarded to both of them.
[22] Mr Creser filed an appeal to the Court of Appeal against the adjudication order made by Associate Judge Gendall on 8 March 2004. He then applied to this Court for a waiver of security for costs on that appeal, and the application for waiver was the subject of a judgment given by Ronald Young J on 7 April 2004. The Judge refused the application to waive security for the appeal, noting that Mr Creser had been given two adjournments of the bankruptcy petition before the hearing at which the adjudication order was made.
[23] Ronald Young J canvassed the grounds advanced by Mr Creser in his proposed appeal, and noted that as the will then stood, Mr Creser was only a discretionary beneficiary in his late mother’s estate.4 The Judge noted that the residuary estate was divided between Mr Creser and his two sisters, but Mr Creser’s interest was not absolute – he had a life interest only, payable by way of maintenance and care at the absolute discretion of an independent trustee to be appointed.
Ronald Young J noted that Mr Creser might get nothing from the estate, or he might get some form of regular maintenance. The Judge went on to refer to Mr Creser’s
submission that the trustees should have considered his share of the estate as some
4 In subsequent proceedings under the Family Protection Act 1955, the Official Assignee succeeded with an argument that Mr Creser’s late mother breached her moral duty to him in failing to make any direct provision for him in her will – see the judgment of Miller J in Creser v Creser [2006] NZFLR 850, (2006) 25 FRNZ 902 (HC).
form of security for the costs he owed, and should not have pursued him to bankruptcy. Ronald Young J stated:5
Once the Courts made an order for costs, the trustees were entitled to enforce it against Mr Creser in any way they considered suitable according to law. They chose to enforce it by way of bankruptcy petition and they were entitled to do so. There is no evidence of any fraud in obtaining the bankruptcy order.
Ronald Young J considered that Mr Creser’s chances on the appeal against the adjudication orders seemed slim, noting particularly that Mr Creser had not successfully appealed against the costs orders.
[24] Mr Creser then applied to the Court of Appeal for special leave to appeal, under r 6(3) of the Court of Appeal (Civil) Rules which were then in force. In a judgment delivered on 2 September 2004, the Court of Appeal noted that the consequence of Mr Creser’s failure to provide security for Ms Janine Creser’s costs in the Court of Appeal was that his appeal was treated as having been abandoned. The Court of Appeal concluded that the order for adjudication was properly made,
and that Mr Creser had no arguable grounds of appeal.6
[25] In considering the merits of Mr Creser’s proposed appeal, the Court of Appeal found that all of the grounds of appeal were misconceived. On Mr Creser’s argument that he should have been allowed to set off the costs orders against his entitlement in his mother’s estate, the Court of Appeal said:7
There is nothing in that point, however, as Mr Creser has no vested interest in his mother’s estate. His “share” has been left to an institutional trustee who has a discretion to pay income to Mr Creser. In any event, Mr Creser’s earlier proceeding against his sister was not a claim against the estate: it seems to have been a misguided attempt to prevent his sister from applying for probate.
[26] The Official Assignee formed the view that Mr Creser had a valid claim against his late mother’s estate under the Family Protection Act 1955, and an application under that Act was made by the Official Assignee on behalf of
Mr Creser’s bankruptcy estate.
5 Creser v Creser HC Wellington, CIV-2003-485-2225, 7 April 2004 at [11].
6 Creser v Creser CA110/04, 2 September 2004 at [12].
7 At [8].
[27] In a judgment delivered on 11 May 2006, this Court awarded Mr Creser his one third share in his mother’s estate absolutely, so terminating the trust for him.8
The result of that judgment was that the Official Assignee was able to clear all of
Mr Creser’s debts, leaving a modest surplus.
[28] Mr Creser was automatically discharged from bankruptcy but he was not content to let the matter of the March 2004 adjudication rest. He applied for an order of annulment of his bankruptcy, pursuant to the same section on which he now relies (s 119 of the 1967 Act).
[29] In a reserved decision given on 24 August 2007, MacKenzie J noted that Mr Creser had been automatically discharged from his bankruptcy, pursuant to s 107 of the 1967 Act, three years have expired since the date of his adjudication.9 The Judge made an order releasing the Official Assignee from the administration of Mr Creser’s bankrupt estate, and went on to consider Mr Creser’s annulment application.
[30] There was no dispute that Mr Creser was entitled to an annulment order under s 119(1)(b), as Mr Creser’s creditors had all been paid. But both the Official Assignee and Ms Janine Creser opposed Mr Creser’s application for annulment under s 119(1)(a).
[31] MacKenzie J noted that the distinction between an order of annulment under subparagraphs 1(a) and 1(b) is significant, in that the making of an annulment order under subparagraph 1(a) has the effect that the adjudication is deemed to be annulled from and after the date of the adjudication. An adjudication made under any of the other paragraphs of s 119(1), takes effect only from the date of the annulment order.
[32] Mr Creser made a number of arguments in support of his application for annulment under s 119(1)(a). One of Mr Creser’s grounds was that Ms Janine Creser’s decision to act before probate in respect of property requiring
title was outside her powers and consequently the act of an executor de son tort.
8 Creser v Creser, above n 3.
9 Creser v Creser above n 3.
MacKenzie J held that, in the light of the extensive litigation which had already occurred, it would be “quite inappropriate to re-open issues of that type on this application”.10
[33] Mr Creser again ran the argument that the debt upon which the bankruptcy petition was based should have been set off against his share in his mothers’ estate. MacKenzie J noted that the set-off contention had been rejected by the Court of Appeal in its judgment of 2 September 2004, and could not be re-litigated. Various other grounds advanced by Mr Creser in support of his application under s 119(1)(a) were all rejected by the Judge. In the result, the only issue on which Mr Creser succeeded was his (unopposed) application for annulment under s 119(1)(b).
The issues
[34] In the current application, the following issues fall to be determined:
(1)Is there jurisdiction for the Court to make an order for annulment under s 119(1)(a) after Mr Creser’s automatic discharge from bankruptcy, and the subsequent making of an annulment order under s 119(1)(b)?
(2)If such jurisdiction exists, is Mr Creser entitled to make another application under s 119(1)(a) when a previous application under that section has been heard and dismissed?
(3)If jurisdiction to make a second application exists, has Mr Creser shown (i) that the adjudication order made on 8 March 2004 should not have been made and (ii) the Court should exercise its discretion in
favour of making an annulment order under s 119(1)(a)?
10 At [11(b)].
Discussion
Issue 1 – Is there jurisdiction for the Court to make an order for annulment under s 119(1)(a) after Mr Creser’s automatic discharge from bankruptcy, and the subsequent making of an annulment order under s 119(1)(b)?
[35] I will assume, without deciding, that the Court has jurisdiction to make an order under s 119(1)(a), notwithstanding that an annulment order has already been made under s 119(1)(b) of the 1967 Act. That is the view to which Associate Judge Matthews came in Brooks v Clyne & Bennie (1988) Ltd, a case decided under the equivalent provisions of the Insolvency Act 2006.11 And I accept that the automatic discharge of the bankrupt does not preclude an annulment order being made, at least under s 119(1)(b).12
[36] Whether there is jurisdiction to make an order under s 119(1)(a) after the date of a bankrupt’s automatic discharge is not entirely clear, particularly where the annulment application is based on some alleged invalidity of the original bankruptcy proceedings. The difficulty arises out of s 115 of the 1967 Act, which provides:
115 Discharge conclusive evidence of bankruptcy
A discharge shall be conclusive evidence of the bankruptcy and of the validity of the proceedings therein; and in any proceedings instituted against a bankrupt who has obtained an order of discharge in respect of any debt from which he is released by the order, the bankrupt may plead that the cause of action occurred before his discharge.
[37] I note that MacKenzie J was willing to entertain Mr Creser’s annulment application under s 119(1)(a), notwithstanding his earlier automatic discharge. However Mr Creser was not represented by counsel at the hearing, and the question of the possible impact of s 115 on the jurisdiction to make an annulment order under s 119(1)(a) was not discussed.
[38] I take “conclusive evidence of the validity of the proceedings in the bankruptcy” to include the validity of the bankruptcy notice which formed the basis
of the subsequent adjudication order.
11 Brooks v Clyne & Bennie (1988) Ltd [2013] NZHC 3501.
12 Cameron v Official Assignee HC Hamilton B81/80, 21 March 1989; Creser v Creser, above n 3.
[39] Mr Haines submitted that the section was designed to provide protection for the bankrupt against third party claims on causes of action occurring before the bankrupt’s discharge, and that certainly appears to have been one of the section’s purposes. However I am not sure that the plain wording of the section can or should be limited in the way for which Mr Haines contended.
[40] In the end, it is not necessary for me to decide the point, as Mr Creser’s
application fails on other grounds.
Issue 2 – If such jurisdiction exists, is Mr Creser entitled to make another application under s 119(1)(a), when a previous application under that section has been heard and dismissed?
[41] The question here is whether Mr Creser is entitled to make more than one application for annulment under s 119(1)(a).
[42] I think the answer must be “no”. The point arose in Cameron v Official Assignee, a case to which Mr Haines referred in his submissions.13 In that case, the debtor had been adjudicated bankrupt in July 1980, and later that year applied for an order of annulment. The debtor’s application was made under s
119(1)(a) of the 1967 Act. The application for annulment was dismissed, but leave was reserved to the debtor to apply again if grounds arose under s 119(1)(b). The case came before Doogue J in March 1989, when the debtor made a second application for annulment of the adjudication order made in July 1980. Counsel for the former bankrupt (by then, the debtor had been discharged from bankruptcy) submitted that the original order for adjudication ought not to have been made; that the case came within s 119(1)(a) of the 1967 Act. Counsel for the Official Assignee pointed to the fact that, when the case came before Bisson J on 17 October 1980, the Judge refused to make an annulment order under s 119(1)(a), but reserved the debtor’s position under s 119(1)(b).
[43] Doogue J dealt with the court’s dismissal of the earlier application under
s 119(1)(a) in the following terms:
13 Cameron v Official Assignee, above n 12.
I am also faced with the position where Bisson J took the view, on
17 October 1980, that the identical application which is now made to me should be refused but that leave should be reserved to the Applicant to apply
again but solely if grounds arise under section 119(1)(b) if [a Court
proceeding relating to the debtor’s tax liability] was decided in his favour. Whilst the point has not been argued before me, it appears to me that there was necessarily a determination by Bisson J that relief should not be granted under s 119(1)(a) of [the 1967 Act] and that, there having been no appeal from that application, the applicant’s present rights relate only to the extent that they were kept alive by Bisson J in respect of s 119(1)(b) of [the 1967
Act].
[44] So in this case, there has been no successful appeal against the August 2007 judgment of MacKenzie J, in which an annulment application made by Mr Creser under s 119(1)(a) was dismissed.
[45] It seems to me that there are two broad points of principle which favour the view that a bankrupt (or former bankrupt) should not be permitted to make serial applications for annulment of the original adjudication order. First, there is the principle of finality. It is appropriate in bankruptcy law that issues should be concluded once and for all, in the interests of commercial certainty and finality.14
Secondly, there is the broader litigation principle that a party should put before the
Court all matters of which he or she is aware, which go to the issue to be determined, at the one hearing. In Greenhalgh v Mallard Somervell LJ said: 15
I think that on the authorities to which I will refer it would be accurate to say that res judicata for this purpose is not confined to the issues which the court is actually asked to decide, but that it covers issues or facts which are so clearly part of the subject-matter of the litigation and so clearly could have been raised that it would be an abuse of the process of the court to allow a new proceeding to be started in respect of them.
[46] More recently, the same point was made by Asher J in Rafiq v Secretary, Department of Internal Affairs of New Zealand:16
Mr Rafiq returns to Court to advance arguments that he could have put forward for decision in the 1385 proceedings, but failed to raise. A party cannot bring a case relating to a certain party, certain sequences of conduct, and a certain timeframe, and then when it fails bring another case raising another similar complaint relating to the same party, the same sequence and
14 Insolvency Law and Practice (online looseleaf ed, Brookers) at [IN37.01(1)(a)] citing Re Guest, ex parte BNZ Finance Ltd [1991] 1 NZLR 250 (HC) at 255.
15 Greenhalgh v Mallard [1947] 2 ALL ER 255 (CA) at 257.
16 Rafiq v Secretary, Department of Internal Affairs of New Zealand [2014] NZHC 2064 at [21].
the same timeframe. Parties must bring their whole case to the Court so there can be finality of litigation.
[47] In this case, the factual bases for Mr Creser’s application were all well known to him before he made the annulment application under s 119(1)(a) which was dismissed by MacKenzie J in August 2007. The broad issue determined by MacKenzie J on Mr Creser’s 2007 annulment application, was whether or not the March 2004 adjudication order should have been made, and the Judge determined that issue against Mr Creser.
[48] Mr Haines submits that Mr Creser did not have the benefit of counsel’s assistance in the earlier hearings, but I am not aware of any exception to the principles of finality and a litigant’s obligation to put all relevant and available arguments before the Court on the one application on that account. I do not think it is open to Mr Creser to bring a second application, relying on grounds all of which were available to him before the first application was made. The question of whether the March 2004 adjudication order should not have been made has been determined against Mr Creser, and (as in Cameron v Official Assignee) the point cannot be re-litigated now.
Issue 3 – If jurisdiction exists, has Mr Creser shown that (i) the adjudication order made on 8 March 2004 should not have been made and (ii) the Court should exercise its discretion in favour of making an annulment order under s
119(1)(a)?
[49] In case I am wrong in my conclusion that Mr Creser is not entitled to a second bite at the cherry under s 119(1)(a), I record that I would not in any event have been prepared to exercise my discretion in favour of making an annulment order under s 119(1)(a).
[50] The authors of Heath & Whale on Insolvency note that the Court’s power to order annulment is a discretionary power, and that unreasonable delay in making an application for annulment may supply good reason for the Court to refuse to grant
the application.17 The delay in this case is extreme (over ten years from the date of
17 Paul Heath and Michael Whale (eds) Heath and Whale on Insolvency (online looseleaf ed, LexisNexis) at [9.23].
citing Ex parte French, Re Trim (1882) 52 LJ Ch 48 and Re and Ex parte Ponsford [1904] 2 KB
adjudication), and I take into account also the delay since Mr Creser’s 2007
application for annulment under s 119(1)(a) was dismissed.
[51] Furthermore, I note that Mr Creser did raise the issue of whether Ms Janine Creser was entitled to pursue recovery of the two costs judgments, before the adjudication order was made.18 It was therefore a matter which was before the Court when the adjudication order was made, and the Court of Appeal saw no basis to overturn the adjudication order. Mr Haines submits that the point has not been raised before in the context of the validity of the bankruptcy notice. But the point was made clearly enough by Mr Creser, and if there was a fundamental defect in the adjudication proceedings as Mr Creser contends, it would have been obvious to
Associate Judge Gendall and to the Court of Appeal. I note too that the judgment of Gendall J in the High Court, in which the first of the costs orders was made, was expressly made in favour of the only named defendant in the relevant proceeding, Ms Janine Creser. The appeal against the judgment of Gendall J appears to have been argued primarily on the issue of Mr Creser’s application for special leave to appeal out of time against the costs judgment of the High Court, which was of course a judgment in favour of Ms Janine Creser. I do not see this ground as providing a sufficient reason for me to exercise my discretion in favour of setting aside the adjudication order over ten years after it was made.
[52] A further point is that, under s 20(b) of the 1967 Act, a bankruptcy notice would not have been invalidated by reason only that the sum specified in the notice as the amount due exceeded the amount actually due, unless the debtor, within the time allowed for payment, gave notice to the creditor that he disputed the validity of the notice on the ground of that misstatement. If the correct position is that Ms Janine Creser’s standing as a creditor was limited to the amount of the costs judgment made in the High Court, and she had no entitlement to the costs ordered in the Court of Appeal (on the basis that those costs were awarded to her and her sister in their capacities as the named executors in their mother’s estate) then it seems to
me that the result would simply have been that the bankruptcy notice was overstated
704 (CA).
18 Affidavit of Richard John Creser dated 1 March 2004 at [3] (set out above at [21].
to the extent of the amount of costs awarded by the Court of Appeal. Under s 20(b), that would not have been sufficient to invalidate the notice.19
[53] Mr Haines submitted that the bankruptcy notice was defective, because it referred to two separate judgment debts. His submission, citing Re Low20 and Carlyle v McCardle & Ors21, was that a bankruptcy notice must be based on only one judgment debt. The rationale for the rule is said to be that, if that were not the position, the debtor’s right to satisfy one of the notices, or to raise a counterclaim, set-off, or cross-demand to it (and so prevent that notice being used as the basis for presenting a bankruptcy application) would be taken away from him or her.22
[54] But if such a principle does exist in New Zealand law (a point I do not need to consider) I do not think it could have any application to the present case. In this case, it seems to me that Mr Creser’s liability for the amount claimed in the bankruptcy notice did arise out of one final judgment, namely the Court of Appeal decision dated 8 October 2003, in which the Court of Appeal (i) effectively upheld the costs order which Gendall J made on 2 September 2003 and (ii) awarded further costs of $2,000 against Mr Creser.
[55] The point is technical and lacking in any substantive merit – no basis has been put forward on which I could conclude that Mr Creser’s rights were somehow prejudiced. There is no suggestion that he might have paid the High Court costs order but not the order made by the Court of Appeal (or vice versa), or that he had some cross-claim or demand that might have been set off against either order. To the extent that I might be wrong in my view that the bankruptcy notice was not defective on the “two judgments” basis, the defect would not in my view justify the making of the annulment order which Mr Creser seeks.
[56] Nor do I see any merit in the argument that the bankruptcy notice was defective because Ms Janine Creser failed to refer in it to security held by her. The
19 There is nothing in the evidence on this application to show that Mr Creser gave notice to Ms Janine Creser disputing the validity of the bankruptcy notice, on the grounds that it overstated the amount which was due to her in her personal capacity.
20 Re Low, ex parte the Argentine Gold Fields Ltd [1891] 1 QB 147.
21 Carlyle v McCardle and Richardson; Wellington Registry B 394/96; 12 March 1997, Master
Thomson.
22 Re Low, above n 20, p 148.
judgments of Ronald Young J and the Court of Appeal on Mr Creser’s application for a waiver of the obligation to provide security for the respondent’s costs on his appeal against the adjudication order, make it clear that Mr Creser did not then have any vested interest in his mother’s estate. Whatever the deed of assignment said, it could not change that reality. Furthermore, the deed of assignment did not confer on Ms Janine Creser security for the debts which were the subject of the bankruptcy notice: the deed of assignment only created security in respect of the costs Ms Janine Creser and her sister would incur in the future in prosecuting their claim for a grant of probate in solemn form. I think it is reasonably clear that Ms Janine Creser did not hold any security in respect of the costs order made against Mr Creser in the High Court.
[57] In all of those circumstances, Mr Creser has not shown that there are circumstances which would have justified the exercise of my discretion in favour of making an annulment order, if I had had jurisdiction to do so. Mr Creser’s amended application for an annulment order is accordingly dismissed.
Associate Judge Smith
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