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 but the law is otherwise.  I have sympathy for Ms Gates.  She clearly has found her involvement in this claim in the litigation stressful and it has given rise to great anxiety and anguish on her part but at the same time the Court is required to take an even handed stance and to apply the law.

[5]      Approaching this matter from that perspective I am unable to see any defence being available to Ms Gates. All of the matters that the judgment creditor is required to prove in this matter under s 13 of the Insolvency Act 2006 have been proved. Counsel for Mr Dench, Ms Bennington properly addressed the Court in her memorandum  on  the  discretion  which  the  Court  must  exercise  when  deciding whether or not to grant an order of adjudication.   The principles that govern the exercise  of  that  discretion  were  reviewed  by Associate  Judge  Faire  in  Eide  v

Colonial Mutual Life Insurance Society Ltd2  and that judgment makes it clear that

the making of an order for adjudication does not automatically follow on the establishment of the facts which give rise to the judgment creditor’s entitlement to seek an order.  In this case the judgment creditor seeks to enforce a legitimate right arising out of a Court order for costs.  He is confronted with a recalcitrant debtor, who continues to assert wrongly in opposition to paying the costs, matters which in fact have no relevance to whether or not she is under an obligation to pay the costs or not.   The fact is that there is a public interest in the Court ensuring unquestioned obligations are met and if a debtor who has an unquestionable liability to make a payment refuses to do so the public interest requires that the creditor be entitled to enlist the aid of the Court to obtain payment.  Having regard to these matters in my view there is no discretionary reason why an order should be declined and in fact there is every reason why one ought to be made.  I intend therefore to make an order adjudicating Ms Gates bankrupt.  The order is made at 11 a.m. 26 November 2013. It is however to lie in Court for a period of three days till 5 p.m. Friday 29 November

2013. The reason for deferring the commencement of the bankruptcy order is to give

Ms Gates one last opportunity to meet her obligations in this matter.

[6]      Costs are reserved.

J.P. Doogue

Associate Judge