Farrow v Attorney-General HC Wellington CIV 2010-485-515
[2010] NZHC 563
•4 May 2010
IN THE HIGH COURT OF NEW ZEALAND
WELLINGTON REGISTRY
CIV 2010-485-000515
BETWEEN GEOFFREY EDWARD FARROW
Plaintiff
AND ATTORNEY-GENERAL
Defendant
Hearing: 26 April 2010
Counsel: Plaintiff in Person
T G H Smith for Defendant
Judgment: 4 May 2010
JUDGMENT OF WILD J
Introduction
[ 1 ] Mr Farrow is aggrieved that he was bankrupted by the Federal Court of
Australia in Adelaide on 8 May 1989. The bankruptcy has undoubtedly cost him dearly. Whether Mr Farrow’s grievance is justified, or whether he is the author of his own misfortune, I am unable to say. That is because I am not in command of all the facts.
I have begun this judgment by making that point because it is often the case
that the obsession of a vexatious litigant has its origins in a genuine complaint or injustice. Mr Farrow is a vexatious litigant, or certainly an obsessive one. This is the third time he has come to this Court seeking redress in respect of his bankruptcy in Australia.
FARROW V ATTORNEY-GENERAL HC WN CIV 2010-485-000515 4 May 2010
For the reasons I will attempt to explain, this Court cannot give Mr Farrow
any redress, and I intend granting the Crown’s application to strike out Mr Farrow’s proceeding.
The two applications for decision
For decision are two applications, the first by Mr Farrow, the second by the
defendant (whom I will call the Attorney). By application “for judgement of hearing” dated and filed on 31 March 2010 Mr Farrow applies in these terms:
Application now for a Court Judgement and Award of Damages as per the matters decided at the previous hearing on the 7th May 1998 whereby the parties along with the Master [Thomson] agreed that the Order in Aid from Australia was orally and documentary proved “ill-conceived” and was and is a Criminal Offence and that including the initiating falsely Bankrupting of G.E.Farrow No 475 of 1989, South Australian Registry, in the Commonwealth of Australia.
(1) The Plaintiff and the Insolvency and Trustee Service of Australia request the Judgement.
(2) The award of Damages to be in accord as agreed between Her Majesty, Queen Elizabeth the Second, and as detailed in the Notice of Compliance now on the Court File CP 54/98
UPON THE GROUNDS
That Bankruptcy cannot be used for a debt owed, or ulterior purposes, Creditors have their remedies in debt collection, Re – Simpson and Bankruptcy v Bank of New Zealand, Auckland High Court.
When Financial documents are shown to be forgeries, other documents show Forgeries of G.E.Farrows signature, if Trustee Statements presented before the Courts show omissions then the whole matter is nothing more than a “Criminal Fiasco”.
The Plaintiff relies on the Commonwealth Crimes Act 1914
In his Notice of Opposition dated 22 April, the Attorney gives notice that he
opposes the making of a judgment and award of damages on the grounds that:
2.1 No order, decision and/or agreement as to the matters referred to in
the first paragraph of the Application was made at the hearing before master Thomson dated 7th May 1998.
2.2 There is no evidence of a request for the Judgment from the
Insolvency and Trustee Service of Australia referred to in paragraph
(1) of the Application and, even if such request had been made, it would not be a basis for the order sought.
2.3 The provenance of the Notice of Compliance referred to in
paragraph (2) of the Application is unclear and would not be a basis for the order sought.
2.4 The Applicant appears to be based on alleged criminal offences
outside this Court’s jurisdiction.
Also on 22 April, the Attorney filed an application for orders striking out
Mr Farrow’s statement of claim, dismissing Mr Farrow’s claim, and for costs. The main grounds on which the Attorney seeks those orders are:
3. The statement of claim discloses no reasonable cause of action
because the causes of action pleaded are so clearly untenable that they cannot possibly succeed. In particular:
3.1 The relief sought, being revocation of the Order in Aid
purportedly issued by the High Court in New Zealand, is unavailable to the plaintiff as no such order has been made.
3.2 The proceedings in which the Order in Aid was requested
namely The Official Assignee v Geoffrey Edward Farrow, High Court, Christchurch, B328/91, were discontinued on 22nd June 1998.
3.3 The Official Assignee was not the source of any harm
alleged.
...
6.The statement of claim is an abuse of process in so far as it is an attempt to re-litigate matters already determined by the court, in particular:
6.1 The plaintiff’s application for summary judgment for orders
in substantially the same form as those contained in the instant proceedings, was struck out pursuant to the judgment of Master Faire dated September 1998 in GE Farrow v Attorney General of South Australia & Others High Court, Auckland, CP 276/98 September 1998;
6.2 On 5 March 1999 the plaintiff’s application to recall the
judgment of Master Faire referred to in paragraph 5.1 was struck out, there being no appearance by the plaintiff.
7.The plaintiff failed to prosecute his proceedings and has caused inordinate and inexcusable delay in the conduct of these proceedings such that it is not in the interests of justice that the case should proceed.
The Attorney also grounds his application on prejudice caused by Mr Farrow’s recent attempt to extend his claim “to Case No. CP54/98” (the number given to this proceeding when it was commenced on 16 March 1998), and because Mr Farrow’s claim is “incomprehensible and cannot be properly pleaded to”. Finally, the Attorney relied on the well established strike out principles laid down by the Court of Appeal in Attorney-General v Prince & Gardiner [1998] 1 NZLR 262.
Procedural and factual background
As is evident from what I have set out, there is a substantial procedural and factual background to the two applications I must decide. In attempting to summarise this background, I reiterate that I do not have a complete grasp of the facts. The starting point is an incident in South Australia in or about 1987. It involved an incident in which Mr Farrow apparently maliciously damaged a vehicle owned by a Mr M J Down, and was subsequently convicted and sentenced to imprisonment in South Australia for attempted murder and assault causing grievous bodily harm, I assume to Mr Down. I understand he served his sentence, initially in Mobilong Prison outside Adelaide, and later in less secure prisons, including the Yatala Labour Prison. I gather that Mr Down and Mr Farrow’s estranged wife, Margaret, were both tutors at the Institute of Technology in Adelaide. An inference as to the reason for the malicious damage is available.
Mr Down’s insurance company subsequently made a claim against Mr Farrow for $1,200 damage to his motor vehicle. Mr Farrow apparently instructed a Mr Deegan to represent him in defending that claim. According to Mr Farrow, Mr Deegan failed to appear or to advise Mr Farrow of the hearing, and judgment for $1,330 (the debt plus costs) was entered against Mr Farrow by default. By April 1989 Mr Deegan had been appointed a Magistrate, presiding in the Frobisher Court in Elizabeth, South Australia. I gather Mr Farrow believes that, when Mr Deegan took up his Magisterial duties, he simply abandoned Mr Farrow and the defence of Mr Down’s claim. Mr Farrow subsequently complained (by letter dated 7 April 1998) to the Attorney-General of South Australia about Mr Deegan’s conduct. I do
not know whether Mr Farrow’s complaint was justified, and it is not clear to me what subsequently happened; whether Mr Farrow was unaware of the judgment or whether he knew of it but refused to pay it or was unable to pay it. It seems that Mr Farrow may not have been aware of the judgment because, on 14 March 1989, Mr Down petitioned the Federal Court ex parte for an order adjudicating Mr Farrow bankrupt.
[10] Mr Farrow was adjudicated bankrupt on 8 May 1989 by Registrar Carey of the Federal Court in Adelaide who made a sequestration order against Mr Farrow’s bankrupt estate. Mr Farrow was adjudicated bankrupt because he failed to comply within 14 days (ie by 29 September 1988), with a bankruptcy notice that had been served on him on 15 September 1988.
[ 11 ] My understanding is that Mr A C Matthews, a partner of Horwarth & Horwarth, Chartered Accountants in Adelaide, was initially appointed trustee of Mr Farrow’s bankrupt estate. On 23 January 1991 Mr Matthews was replaced as trustee by Mr J A Huppatz, an employee of Horwarth & Horwarth.
In an affidavit filed in this proceeding on 16 March 1998, Mr Farrow claimed that, on 8 May 1989, his assets ($118,203) exceeded his liabilities ($44,548) by some $44,548. That is based on an unsourced statement which I assume Mr Farrow himself prepared. Somewhat curiously, that statement is endorsed:
This statement is indicative of my true status at the above date. The accountants society of New Zealand have declined to handle this matter and I have been threatened by the society president, Auckland. Oct 10th 1997 at 10.00am.
At the instance of Mr Huppatz, on 17 June 1991 Von Doussa J of the Federal Court signed a Request to this Court for its assistance with Mr Farrow’s bankruptcy, by appointing the Official Assignee of New Zealand receiver of assets which it was believed Mr Farrow owned in New Zealand. These were specified in the Request to comprise:
a) A property in Geraldine (CT 450/242 Christchurch Land Registry);
b) Monies in the Raymond S Walker Trust Account, in Auckland;
c) Monies in a United Building Society account in Christchurch;
d) Monies in two Trust Bank South Canterbury accounts in Timaru; and
e) Monies in Bradley West Clarke List Trust Account in Geraldine. [ 14] On 5 November 1991 the Official Assignee filed, in the Christchurch Registry, an originating application (B328/91) in terms of the Federal Court’s Request. This application was supported by an affidavit sworn on 5 November 1991 by Mr J G Rollinson, Deputy Official Assignee. He annexed the bankruptcy order and the Federal Court’s Request. He also annexed a copy of the statement of affairs as at 8 May 1989 sworn by Mr Farrow on 16 May 1989, which listed these liabilities (or creditors):
Australian Tax Office $39,407.11
M Down – Court Judgment $3,360.08
Ross McCarthy & Co $2,000.00 (Approximately)
Total $44,767.19
Because of obliterations on the copy on the Court file, I am unable to discern what Mr Farrow deposed his assets comprised and amounted to. However, in a later (31 May 1999) report to creditors, Mr Huppatz stated that this statement of affairs by Mr Farrow as at the date of his bankruptcy “was grossly inaccurate requiring in depth investigation including the employment of an enquiry agent”.
[15] On 12 December 1991 Mr Farrow filed an application (expressed as being ex parte) for various orders, in particular that the Federal Court’s Request be denied. These opposing applications were heard by Holland J on 4 February 1992. Mr Etherington, a solicitor with the Christchurch firm Gough & Irving, represented Mr Farrow. In a judgment he gave orally the same day, Holland J:
a) Expressed the view that it would have been preferable for the Official
Assignee to have left the application to the (Australian) trustees of
Mr Farrow’s bankrupt estate, rather than make it himself.
b)Expressed a reservation as to whether a wide order appointing the Official Assignee as agent for the trustees was appropriate.
c)Recorded that it seemed that Mr Farrow’s assets were “more than sufficient to meet the bankrupt’s debts”.
d)Recorded his view that the bankruptcy was “an unusual one” for these reasons:
... The petitioning creditor had a relatively small debt arising out of a motor accident to a motor vehicle owned by his creditor who was the victim of an assault by the bankrupt in respect of which the bankrupt has been imprisoned. There are suggestions that the bankruptcy proceedings have been brought by way of retribution and it is suggested by the defendant that he had offered to pay the amount of the judgment before judgment was obtained but this had been refused by the creditor who had indicated a determination to have him made bankrupt. At the time of the judgment and the bankruptcy the defendant was in prison.
e)Remarked that it was unfortunate that one of the original trustees was a solicitor (incorrect he was in fact an accountant) who had been replaced by a managing clerk in his employ.
f)Observed of Mr Farrow’s attitude:
The defendant has adopted an attitude which is most unfortunate. His lack of cooperation and his refusal to pay can only cause him a great deal more expense and a great deal of suffering. There are occasions, and the Courts see them from time to time, where people, with what may have originally been a legitimate sense of grievance, allow that sense of grievance to simply become exaggerated to such an extent that it controls their whole lives and as a result what could otherwise be a worthwhile life is spoilt because of what is simply regarded as a matter of principle and one which could have been solved, and still could be solved, by resolution of the dispute. I am told that the defendant really has no intention of lying down and accepting the situation. That may be his right, but he may be still acting very unwisely and not really in his best interests as far as the future is concerned.
g) In what he termed “the very unusual circumstances of this case”,
adjourned the application on conditions:
(1)That the defendant forthwith return to Australia;
(2)That within three weeks he pays the original debt of $1300 (Australian) into the office of the Federal Court of Australia, South Australia District Registry General Division, Adelaide, such sum to remain in the jurisdiction of the Federal Court until further order of the Court or with the consent of both parties to this litigation, namely the Official Assignee at Christchurch and the defendant;
(3)That the defendant immediately take steps either to set aside the judgment obtained against him in respect of this debt of $1300, or pay the full amount of the judgment into the Federal Court on the same terms as the order as to the $1300;
(4)That the defendant forthwith apply for a review of his tax assessment;
(5)That the defendant forthwith take reasonable steps to ensure solution of the dispute with his former wife over the matrimonial property settlement;
(6)That the defendant either apply to set aside the sequestration order in the Federal Court of Australia, or if that should be impossible, or if he should decide that he does not wish to set it aside, that he cooperates with the trustees duly appointed or he applies for substitution of other trustees in his estate.
[16] Mr Farrow assured me that he had, promptly, complied with condition (3). That is confirmed by a letter dated 8 April 1992 from the Federal Court of Australia, South Australia District Registry, confirming receipt by the Court of “$1,300 as per the Order of the Honourable Mr Justice Holland of the High Court of New Zealand”. [ 17] In the course of the hearing, Mr Farrow mentioned that he was committed to Sunnyside Hospital around the time of the hearing before Holland J. Nothing I have fixes the date on which he was committed to Sunnyside. If he was in Sunnyside at the time of the hearing, then Mr Etherington cannot have informed the Judge of that, because the consequence would obviously have been that Mr Farrow could not have complied with condition (1). I asked Mr Farrow how he came to be committed to Sunnyside Hospital. I gathered from his answer that he had assaulted a Christchurch lawyer, a Mr E H Parsons, whom he alleged had failed to pay the debt he owed to Mr Down, and had also assaulted his secretary. Mr Farrow told me that this lawyer was administering his mother’s estate, and had failed to respond to several requests
he had made to the lawyer for the funds due to him from the estate. Mr Farrow said that he was convicted of assaulting both the lawyer and the secretary and sentenced to five years imprisonment. At some stage during that imprisonment – it must have been earlier rather than later – he was moved from prison to Sunnyside Hospital and detained there under the Mental Health Act as a patient until April 1997. I have recounted this because it is significant, in more than one way, that Mr Farrow had been obliged to resort to Mr Parsons for money to pay the AUD1,300 he owed Mr Down.
[18] Mr Huppatz did not ask the Official Assignee to pursue the application and, when it was recalled before Holland J on 4 June 1992, His Honour adjourned it sine die (ie indefinitely). Mr Etherington again appeared for Mr Farrow, and consented to that adjournment. The same day, 4 June 1992, Mr Etherington reported by letter to Mr Farrow on the hearing. His letter is addressed to Mr Farrow c/- Sunnyside Hospital. Mr Etherington enclosed with his letter a statement which the Official Assignee had submitted to the Court with a memorandum. This appears to be a statement of the bankrupt estate of Mr Farrow prepared by the Trustee. It shows:
· Receipts from the realisation of assets totalling $40,203.17.
·Payments from those receipts totalling $32,669.03. All of these payments are for expenses of administering the estate. By far the largest payment is for “trustee’s remuneration” (I assume to the firm of Horwarth & Horwarth) totalling $18,645.90.
·A resulting balance on hand of $7,534.14.
·Creditors’ claims totalling $57,698. One of these is Mr Down’s claim, now standing at $3,360. The largest claim is by the Australian Taxation Office for $49,120.
·Accrued but unpaid or estimated costs and disbursements totalling $10,487. This includes accrued but unpaid trustee’s remuneration of a
further $5,632 (bringing the total trustee’s remuneration to $24,278 for the administration of a small and still incomplete bankruptcy).
• A deficit of $60,651.
[ 19] I also have the reporting letter Mr Panckhurst sent Mr Huppatz, following the 4 June 1992 hearing before Holland J. In this Mr Panckhurst reports that Mr Etherington had sought a further adjournment on the basis of developments in the interim, including:
that Farrow had been arrested on criminal charges and remanded to a psychiatric hospital for assessment of his mental condition, pending the criminal trial.
[20] As I mentioned, Mr Farrow was detained in Sunnyside Hospital until April 1997. On 16 March 1998 he commenced the present proceeding (at the time numbered CP54/98), filing the statement of claim which the Attorney now seeks to strike out. The statement of claim was in these terms:
1.That a Bankruptcy (S. Aust.) No. 475 of 1989 was used as means of putting pressure on the Debtor G.E. Farrow being the plaintiff in the proceedings.
2.That an “Order in Aid” brought to the New Zealand High Court – (Chch.) B-328-91 was out of order whilst supporting the original claim.
3.The statement at 8th May 1989 shows a surplus of funds to the amount of $73,655.17 which was known in detail by the Trustee.
4.The Trustee in Bankruptcy in Australia was the Official Receiver and by law is not allowed to handle the plaintiff’s affairs. The Trustee knew the Plaintiff had been prevented from satisfying the Petitioning Debt.
5.The Trustee was obliged to the Plaintiff and to consult with him as well as the Debtor. This did not happen when requested.
6.The Official Assignee was aware of the error in the statement supplied to the High Court and annotated to him by the Plaintiff’s lawyer, C.W. Etherington, for Gough & Irving Solicitors, Christchurch on 3rd June 1992 approx.
7.I believe that the Defendant has no defence against the allegations made herein.
Causes of Action
8.That Items (1) to (7) in the Statement of Claim being so true that the Order in Aid be revoked in New Zealand.
9.The Courts in Australia and New Zealand exceeded their jurisdictions in view of the information given by the Registered Trustee, J.A. Huppaz, and his knowledge that the bankruptcy was invalid legally.
10.Re – Simpson in Bankruptcy Master Ann Gambrill:
Bankruptcy cannot be used as a means of putting pressure on the debtor.
Relief Sought
11.That the Order in Aid be revoked setting out the above facts to put an end to the spectacle of worthless defence.
12.That damages and legal and all costs incurred to date be recoverable from the Crown, plus costs of the proceedings,
i.e. the Term of the Bankruptcy and Order in Aid being effective in New Zealand only.
This Statement of Claim is filed by G.E. Farrow in person
On the................... day of........... 1998 at The High Court of Wellington
[21 ] Paragraph 2 appears to allege that this Court made an Order in Aid. Paragraphs 8 and 9 seek to found causes of action on the alleged Order in Aid, and paragraph 11 seeks, by way of relief, that the order be revoked. As is clear from the narrative I have set out, this Court did not make an Order in Aid. Indeed, Holland J declined to make such an order. Paragraph 6 refers to the statement I have detailed above in [18]. It is obviously correct that the Official Assignee was aware of this statement, since he submitted it to the Court with a memorandum. But it is obviously a statement provided to the Official Assignee by the trustee (Mr Huppatz of Horwarth & Horwarth) administering Mr Farrow’s bankrupt estate in South Australia.
[22] Along with his Statement of Claim, Mr Farrow filed a notice of proceedings for summary judgment, but not the required application for summary judgment. That application followed on 1 May 1998. It:
• Contains numerous complaints about what had occurred in Australia.
These complaints are directed variously against the petitioning
creditor, the Registrar of the Federal Court, the trustee and “the Official Receiver”.
·Notes that Holland J had declined to make an “Order in Aid”, but alleges he “gave orders which were ‘out of order’”. It alleges the order should have been “revoked” because it was “illegal”.
·Makes allegations against an unnamed lawyer in Christchurch, including “reneging” on paying the petitioning creditor’s debt in South Australia and destroying letters when asked for copies.
·Seeks, amongst other things:
(20)To have the “Order in Aid” in New Zealand revoked.
To have the Official Receiver, Consultant, Registered Trustee, Dogsbody etc. – removed from his position.
He is acting illegally by the law of Australia.
(21)To have a New Zealand Court appoint A.C.T. Australia lawyers to review all matters concerning the bankruptcy and have it “rescinded”.
(22)To award damages and costs in New Zealand for the period of the bankruptcy and Order in Aid being effective.
[23] Meanwhile, on 2 April 1998, Mr Farrow wrote to the Solicitor-General in these terms:
Dear Sir or Madam,
Re: High Court Hearing, Wellington, 6th April 1998, Case CP 54/98
For Summary Judgement
In the matter of Revocation of an Order in Aid from Australia (Bankruptcy) Between Geoffrey Edward Farrow Plaintiff
And The Crown of New Zealand
The Attorney General for and on behalf of the (Official Assignee)
The Statement of Claim attached to the above case being so true, the following facts are also true as explained to me by the legal division of the Public Trustee:
(1)As I was a Special Patient in Sunnyside Hospital at the time of the High Court hearing around June 3rd 1992 (until April 1997) the responsibilities of my affairs came under the Property Law Act and under the managers of my affairs, those being –
The Official Assignee (L.A. Saunders)
The Judge of the High Court (J. Holland)
Lawyers in Christchurch and Auckland, as shown.
(2)All parties are in default of “duty of care” with the information in their possession and the responsibility lies squarely with the Government when they proceeded against me, when they were shown quite justly and clearly that they should not have done so.
(3)The responsibility of the case before the High Court is legally yours and the subsequent resolve is also yours in Australia.
(4)I am not the instigator of this action but am acting on instructions of lawyers in the Hague.
(5)I await your reply on these facts, as soon as possible.
The Solicitor-General sent this letter to the office of the Official Assignee in Christchurch where it was dealt with by Mr R A MacDuff, a senior solicitor in the office. Mr MacDuff instructed Mr Liddell of the Crown Law Office in Wellington to appear on the Official Assignee’s behalf at the 6 April 1998 hearing referred to in the heading to Mr Farrow’s letter. Mr Farrow served a number of further documents on Mr Liddell at that hearing, and the matter was adjourned to 7 May 1998.
Mr MacDuff’s evidence is that Mr Liddell attended the hearing on 7 May 1998 with instructions to seek dismissal of Mr Farrow’s application for summary judgment. Mr Liddell sought dismissal on the basis that the Order in Aid which Mr Farrow sought to have revoked had not been made and the Official Assignee was not the cause of any damage that Mr Farrow might have suffered. Master Thomson’s handwritten minute of the hearing on 7 May records this:
Mr Liddell
Mr Farrow in person
Application adjourned. Mr Liddell to obtain instruction to have the
application for an Order in Aid from Australia dismissed. He is to file a
memorandum as to the Crown’s view as to the future conduct of the case. Mr Liddell agreed to accept service by mail.
Master Thomson
(The emphasis was the Master’s.)
Mr MacDuff deposes that Mr Liddell reported to him that Mr Farrow had made a number of submissions to the Master. In the end, the Master adjourned the application sine die on the basis that Mr Liddell would obtain instructions to have the Order in Aid proceeding dismissed or withdrawn. Mr MacDuff further deposes that, with a view to resolving the matter, he agreed to file a Notice of Discontinuance of the Order in Aid proceeding (B328/91 Christchurch Registry), and that Notice of Discontinuance was duly filed, dated 22 June 1998. A copy was served on Mr Farrow at his home in Hastings on 25 June 1998 by a process server. Mr Farrow accepts that he was served.
In the affidavit Mr Huppatz swore on 11 October 1999 (which I refer to below in [35]), he deposed that proceeding B328/91 was “discontinued without my knowledge or consent”. I note that Mr MacDuff, by letter dated 23 September 1998, in response to a letter from Mr Huppatz on 8 September 1998, confirmed that he had lodged a notice of discontinuance “on the Official Assignee’s instructions”.
On 12 June 1998 Mr Farrow filed a second proceeding, this time in the High Court at Auckland (CP 276/98 Auckland Registry). He sued five defendants: The Attorney-General of South Australia; Countrywide Banking Corporation; The Attorney-General of New Zealand; Horwarth & Horwarth and the Insolvency & Trustee Service and Federal Bankruptcy Administration (of Australia). Again, his statement of claim was accompanied by an application for summary judgment. Again, this was a proceeding in which Mr Farrow made against the defendants a range of allegations arising out of his bankruptcy in South Australia in 1989, and in which he again sought revocation of the Order in Aid he alleged had been made in New Zealand. The proceeding was met by various applications by the defendants. Four of them applied to strike the proceeding out as unintelligible and as disclosing no reasonable cause of action. The fourth defendant (Horwarth & Horwarth)
protested this Court’s jurisdiction, contending that the proper place to determine Mr Farrow’s claims was in the Courts in South Australia.
[29] The proceeding was first called before Master Faire on 13 August 1998. The Master delivered a minute listing various deficiencies with Mr Farrow’s pleadings, and adjourned the proceeding to give Mr Farrow an opportunity to remedy those. His minute records that he had been told there was a similar proceeding in the Wellington High Court, and requested information about that proceeding.
[30] When the proceeding was called again before Master Faire on 27 August 1998 no progress had been made and the Master adjourned it further to 24 September 1998. On that date Master Faire invited Mr Farrow to make submissions about the deficiencies in his pleadings, which remained largely unremedied. The last two paragraphs of Master Faire’s judgment of 24 September 1998 record the Master’s view and what he did:
[13] I emphasise that, in my view, the current pleading does not disclose a reasonable and credible cause of action against any of the defendants. In my view, the document is one that cannot be properly pleaded to. It does not define a series of facts and issues which are relevant to specific recognised causes of action. Quite apart from disclosing no reasonable cause of action, the defendants are understandably prejudiced and embarrassed by being confronted with a document that is so deficient.
[14] Accordingly, I order that the proceedings be struck out. I reserve costs. If any party desires to seek an order for costs, memorandum in support shall be filed and served within 14 days. Mr Farrow shall have 14 days after service of such memorandum to file a memorandum in answer.
[31] Mr Farrow subsequently applied to recall Master Faire’s judgment. That recall application was heard by Master Faire at 2.15pm on Friday 5 March 1999. All five defendants were represented, but Mr Farrow did not appear. A search of the precincts of the Courthouse failed to locate him. The defendants were able to point out to the Master that Mr Farrow had filed an affidavit referring to the “hearing on 5th March 1999 at 2.15pm ...”. After hearing from counsel for all the defendants Master Faire ordered:
There being no appearance by the Plaintiff, his application to recall the judgment of 24 September 1998 is struck out. Costs for this hearing are reserved.
I spent several hours during the hearing on 26 April, trying to understand Mr Farrow’s grievances, and to see whether he might have some genuine cause for complaint against the New Zealand Official Assignee. I asked Mr Farrow a number of questions with the aim of ascertaining whether any of his New Zealand assets had been taken and applied toward his bankruptcy in South Australia, and if so which, when and how. In the course of this exchange with Mr Farrow, he told me that his property in Geraldine had been sold and the proceeds applied to his bankruptcy. When I inquired how this could be, Mr Farrow drew my attention to a letter dated 20 April 2000 from Mr Crichton of Crichton Horne & Associates, Chartered Accountants in Christchurch. This letter is addressed to Village Hair Care, one of the tenants of Mr Farrow’s Geraldine property. It advises that, on 22 March 2000, the High Court had appointed Mr Crichton receiver of Mr Farrow’s bankrupt estate. I asked Mr Farrow how he had become aware of this letter. He explained that he was in Geraldine doing some maintenance on the property, including repainting the roof, and the “girls” from the hair salon had shown him the letter. Mr Farrow responded by getting in his car and travelling up to the High Court in Christchurch, and obtaining from the Registry there a copy of the order made by the Court. Mr Farrow told me that he also called in to see Mr Crichton at his office. He acknowledged that he was rude to Mr Crichton, who he said reciprocated, telling him that he did not want to discuss anything with Mr Farrow.
Although of little relevance, I mention a curious event that occurred much earlier in relation to Mr Farrow’s Geraldine property. Amongst the disordered mass of documents now on the Court file, is a letter dated 20 September 1990 addressed to Mr Farrow by four of the tenants of his Geraldine property. This states that on or about 17 October 1989 they were approached by a private investigator who said he was from Interpol. This investigator told the tenants that Mr Farrow had died and that his estate was to be wound up. He told them that they were required to provide to him full details of the rent and rates of the properties, because an investigation was underway.
It was clear to me at the hearing on 26 April that Mr Smith was unaware of the order made by this Court on 22 March 2000, no doubt because the Official Assignee was himself unaware of it. For two reasons, Mr Smith can be forgiven for
being unaware of the order. First and foremost, Mr Farrow’s statement of claim of 16 March 1998 did not mention the order (it preceded it by two years), and nor did his 31 March 2010 application “for judgment of hearing”. Secondly, although a copy of the order is amongst the documents Mr Farrow has filed in this proceeding (and presumably served), it is nigh impossible to locate. I have already referred to the documents being a disordered mass. The Court’s 22 March 2000 order is one of a random collection of documents attached by Mr Farrow to a “Writ of Compliance” he filed in this Court on 19 March 2010. The ‘Writ’ is expressed as “in the High Court of Australia Melbourne Registry”, and is addressed to Her Majesty the Queen of Australia, the South Australia and Federal Solicitors and Attorneys-General and also the Solicitor-General and Attorney-General of New Zealand “acting as agents for the Federal Commonwealth of Australia and Courts”.
I have since obtained copies of the pleadings in the Christchurch proceeding (B30/00 Christchurch Registry). They comprise an originating application and a supporting affidavit, both filed on 26 January 2000 by Buddle Findlay, Solicitors, Christchurch. The affidavit was sworn by Mr Huppatz in Adelaide on 11 October 1999. Neither document was served on Mr Farrow. The entitulement to these documents describes Mr Farrow as “formerly of Adelaide, South Australia, but now of New Zealand (address unknown) a bankrupt adjudicated in South Australia on the 8th day of May 1999”.
In his affidavit, Mr Huppatz makes full disclosure of his earlier (1991) application to this Court for an Order in Aid, and of its outcome. He annexed a copy of Holland J’s judgment of 4 February 1992. Mr Huppatz explained that what had prompted this second application was advice from Buddle Findlay that the caveat which had been lodged (on 2 August 1989) by Mr Matthews against Mr Farrow’s Geraldine property had lapsed on 4 February 1997. Mr Huppatz had a resulting concern that Mr Farrow may attempt to dispose of the Geraldine property. Mr Huppatz also annexed a number of letters he had sent Mr Farrow, and copies of affidavits he had filed in the bankruptcy division of the Federal Court of Australia, and of his reports to creditors of Mr Farrow’s bankrupt estate.
[37] Mr Huppatz’s second application for an Order in Aid came on for hearing before Chisholm J on 22 March 2000. After hearing from Ms Dunningham of Buddle Findlay, appearing for Mr Huppatz as applicant, and there being of course no appearance for Mr Farrow (who knew nothing of the application), Chisholm J ordered:
1.The bankrupt’s interest in a freehold property situated in New Zealand comprised in Certificate of Title the registered book volume 450, Folio 242, situated in the borough of Geraldine, being part of Lot 1 on plan deposited in the Land Registry Office at Christchurch number 940, part of reserve 346 (“the Geraldine property”) is vested in the trustee of the bankrupt’s estate, Maris Andris Rudaks.
2.David Donald Crichton (“Mr Crichton”) in New Zealand is appointed to be the receiver (without security) for the rents and profits of the Geraldine property with liberty to sell and lease the same and to receive the proceeds of such sale or leasing, but without prejudicing the rights of any encumbrances, and with authority to take such steps and do such acts and things that may be necessary and proper for the purpose of receiving the rents and profits out of selling the Geraldine property.
3.Mr Crichton is authorised to remit (after payment of costs, charges and expenses he has incurred) the monies coming to him by the receipt of the rents and profits and by the sale of the Geraldine property to the trustee at 60 Waymouth Street, Adelaide, in the State of South Australia.
4.The bankrupt by himself, his servant or agent is restrained from disposing or taking any steps to dispose of his interest in the Geraldine property.
Decision
[38] By the end of the hearing on 26 April, I had two concerns, and voiced at least the second of them. My first concern related to the level of “remuneration” charged by Mr Huppatz. I have referred to this in [18]. A later statement of account of Mr Farrow’s bankrupt estate discloses that, by 8 January 2003, Horwarth & Horwarth had charged remuneration totalling $73,718.25. I did not – and still do not – know what accountability or scrutiny Mr Huppatz and his firm were subject to in terms of that remuneration. It seems to me excessive, at least in relation to the $56,354 of creditors the bankrupt estate had, as of 4 May 1999 (I take that figure from an affidavit sworn on that date by Mr Huppatz).
[39] However, in fairness to Mr Huppatz, I need to put his side of the story as to the cost of administering the bankrupt estate. In his 4 May 1999 affidavit just referred to, Mr Huppatz deposed as follows:
...
3.The administration of this estate has been very time consuming and expensive from the beginning. The bankrupt was in jail at the time sequestration order was made on 8/5/89. The statement of affairs filed by him was inaccurate and inadequate. This resulted in me hiring a private investigator to investigate his affairs. Over a period of a number of years various assets of the bankrupt in both Australia and New Zealand were discovered including a bank account in the name of the bankrupt’s sister which realised $26,863 for the estate.
4.In addition the initial order in aid proceedings, The New Zealand Proceedings and the Family Court Proceedings were protracted and expensive for me to conduct. In particular, because the Family Court Proceedings were not resolved quickly, I had to prepare estate tax returns for a further five years at considerable expense, and resolution of the NZ proceedings could not proceed as the bankrupt’s former wife had made claim to the Geraldine property.
...
[40] Further, amongst the annexures to his 11 October 1999 affidavit (referred to in [27] above) were a number of letters Mr Huppatz, or Mr Matthews his predecessor as trustee, had sent Mr Farrow. On 31 October 1989 Mr Matthews wrote to Mr Farrow in Yatala Prison saying:
... I strongly recommend that it is your interests to co-operate with me so that the assets in Australia can be realised with the least possible cost. If you have any doubt in this regard I suggest you obtain independent legal advice.
[41 ] On 25 February 1991 Mr Huppatz wrote to Mr Farrow:
I refer to previous correspondence and discussion regarding the realisation of the assets of your estate and payment of the debts.
Realisation of assets was deferred as it was understood the funds were to be provided to pay the debts in full. Apparently, the action to raise the necessary funds is now not proceeding.
In the circumstances I believe that I am obliged to now proceed with realisation of the assets and I intend to do so forthwith.
Take note that I intend to take action to settle the dispute regarding the funds
held in trust (from the sale of the house property). I hope to be able to reach
agreement with your former wife so that the funds can be shared between her and your bankrupt estate.
I also intend to instruct my solicitor to commence proceedings for the recovery of assets in New Zealand. It is unfortunate that I must take this action as I believe it will incur very considerable costs. You could avoid these costs if you firstly instructed the solicitors and/or relevant financial institutions to pay the funds held to me. I recommend that you do so. If you do take such action please forward to me copies of your instructions.
You are reminded that the Taxation Office is not prepared to reduce its claim unless you file amended returns.
And then, two months later on 7 March 1991, Mr Huppatz wrote again to Mr Farrow:
It now appears that I cannot negotiate a reasonable settlement regarding the funds in trust and therefore I intend to take legal proceedings.
As I advised you I intend to take proceedings regarding the assets in New Zealand. You could avoid a considerable amount of the costs if you authorised your solicitors, Bradley, West, Clark & List to forward to me the funds on hand and further to provide me with pertinent information regarding the property (eg. Insurance).
Please advise me urgently as to whether you are prepared to so authorise the solicitors.
[42] There is also an exchange of letters between Mr Matthews, when trustee, and Mr Farrow’s solicitors suggesting obstruction on Mr Farrow’s part. On 7 November 1990 Mr Matthews wrote to Mr Farrow’s New Zealand solicitor, Raymond S Walker of Auckland, in these terms:
I refer to previous correspondence. I understand that instructions given to solicitors in Adelaide to apply for an annulment have been withdrawn.
It is my intention to proceed with the administration of the bankruptcy and to realise sufficient assets to pay the debts in full.
I authorised Tom West, solicitor and the banks to release funds to you for the purpose of paying the debts to Farrow.
Would you please advise me as to what funds were received and the amount that is currently held by you. Take note that I maintain that these funds have vested in me as trustee and you must not deal with the funds without my authority.
Please also advise as to your requirements to enable you to pay the funds to me.
Mr Walker replied on 27 November 1990 (and the emphasis is mine):
I refer to your letter of the 7th of November. As your firm will know, we went to considerable lengths, in association with Randle & Taylor, to have the Bankruptcy annulled upon payment of the proven debts. Indeed at one stage we had remitted the appropriate funds to Adelaide, only to have them reversed to our trust account on Geoffrey Farrow’s instructions. Accordingly, after payment of costs and currency exchange losses, we are holding precisely $21,395.04 in my trust account available to pay towards the Bankrupt’s estate. I am prepared to pay these funds to you upon confirmation that the authority does exist, if needs be in the nature of a Court Order or other empowering provision under your Insolvency Laws. I look forward to hearing from you.
[43] The Federal Court shared the concerns I have expressed about the administration of Mr Farrow’s bankrupt estate, because they are referred to in Mr Huppatz’s trustee’s report to creditors of 31 May 1999. As this report also gives an overview of 10 years of bankrupt estate administration, I set it out in full:
1. The Trustee has made application to the Federal Court for an Order
in Aid with a view to realisation of assets in New Zealand. The Court has expressed concern that:
(1)this administration has taken over 10 years
(2)that if the real estate in New Zealand is ultimately sold the trustee would have received $200,000 (gross) and yet there will be a distribution to creditors of only (an estimated) 56 cents in $ (or less).
2. The Court has requested that the creditors be made aware of this
situation and confirm or otherwise approval for the action of the trustee. The Court suggests that after such a lengthy period of time the creditors may wish that the trustee take no further action and in particular expend no further costs.
3. Therefore creditors are asked to approve or disapprove the trustee’s
action by completing and returning to the trustee the enclosed form. To enable the trustee to file an affidavit before the next hearing on 14 June 1999, please reply by COB 4 June 1999.
4. Some detail regarding this matter has been set out in previous reports
to creditors, particularly the trustees reports dated 22 February 1996 and 13 November 1998. That former report included a statement of receipts and payments and details of legal costs and trustee’s remuneration.
5. In summary to date a total of $71,684.30 has been realised by the
trustee.
The major outlays have been:
Legal costs $22,129.66
Trustee’s fees $38,653.50
There is on hand a balance of only $2,059.09.
| Accounts incurred but unpaid are: | |
| Legal costs | $5,943 |
| Trustee’s remuneration | $5,339 |
| Trustee’s disbursements | $295 |
This administration has been lengthy and expensive, principally due
to:
(a)the Statement of Affairs filed by the bankrupt was grossly inaccurate requiring in depth investigation including the employment of an enquiry agent.
(b)protracted proceedings in the Family Court of Australia in relation to certain funds in trust.
The trustee was involved in those proceedings from December 1991 to December 1995.
(c)action taken to realise certain assets in New Zealand. Originally the trustee obtained an Order in Aid in 1991. Proceedings in New Zealand were oppressed by Farrow and an adverse judgement was made.
(d)Farrow took proceedings in New Zealand against a number of parties including the trustee. The action was struck out (the legal costs of this firm were met under an insurance policy).
The trustee’s actions in pursuing the assets in New Zealand have
been approved by creditors at several meetings and for some time the trustee was indemnified by a creditor, Australian Taxation Office. After that funding was withdrawn the trustee sought and ultimately obtained an offer of funding from Insolit Pty Ltd. The creditors at a meeting on 24 November 1998 approved the trustee entering into such a funding agreement.
The trustee originally estimated that the following could be the
outcome if the real estate in New Zealand is realised by the trustee. However please note that such outcome may well be the optimistic view.
Gross sale proceeds $130k
Agents charges $5k
NZ Trustee $5k
| Mortgage | $8k | |
| Legal costs | $15k | |
| Insolit premium | $35k | 68 |
| Net | $62 | |
| Less Trustee’s legal costs | 10 | |
| Trustee’s fees | 20 | 30 |
| Available for Creditors | $32 | |
| Creditors proved total $56,354. |
My second concern was that Mr Huppatz may not have alerted Chisholm J to his earlier application for an Order in Aid, and of the outcome of it, in particular Holland J’s judgment. But he clearly did; he made a full and fair disclosure of the whole position.
In some respects sympathy with Mr Farrow’s predicament may be warranted. However, in what I have set out there are a number of indications that Mr Farrow may have contributed, through incomplete or inaccurate disclosure, and an uncooperative or even obstructive attitude, to what can only be regarded as a disastrous bankruptcy administration.
But the point is that none of this is of any assistance to Mr Farrow in respect of this proceeding. As I have made clear, the proceeding is directed to what happened in this Court in Christchurch when Holland J dealt with the original application for an Order in Aid on 14 February 1992, and to what happened when Master Thomson dealt with this very proceeding in Wellington on 7 May 1998. Neither of those judicial officers made, at the instance of the New Zealand Official Assignee, an Order in Aid of Mr Farrow’s bankruptcy in South Australia. There is accordingly no basis for Mr Farrow to seek any relief against the New Zealand Official Assignee, or any other officer of the Crown in New Zealand.
The order made by Chisholm J on 22 March 2000 is not the subject of this proceeding; it post-dates Mr Farrow’s statement of claim of 16 March 1998 by some two years. I specifically asked Mr Farrow whether he had filed any amended
statement of claim. He said he had, but what he directed me to was a letter dated 23 February 2001 addressed to the Solicitor-General of Sweden and the Prime Minister of Sweden in Stockholm. I told Mr Farrow in no uncertain terms that that was not an amended statement of claim that I could entertain.
Even if Chisholm J’s Order in Aid was encompassed by this proceeding, I have made it clear that the New Zealand Official Assignee played no part in the making of that order. Indeed, he was by-passed by Mr Huppatz, who instructed the law firm Buddle Findlay to make the further application for an Order in Aid. Mr Crichton, who executed that order as receiver, was an accountant in private practice and not a public official. Nor was he acting on behalf of the Crown in New Zealand.
The inevitable result must be the striking out of Mr Farrow’s statement of claim and the dismissal of this proceeding.
Result
Pursuant to r 15.1(1)(a) High Court Rules I strike out Mr Farrow’s statement of claim, undated but filed in this proceeding (then CP 54/98) on 16 March 1998 on the ground that it discloses no reasonably arguable cause of action. I also specifically dismiss Mr Farrow’s “application for judgment of hearing” dated 31 March 2010, filed on 1 April 2010, on the basis that Mr Farrow has no pleaded cause of action to found any judgment. I dismiss this proceeding.
Costs
As requested by Mr Smith, I reserve the costs of and incidental to last Monday’s hearing for application by memorandum if considered appropriate.
Solicitors:
Crown Law Office, Wellington for the Defendant
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