Dysart Timbers Limited v Nielsen HC Auckland CIV-2007-404-5594

[2008] NZHC 2576

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2007-404-5594

CIV-2007-404-3653

BETWEEN  DYSART TIMBERS LIMITED Applicant

ANDGREGORY NIELSEN AND RODERICK WILLIAM NIELSEN

Respondents

Hearing:         18 September 2008

Appearances: CFL Godinet and J Ropati for Applicant

AM Swan, CT Patterson and E Grove for Respondents

Judgment:      18 September 2008

JUDGMENT OF JOHN HANSEN J

Solicitors:

J Ropati, PO Box 37 396, Parnell, Auckland

Farry & Co. PO Box 91212, Auckland
Copy:

CFL Godinet, PO Box 618, Shortland Street, Auckland

AM Swan, PO Box 5444 Wellesley Street, Auckland

CT Patterson, PO Box 2886 Auckland

DYSART TIMBERS LTD V NIELSEN & ANOR HC AK CIV-2007-404-5594  18 September 2008

[1]      This is a matter with a long and unfortunate procedural history.  As long ago as September 2005, Ellen France J in the High Court at Auckland rejected a claim in contract by Dysart Timbers  Limited (“Dysart”) against the Nielsens.    That  was appealed  to  the  Court  of  Appeal.    On  22 May 2007  the  appeal  was  allowed. Judgment was entered for a sum of $213,169.39, along with a considerable amount of interest.   The position by 9 August 2007 was that the Nielsens were judgment debtors to Dysart in the sum of $314,867.02.

[2]      On 3 December 2007, Mr Roderick Nielsen applied to the Court of Appeal for a stay of execution.  This was refused by the Court of Appeal.  The matter then proceeded further and was before Baragwanath J in December 2007.  Ultimately he made an order staying execution on condition that the judgment sum was paid into Court.  I note in passing that following the Court of Appeal decision overturning the findings of Ellen France J, there was a compromise negotiated between the parties.

[3]      The Nielsens denied that there was any compromise and the matter came before  Priestley J  in  November  2007.    He  entered  judgment  for  the  applicants. Mr Roderick Nielsen appealed that.  Mr Gregory Nielsen applied for a recall on the grounds that those that negotiated the compromise were not in fact instructed to act for him.   That recall has simply been adjourned sine die while the appeal was pursued.  That appeal against the decision of Priestley J has now been dismissed by unanimous Court of Appeal decision.   Mr Roderick Nielsen apparently is seeking leave to appeal to the Supreme Court.  Such leave application is to be heard later this year, with luck.

[4]      There  was  then  a  further  application  that  came  before  Woodhouse J  on

4 September 2008.    In  that  decision  he  refused  the  stay  of  execution  pending Mr Gregory Nielsen’s attempt to obtain leave from the Supreme Court.  At that time Mr Godinet applied for an order that the $260,000 in Court be paid out.   Because there was no formal application before Woodhouse J that matter was left in abeyance until an application was filed.

[5]      On  8 September 2008  that  matter  came  before  me.     For  the  sake  of completeness I note that bankruptcy proceedings had been commenced by Dysart against  Roderick  Nielsen,  and  those  proceedings  have  remained  awaiting  the outcome of the appeal.  The other respondent in this matter, Gregory Nielsen, has obtained a judgment against his brother in unrelated proceedings and has appeared as a supporting creditor.

[6]      When the matter came before me the response from Mr Swan appearing for Mr Roderick  Nielsen  was  a  reference  to  s 24  of  the  Insolvency  Act 1967,  the applicable legislation.  That section requires that no execution shall be issued by a creditor against the debtor except with leave of the Court once a petition has been filed.  There was some discussion about this, where I pointed out that a procedural way through the morass could be the withdrawal of the bankruptcy petition and withdrawal by the supporting creditor.  What I did not say was that this matter was coming back today to try and negotiate some form of settlement.   I was simply suggesting a possible way through the morass, which in the event has not proved possible.     Mr Gregory  Nielsen  wants  to  continue  with  his  application  to  be substituted.

[7]      It therefore remains the position that Dysart requires leave of this Court to issue  execution  pursuant  to  s 24.    Mr Swan  tells me  that  he  misunderstood  the position  and  cannot  argue  that  today,  although  my  recollection  is  that  the Countrywide case he relied on, he in fact placed in front of me last week.  However, because I am not prepared to let this matter drag on any further I am going to give Mr Swan the further opportunity to make submissions to me as to why I should not grant Mr Godinet’s oral application for a charging order pursuant to s 24.  Mr Swan advises that he does not wish to make any further submissions.

[8]      Accordingly, pursuant to s 24 on Dysart’s oral application, there is leave to issue a charging order against the sum in Court forthwith.   There will be leave to Gregory Nielsen to substitute as the petitioning creditor, on condition that an application for adjudication is filed within seven (7) days.  I understand in relation to Gregory Nielsen’s bankruptcy there has been an order for substituted service in

relation to the application for adjudication.  I would state that it can be substituted service on exactly the same terms.

[9]      There will be costs to Dysart on this application on a 2B basis for the hearing last week and the hearing today.

……………………… John Hansen J