Gwyer v Westpac New Zealand Limited

[2013] NZHC 257

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2012-404-003049 [2013] NZHC 257

BETWEEN  ALAN WILLIAM GWYER Judgment Debtor

ANDWESTPAC NEW ZEALAND LIMITED Judgment Creditor

Hearing:         19 February 2013

Appearances: Judgment Debtor in person

N R Frith for Judgment Creditor

Judgment:      20 February 2013

JUDGMENT OF COURTNEY J

This judgment was delivered by Justice Courtney on 20 February 2013 at 11.00 am

pursuant to R 11.5 of the High Court Rules

Registrar / Deputy Registrar

Date……………………….

Solicitors:           Minter Ellison Rudd Watts, P O Box 3798, Auckland 1140

Fax: [phone] – N Frith – Email: [email protected]

Copy to:             A Gwyer – Email: [email protected]

GWYER V WESTPAC NZ LTD HC AK CIV-2012-404-003049 [20 February 2013]

[1]      The Westpac obtained judgment against Alan William Gwyer for $52,126.17 in April 2012. It served a bankruptcy notice and now applies to have him adjudicated bankrupt.  Mr Gwyer opposes adjudication on the ground that he has a third party claim which would yield sufficient funds to clear the Westpac judgment and which he wishes to pursue.

[2]      Under s 38 of the Insolvency Act 2006 the Court has the power to halt a creditor’s application on terms and conditions and for the period the Court thinks appropriate. The judgment debtor has the onus of persuading the Court that it should exercise its discretion.[1]    The existence of a third party claim is a matter that may justify the exercise of the discretion under s 38, though this Court has previously expressed the view that that would rarely be the case.[2]     In general, bankruptcy proceedings ought to be completed within a reasonable period.

[1] McHardy v Wilkins & Davies Marinas Ltd CA54/93, 7 April 1993.

[2] Re Kroon ex parte Westpac Banking Corporation HC Auckland CIV-2006-404-4720, 24 April 2007.

[3]      Mr Gwyer appeared in person and gave a very lengthy explanation regarding the background to the claim he wishes to pursue.     In fairness to Mr Frith, who appeared for Westpac, the true nature of the claim as it eventually emerged was significantly different from that described in the papers Mr Gwyer has filed to date. Mr Gwyer also tendered documents to me and gave lengthy explanations.  Mr Frith, responsibly, did not object.

[4]      Mr Gwyer has been enmeshed in long-standing, complex and acrimonious litigation in the Family Court concerning the status of his mother and her assets under the Protection of Personal and Property Rights Act 1988.   He outlined a number of serious complaints against parties involved in that litigation, particularly court-appointed counsel, Ms Laracy, and the Public Trust.  The general nature and background  of  the  litigation  is  recorded  in  Judge Twaddle’s  costs  judgment  21

January 2011 which Mr Gwyer was permitted to refer to in this proceeding.   It is

unnecessary for me to record the detail of the litigation and of Mr Gwyer’s various

concerns.

[5]      The third party claim that is relevant for present purposes turns on a loan contract  dated  25  September  2001  between  Mr  Gwyer’s  mother,  Phyllis  Edna Gwyer, as borrower and Mr Gwyer as lender for $86,000 together with interest at 6 per cent per annum.  Mr Gwyer provided a copy of the contract.  I understood him to say that his mother had received independent advice at the time of entering into the contract from Schnauer & Co, which firm has also been involved in the litigation, acting for Age Concern in a position opposing Mr Gwyer.

[6]      Mr Gwyer explained that the loan was entered into when his mother and stepfather refinanced an existing mortgage over their family home.   Because they were unable to meet the mortgage repayments Mr Gwyer assumed responsibility for them (he having guaranteed the mortgage in any event).  The loan contract related to the monies Mr Gwyer had paid and was continuing to pay in respect of the mortgage loan.

[7]      Mr Gwyer told me that he has approached the Public Trust, which holds the balance of the proceeds of sale of Mrs Gwyer’s home seeking payment under the loan contract.  The Public Trust has, apparently, refused to pay on the basis that it considers that Mr Gwyer owes his mother money in the vicinity of $50,000.  If that is correct then, whether or not Mr Gwyer actually does owe his mother any money, it would seem that the Public Trust has implicitly acknowledged the existence of her debt to him.  Also self-evidently, if Mr Gwyer is entitled to be paid his loan together with interest then it would be sufficient to either clear or significantly reduce the amount of the Westpac judgment debt.

[8]      Mr Frith rightly pointed out that Mr Gwyer had taken no steps to actually commence proceedings to recover the loan.   Mr Gwyer acknowledged this but explained that the last couple of years have been completely consumed with the very stressful task of managing the Family Court litigation.  It appears, however, that this matter is one which is to be canvassed at a forthcoming Family Court conference on

4 March 2013.  If progress were able to be made in the next few weeks up to and including that conference which resulted in Mr Gwyer obtaining payment from the Public Trust then the Westpac would be significantly better off than if Mr Gwyer

were  adjudicated  today.    It  would  certainly  be  no  worse  off  since  Mr Gwyer apparently has no assets other than this debt.

[9]      Having considered Mr Gwyer’s position, his explanations and Mr Frith’s submissions I made an order halting the Westpac application until further order of this Court and, at least, pending the outcome of the Family Court conference (with these reasons to follow).  The matter is to be called again in the Duty Judge List on

18 March 2013 at 10 am.

[10]     I record that Mr Frith did his best in a most difficult situation and was restrained and responsible in dealing with the practical difficulties confronting the Court in coming to grips with Mr Gwyer’s position.

[11]     Finally, Mr Gwyer provided me with a copy of Ms Laracy’s memorandum

24 January 2013 filed in the Family Court.  Unfortunately, Mr Gwyer did not receive the memorandum himself until 14 February 2013.  It is therefore uncertain whether Judge Druce, who gave Mr Gwyer leave to refer to Judge Twaddle’s  judgment actually had a copy of this memorandum to hand when he made his decision.  For that reason  I granted Mr Gwyer leave to refer to the memorandum.   With this judgment I return to both he and Mr Frith a copy of the memorandum for their future

use.

P Courtney J