Gunns Finance Pty Limited (in liquidation) v Boyce

[2018] NZHC 551

IN THE HIGH COURT OF NEW ZEALAND ROTORUA REGISTRY

I TE KŌTI MATUA O AOTEAROA TE ROTORUA-NUI-A-KAHU

CIV-2017-463-000080

[2018] NZHC 551

UNDER

the Insolvency Act 2006

IN THE MATTER

of the bankruptcy of D Boyce

BETWEEN

GUNNS FINANCE PTY LIMITED (in

liquidation) Applicant Creditor

AND

DAMIAN BOYCE

Defendant

Hearing:	2 March 2018
Appearances:	D M Hughes for the Applicant Respondent No appearance for the Defendant
Judgment:	27 March 2018

JUDGMENT OF ASSOCIATE JUDGE SARGISSON

This judgment was delivered by me on 27 March 2018 at 3.30 p.m. pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar Date.......................................

Solicitors:

Anthony Harper, Hamilton

GUNNS FINANCE PTY LTD v BOYCE [2018] NZHC 551 [27 March 2018]

[1]        I thank counsel for the further memorandum dated 22 February 2018, filed pursuant to the leave I granted in my minute of 21 February 2018.

[2]        On 20 February 2018 I struck out the creditor’s application for the debtor’s adjudication.

[3]        The creditor (by memorandum) now seeks recall of the order striking out. At issue is whether the creditor’s application for adjudication was filed within the statutory three-month time limit set out in s 13(b) of the Insolvency Act 2006. That provision permits a creditor to make such an application if:

… the debtor has committed an act of bankruptcy within the period of 3 months before the filing of the application; …

[4]Counsel for the creditor submits the application was filed on time because:

(a)Pursuant to s 17 the last day for the debtor to comply with the bankruptcy notice was 20 September 2017; being 10 working days after he was served with the notice on 6 September 2017;

(b)An act of bankruptcy occurred on 21 September 2017;

(c)21 December 2017 was the last day for filing the application for adjudication, relying on the act of bankruptcy;

(d)Though recognising that the original hard copy of the notice and the application and the actual cheque were in fact delivered to the Court on the morning of 21 December 2017, the notice of application was sent, together with a copy of the cheque for the fee payable for the filing fee, by electronic transmission on 19 December 2017. The Registry accepted the electronically transmitted documents.

(e)If the actual cheque was filed late the court should waive the late filing under r 1.15 as an irregularity that does not nullify the proceeding.

[5]        I agree with counsel - up to a point. The last day for the debtor to comply with the bankruptcy notice was indeed 20 September 2017; and because he did not comply, he committed an act of bankruptcy.

[6]However, I find that:

(a)The act of bankruptcy occurred at the expiry of the last day for compliance and not, as counsel submits, on the following day. In other words, the debtor committed an act of bankruptcy as the clock struck midnight on 20 September and the time for filing began to run from, and including, 21 September 2017.

(b)In terms of s 13(b), the creditor needed to file the application for adjudication within three months before the debtor’s committing an act of  bankruptcy.  Looking  backwards  from  the  date  of  filing  on   21 December, the earliest in time that the relevant act of bankruptcy could have occurred to satisfy the jurisdictional requirement that “the debtor has  committed  an  act  of  bankruptcy  within  the  period  of  3 months before the filing of the application …” was 21 September. Therefore, considering that the relevant act of bankruptcy occurred on 20 September, the application was filed a day late.

(c)Further,  for  the  creditor  to  properly   “file”  the   application   by  20 December, the creditor needed to lodge it together with the fee for filing it: see High Court Rule 1.3.1

[7]        Even if I were to assume the Registrar gave leave to file an electronic copy of the notice of application on 19 December 2017 together with an electronic copy of the cheque for the filing fee, that does not satisfy the requirement for the creditor to lodge the fee. Counsel does not suggest electronic transmission of a copy of a cheque is legal tender, or provide any authority to show it is; and I do not accept such transmission constitutes lodging “the fee” payable for filing the application. It was of course open

1      Rule 1.3 states “to file, in relation to any document, means to lodge the document in the form required by these rules in, or to send it by post or electronically in accordance with these rules to, the proper registry of the court, together with the fee (if any) payable for filing it”.

the to the creditor to seek the Registrar’s leave to lodge the notice of application electronically and to lodge the actual fee by electronic transfer (and not simply transmit an electronic copy of the cheque). Had the creditor taken such steps on or before 20 December, that may well have satisfied me that there was sufficient compliance with s 13 and High Court Rule 1.3. But what happened falls short of that.

[8]        In the circumstances, I do not consider that there are grounds to recall the strike-out order made on 20 February 2018. It is trite law that the Court does not have jurisdiction to extend the time limit in s 13(b) for filing an application for adjudication that is based on an act of bankruptcy.

[9]        I add a postscript. It appears from the memoranda filed that counsel was aware of the need to file the application by 20 December, and did give clear instructions to the courier company to ensure that happened. For reasons best known to the courier company, it did not in fact deliver the documents to the Court until the morning of  21 December. I sympathise with the creditor and its counsel for the unfortunate outcome. But if the debtor continues to fail to satisfy the obligation to pay the judgment debt the creditor is not without remedies; and indeed, is at liberty to serve a fresh bankruptcy notice.

Associate Judge Sargisson