Gudmundsen v Carrington

[2015] NZHC 3070

IN THE HIGH COURT OF NEW ZEALAND NELSON REGISTRY

CIV-2014-442-000069 [2015] NZHC 3070

IN THE MATTER	of the Insolvency Act 2006
AND
IN THE MATTER	of the Bankruptcy of NINA CARRINGTON
BETWEEN	KEN JOSEPH GUDMUNDSEN Judgment Creditor
AND	NINA CARRINGTON Judgment Debtor

Hearing:	13 August and 3 December 2015
Counsel:	H Palmer for Judgment Creditor S J Zindel for Judgment Debtor
Judgment:	4 December 2015

JUDGMENT OF ASSOCIATE JUDGE MATTHEWS

[1]      In  this  proceeding  Dr  Gudmundsen  applies  for  an  order  adjudicating Ms Carrington  bankrupt.    The  application  is  based  on  a  final  judgment  of  the Supreme Court of New South Wales dated 5 March 2012 in a total sum of AU$371,677.46.

[2]      The application was opposed.  It was argued before me on 13 August 2015. At the close of argument I reserved my decision. This judgment is issued as a result.

[3]      The  grounds  on  which  the application  for  adjudication  is  based  are that

Ms Carrington disputes the validity of the Australian judgment.  She says part of it is grounded in tax evasion by Dr Gudmundsen, that there was fraud in the obtaining of

Gudmundsen v Carrington [2015] NZHC 3070 [4 December 2015]

the judgment against her, or that the judgment was obtained as a result of a miscarriage of justice for other reasons.

[4]      Ms Carrington also signified to the Court her intention to apply to set aside the judgment, and to have Dr Gudmundsen’s case against her reheard.   For this purpose she intended to apply for legal aid in New South Wales.  In order to take these steps it was necessary for her to be awarded legal aid in New Zealand.   I therefore agreed with counsel that I would defer issuing my judgment on this application while applications for legal aid were made.  To keep the position under review the case has been successively adjourned at List calls at the High Court at Nelson, at which Mr Zindel has reported the position.  There can be no doubt that he has diligently pursued Ms Carrington’s application for legal aid in New South Wales, having obtained a grant of legal aid in New Zealand to do so.   Understandably, Dr Gudmundsen through his counsel has indicated real concern about the delay in deciding his application which has been brought about by this opportunity being afforded to Ms Carrington.

[5]      A more detailed description of the events which I have briefly summarised is set out in a Minute dated 17 August 2015.

[6]      Prior  to  the  call  of  this  case  on  3  December  2015,  Mr  Zindel  filed  a memorandum dated 30 November, as he could not himself appear.  He also arranged for an appearance by Mr Jones, in his place.  His memorandum contains a detailed description of the steps he has taken in order to try and obtain legal aid in New South Wales.   It is apparent,  however,  that Ms Carrington’s legal  aid application was refused on 11 September 2015, and that after receiving further information and submissions from Mr Zindel, it was refused again on 25 November.

[7]      It may be that there is a further right of appeal against the second refusal, but that is not clear.  As well, Mr Jones informed me that Ms Carrington may now have funds available with which she could pay for a further approach to the Supreme Court to set aside the judgment and retry the case.  Mr Zindel, in his memorandum of 30 November, put it very fairly when he said that she had referred to him the possibility of funding the litigation privately, as her means improve, but this proposal

has not been clarified with a suitable Australian lawyer.  I take this to mean that the cost of taking these steps, and Ms Carrington’s ability to fund those costs as they are incurred, have not been analysed.

[8]      Against this background, Dr Gudmundsen asks that the Court now consider and  release a reserved  judgment  in  relation  to his  application.    In  my opinion, sufficient time has been allowed to pass for Ms Carrington to take the steps she wishes to take in order to apply to the Supreme Court of New South Wales.  Despite the evident strenuous attendances of Mr Zindel, these have been to no avail.   I therefore consider it appropriate to release my final judgment.

[9]      The principal submissions presented by Mr Zindel on Ms Carrington’s behalf, and the evidence she presented to the Court by affidavit, are directed at the reasons why she believes the Australian judgment is unsound.   The judgment holds her responsible for sums Dr Gudmundsen maintains she owed him as a result of her conduct when working as the practice nurse in his medical practice.  It is plain from the judgment of the Supreme Court of New South Wales, Ms Carrington’s affidavit, and the affidavit in reply from Dr Gudmundsen that Dr Gudmundsen maintained that by various means Ms Carrington had misappropriated funds, but that Ms Carrington maintains that all monies that she handled through the practice were handled appropriately and in accordance with the terms of her employment.   These issues were aired at the trial, though not as Ms Carrington would have wished.  She did not in fact participate in the trial at all, other than sending emails to the Court, which are referred to in the judgment.

[10]     I have considered the evidence put before this Court and the judgment of the

Supreme Court of New South Wales.  As I have recorded in the Minute issued on

17 August it is the usual practice of this Court to recognise the validity of judgments of other courts of competent jurisdiction which are relied upon as the foundation for bankruptcy notices under the Insolvency Act.  Where counsel or parties indicate to the Court that they intend to seek to appeal, or to have the judgment in question set aside, time is commonly allowed for those steps to be taken provided they are pursued expeditiously, but that does not detract from the fundamental principle that where there is a final judgment of a court of competent jurisdiction, this Court

should recognise it as the foundation for an application for bankruptcy.  I hesitate to comment on the process which led to judgment, because any comment that could be made would be based on just a fraction of the evidence that would be required in order to assess whether there is any material basis to consider that the judgment may been unfairly obtained.  It is not the role of this Court to make that assessment.  Even if  it  were,  I am  mindful  that  Ms Carrington,  for  reasons  which  she  considered sufficiently compelling at the time, elected not to participate fully in the process that led to the judgment, by mounting a defence to Dr Gudmundsen’s claims.  The fact that she now wishes to do so, some years after the event, and believes that she had good grounds for doing so, have led the Court to give her an ample opportunity to seek the funding that is required for that task.  Against Ms Carrington’s interests, however, must be balanced the interests of Dr Gudmundsen and the broader interests of the community in relation to the solvency of Ms Carrington, given that a bankruptcy notice issued against her expired without being met on 8 May 2015.

[11]     For these reasons I make the following orders:

(a)     Ms Carrington is adjudicated bankrupt at the time of release of this judgment, 4.00 pm on 4 December 2015.

(b)She is to pay to the applicant costs on this application on a 2B basis together with disbursements fixed by the Registrar.

J G Matthews

Associate Judge

Solicitors:

AWS Legal, Invercargill.

Zindels, Nelson.