Deacon Holdings Limited v Hartley

[2019] NZHC 1177

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2018-409-400

[2019] NZHC 1177

BETWEEN

DEACON HOLDINGS LIMITED

Judgment Creditor

AND

LYNDA LOUISA HARTLEY

Judgment Debtor

Hearing:

(Determined on the Papers)

Counsel:

K T Glover for Judgment Creditor

L L Hartley (self represented Judgment Debtor)

Judgment:

27 May 2019

JUDGMENT OF ASSOCIATE JUDGE LESTER

(Striking out Judgment Debtor’s application to set aside bankruptcy notice)

Background

[1]The background to this matter is set out in my Minute of 21 May 2019.

[2]        The judgment debtor, Ms Lynda Louisa Hartley, has pointed out that my Minute of 21 May 2019 incorrectly referred to the judgment debtor as John Carlton Hartley, Ms Hartley’s husband. A corrected Minute will issue with the judgment debtor shown as Lynda Louisa Hartley.

[3]        In my Minute, I went through the chronology of steps relating to service of the bankruptcy notice and of steps taken by Ms Hartley to challenge the bankruptcy notice.

DEACON HOLDINGS LTD v HARTLEY [2019] NZHC 1177 [27 May 2019].

[4]        Even taking the most benevolent view of the facts, the documents Ms Hartley attempted to file were outside the 10 working days prescribed by the High Court Rules and under the provisions of the Insolvency Act 2006.

[5]        Once the application is filed outside the 10 working day period (treating the attempted filing by email on 4 April 2019 as if it were a valid filing of the papers), then the application is a nullity.

[6]        In my Minute of 21 May 2019, I said that it seemed inevitable that the judgment creditor was entitled to  a  declaration  that  the  application to set  aside  the bankruptcy notice was filed out of time and void. I only refrained from making an order at that time as no response had been received from the judgment debtor.

[7]        Ms Hartley has filed material within the  time  specified  in  the  Minute  of 21 May 2019, in effect acknowledging the attempt to file documents on 4 April 2019 was one day late.

[8]        The documents that were eventually accepted for filing were date stamped  17 April 2019 with Ms Hartley saying that extensions had been granted by a Deputy Registrar of this Court. The fact is that on 4 April 2019 it was simply too late for the application to set aside the bankruptcy notice to be filed and too late for any claimed extension of time.

[9]        A review of the email correspondence between the Registry and Ms Hartley does not disclose the Deputy Registrar granting an extension, but even if Ms Hartley understood that an extension had been granted, it was not within the power of the Deputy Registrar, or indeed the Court to grant an extension.

[10]      Ms Hartley asks the Court to use its discretion to allow the application to be received. The insurmountable point is that the Court does not have power to extend time. That is because the consequence of not challenging the bankruptcy notice within the time prescribed in the High Court Rules is that an act of bankruptcy is deemed to have occurred pursuant to s 17(1)(d) of the Insolvency Act 2006.

[11]      As Associate Judge Gendall (as he then was), said in H Memelink v Sanco (N.Z.) Ltd:1

[11]              … once the tenth working day after service of a bankruptcy notice, not counting the day of service has passed, an act of bankruptcy occurs. Accordingly, provisions be they in the Insolvency Act 2006 or elsewhere which provide for some extension of time for bringing and serving applications will not assist. Blankly put, they cannot undo an event which has occurred, namely the act of bankruptcy.

[12]              It follows from these and other authorities that where an application (with the required supporting material) from a judgment debtor to set-aside a bankruptcy notice is filed after the tenth working day after service there is no jurisdiction for the Court to deal with that application.

[12]       Accordingly, it is not a case of the Court showing leniency or exercising      a discretion in respect of a late filing of the papers.   I have no power to do so.       As Associate Judge Gendall  (as he then was) put it,  an out of time application     “… cannot undo an event which has occurred, namely the act of bankruptcy”.

[13]      Accordingly, the judgment creditor is entitled to a declaration that the application to set aside the bankruptcy notice was filed out of time and therefore void and the application is struck out on that basis.

[14]      Counsel also seeks that the call scheduled by the Registry of Ms Hartley’s application to set aside the bankruptcy on 30 May 2019 be vacated and I so direct.

Costs

[15]      Counsel for the judgment creditor sought to deal with the issue of the timing of the application to set aside the bankruptcy notice by way of memorandum and the memorandum did not seek costs. Accordingly, I make no order for costs in respect of this matter.

Associate Judge Lester

Solicitors:

Malloy Goodwin Harford, Auckland

Copy to counsel: K T Glover, Barrister, Auckland

Copy to Ms LL Hartley (judgment debtor)

1      H Memelink v Sanco (N.Z.) Ltd HC WN CIV-2008-485-2691 [10 March 2009] at [11]-[12].