De Vries v Bartercard Exchange Limited
[2017] NZHC 1851
•4 August 2017
IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY
CIV-2016-485-428 [2017] NZHC 1851
UNDER the Insolvency Act 2006 IN THE MATTER
of the bankruptcy of
Anthony Harry de VriesBETWEEN
ANTHONY HARRY DE VRIES Applicant/Debtor
AND
BARTERCARD EXCHANGE LIMITED Respondent/Creditor
On the papers Submissions 20 February 2017, 18 and 27 April 2017,
2 May 2017, 6 and 28 July 2017, 1 August 2017
Judgment:
4 August 2017
JUDGMENT OF ASSOCIATE JUDGE SMITH
Introduction
[1] Mr de Vries asks me to recuse myself from hearing an application to adjudicate him bankrupt which is scheduled for 10 August 2017. His application alleges bias on my part, and follows a complaint made to the Judicial Conduct Commissioner.
[2] Bartercard Exchange Limited (Bartercard) wishes to proceed with its application to adjudicate Mr de Vries bankrupt, and it opposes the recusal
application.
DE VRIES v BARTERCARD EXCHANGE LIMITED [2017] NZHC 1851 [4 August 2017]
Background
[3] The history of this matter is set out in my previous judgments and there is no need to give more than an overview.1
[4] Bartercard had obtained two judgments against Mr de Vries in the Hutt Valley District Court in September 2011. One of them was for the sum of $179,772.42 (the principal judgment) and the other was for the sum of $170,303.56. A bankruptcy notice (the first bankruptcy notice) was issued in respect of the principal judgment.
[5] On 30 September 2015, the first bankruptcy notice was served on Mr de Vries. Mr de Vries did not pay or apply to set aside the first bankruptcy notice, and Bartercard filed an application for an order for adjudication on
5 November 2015. Mr de Vries opposed that application.
[6] On 15 April 2016, I issued a judgment dismissing the application to adjudicate Mr de Vries bankrupt, on the grounds that the amount claimed in the first bankruptcy notice was overstated and there was insufficient evidence to determine the exact amount of the overstatement (April 2016 Judgment). I made it clear that nothing prevented Bartercard serving a second bankruptcy notice with the correct amount stated.
[7] On 5 July 2016 Bartercard duly served a second bankruptcy notice (the second bankruptcy notice) on Mr de Vries. On 5 September 2016 Mr de Vries applied to set aside that bankruptcy notice. I dismissed his application in a judgment delivered on 30 November 2016 (November 2016 Judgment).
[8] In the meantime, Mr de Vries had filed an application to set aside the 2011 judgments against him in the District Court. On 5 December 2016, Judge Tompkins dismissed that application.2 Judge Tompkins considered Mr de Vries had failed on
the required grounds of (1) establishing a substantial ground of defence,
1 Bartercard Exchange Ltd, ex parte de Vries [2016] NZHC 703 [April 2016 Judgment] and
De Vries v Bartercard Exchange Ltd [2016] NZHC 2874 [November 2016 Judgment].
2 De Vries v Bartercard New Zealand Limited [2016] NZDC 26160.
(2) reasonably explaining the delay in applying to set the judgments aside and (3) satisfying the Court Bartercard will not suffer irreparable injury if the judgment is set aside.3
[9] On or about 21 December 2016, Mr de Vries filed a notice of appeal against that decision. Initially that document was not accepted, and it was returned to Mr de Vries. However the appeal documents were later accepted for filing and the appeal was called in this Court on 6 June 2017. It was adjourned to the Chambers List on 14 August 2017, pending the determination of an application for legal aid by Mr de Vries’ in respect of temporarily appointed counsel, Ms Hunt.4 A fixture has not been set for the appeal against Judge Tompkins’ decision.
[10] On 9 December 2016 Bartercard filed another application to adjudicate
Mr de Vries bankrupt.
[11] On 23 December 2016 Mr de Vries filed a notice of appeal to the Court of
Appeal against the November 2016 Judgment.
[12] On 20 February, Mr de Vries filed a 50 page submission document in this
Court.
[13] On 21 February 2017, when I was on leave and Associate Judge Christiansen was sitting in my place, Bartercard’s bankruptcy adjudication application was called in the regular fortnightly bankruptcy list. Associate Judge Christiansen adjourned the application for hearing to 24 April 2017. He directed Bartercard to file submissions by 10 April 2017 and Mr de Vries to file submissions by 18 April 2017. The submissions were duly filed.
[14] Bartercard’s application for an order adjudicating Mr de Vries bankrupt came called before me on 24 April 2017. I adjourned the hearing to 22 May 2017, pending decisions in the Court of Appeal affecting Mr de Vries’ appeal against the November 2016 Judgment. I recorded in a minute that Mr de Vries raised concerns
as to whether I should hear the adjudication application.
3 At [13].
4 De Vries v Bartercard HC Wellington CIV-2017-485-425, 6 June 2017 (Minute of Faire J).
[15] The Deputy Registrar of the Court of Appeal had made two decisions in respect of Mr de Vries’ appeal against the November 2016 Judgment. First, the Deputy Registrar had declined Mr de Vries’ application for a waiver of the filing fee on the appeal. Secondly, the Deputy Registrar had declined his application for a dispensation from an appellant’s ordinary obligation to post security for the respondent’s costs. At the time I adjourned the hearing on 24 April 2017 an application by Mr de Vries for a review of those decisions was pending, and a decision on that review application was expected to be delivered shortly by Miller J.
[16] On 28 April 2017 Miller J granted an extension of time to bring the review applications, but then proceeded to dismiss them.5 Security for costs was fixed at
$6,600, with a payment deadline of 26 May 2017. That deadline was subsequently extended to 30 June 2017 when Mr de Vries retained Ms Barbara Hunt on a provisional basis, subject to legal aid being granted in relation to the appeal. (If legal aid were granted, Mr de Vries would not be required to post the security.)
[17] On 3 May 2017 Mr de Vries made a complaint against me to the Judicial Conduct Commissioner. He said that the complaint relied on an enclosed memorandum, his submissions made on 18 April 2017, and his 50 page submission document dated 20 February.
[18] On 19 May 2017 I convened a telephone conference to deal with a request made by Ms Hunt for an adjournment of the 22 May 2017 fixture. Ms Hunt needed some time to get the legal aid application in and to review the documents Mr de Vries had provided her. I granted an adjournment until 22 June 2017, and directed that a further telephone conference be convened on 1 June 2017 to review progress.
[19] On 24 May 2017 I issued another minute, dealing with a request Mr de Vries had made for transcripts of the hearings on 21 February 2017 and 24 April 2017 in the bankruptcy adjudication proceeding in this Court. Mr de Vries had asked for the transcripts by email, saying that they related to the appeal he had filed in this Court.
It appeared that the transcripts were sought in connection with Mr de Vries’ appeal
5 De Vries v Bartercard Exchange Ltd [2017] NZCA 1452.
against the decision of Judge Tompkins on 5 December 2016, in which the Judge had refused to grant Mr de Vries a rehearing in the proceedings in which Bartercard had obtained the 2011 judgments against Mr de Vries.
[20] I noted in my minute of 24 May 2017 that the Supreme Court has held6 that judges should always satisfy themselves that there is good reason in the interests of justice for directing that Court transcripts be supplied to litigants, and it was not immediately clear to me how transcripts of hearings in this Court in February and April of 2017 could affect the correctness or otherwise of Judge Tompkins’ decision given on 5 December 2016. I directed that Mr de Vries must provide further information, making it clear how the transcripts were said to be relevant to the substance or conduct of his appeal.
[21] At the 1 June 2017 telephone conference, at which Mr de Vries was represented by Ms Hunt, I invited counsel to make submissions on a number of matters, including Mr de Vries’ recusal application.
[22] The other matters included the question of progress with Mr de Vries’ application for legal aid, and progress with his appeal to the Court of Appeal. I encouraged Mr de Vries to provide financial information so that the legal aid application could be promptly dealt with, and reminded Mr de Vries of the
30 June 2017 date for posting security in the Court of Appeal if legal aid had not been granted by then. Given the extension of time for Mr de Vries to notify the Court of Appeal of the position with his legal aid application, I granted a further adjournment of the bankruptcy hearing to 10 August 2017.
[23] On 22 June 2017, Ms Hunt notified this Court that Mr de Vries had withdrawn his application for legal aid and his instructions to her. She sought leave to withdraw as counsel. On 6 July 2017, Mr de Vries confirmed he no longer had an application for legal aid, and that his position on recusal remained the same. He referred to “further evidence” to support his position that the original judgment was “out of order”. He again requested the transcripts of the hearings on
21 February 2017 and 24 April 2017, stating they were required for his appeal.
6 Siemer v Heron [2011] NZSC 116 at [9].
[24] On 17 July 2017 I issued a minute in which I requested the registrar to arrange a teleconference, in order to resolve Ms Hunt’s request to withdraw as counsel, Mr de Vries’ requests for transcripts, Mr de Vries’ application to file documents on his own behalf, and his renewed application for recusal.7 Mr de Vries was unable to attend a teleconference, but advised by email correspondence that he did not oppose Ms Hunt’s withdrawal. He confirmed by memorandum filed on
20 July 2017 that he required the full transcripts for the recusal application.
[25] The transcripts of the 21 February 2017 and 24 April 2017 hearings were provided to Mr de Vries on 26 July 2017. On 26 July 2017 I allowed Mr de Vries to file supplementary submission on the recusal application, by 31 July 2017.8 In the meantime, the fixture for the adjudication hearing on 10 August 2017 would remain. Mr de Vries filed supplementary submissions on his recusal application on
28 July 2017.
[26] I allowed Bartercard to file any supplementary submissions in reply by
1 August 2017. Bartercard responded with brief submissions opposing Mr de Vries’ grounds for recusal and contending that “recusal should be robustly rejected”. Mr de Vries promptly responded with a two page memorandum in reply (August reply).
[27] I now deal with Mr de Vries’ application for recusal.
The recusal application
[28] The recusal application is substantially based on Mr de Vries’ 50 page submission document dated 20 February 2017 (February submissions), his submissions dated 18 April 2017 (April submissions), a “Memorandum to the High Court 2 May 2017” (May submissions), a “Memorandum to the High Court
6 July 2017” (6 July submissions) and a “Memorandum to the High Court re Recusal
28 July 2017” (28 July submissions), and the August reply. Mr de Vries says I
7 De Vries v Bartercard HC Wellington CIV-2016-485-428, 17 July 2017 (Minute of Associate
Judge Smith).
8 De Vries v Bartercard HC Wellington CIV-2016-485-428, 26 July 2017 (Minute of Associate
Judge Smith).
should not preside over the adjudication hearing, and that an “independent Judge”
should take my place, regardless of the outcomes of the appeals.
[29] I have read the February submissions, the April submissions, the May submissions and the two July submissions. I have also taken into account the August reply. In summary, Mr de Vries appears to allege bias on ten grounds:
(1) I was the Judge who ruled Mr de Vries had committed an act of
bankruptcy and would “obviously not want [my] ruling overturned”.9
(2)Bartercard “deliberately deceived” all parties,10 and Mr de Vries submits this has been ignored.11 In particular, reference is made to communications between Mr de Vries and Mr Rogers which Mr de Vries says demonstrate that Bartercard had not taken
bankruptcy proceedings against Mr Rogers, despite Mr Chetty’s evidence that he had given instructions for bankruptcy steps to be taken in respect of Mr Rogers.12
(3)At the hearing on 24 April 2017, I wrongly refused to hear case submissions and Mr de Vries’ notice of opposition, due to the fact I wanted to await the decision of Miller J in the Court of Appeal. This is said to have caused “unnecessary delay”.13
(4)I refused to allow a rehearing or accept a miscarriage of justice in relation to the original judgments, for the “sole reason” that Mr de Vries had left the case for five years, yet I invited Bartercard to file the case for bankruptcy during this same time period.14
Mr de Vries also referred to an agreement in 2013 to “drop the case
9 May submissions, at [10] and [12] and April submissions at [13] and [15]. 28 July submissions at [22] and [25].
10 February submissions at [46]-[50].
11 February submissions at [34] (failure to order costs) and [36].
12 November 2016 Judgment at [55].
13 May memorandum at [9].
14 February submissions at [15] and [51]; April submissions at [3], [27], May submissions at [19]
and 28 July submissions at [6] and [9].
without costs”, in terms of his efforts to counter Bartercard’s
“unjustified attack”, which I am said to have ignored.15
(5)I should have waited until the decision of the District Court on the application to rehear the District Court claims, before determining the application to set aside the second bankruptcy notice in the High Court. Mr de Vries submits there was a denial of rights to fairness and rights to a proper hearing.16 Mr de Vries also submits that the notice of opposition filed in respect of his stay of execution application had been lost by Bartercard, yet I allowed the proceeding on the second bankruptcy notice to go ahead.17
(6)The failure to wait for the District Court decision before determining the application to set aside the second bankruptcy notice resulted in Judge Tompkins using the High Court ruling to deny a rehearing.18
Mr de Vries alleges there was “collusion” between the rulings of the
Judges.19
(7)When I referred in Court to Mr de Vries having worked for the ANZ Bank some years ago, this demonstrated there was “more going on behind the scenes than there ought to be”, and was a “further breach of Mr de Vries’ privacy”.20
(8)I should have removed Mr Dewar from the proceedings, and ensured Bartercard had an “independent lawyer”. Mr de Vries submitted that Mr Dewar unethically contacted Bartercard to re-open the case in
2015. He contends that I was aware of Mr Dewar’s “collusion” to get
involved in cases that had nothing to do with him (referring to
Body Corporate 68792 cases), and that Mr Dewar and Bartercard
15 28 July submissions at [7] and August reply at [4].
16 February submissions at [21], [24] and [25] and 28 July submissions at [17].
17 28 July submissions at [7].
18 February submissions at [27], [31] and [32].
19 February submissions at [52]
20 February submissions at [52].
should have been held to account for false statements.21 I should have also removed Mr Dewar from the proceedings related to Body Corporate 68792.22
(9) In respect of the transcripts, I should not have delayed giving these to
Mr de Vries.23
(10)What was said by Associate Judge Christiansen at the February hearing was not followed through procedurally by me in the April hearing, and I should not have “taken over” this case.24 The transcripts show I have failed to read or consider properly Mr de Vries’ position.25
[30] On the subject of alleged bias generally, Mr de Vries said:26
… the failure of Associate Judge Smith to apply the law to parties that manipulate the case and made false statements in Court and refusal to address persecution of Mr de Vries and refusal to focus on the real issues and show favouritism to Bartercard and Mr Dewar is simply not right…
[31] In Mr de Vries’ submissions, he has raised a number of points that go to the appeal against the November 2016 Judgment, which I do not consider appropriate for determination on this recusal application. For example:
(a) There are “major issues” with my last ruling as per affidavits and documents fully verified.27 The facts clearly show my previous ruling was “out of order”.28
(b)The Court refuses to take into consideration Bartercard dollars have no time limit for repayment of any alleged debt and Bartercard debt is
21 28 July submissions at [1], [2], [3], [8], [10] and [11]; 6 July submissions at [9] and [10] and
August reply at [4]-[9].
22 28 July submissions at [28].
23 6 July submissions at [5] and [6].
24 6 July submissions at [8].
25 28 July submissions at [12]-[15], [19], [20] and [25] and 6 July submissions at [7] and [8].
26 February submissions at [38].
27 May memorandum at [8].
28 May memorandum at [14] and February submissions at [38], responses to November 2016 judgment and [53]-[57].
owned by members. Bartercard dollars are not New Zealand dollars.29
[32] Mr de Vries has extracted from the November 2016 Judgment various conclusions which he challenges. Generally, these go to the appeal, and do not raise issues which are appropriately dealt with on the recusal application. For example, Mr de Vries questioned aspects of Mr Chetty’s affidavit filed in opposition to the application to set aside the second bankruptcy notice, and submitted that the affidavit did “not portray the whole truth”. Those are arguments for appeal against the November 2016 judgment; they do not raise recusal issues. I note also that Mr de Vries included in the February submissions his notice of appeal to the Court of Appeal. He has applied for “an award for costs and damages”. Again, those are not issues for this application.
[33] Numerous arguments were similarly raised by Mr de Vries which go toward the adjudication application, and not to the application for recusal. For example:
(a) Bartercard’s submissions of 10 April do not justify the alleged debt or how the debt was accumulated, and do not prove Mr de Vries should be adjudicated bankrupt.30
(b)New evidence proves the claims of Bartercard are unfounded and show that Bartercard misrepresented the case, facts and figures. Mr de Vries says he will prove this at the 10 August hearing.31
Mr de Vries says that references to further evidence may also be relevant to his appeal.
[34] If Mr de Vries has new evidence to produce which is relevant to the adjudication application, he will need to apply for leave to produce that evidence, with an affidavit or affidavits setting out that new evidence. He is well outside the
timetable directions made on 21 February 2017 for the filing of affidavits, and
29 May memorandum at [22] and [23]. April submissions at [6].
30 May memorandum at [15] and [20]. April submissions at [25] and [26] and “Summary” [1] -[8].
31 28 July submissions at [23] and [27]; 6 July submissions at [11] and August reply at [11].
Bartercard will have the right to be heard on any application to adduce further evidence.
[35] Mr de Vries’ contentions toward the end of his 28 July submissions regarding his disputes with Body Corporate 68792 appear to have no bearing on the recusal application, except to the extent that he says Mr Dewar was involved for the Body Corporate in those disputes, and his firm should not have been permitted to represent Bartercard in its bankruptcy claims against him.32 The principal focus of the bankruptcy adjudication application will be whether or not Bartercard has made out its case for an adjudication order.
Recusal for apparent bias – the law
[36] The starting position is that a judge has an obligation to sit on any case allocated to him or her unless grounds for recusal exist.33 A judge should disqualify him or herself from hearing a case34 “if a fair-minded lay observer might reasonably apprehend that the judge might not bring an impartial mind to the resolution of the question the judge is required to decide.”35 The standard for recusal is one of real and not remote possibility.36
[37] The recusal inquiry requires two steps:37
(a) 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
(b) second, whether there is a “logical and sufficient connection” between
those circumstances and that apprehension.
32 28 July submissions at [29]-[32].
33 Guidelines for Recusal (12 June 2017), available at < to qualifications relating to waiver or necessity.
35 Saxmere Company Ltd v Wool Board Disestablishment Company Limited [2009] NZSC 72, [2010] 1 NZLR 35 (Blanchard, Tipping, McGrath, Gault and Anderson JJ) at [3].
36 Guidelines for Recusal, above n 36, at 1.3.
37 Saxmere, above n 35 and Guidelines for Recusal, above n 33 at 1.4.
[38] The fair minded lay observer is presumed to view matters objectively and be reasonably informed about the legal system and the issues in the case.38 The observer must be taken to understand that a judge is expected to be independent in decision-making and has taken the judicial oath and that judges are also expected to sit on cases allocated to them unless grounds for disqualification exist.39 The observer’s apprehension is not to be tested by reference to individual or motivated views of the particular litigant who alleges bias (that person being the least objective observer of all).40
[39] The Guidelines for Recusal created under s 171 of the Senior Courts Act
2016 by the Chief High Court Judge in consultation with the Chief Justice state some of the matters a judge should consider are:41
(a) A judge should apply the above principles firmly and fairly and not accede too readily to suggestions of bias.
(b)A judge should be mindful of the burden that passes to other judges if the judge recuses him or herself unnecessarily.
(c) A judge is not required to recuse him or herself merely because the issues involved in a case are in some indirect way related to the judge’s personal experience or that the judge has previously dealt with the case.
(d)If, after considering all relevant circumstances, there is doubt about whether there may properly be an appearance of bias, it may be prudent for the judge to decline to sit in that case.
[40] In Havenleigh Global Services Ltd, ex parte Henderson, Associate Judge
Osborne noted that if there is to be a ground of recusal based on apparent bias once a proceeding has commenced, it would most logically have come about because the
38 Saxmere, above n 35, at [5].
39 At [8].
40 At [10].
41 Guidelines for Recusal, above n 33, at 1.5.
judge in the course of the proceeding has displayed such a high degree of favouritism or antagonism as to preclude fair judgment and/or lead to pre- judgment.42
[41] The simple filing of a complaint with the Judicial Conduct Commissioner does not, without more, require a judge to recuse himself or herself from hearing further matters in a proceeding.43 (In this case the complaint documents referred to the Judicial Conduct Commissioner which have been referred to me comprise the February submissions, the April submissions, and the May submissions. I am not aware of any complaint to the Judicial Conduct Commissioner which is not referred
to in one or more of those submissions.)
The nature of an adjudication order
[42] Before turning to my analysis, it may be helpful to outline the differences between determining an application to set aside a bankruptcy notice (at issue in the November 2016 Judgment), and an application to adjudicate someone bankrupt (at issue now).
[43] Section 13 of the Insolvency Act 2006 (the Act) sets out when a creditor may
apply for a debtor’s adjudication:
13 When creditor may apply for debtor’s adjudication
A creditor may apply for a debtor to be adjudicated bankrupt if –
(a) the debtor owes the creditor $1,000 or more, if 2 or more creditors join in the application, the debtor owes a total of $1,000 or more to those creditors between them; and
(b) the debtor has committed an act of bankruptcy within the period of 3 months before the filing of the application; and
(c) the debt is a certain amount; and
(d) the debt is payable either immediately or at a date in the future that is certain.
42 Re Havenleigh Global Services Limited, ex parte Henderson [2016] NZHC 2356 at [13].
43 Guidelines for Recusal, above n 33, at 1.5.4 and Siemer v Heron [2011] NZSC 116 and Slavich v
Attorney-General [2013] NZSC 130.
[44] Failure to comply with a bankruptcy notice is an “act of bankruptcy” for the
purposes of s 13(b). Section 17 of the Act materially provides:
17 Failure to comply with bankruptcy notice
(1) A debtor commits an act of bankruptcy if –
(a) a creditor has obtained a final judgment or a final order against the debtor for any amount; and
(b) execution of the judgment or order has not been halted by a court; and
(c) the debtor has been served with a bankruptcy notice; and
(d) the debtor has not […]
(i) complied with the requirements of the notice; or
(ii) satisfied the court that he or she has a cross claim against the creditor
(2) In subsection 1(d)(ii), cross claim means a counterclaim, set-off, or cross demand that –
(a) is equal to, or greater than, the judgment debt or the amount that the debtor has been ordered to pay; and
(b) the debtor could not use as a defence in the action or proceedings in which the judgment or the order, as the case may be, was made.
[45] Section 37 of the Act sets out when the Court may refuse adjudication. It confers on the Court a wide discretion:
37 Court may refuse adjudication
The court may, at its discretion, refuse to adjudicate the debtor bankrupt if –
(a) the applicant creditor has not established the requirements set out in section 13; or
(b) the debtor is able to pay his or her debts; or
(c) it is just and equitable that the court does not make an order of adjudication; or
(d) for any other reason an order of adjudication should not be made.
[46] It will be apparent from those sections that decisions as to whether a relevant act of bankruptcy has occurred, and decisions on whether an order for adjudication
should be made, are distinct decisions under the Act. If and to the extent I may have erred in my conclusion that Mr de Vries committed an act of bankruptcy, he had the right to appeal the November 2016 judgment to the Court of Appeal. He has exercised that right, and that fact will be a relevant matter for consideration at the hearing of the adjudication application, as will Mr de Vries’ appeal to this Court against the December 2016 decision of Judge Tompkins. In addition to s 37 of the Act, ss 38 and 42 of the Act provide:
38 Court may halt application
(1) The Court may at any time halt the creditor's application for adjudication.
(2) The Court may halt the application on the terms and conditions (if any), and for the period, that the Court thinks appropriate.
…
42 Halt or refusal of application when judgment under appeal
(1) This section applies if the creditor’s application for adjudication
relies on 1 of the following acts of bankruptcy:
(a) the debtor failed to comply with a bankruptcy notice (see
section 17)…
(2) If the debtor has appealed against the judgment or order underlying the bankruptcy notice or the judgment for non-payment of trust money, as the case may be, and the appeal is still to be decided, then the Court may—
(a) halt the creditor’s application for adjudication; or
(b) refuse the application.
Analysis of Mr de Vries’ particular grounds of recusal
[47] I address each of the ten grounds for recusal raised by Mr de Vries (listed at para [29] of this judgment) in turn.
Ground 1
[48] Mr de Vries submits that because I ruled Mr de Vries’ had committed an act of bankruptcy, I would “obviously not want [my] ruling overturned”.
[49] My determination of Mr de Vries’ application to set aside the bankruptcy notice in favour of Bartercard does not, of itself, constitute grounds for alleging the appearance of prejudgment.44 Judges are expected to hear related proceedings, and “a judge is not required to recuse him or herself merely because… the judge has previously dealt with the case”.45 Moreover, “[a]n expression of opinion in an earlier case or in an earlier stage of a proceeding is not of itself a ground for recusal”.46
[50] An adjudication hearing is not an appeal against my judgment to set aside the bankruptcy notice. The considerations and tests are separate under the Act, as illustrated by the overview above at [41]–[45].
[51] And it is not uncommon for a judge to hear an application to set aside a bankruptcy notice, and then to hear the adjudication application.47 A fair-minded lay observer with knowledge of the general workings of the legal system would not consider that, solely because of the findings I made against Mr de Vries in the November 2016 Judgment, I should recuse myself from the adjudication hearing.
Ground 2
[52] Mr de Vries submits Bartercard deliberately deceived all parties, and that I ignored this. He makes reference to recent communications between him and Mr Rogers which he says confirm his position that he has been “severely prejudiced”
by Bartercard’s favouritism toward Mr Rogers.48
44 See A v R [2016] NZSC 31, where William Young and O’Regan JJ did not have to recuse themselves from the Supreme Court leave decision having sat on the Court of Appeal panel in R v AM (CA27/2009) [2010] NZCA 114.
45 Guidelines for Recusal, above n 33, at 1.5.3. And in the recent Court of Appeal decision in Harrison v Harrison [2017] NZCA 260, the Court stated: “the fact that a judge has made earlier adverse decisions in related proceedings, or the same proceedings, is not of itself grounds for
recusal … ( at [3]).
46 At 5.2.
47 See for example Re Harrison, ex parte Harrison [2015] NZHC 244 and Re Harrison, ex parte Harrison [2015] NZHC 254 where Associate Judge Osborne heard both the application to set aside a bankruptcy notice and the adjudication application.
48 April submissions at [10].
[53] In the November 2016 Judgment, I summarised Mr de Vries’ submission
regarding the relationship between Mr Rogers and Bartercard as follows:49
Bartercard has forgiven the debt owed by the co-guarantor Mr Rogers, but has treated Mr de Vries unfairly by not forgiving Mr de Vries’ share of the debt. In this respect, Bartercard’s actions have prejudiced Mr de Vries.
[54] I concluded there was no arguable setting aside ground based on Bartercard’s dealing with Mr Rogers.50 Mr Chetty had confirmed on oath that Mr Rogers’ debt had not been forgiven and stated that steps were being taken to have Mr Rogers’ adjudicated bankrupt. I noted that the “arrangement” entered into with Mr Rogers, in which Mr Rogers was only obliged to pay 50 per cent of the debt, did not appear to have altered Mr de Vries’ joint and several liability for the debt which underpinned the principal judgment.51
[55] Since the November 2016 Judgment Mr de Vries has put forward material which he relies on to suggest that Mr Chetty deliberately deceived all parties. He relies on an email sent to him by Mr Rogers dated 18 February 2017 which says:52
Bartercard have not sort to bankrupt me. Bartercard enabled me to continue operating my Pipers bartercard account with the agreement that [I] make monthly bartercard and cash payments.
Regards
Andy [Rogers]
[56] Mr de Vries’ also attached to his February submissions an email sent to
Bartercard on 14 February 2017, with the response:53
Mr de Vries
I am unfortunately unable to comment in depth on this matter as this would
be a breach of privacy on Mr Rogers’ behalf.
However, please be advised that we are pursuing all avenues available to us in respect to the recovery of the debt owing.
49 November 2016 Judgment, at [18](6).
50 At [53]-[55].
51 The principal judgment related to obligations incurred by Mr de Vries as guarantor of a company called Zoom Zoom Properties Ltd, which was put into liquidation on 12 July 2011.
52 February submissions, p 31.
53 February submissions, p 29.
[57] Neither of these communications were in evidence at the hearing which preceded the November 2016 Judgment, and they accordingly cannot support an argument that anything in the November 2016 judgment, or in the hearing which preceded it, created a reasonable apprehension that the setting aside application might be decided otherwise than on the merits of the application. There can be no logical connection between the circumstances of the deliberate deception Mr de Vries’ is alleging, and any reasonable apprehension of bias.
Ground 3
[58] Mr de Vries submits that at the 24 April 2017 hearing I should have listened to his oral submissions and dismissed the adjudication application, rather than adjourn it.
[59] There was no bias toward Mr de Vries, actual or apparent, in my decision to adjourn the adjudication hearing. Beyond checking what documents would need to be considered and ascertaining what was happening with Mr de Vries’ appeal to the Court of Appeal, I did not hear any significant submissions from Bartercard, and my decision to adjourn was appropriate in light of the uncertainty surrounding the difficulties Mr de Vries had encountered in pursuing his appeal against the November 2016 Judgment. The decision to adjourn could not have been seen as favouring Bartercard, who did not request the adjournment, and Mr de Vries was assured that his submissions would be fully considered at the adjourned hearing. Accordingly, I cannot identify any form of bias in my decision to adjourn the hearing for a relatively short period, to see whether Mr de Vries’ appeal was likely to be pursued.
Grounds 4, 5 and 6
[60] It is convenient to deal with these grounds together, as they relate to
Mr de Vries’ application to the District Court to set aside the principal judgment.
[61] Mr de Vries’ application to set aside the principal judgment was considered in the November 2016 Judgment.54 Mr de Vries first submits that I “refused to allow a rehearing or accept miscarriage of justice” for the “sole reason” Mr de Vries had left the case for five years, and yet allowed Bartercard’s bankruptcy notice to proceed.
[62] In the April 2016 Judgment, I considered Mr de Vries’ submissions relating to a rehearing of the relevant 2011 judgments, under “Issue 1”. I stated:
Should the District Court judgments (or at least the principal judgment, on which the bankruptcy notice was based) be set aside as Mr de Vries requests? If not, should the Court order that any enforcement of those judgments or that judgment be stayed?
[63] I concluded that it was not possible for the High Court, sitting in its bankruptcy jurisdiction, to set aside the judgments made in the District Court. Nor was it possible for this Court, sitting in its bankruptcy jurisdiction, to stay enforcement of those judgments. I made it clear to Mr de Vries that if he was unhappy with those judgments he should seek a rehearing in the District Court. I then noted:55
Even if r 17.29 [of the High Court Rules] did permit this Court to direct a stay of enforcement of a judgment of the District Court, the rule requires the judgment debtor to show that a “substantial miscarriage of justice” would be likely to result if the judgment were enforced. In this case Mr de Vries has had over four years to appeal the District Court judgments, or attempt to have them set aside. He has not taken any such steps, and he has not offered any credible explanation for his failure to do so…
[64] So contrary to what Mr de Vries submits, his delay was not the “sole reason” for my decision not to set aside the District Court judgments. I did not consider that I had jurisdiction to do so. In those circumstances no fair-minded independent observer would reasonably have apprehended that Mr de Vries’ setting aside application might have been dealt with otherwise than in accordance with the merits of the application.56 Mr de Vries’ allegations of bias in this respect must be
dismissed.
54 November 2016 Judgment at [12]-[16].
55 April 2016 Judgment, at [26].
56 The fair-minded observer would have noted in that regard that I in fact dismissed Bartercard’s
first application to adjudicate Mr de Vries bankrupt.
[65] Mr de Vries had 20 working days after the 2011 judgments were issued to appeal against the District Court judgments if he was dissatisfied with the outcome in that Court.57 The statement in the April 2016 Judgment which is quoted at para [63] of this judgment simply reflected the reality of the position on the evidence then before the Court – I cannot see that any fair-minded independent observer could possibly have been concerned by it.
[66] Mr de Vries’ reference to an agreement in 2013 to “drop the case without costs” does not affect the question of recusal. Whether there was or was not such an agreement is a question of fact going to the merits of my decisions, and a fair-minded observer would in any event have noted that Mr de Vries continued making payments to Bartercard up to October 2015.
[67] I turn to Mr de Vries’ submission that I should have waited until the application for a rehearing had been heard in the District Court before determining the application to set aside the second bankruptcy notice, and that the failure to do so showed bias on my part.
[68] The application to set aside the second bankruptcy notice was heard on 21
October 2016. Mr de Vries’ application to set aside the principal judgment had been set down for hearing in the District Court on 5 December 2016. There was no guarantee when judgment would be issued in the District Court, but as it so happened Judge Tompkins’ dismissed Mr de Vries’ application on 5 December 2016. Judge Tompkins’ decision is now the subject of an appeal in this court. A fixture is yet to be set.
[69] A stay of execution had been ordered by Judge Tompkins until 22 August
2016 “or later determination of the application to set aside bankruptcy notice”. I considered that that order did not affect Mr de Vries’ application to set aside the second bankruptcy notice, which was not in any event a form of execution by
Bartercard.58
57 High Court Rules, r 20.4.
58 November 2016 Judgement, see [16] and [35]-[36].
[70] I do not consider that the issues raised by Mr de Vries about the loss of a notice of opposition (in connection with the stay of execution application in the District Court) have any bearing on the matters with which I am presently concerned. Mr de Vries own application to set aside the second bankruptcy notice (which had been issued before the interim stay order was made in the District Court) was not a matter which would have been affected by any stay of execution of the
2011 judgments.
[71] Consistent with that view, at a call of Mr de Vries’ application to set aside the second bankruptcy notice on 6 September 2016, Associate Judge Christiansen noted that Mr de Vries had applied to the District Court to set aside the principal judgment. The Associate Judge saw no reason why Mr de Vries’ application to this Court to set aside the second bankruptcy notice should not proceed to a hearing. The Associate Judge’s interpretation of the stay, and the wording of the stay by Judge Tompkins, made it clear that neither Judge considered the stay ordered in the District Court should interfere with the hearing and determination of Mr de Vries’ application to set aside the second bankruptcy notice. I do not consider there could be any reasonable apprehension of possible bias when the view I took in proceeding with the hearing and giving the November 2016 Judgment was consistent with Associate Judge Christiansen’s apparent expectation and the wording of Judge Tompkins’ orders. A fair-minded lay observer would not infer bias in my issuing the November 2016 judgment prior to the District Court’s determination on
5 December 2016.
[72] Mr de Vries’ submission that Judge Tompkins improperly used the April 2016
Judgment or the November 2016 Judgment to deny a rehearing, was an issue for determination on appeal to this Court. It is not a matter for consideration on the recusal application.
[73] Finally on these three grounds, Mr de Vries alleges “collusion” in the
judgments of Judge Tompkins and myself given in November and December of
2016. There is nothing in this. There were no communications between myself and
Judge Tompkins regarding the judgments.
Ground 7
[74] Mr de Vries says I breached his privacy by mentioning in Court that he had worked for the ANZ Bank some years ago. He further alleges that my comment shows there was “more behind the scenes”.
[75] There is nothing in the point that would raise any concern about either privacy or bias. In proceeding CIV-2015-485-739, being the proceeding in which I delivered the April 2016 Judgment, Mr de Vries had in a number of documents expressly (and in general terms) invited the Court and Bartercard to refer to earlier litigation between himself and the ANZ Bank, where the bank’s claim against him had been withdrawn.59
[76] A reference to Mr de Vries having worked for the ANZ Bank would have been viewed by the fair-minded lay observer as entirely neutral, and incapable of supporting any apprehension of any favouritism toward Bartercard, or bias against or antagonism towards Mr de Vries. Nor would such an observer reasonably infer that
there might be “more going on behind the scenes”.60
Ground 8
[77] Mr de Vries raises issues with Mr Dewar and his firm’s representation of Bartercard. I dealt with Mr de Vries’ submission on the authority of Bartercard’s solicitors to act, in a minute issued on 21 October 2016.61 I could find nothing in Mr de Vries’ objection to Mr Dewar’s firm’s involvement on account of either alleged “collusion” or a conflict of interest. The solicitors with responsibility to the Court for the conduct of the proceeding on behalf of Bartercard are Ewart and Ewart.
All other things being equal, that firm was entitled to brief counsel of its choice.
59 ANZ Bank New Zealand v de Vries CIV-2014-485-11546, referred to by Mr de Vries with the request “please refer to CIV-2014-485-11546” in a document filed on 30 November 2015 in proceeding CIV-2015-485-739. And in an affidavit sworn in proceeding CIV-2015-485-739 on
25 November 2015, Mr de Vries said “All of the above clearly shows that a bankruptcy
judgment is out of order as per the ANZ case versus Mr de Vries withdrawn from Court”.
60 As I recall it, the context was one where I had engaged Mr de Vries on the issue of joint and several liability for the debts as between Mr Rogers and himself. I was concerned to know whether Mr de Vries, in making his submissions, appreciated the nature of that kind of liability.
61 De Vries v Bartercard HC CIV-2016-485-428, 21 October 2016 (minute of Associate
Judge Smith).
[78] In my minute of 21 October 2016, I said:62
Mr de Vries has set out at considerable length his complaints about alleged conduct of Mr Dewar in relation to a body corporate which is not a party to the present proceeding. While Mr de Vries has a complaint pending with the Law Society and/or the Legal Complaints Review Office, I am not aware of any adverse finding having been made by either body against Mr Dewar, and there is nothing specifically before me which would suggest any concern over Mr Anderson or his firm members acting as counsel on instruction from Ewart and Ewart on behalf of Bartercard. I repeat, the issues which Mr de Vries may have with regard to the body corporate are not the issues which are relevant to this proceeding.
[79] It was for Mr de Vries to show that “the interests of justice required”63
Mr Dewar and his firm or staff to be restrained from acting, and there was nothing before me when I issued my minute on 21 October 2016 to demonstrate that a relevant conflict existed, so that Mr Anderson (a solicitor employed by Mr Dewar’s firm) would or might be unable to discharge his professional obligations as counsel. Broad allegations of “collusion” between Bartercard and Mr Dewar in his capacity as solicitor for Body Corporate 68792 could not have been a basis to prevent Mr Dewar’s firm from acting. Absent any other factors, I know of nothing which would prevent two creditors who are pursuing the same debtor from either “comparing notes” or using the same solicitor. That would have been entirely for Bartercard and Body Corporate 68792, then acting through its Court-appointed administrator. My decision that no orders were necessary in relation to Bartercard’s representation would not have caused a reasonable observer to have any concern about possible bias on account of the alleged “collusion”.
[80] Mr de Vries’ allegations in the August reply refer to a Legal Complaints Review Officer hearing. While a complaint may have been accepted for a hearing, there is currently no indication of any adverse findings against Mr Dewar.
[81] In addition, Mr de Vries alleges that there was a conflict of interest preventing Mr Dewar acting for Bartercard. He refers to Mike Pero Mortgages Ltd v
Mike Pero,64 where Buddle Findlay was restrained from acting against Mr Pero as it
62 De Vries v Bartercard, above n 62, at [14].
63 Guardian Retail Holdings Ltd v Buddle Findlay & Ors [2013] NZHC 1582.
64 Mike Pero Mortgages Ltd v Mike Pero [2014] NZHC 2798, [2015] 3 NZLR 24.
owed a fiduciary duty of loyalty to him, having acted for him in certain proceedings in the past.
[82] As far as I can see Mr de Vries’ complaint appears to be that Mr Dewar has acted not for him but against him on behalf of Body Corporate 68792. For example, at page 41 of the February submissions he refers to “the continual persecution by Mr Dewar in BC 68792 including the denial of my legitimate compensation claims in 2008”.
[83] Brown J did not express any concern in certain judgments given by him in
2015, when Mr Dewar was acting for the Body Corporate in proceedings in which Mr de Vries was a named respondent, although in his third decision his Honour noted he had heard from Mr de Vries at some length on several matters including “the issue concerning the terms of engagement of Mr Dewar on behalf of the Body Corporate”.65 Mr de Vries does not then appear to have alleged that Mr Dewar’s firm should not be acting because of any past relationship with him as his solicitor.
[84] In bankruptcy proceedings against Mr de Vries by a creditor such as
Bartercard, with no apparent involvement or interest in the affairs of Body Corporate
68792, I do not consider that any solicitor/client relationship between Mr Dewar’s firm and the Body Corporate could have been sufficient to justify an order that Mr Dewar’s firm should not act for Bartercard in this proceeding. Solicitors acting for body corporates will no doubt frequently be called upon to act against a member of the body corporate (eg to collect unpaid levies), and the mere fact that the solicitor might have previously acted for the benefit of all members of the body corporate, including the non-payer, in some capacity (eg negotiation with a local authority), would not in my view require the solicitor to disqualify himself or herself from acting in the levy recovery action. It was for Mr de Vries to provide a sufficient evidential basis for me to conclude that Mr Dewar may have obtained some relevant confidential information in the course of a solicitor/client relationship with Body Corporate 68792, which Mr de Vries would be entitled to have protected.
Mr Dewar’s obligations in that relationship were owed to the Body Corporate
65 Body Corporate 68792 v Memelink (No 3) [2015] NZHC 1159.
through its administrator, and not to a person such as Mr de Vries with whom the
Body Corporate had been in dispute.
[85] In the circumstances described, I do not consider that a fair minded, fully informed observer would have had any reasonable apprehension of impartiality in my allowing Mr Anderson to conduct the hearings on 21 October 2016 and
24 April 2017 as counsel for the Body Corporate, or in allowing Mr Dewar to participate in subsequent telephone conferences.
Ground 9
[86] Mr de Vries submits I was biased in declining his request for the transcripts. I do not see that any delay in providing the transcripts to Mr de Vries could give rise to any appearance of bias. Initially, the request appeared to be concerned with Mr de Vries’ appeal to this Court, and it was not clear how the transcripts of hearings in this Court in February and April of 2017 could assist on the appeal against Judge Tompkins’ decision given in December 2016. Similarly, it was difficult to see that any issues over the conduct of the hearings of 21 February 2017 and
24 April 2017 could affect the Court of Appeal’s view of the correctness or otherwise
of my judgment of 30 November 2017.
[87] At the telephone conference on 1 June 2017 Ms Hunt advised that the Court of Appeal had directed that Mr de Vries had until 30 June 2017 to advise the result of his legal aid application. The Court of Appeal had indicated that the time might be further extended if a grant of legal aid had not been made by then. Ms Hunt did not indicate at the 1 June 2017 conference that there was any immediate need for the transcripts of the High Court hearings for Mr de Vries to advance matters in the Court of Appeal.
[88] Ms Hunt sought leave to withdraw as counsel on 22 June 2017, and on
11 July 2017 I invited Mr de Vries to advise by 14 July 2017 whether he had any objection to Ms Hunt withdrawing as counsel. In the event, he did not.
[89] I issued a minute on 17 July 2017 listing a number of issues for resolution before the 10 August hearing. One of them was Mr de Vries’ renewal requests for transcripts of the 21 February and 24 April 2017 hearings. I asked the Registrar to arrange the earliest practicable hearing in chambers to deal with the listed matters.
[90] A hearing in chambers was proposed by the Registrar for 2.15 pm on
18 July 2017, but Mr de Vries was unable to attend and the hearing did not proceed.
[91] Mr de Vries’ recusal application was one of the matters for resolution listed in my minute of 17 July 2017. Mr de Vries confirmed that he wished to have the transcripts for the purpose of making any further submissions directed to that application, and I accepted that it was appropriate that the transcripts be made available to him for that purpose. I issued a further minute on 26 July 2017, attaching the transcripts and allowing Mr de Vries until 31 July 2017 to make any supplementary submissions. Mr de Vries filed his supplementary submissions on
28 July 2017.
[92] In the foregoing circumstances I do not consider that delay in providing the transcripts to Mr de Vries would have caused a fair-minded neutral observer to have any reasonable apprehension of bias. Ms Hunt had not indicated that they were urgently required for the Court of Appeal, and Mr de Vries was apparently unable to attend the chambers hearing proposed for 18 July 2017, when the transcripts was one of the items to be addressed. The transcripts were provided to him in any event on
26 July 2017, and he has been afforded the opportunity to make further submissions on them.
[93] As for the content of the transcripts, I note that when Associate Judge Christiansen set down the adjudication hearing for 24 April 2017 he advised Mr de Vries, in relation to his February submissions, “you can be sure that it will
read”.66
66 De Vries v Bartercard HC Wellington CIV-2016-285-428, 11 February 2017 (transcript of hearing before Associate Judge Christiansen) at 5.
[94] At the April hearing I began by clarifying with counsel what documents I would need to consider. I noted “I haven’t had as full a time as I would have liked to look through the file” but referred to Mr de Vries’ submissions for that hearing and noted that many of the arguments Mr de Vries was raising had some bearing on the appeal against the November 2016 Judgment. I accepted that Mr de Vries opposed
an adjournment (as did Bartercard), but stated:67
My first concern is we’re preceding the adjudication application proceeds on the basis that there was an act of bankruptcy. And Mr de Vries [appeal] in the Court of Appeal challenges that very underpinning…
I am loathe to shut out Mr de Vries’ position while he has an appeal pending against the very matter underpinning the bankruptcy proceeding.
[95] I set out my reasons for adjourning the hearing in a minute dated
24 April 2017. I assured Mr de Vries that his submissions would be read prior to any judgment being issued. Before that would happen, however, it was appropriate to ascertain the position with the appeal to the Court of Appeal and the appeal to this Court (against Judge Tompkin’s decision).
[96] A reasonable observer would not have apprehended from the hearings of
21 February or 24 April 2017 any reasonable possibility of bias against Mr De Vries. The decision to adjourn was at least in part for his benefit, and it was not the outcome counsel for Bartercard had sought.
[97] Subsequent conferences have seen a number of further adjournments, primarily designed to allow Mr de Vries time to progress his legal aid application and secure legal representation.
Ground 10
[98] Mr de Vries submits that I did not follow through on what Associate
Judge Christiansen said in the February 2017 hearing when the case came before me in April 2017.
67 De Vries v Bartercard HC Wellington CIV-2016-285-428, 26 July 2017 (transcript of hearing before Associate Judge Smith) at 7 and 11.
[99] I note first that I did not “take over” the case from Associate Judge Christiansen, who happened to be covering for me while I was on leave in February. The case came before the Associate Judge because it had been included in an ordinary fortnightly bankruptcy list.
[100] The Judge hearing a defended application must have the power to adjourn that application if that appears to be the sensible course. That was particularly relevant to this case, where it was clear before the 24 April 2017 hearing that an important consideration would be whether Mr de Vries’ appeal to the Court of Appeal was being progressed promptly, and the decision options for the Court included refusal of the adjudication application, adjourning the application for a period sufficient to allow the appeal to be heard, and making a halt order under s 38 or s 42 of the Act. In those circumstances a relatively short adjournment to
22 May 2017 would not have caused any reasonable apprehension of bias when considered by a fair-minded independent observer.
Conclusion
[101] In order to be disqualified for bias in the form of prejudgment, a judge’s state of mind must be one “so committed to a conclusion already formed as to be incapable of alteration, whatever evidence or arguments may be presented”.68
[102] I have considered seriously Mr de Vries’ submissions regarding recusal. However a judge should apply the principles regarding an application for recusal “firmly and fairly, and not accede too readily to suggestions of bias.”69 To do so would be to allow every aggrieved litigant the ability to swap judges when they choose, without a credible source of bias and despite the oath taken when a judge is
sworn to view matters objectively, and to act impartially and independently.
68 Minister for Immigration and Multicultural Affairs v Jia [2001] HCA 17, (2001) 205 CLR 507 at
532.
69 Guidelines, above n 33, at 1.5.1.
[103] For the reasons set out above, I dismiss Mr de Vries’ application for recusal.
Associate Judge Smith
Solicitors:
Thomas Dewar Sziranyi Letts, Lower Hutt for the plaintiff
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