Dench v Gates - [2013] NZHC 3134

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2013-404-00786 [2013] NZHC 3134

UNDER the Insolvency Act 2006

BETWEEN SIMON CHARLES DENCH Judgment Creditor

ANDLINDA SUSAN GATES Judgment Debtor

Hearing: 26 November 2013

Appearances: Ms Bennington for Judgment Creditor
Mr Dench in person

Judgment: 26 November 2013

ORAL JUDGMENT OF ASSOCIATE JUDGE J P DOOGUE

DENCH v GATES [2013] NZHC 3134 [26 November 2013]

[1] There is before the Court today an opposed application for an order adjudicating Ms Gates bankrupt. The bankruptcy application is based upon unpaid costs which were ordered against Ms Gates following a proceeding that she commenced in the District Court against Mr Dench under CIV-2012-004-439.

[2] The background to these matters has been already rehearsed on previous occasions and judgments of the Court and I do not intend to add a detailed statement of the background. Essentially though this all goes back to proceedings which took place between Ms Gates and an insurance company about disability insurance. Ms Gates has always considered that the conduct of Sovereign was irregular and dishonest. Although she was successful in asserting her rights under the policy she obviously considers there is unfinished business having to do with the dishonest actions, as she sees them, of various employees and agents of the bank and the insurer involved. How Mr Dench comes into it is that he was the lawyer acting for Sovereign. Ms Gates was of the view that she could ventilate the grievances that she had against the insurer by taking proceedings against Mr Dench as their counsel. Her view of matters was stated today as being that Mr Dench as an enrolled barrister and solicitor had an obligation of honesty and truth to the Court. The view that was expressed in the course of her address to me meant that if the witnesses before the Court which he called in his capacity as counsel gave dishonest evidence that he bore responsibility for that outcome.

[3] In that earlier phase of the present litigation the Court heard an application to set aside a bankruptcy notice which had been served on Ms Gates. This sought to enforce an award for costs that was made in Mr Dench’s favour when the proceedings that Ms Gates had brought against him was struck out. In that judgment at paragraph 32 Associate Judge Bell said:1

I appreciate that Mrs Gates has been disappointed at the outcome of the litigation against Sovereign. She had partial success, but she has been disappointed that she was not as successful as she would have hoped. However, that litigation is now at an end. It is not open to her in the context of her application to set aside a bankruptcy notice to complain about the way the litigation against Sovereign was conducted.

[4] I respectfully agree with those remarks in their entirety. Ms Gates perception that she has unfinished business against Sovereign has nothing to do with the present application to adjudicate her bankrupt. She may think so…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Dench v Gates

Details

AGLC: Dench v Gates [2013] NZHC 3134
Case: [2013] NZHC 3134
Decision Date: 26 November 2013

CaseChat Overview and Summary

The High Court of New Zealand, Auckland Registry, heard an opposed application for an order to adjudicate Ms Linda Susan Gates bankrupt, following unpaid costs ordered against her in a previous proceeding against Mr Simon Charles Dench. The costs arose from a District Court proceeding Ms Gates had commenced against Mr Dench, who was acting as the lawyer for Sovereign, an insurance company. Ms Gates was successful in her claim against Sovereign but remained dissatisfied with the conduct of the insurer and its employees and agents. She took her grievances against Mr Dench, as the lawyer for Sovereign, to court, but her claim was ultimately struck out, and she was ordered to pay costs.

The primary legal issue was whether the court should exercise its discretion to grant an order of adjudication to the judgment creditor, Mr Dench, despite Ms Gates's opposition. The court had to consider the principles governing the exercise of that discretion, as well as the public interest in ensuring that unquestioned obligations are met.

The court found that all the matters required to be proved under section 13 of the Insolvency Act 2006 had been established. The judgment creditor was seeking to enforce a legitimate right arising out of a court order for costs, and Ms Gates was refusing to pay the costs, asserting matters irrelevant to her obligation to do so. The court held that there was no discretionary reason to decline the order, and every reason to make it. The court granted the application for an order of adjudication, but deferred the commencement of the bankruptcy order for three days to give Ms Gates a final opportunity to meet her obligations. Costs were reserved.

In conclusion, the High Court of New Zealand granted the application for an order to adjudicate Ms Gates bankrupt, finding that she had an unquestionable liability to pay the costs ordered against her in a previous proceeding. The court exercised its discretion to make the order, taking into account the public interest in ensuring that unquestioned obligations are met. The commencement of the bankruptcy order was deferred for three days to give Ms Gates a final opportunity to meet her obligations, and costs were reserved.

Orders