Dench v Gates - [2013] NZHC 1133

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2013-404-786 [2013] NZHC 1133

UNDER the Insolvency Act 2006

IN THE MATTER OF the Bankruptcy of LINDA SUSAN GATES BETWEEN SIMON CHARLES DENCH
Judgment Creditor

ANDLINDA SUSAN GATES Judgment Debtor

Hearing: 13 May 2013

Appearances: L S Gates in person
A E Malone for Judgment Creditor

Judgment: 13 May 2013

ORAL JUDGMENT OF ASSOCIATE JUDGE R M BELL

Solicitors:
Duncan Cotterill (Duncan McGill/Amy Malone) P O Box 5326 Auckland for Judgment Creditor
Email: d.mcgill@duncancotterill.com / a.malone@duncancotterill.com

Copy for:
Mrs L S Gates, P O Box 47-474 Auckland 1144

DENCH V GATES HC AK CIV-2013-404-786 [13 May 2013]

[1] Mrs Gates, the judgment debtor, applies to set aside a bankruptcy notice. I have heard the application in court after discussing that with the parties.

[2] The grounds that Mrs Gates gives for setting aside the bankruptcy notice are:

... The matter of Sovereign Assurance Company Ltd was not as alleged by the creditor litigated in CIV-2004-044-2821...

[3] The bankruptcy notice is based on an order for costs made in the District Court at Auckland in a proceeding CIV-2012-004-439, in which Mrs Gates was the plaintiff and Mr Dench was the defendant.

[4] On 21 August 2012 the District Court heard an application by Mr Dench to strike-out Mrs Gates’ proceeding against him. Judge Dawson granted the application and made an order that Mrs Gates pay Mr Dench costs. The amount of the costs ordered to be paid was $13,991.85. That was assessed as being three-quarters of actual costs. That order striking out Mrs Gates’ proceeding and ordering her to pay costs was a final decision of the District Court. There has been no appeal from that decision and there has been no stay of enforcement of the costs order. As it is a final order of the District Court, the order for costs can also be the basis for a bankruptcy notice.

[5] After she was served Mrs Gates filed her application to set aside the bankruptcy notice within time. Under r 24.10, the time for compliance with the bankruptcy notice has been extended until this setting aside application has been decided.

[6] As set out in the bankruptcy notice, there are a number of ways by which a person served with a bankruptcy notice can comply with it:

(a) The debtor can pay the amount of the judgment debt to the judgment creditor;

(b)
The debtor can give security or enter into a new formal agreement

with the creditor or obtain the Court’s approval for terms of payment;

and

(c)

The debtor must satisfy this court that the debtor has a counterclaim,

set-off or cross-demand against the judgment creditor that equals or

exceeds the amount claimed by the judgment creditor, and which the

debtor could not have put forward in the proceeding in which the judgment or order was obtained.

[7]

If th

e judgment debtor has not done any of those steps within the time for

compliance, then…

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 1133
Case: [2013] NZHC 1133
Decision Date: 13 May 2013

CaseChat Overview and Summary

The case of Dench v Gates involved Linda Susan Gates, the judgment debtor, seeking to set aside a bankruptcy notice served on her by Simon Charles Dench, the judgment creditor. The bankruptcy notice was based on an order for costs made in the District Court at Auckland in a proceeding in which Gates was the plaintiff and Dench was the defendant. The District Court had ordered Gates to pay Dench costs amounting to $13,991.85. Gates filed an application to set aside the bankruptcy notice within the required time. The legal issues in the case included whether the inherent jurisdiction of the court could be exercised to set aside the bankruptcy notice to prevent an abuse of process and whether Gates had arguable grounds of defence to the claim for which judgment was given. The court found that the inherent jurisdiction to set aside a bankruptcy notice was an exception to the general principle that judgments of other courts are final and the court will not reconsider them. The court also found that Gates did not have any arguable basis for going back to the District Court and inviting the court to set aside the order for costs made against her. The court dismissed Gates' application to set aside the bankruptcy notice and ordered her to pay costs according to scale. The dismissal of Gates' application meant that the time for compliance with the bankruptcy notice had now expired and if the sum in the bankruptcy notice was not paid, Dench may be able to apply to the court for an adjudication order.

Orders