Fava v Official Assignee - [2013] NZHC 1042

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2011-404-4669 [2013] NZHC 1042

BETWEEN PHILIP JOSEPH FAVA Applicant

ANDOFFICIAL ASSIGNEE Respondent

Hearing: 9 May 2013

Counsel: Applicant in person
J D McBride for Aral Property Holdings Ltd, a creditor
No appearance for Official Assignee (abiding) Judgment: 10 May 2013

JUDGMENT OF DOBSON J

This judgment was delivered by me on 10 May 2013 at 3pm pursuant to r 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Solicitors:
Bell Gully, Auckland (ralph.simpson@bellgully.com)

Copy to:
P J Fava (philipfava@paradise.net.nz)
J D McBride, Auckland (josh@joshmcbride.co.nz)
Ministry of Economic Development (guy.caro@companies.govt.nz)

FAVA v OFFICIAL ASSIGNEE HC AK CIV-2011-404-4669 [10 May 2013]

[1] The current stage reached with these proceedings is an application by

Mr Fava for review of the judgment of Associate Judge Bell delivered on 20 March

2013, striking the present proceeding out.[1]

[1] Fava v Official Assignee [2013] NZHC 564 [the strike out judgment].

[2] A notice of opposition to that application was filed on behalf of the creditor, Aral Property Holdings Limited (Aral), that has consistently opposed Mr Fava’s initiatives to re-visit costs orders made against Mr Fava in favour of Aral.

[3] The current proceedings constitute a variant on earlier initiatives pursued by Mr Fava to re-visit a 2009 judgment of Hugh Williams J, ordering substantial costs against Mr Fava as a non-party to the proceedings to which the costs related. Mr Fava had been the alter ego and driving force of the corporate plaintiff that had been unsuccessful in those proceedings.

[4] The current proceedings were brought under s 238 of the Insolvency Act

2006, which provides for a bankrupt to challenge the admission of a creditor’s claim within the debts proven in the bankruptcy. Aral’s claim was admitted for the extent of Hugh Williams J’s costs judgment against Mr Fava.

[5] On 7 November 2012, the Associate Judge upheld an application Aral made in the present proceedings for security for costs.[2] The judgment ordered that the proceedings be stayed until $20,000 was paid by way of security for costs.

[2] Fava v Official Assignee [2012] NZHC 2980 [the costs judgment].

[6] After the expiry of three months, Aral applied to have the proceedings struck out. Mr Fava opposed that, essentially on the somewhat unusual ground that the Associate Judge should not have ordered security for costs in the first place. It was implicit that Mr Fava could not or would not comply with the order to provide security for costs.

[7] In the judgment on security for costs, and that granting Aral’s application to strike the proceedings out, the Associate Judge has reviewed the unusually extensive initiatives Mr Fava has pursued, essentially to prolong collateral attacks on the
adverse costs orders made against him in the judgment of Hugh Williams J in 2009.

Correctly, in my respectful view, the Associate Judge has observed that in balancing the interests of opposing parties in litigation, achieving finality has to be given recognition in reflecting on the extent of attempts 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.

Continue reading Fava v Official Assignee

Details

AGLC: Fava v Official Assignee [2013] NZHC 1042
Case: [2013] NZHC 1042
Decision Date: 10 May 2013

CaseChat Overview and Summary

The High Court of New Zealand dealt with an application by Mr Philip Joseph Fava for a review of the judgment striking out his proceedings against the Official Assignee. The court considered Mr Fava's attempt to revisit adverse costs orders made against him in a 2009 judgment. Aral Property Holdings Limited, a creditor, opposed Mr Fava's initiatives. The court examined Mr Fava's repeated attempts to challenge the costs orders through various legal means, and whether these attempts were in bad faith and intended to prolong the litigation without addressing the non-compliance with the order for security for costs.

The legal issues before the court were whether the Associate Judge's findings of Mr Fava's contumelious disregard for the court's orders were correct and whether the grounds cited in Mr Fava's application for review met the high standard required for successfully challenging the Associate Judge's decision. The court also considered whether Mr Fava's application was vexatious or an abuse of process, and if it should be struck out.

The court found that Mr Fava's conduct in relation to non-compliance with the order for security for costs was intentional and contumelious, and that continuation of the proceedings would involve substantial prejudice to Aral. The court held that the Associate Judge's findings were accurate and that the grounds cited in Mr Fava's application for review did not meet the high standard for successfully challenging the Associate Judge's decision. The court granted Aral's application to strike out Mr Fava's application for review of the strike out decision and ordered that Aral was entitled to costs on a 2B basis.

The court's decision reinforced the importance of achieving finality in litigation and preventing parties from prolonging proceedings through repeated attempts to re-litigate the same issues. The court also emphasised the need for parties to comply with court orders, particularly those related to security for costs. The decision serves as a reminder to litigants that repeated attempts to challenge adverse judgments without addressing the underlying issues may be considered vexatious and an abuse of process.

Orders