Harrison v Harrison

[2016] NZHC 2854

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH  REGISTRY

CIV-2016-409-000400 [2016] NZHC 2854

IN THE MATTER

of the Insolvency Act 2006

AND

IN THE MATTER

of the bankruptcy of ANGELA JANICE HARRISON

BETWEEN

GRAEME ROSS HARRISON AND ADRIENNE HARRISON

Judgment Creditors

AND

ANGELA JANICE HARRISON Judgment Debtor

Hearing:	24 November 2016
Appearances:	S J Shamy for Judgment Creditors A J Harrison (Judgment Debtor) in person
Judgment:	29 November 2016

JUDGMENT OF ASSOCIATE JUDGE OSBORNE (on adjudication application)

Introduction

[1]      For some  years, Angela Harrison (Ms Harrison) and her mother, Pauline Harrison, have been in dispute and litigation with Ms Harrison’s uncle and aunt (the judgment creditors in this proceeding).  Their disputes relate to the administration of the Valerie Geard Trust (the Trust).

[2]      There have been issues on which the position taken by Ms Harrison and her mother have been found to be correct.  For instance, in Harrison v Harrison,1 Faire J

found (in favour of Ms Harrison and her mother) that a purported resettlement of the

1      Harrison v Harrison [2015] NZHC 2935.

HARRISON v HARRISON [2016] NZHC 2854 [29 November 2016]

Trust had been invalid, awarding to Ms Harrison and her mother their reasonable disbursements (they having represented themselves).

[3]      On the other hand, in Valerie Geard Family Trust v Harrison2  Toogood J ruled in favour of the trustees on a number of interlocutory applications and awarded costs and disbursements against Ms Harrison and her mother.

[4]      Ms  Harrison  and  her  mother  had  lodged  a  caveat  against  the  title  of  a property owned by the Trust.  In April 2016, some six months after Faire J had given judgment in favour of Ms Harrison and her mother on the Trust resettlement issue,3

Faire J heard and granted an application by the trustees for an order that the caveat be removed.4  At the same time, he awarded costs and disbursements in favour of the trustees.   Although the trustees had two proceedings before the Court (being the originating application for removal of the caveat and an application for summary judgment), it is clear from the concluding paragraphs of the judgment that the order granted was pursuant to the originating application – the summary judgment application proceeding in respect of which it was filed being struck out.5

The debt on which this bankruptcy proceeding is based

[5]      The trustees had a bankruptcy notice issued in reliance upon Faire J’s costs

and disbursements order (totalling $12,749.90).

[6]      Ms Harrison did not make payment.  She applied to set aside the bankruptcy notice.

[7]      Associate Judge Matthews heard and dismissed the application in August

2016.6

[8]      In describing generally Ms Harrison’s application, his Honour stated:

2      Valerie Geard Family Trust v Harrison [2013] NZHC 385.

3 Above at [2].

4      Harrison v Harrison [2016] NZHC 574.

5 At [28].

6      Harrison v Harrison [2016] NZHC 202.

[7]       The application … sets out various criticisms of the judgment of Faire J. Ms Harrison concludes this portion of her application by stating she does not owe any money to the Valerie Geard Trust, and she makes reference to costs and damages for blackmail, humiliation, distress and invasion of rights.

[8]       As further grounds on which her orders are sought, Ms Harrison refers, without details, to fraud upon the Court and says that the Valerie Geard Trust has engaged in deceptive conduct and self-dealing and that its lawyer has used blackmail and menacing threats. She refers to unconscionability, miscarriage of justice, a cross-claim (without details) and a  case  stated  on  questions  of  law  and  fact  (again  without  details).  Ms Harrison says she has been caused loss from what she describes as her adversaries’ fraud on the Court in respect of which she cross-claims, again without details.

[9]      Associate Judge Matthews continued:

[10]     Ms Harrison … levels a range of criticisms against the judgment of Faire J and against the trustees and the administration of the Trust. Any issues relating to the judgment could have been raised by way of appeal, but have not been. It is not the function of the Court on this application to review the merit of that judgment.

[10]     His Honour then referred to an assertion by Ms Harrison that she had a cross- claim against the trustees. The judgment continues:

[12]     …Nothing in Ms Harrison’s affidavit goes further than being a trenchant criticism of the trustees of the Trust, as well as an earlier judgment of this Court. To rely on having a cross claim a judgment debtor must demonstrate that there is a cross claim of true substance which the debtor genuinely proposes to pursue. The debtor must establish that the cross claim is equal to or greater than the judgment debt, and that the judgment debtor could not use the cross claim as a defence in the action or proceeding on which the judgment or order providing the basis for the bankruptcy notice was entered. There is no evidence before the Court establishing the quantum of  any  cross  claim,  nor  establishing  that  the  issues  now  raised  by  Ms Harrison could not have been raised in the court prior to the judgment on which  reliance  is  now  placed.  Indeed,  the  evidence  presented  by  Ms Harrison does not specify the basis of a claim at all; rather it is a string of criticisms without focus on how, if at all, they might found liability on the part of the trustees in respect of which they might be accountable at law. Ms Harrison’s evidence stops well short of establishing that she has a genuine triable claim. Ms Harrison is not a beneficiary of the Trust so does not appear to have any right to challenge the actions of the trustees in any event, as discussed below.

(Footnotes omitted).

[11]     Associate  Judge  Matthews  then  turned  to  a  further  issue  raised  by  Ms Harrison.   She had submitted that there was a “disproportionate use” of the bankruptcy procedure in relation to an unpaid costs award.   In that context, Ms Harrison had raised issues concerning “the bigger picture issues” raised against the trustees, which in part involved the sale of Auckland property at an alleged undervalue.  His Honour noted that no evidence had been presented on those issues and that, in any event, Ms Harrison appeared to be conflating the position of her mother (who is a beneficiary of the Trust) with the position of herself (who is not a beneficiary).

[12]     Ms Harrison had also submitted that it would be unjust for bankruptcy to proceed because she may lose her home (in which she and her mother reside) if she is bankrupted; her mother is unwell; and she herself is towards the end of her working life.   Associate Judge Matthews noted that those concerns were “understandable” but observed that it was not for the Court to speculate on what the outcome of bankruptcy might be.   His Honour recorded a discussion with Ms Harrison which occurred in the course of submissions from which it appeared that Ms Harrison may have assets (other than her house) which could be realised to meet the debt to the trustees.

[13]     Associate Judge Matthews concluded:

[27]     I record once more that I disagree [with Ms Harrison’s submission that she is in a totally different position from a person who simply elects not to pay debts]. Ms Harrison is not a beneficiary in the Trust. Nor is there any evidence before me of any probative value that the trustees have any liability for the actions to which Ms Harrison made reference. It is clear she is electing not to comply with the judgment of this Court.

[14]     Ms Harrison’s application to set aside the bankruptcy notice was accordingly dismissed.  She was ordered to pay the costs and disbursements of the application in a  total  sum  of  $6,900.80,  which  she  has  not  done.    The  trustees  are  therefore judgment creditors for that sum in addition to the $12,749.90 identified in the bankruptcy notice.   Associate Judge Matthews extended the time for compliance with the bankruptcy notice to 4.00 pm, 6 September 2016.

[15]     Ms  Harrison  committed  an  act  of  bankruptcy  when  she  failed  to  make payment pursuant to the bankruptcy notice by 30 August 2016.

The application for an adjudication order

[16]     The trustees filed their adjudication application on 15 September 2016.  They subsequently had to obtain an order for substituted service as the process server was unable  to  gain  access  to  Ms  Harrison’s  property.     Service  was  effected  (by substituted service) on 1 November 2016.

Ms Harrison’s intended opposition

[17]     Ms Harrison attended the Registry on 23 November 2016, being the last day before the hearing identified on the summons.   She wished to file a Notice of Intention to Oppose (the adjudication application) and an affidavit in opposition. She did not have with her the funds to pay the filing fee.  The Registry accordingly did not accept for filing the documents.  Ms Harrison explained that she was not in a position to apply for a fees waiver as she was financially able to pay the fee, which she undertook she would do.

[18]     When I was apprised of this situation by the Registry later on 23 November

2016, I directed that the documents be received on a strictly provisional basis, with the question of whether they would be read reserved for the hearing.

Leave to rely on the opposition documents

[19]     At the beginning of the hearing, I explained to Ms Harrison that there would be two parts to the hearing.  First, I would be considering her request that I read her documents and hear her in opposition.  Secondly, I would be considering the grounds of her opposition.   As it was convenient to consider the substantive grounds in conjunction with the leave application, I asked that both Ms Harrison and Mr Shamy deal with all aspects at once.

[20]     In relation to leave to be heard, there were two matters to consider.

[21]     First,  there  is  the  question  of  delay.    I  am  satisfied  in  relation  to  Ms Harrison’s position as a lay-person representing herself that the delay was understandable and excusable.  Her documents were ready to be filed on time but she had overlooked the requirement for the filing fee.  Responsibly, Mr Shamy did not suggest that anything should turn on the delay.

[22] Secondly, the Court must consider whether the matters to be raised in opposition are substantial. For reasons I come to at [25] – [31] below, I find that the grounds of opposition upon which Ms Harrison intended to rely are not substantial. I accordingly will deny her leave to rely on the documents filed out of time and therefore deny her leave to be heard further.

[23]     Therefore,  there  being  no  notice  of  opposition  or  affidavit  in  opposition formally properly before the Court, I will be making an adjudication application on a (formally) unopposed basis.

Ms Harrison’s substantive grounds of opposition

[24]     Ms Harrison’s notice of opposition ran to 12 narrative pages.  The grounds

began unpromisingly with these two grounds:

1.The Court is endeavouring to make a silk purse out of a sow’s ear (the adage means that you can’t make something good out of something that is naturally bad).

2.        The Court is covering up for Justice R Harrison and is taking sides.7

[25]     In the proposed notice of opposition thereafter, Ms Harrison makes a number of allegations against the trustees.  Scandalous allegations are made against Harrison J and Associate Judge Matthews (with references to such concepts as “an emerging pattern of tyranny of the majority” and “the monstrous fraud”).   The key subject- matter of the first 25 numbered paragraphs of the proposed notice of opposition is the allegation that the Trust has been fraudulently administered (with the support or failed supervision of the Court).  The notice of opposition contains the conclusion

that the trustees’ reliance on the costs and disbursements awards is then used “as an

7      The reference to Harrison J apparently relating to his Honour’s involvement in proceedings in or

engine to oppress and cause detriment to [Ms Harrison and her mother] which is

disproportionate”.

[26]     The proposed notice of opposition then concludes with 11 further heads of opposition. They are not developed in detail but are identified by one or a few words such as “hostility to me and my mother”, “oppression”, “due process and natural justice”, “the innominate ground” and “public interest”.

[27]     The tone of the proposed notice of opposition is reflected in the concluding paragraph which reads (printed in the notice of opposition in bold and in capital letters) but here reproduced in ordinary font:

And on the further grounds that it is totally dispute (sic) the costs order that was obtained fraudulently and improperly, and that is oppressive use of the Insolvency Act  2006  which  is  seriously  oppressive  and  disproportionate against my aggrieved mother in her 78th year in broken health from a culmination of denial of justice and transgression of her rights and to me in my 57th year at the greater end of my working life and our multiple pets and home of 17 years and our right to fairness and justice, and on the grounds of other principles of law and legal references and in the evidence contained in my sworn affidavit which will be filed in support of this notice and my submissions.

Discussion

[28]     The grounds upon which Ms Harrison sought to oppose the adjudication application are accordingly a close reproduction of those advanced to Associate Judge Matthews. They centre on the same propositions and grievances.

[29]     They reflect a failure by Ms Harrison to accept the outcome of the costs award of Faire J or the dismissal of her setting aside application by Associate Judge Matthews, notwithstanding the fact that Ms Harrison neither appealed nor reviewed those decisions.

[30]     For the same reasons as traversed in detail in Associate Judge Matthews’

judgment,8  Ms Harrison has failed to demonstrate that the matters contained in her

8      Harrison v Harrison [2016], above n 4.

proposed notice of opposition constituted a substantial ground of defence.  It would be inappropriate to grant her leave to be heard in opposition.

Costs and disbursements

[31]     Costs and disbursements must follow the event.

Orders

[32]     I order:

(a)      The  judgment  debtor  is  refused  leave  either  to  file  her  notice  of opposition and evidence in opposition or to be heard in opposition;

(b)      There is an order adjudicating Angela Janice Harrison bankrupt;

(c)      The judgment debtor is to pay the costs of the judgment creditors’ application on a 2B9 basis together with disbursements to be fixed by the Registrar;

(d)      The order is timed at 1.30 pm, 29 November 2016.

Associate Judge Osborne

Solicitors:

Birdsey & Associates, Auckland

Counsel: R O Parmenter, Barrister, Auckland

Copy to: A J Harrison, Christchurch

9      High Court Rules, Category 2 under r 14.3(1) and band B under r 14.5(2).