Dennis v Goode - [2023] NZHC 2650

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2022-409-593

[2023] NZHC 2650

IN THE MATTER of the bankruptcy of Bevan John Goode

BETWEEN

PETER RAYMOND DENNIS, PAUL STUART GOOBY and DEIRDRE

McNABB, as executors of the Estate of Phyllis Lorraine Frances Dennis Judgment Creditors

AND

BEVAN JOHN GOODE

Judgment Debtor

Hearing: 18 September 2023

Appearances:

S C Cowan and K P Webley for Judgment Creditors Self-represented Judgment Debtor

Judgment:

21 September 2023

JUDGMENT OF ASSOCIATE JUDGE LESTER

DENNIS v GOODE [2023] NZHC 2650 [21 September 2023]

[1] Mr Goode and Mr Ilagan guaranteed the rental obligations of Dynamic Technology Engineering Limited (DTEL) to the plaintiff, who I will refer to as Mr Dennis. The guarantee is recorded in an agreement to lease dated 7 March 2017 (the Lease). The binding nature of the guarantee is not in issue.

[2]The Lease provided that:

4.3Notwithstanding that the Lease may not have been executed, the parties shall be bound by the terms, covenants and provisions contained in this Agreement and in the Lease as if the Lease had been duly executed.

[3] “Lease” is defined as the then current Auckland District Law Society Deed of Lease. The relevant deed of lease required the tenant to pay the rent “without any deduction or set off”.

[4] For reasons I need not go into, DTEL did not pay the rent and summary judgment proceedings were issued against DTEL and the guarantors with judgment being entered by default. Mr Goode explained he was waiting outside the Court to be called but said the Registrar did not call his case, leading to the default judgment of 16 July 2018 in the sum of $16,658.19, indemnity costs of $6,780.00 and disbursements of $1,043.00.

[5]The order for summary judgment is silent as to interest.

[6] The certificate of judgment issued by the District Court on 5 December 2022, in addition to the above amounts, then records:

Interest from July 2018 to current plus two lots of 2B scale costs on the original charging order and renewal applications $3,526.45

[7]As will be discussed below, the creditor registered charging orders against the

guarantors’ properties.

[8] The creditor obtained a bankruptcy notice against Mr Goode whose challenge to the bankruptcy notice was filed out of time and dismissed.1 Mr Dennis issued an

1 Dennis v Goode [2023] NZHC 1883.

application to have Mr Goode adjudicated bankrupt which is opposed by Mr Goode on the following grounds:

(1)DTEL had a damages claim against Mr Dennis;

(2)after Mr Goode applied to have the default judgment set aside, that application was withdrawn as Mr Goode says he and Mr Dennis reached a compromise that Mr Dennis would accept payment of his out-of-pocket legal costs in settlement of the debt;

(3)Mr Dennis had a charging order over Mr Ilagan’s property which he released without requiring any payment from him;

(4)the judgment debt should not have included GST; and

(5)a dispute as to…

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.

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Details

Case: [2023] NZHC 2650
Decision Date: 21 September 2023

CaseChat Overview and Summary

In Dennis v Goode, the High Court of New Zealand examined the bankruptcy of Bevan John Goode, focusing on his obligations as a guarantor under a lease agreement. The dispute centered on the interpretation of the guarantee, the enforceability of a compromise, the impact of releasing a charging order, and the calculation of interest and costs. The court had to determine whether Mr. Goode’s defenses, including claims of a compromise with the judgment creditor and the improper release of a charging order, were valid and whether the interest and costs claimed were properly calculated.

The court first addressed Mr. Goode's argument that DTEL's claim against Mr. Dennis could be used as a defense against the bankruptcy proceedings. The court found that such claims belonged to DTEL and not Mr. Goode, and thus, were not valid defenses. The court also considered the alleged compromise between Mr. Goode and Mr. Dennis, which was not upheld as the full amount of agreed costs was not paid. Regarding the release of the charging order over Mr. Ilagan's property, the court found that Mr. Goode was prejudiced by this action, which discharged his liability pro tanto. The court ruled that Mr. Goode was liable for half of the judgment debt. The interest claim was dismissed as the procedural requirements under the Interest on Money Claims Act 2016 were not met. The court also noted that the judgment did not include GST on the rental component, and a GST invoice would be provided to Mr. Goode.

The court concluded that Mr. Goode's liability was reduced by the amount he had already paid and ordered him to pay the remaining sum along with costs. The costs were assessed on a 2B basis, with some indemnity costs awarded due to the irrelevance of certain issues raised by Mr. Goode. The court emphasized that bankruptcy proceedings should not be used as an alternative means of debt collection. The orders included providing a GST invoice, preparing a notice of satisfaction of judgment, and fixing costs to be paid by a specified date.

The final orders mandated that Mr. Goode pay the determined amount plus costs by the next adjournment date, failing which he would be declared bankrupt. The court also noted that further submissions from the judgment creditor's counsel, seeking to revisit certain points, were not justified and were declined.

Orders