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 ([email protected])

Copy to:
P J Fava ([email protected])
J D McBride, Auckland ([email protected])

Ministry of Economic Development ([email protected])

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 re-litigate what is in essence the same issue.

[8]      A further matter of concern to the Associate Judge was that Mr Fava has continued all these initiatives as if he were immune to adverse costs orders made on numerous determinations against him.[3]   None of the adverse costs orders have been complied with.

[3] At [30] of the costs judgment and [24] of the strike out judgment.

[9]      In that context, the Associate Judge found Mr Fava’s conduct in relation to non-compliance   with   the   order   for   security   for   costs   was   intentional   and contumelious disregard of the orders of the Court.  He also found that continuation of the proceedings would involve substantial prejudice to Aral.  Those findings were relied on in the decision to strike the proceedings out.

[10]     The present application amounts to a continuation of the course of conduct which has been found by the Associate Judge to warrant striking out.

[11]     The terms of the application to review the strike out decision do not allege that those findings were made in reliance on a wrong principle, that they were made with the Associate Judge failing to take into account a relevant matter, or having regard to an irrelevant matter, or that the Associate Judge was plainly wrong.  Rather, consistently  with  the  theme  observed  in  numerous  judgments  about  Mr Fava’s initiatives, it foreshadows a further attempt to re-argue the merits of matters previously determined.

[12]     Mr McBride argued for striking out of the present application on the grounds that it would be vexatious, or an abuse of process to avoid the consequences of a striking out for non-compliance with an order for security for costs, to allow the proceedings to be prolonged without addressing that non-compliance.  He also took

the point that the scope of grounds cited for seeking review did not, in any respects,

meet the high standard required for review of an Associate Judge’s decision to be

entertained.

[13]     Having heard Mr Fava  at  some  length,  I am  satisfied  that  Mr McBride’s characterisation of these matters is accurate.  Having reflected on the history of the matters as charted in the Associate Judge’s two most recent judgments, I can find no basis for distinguishing the Associate Judge’s finding that the initiatives Mr Fava has taken in attempts to prolong the proceedings continue to be in intentional disregard of the order for security for costs, and contumelious.

[14]     I am also satisfied that the range of grounds potentially available to Mr Fava for seeking to review the Associate Judge’s strike out decision could not meet the high standard for successfully doing so.

[15]     In these circumstances, Aral’s application to strike out Mr Fava’s application

to review the Associate Judge’s decision which struck out the proceedings is granted. [16]     Aral is entitled to costs on a 2B basis.

Dobson J