Havenleigh Global Services Limited v Henderson
[2016] NZHC 1472
•30 June 2016
IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY
CIV-2010-409-000559 [2016] NZHC 1472
BETWEEN HAVENLEIGH GLOBAL SERVICES
LIMITED AND FM CUSTODIANS LIMITED
Judgment Creditors (Substituted)
AND
DAVID IAN HENDERSON Judgment Debtor/Applicant
Hearing: 23 June 2016 Appearances:
D I Henderson - Applicant in Person
P V Cornege for the Official Assignee, the RespondentJudgment:
30 June 2016
JUDGMENT OF GENDALL J
Introduction
[1] The applicant, David Ian Henderson (Mr Henderson), seeks to review a decision of Associate Judge Osborne in this Court dated 23 March 2016 (“Ruling No. 12”)1 under r 2.3 of the High Court Rules and s 26P of the Judicature Act 1908.
[2] This application is opposed by the Official Assignee (the Assignee).
Background
[3] Mr Henderson is an undischarged bankrupt. He is still currently subject to public examination under s 165 of the Insolvency Act 2006 (“the Act”) an examination which began, I understand, nearly 11 months ago on 3 August 2015. In the course of that examination, Mr Henderson applied to Associate Judge Osborne,
who was conducting the public examination, to adduce further evidence. It is that
1 Havenleigh Global Services Ltd v Henderson [2016] NZHC 562 (“Ruling No. 12”)
HAVENLEIGH GLOBAL SERVICES LIMITED v HENDERSON [2016] NZHC 1472 [30 June 2016]
application to adduce further evidence that was the subject of Ruling No. 12. Ruling No. 12 was a fully reasoned decision of the Associate Judge and, as I understand it, followed a defended hearing which involved full argument from opposing parties (which included Mr Henderson and counsel for the Assignee).
[4] The evidence sought by Mr Henderson in his application was divided into two schedules. Schedule A related to specific documents noted as:
(a) An email dated 10 April 2013 written by Grant Slevin, Senior Investigating Solicitor to Kevin Sullivan, the liquidator of Property Venture Limited (the Slevin email);
(b) A reference letter written by Sir Bob Parker; and
(c) A reference letter written by Garry Moore.
[5] At the time the Assignee did not oppose Mr Henderson’s adducing those Schedule A items noted above, and therefore Associate Judge Osborne granted permission to adduce those three documents. No issue arises here regarding this aspect.
[6] However, what is of relevance to the present review are the items sought by
Mr Henderson listed in Schedule B. These were specified as:
Item 1
Copies of all communication of any nature, including emails, letters, memos, diary notes, meeting notes, that relates to the s 149 approvals policy as articulated by Mr Slevin an email attached to this application. In particular, any interoffice communication, including recollections of those communication between Mr Marshall, Mr Slevin and Ms Cox.
Item 2
Copies of any other material held by an Assignee that in any way relates to the s 149 policy articulated by Mr Slevin
Item 3
Copies of any Court decisions that relate to the unlawfulness of actions by the Assignee including traditional decisions regarding purported statutory forms provided to me by the Assignee to complete.
Item 4
Copies of transcripts of s 165 examination relating to: (a) Mr Ferguson
(b) Mr Leishman
(c) Officers of the ANZ [bank]
[7] In his Ruling No. 12, Associate Judge Osborne held that no discovery or production order was justified or appropriate with regard to the Schedule B documents and he dismissed Mr Henderson’s application in relation to these. It is this ruling that Mr Henderson seeks to review here.
[8] Mr Henderson was declared bankrupt on 29 November 2010. The Assignee, in November 2013, filed a Notice of Objection to Mr Henderson’s discharge from bankruptcy, pursuant to s 292 of the Act. As a result, a public examination is currently taking place pursuant to s 295 of the Act. The purpose of the public examination is to assist the Court in making its decision as to whether Mr Henderson is to be discharged or not, or whether one of the other orders under s 298(1) of the Act is to be utilised. As I understand it, the primary ground for the Assignee’s opposition to Mr Henderson’s discharge from bankruptcy, is an allegation that Mr Henderson may have entered into business while bankrupt in breach of s 149 of the Act. This section prohibits an undischarged bankrupt, either directly or indirectly, from entering into or carrying on or taking part in the management or
control of any business.2
[9] Mr Henderson has noted that, prior to the commencement of the public examination, the Assignee had an obligation to provide information to assist the Court for the purpose of the public examination. Mr Henderson alleges that, in breach of this obligation, the Assignee has refused to make available the correspondence in question which her staff had while they dealt with him. Mr Henderson considers this evidence to be highly relevant to his being able to rebut
allegations made by the Assignee against him.
2 Insolvency Act 2006, s 149.
[10] As I understand his position, it is Mr Henderson’s overall claim that during the period of his bankruptcy he has not been engaged in the management or control of any business, or in the alternative, that his engagement with a particular business or businesses was consented to or approved by the Assignee’s representative with whom he dealt at the time, Mr Terry Marshall (Mr Marshall).
[11] My understanding is that Mr Henderson has given evidence that the Assignee’s representative handling his affairs, Mr Marshall, had repeatedly advised him, in meetings and in telephone discussions, that the things Mr Henderson was telling Mr Marshall about what he was doing or proposing to do were things that Mr Marshall did not require Mr Henderson to seek his consent to undertake. Mr Henderson asserts that Mr Marshall has repeatedly told him that the only time Mr Henderson needed Mr Marshall’s consent, relating to s 149 of the Act, was if Mr Henderson was seeking to be making significant financial decisions for a business organisation or if Mr Henderson, for some commercial purpose, was incurring significant debt that Mr Henderson might not be able to repay.
[12] In support of these propositions advanced by Mr Henderson, he refers the Court to a file note and correspondence from Mr Marshall. This file note made by Mr Marshall on 7 April 2011 states:
DIH (Mr Henderson) phoned…
I said he could not of course be a director and could not have financial control of a company and he understood that but between these issues he could certainly work within those boundaries and earn. I understood as he said that he is always called on to give advice and that in itself was not a problem. He could give advice and market things but final financial decisions should not be his and he must not incur unpaid credit and taxation.
[13] And the email correspondence in question which was between Mr Marshall and a Mr Chris Grant said:
Mr Henderson has resigned as a director.
However Mr Hyndman of course is the remaining director and appears to have asked Mr Henderson to act for him and has confirmed that with you.
It is now up to you whether you accept that but there are no issues for the
Official Assignee as long as Mr Hyndman is making any financial decision.
[14] Mr Henderson therefore repeats that what he is seeking here are that the Schedule B items listed at [6] above be adduced for the public examination process and he says also to assist him in support of his seeking to be discharged from bankruptcy.
Decision (Ruling No. 12) by the Associate Judge
[15] As already noted, Associate Judge Osborne granted Mr Henderson’s unopposed request for the specific documents outlined in Schedule A to be admitted, but he denied Mr Henderson’s request for discovery of the further Schedule B documents. Items 1 and 2 outlined in Schedule B related to requests for “communication of any nature… that relate to the s 149 approvals” and “any other material that in any way relates to the policy for s 149”. As Associate Judge Osborne explained, this request hangs off the Slevin email provided as a Schedule A document. This email was sent from Mr Grant Slevin to Mr Sullivan on 10 April
2013. It stated:
I don’t think Mr Henderson needs leave to represent a company in the
[District Court] in light of s 57 of the District Court Act.
Certainly he hasn’t approval (sic) to be employed by the company but that doesn’t prevent him from acting in a voluntary capacity.
That leaves the question whether representing a company in Court as its agent would breach the prohibition on taking part in the management or control of any business. Having regard to the purposes of the restriction and the regulations governing applications under s 149, the Assignee is of the view that consent is not required where the particular activity does not involve any financial control of the company and could not cause it to incur significant debt that might not be paid.
Accordingly the Assignee does not regard his consent as necessary for this particular activity, in the circumstances
[16] Mr Henderson asserts that this email makes reference to a “policy” as articulated by Mr Slevin which Mr Marshall had used to advise Mr Henderson as to the proper conduct under s 149. He therefore seeks, under items 1 and 2, to discover any communication by Mr Slevin about such a “policy” and any other material relating to this “policy”.
[17] However, Associate Judge Osborne rejected Mr Henderson’s attempt to
adduce this item 1 and 2 material for the following reasons:
(a) The Slevin email was not a communication to Mr Henderson.
Therefore it had no relevance in terms of influencing Mr Henderson in the actions he took during his bankruptcy (which can be contrasted with Mr Marshall’s file note referred to at [12] above, which was annexed to the Assignee’s report);
(b)The Slevin email was not an email concerned with stating a general policy or, indeed, stating a general approach in relation to Mr Henderson’s bankruptcy as a whole;
(c) It is for this Court to determine whether Mr Henderson breached the provisions of the Act. An opinion or review expressed by an officer of MBIE or indeed a policy document of the Assignee cannot affect the correct interpretation of the Act; and
(d)Mr Henderson had a copy of the Slevin email since it was provided in a batch of documents during January 2014 pursuant to a Privacy Act request. If Mr Henderson wished to pursue orders for further disclosure upon the basis of the email he could have done so much earlier in this long-running public examination process.
[18] It seems that Mr Henderson was proffering the Slevin email as some form of a “smoking gun”. In my view it certainly is not that. Mr Henderson also probably saw the Slevin email as an opportunity to call Dr Palmer’s statement into question and to mount an attempt to impugn the Assignee’s duties as an officer of the Court. Clearly, Associate Judge Osborne in his decision did not see this approach as justified in any way and, on all the material before the Court now, I agree. The Slevin email, which is being provided to Mr Henderson, as I see the position, at most involved an expression of opinion on the part of Mr Slevin and, in any event, it must largely be treated as irrelevant.
[19] Furthermore, Associate Judge Osborne in his decision found that the request for items 1 and 2 which Mr Henderson sought to adduce was simply another attempt to re-litigate the issue of general discovery which was declined under his earlier Ruling No. 2.3 This Ruling No. 2, of course, is not the subject of the review application before me. I will return to matters relating to this Ruling No. 2 later in this judgment.
[20] Turning next to the request for item 3 material, this was rejected by Associate Judge Osborne on the grounds that Mr Henderson was under a misapprehension as to the difference between what is evidence and what are properly matters of submission. Requests for judicial decisions are not requests for matters of evidence. Lastly, item 4 was rejected on the basis that Mr Henderson either already was in possession of those transcripts or that the transcripts in question simply did not exist.
Jurisdiction
[21] Jurisdiction to review an Associate Judge’s decision is set out in s 26P of the
Judicature Act 1908 and r 2.3 of the High Court Rules.
[22] The review sought by Mr Henderson here is made following a defended hearing before Associate Judge Osborne supported by documented reasoning. Rule
2.3(4) therefore applies and the review proceeds as a rehearing with the principles of general appeal to be applied in this particular circumstance.4 As is well established in the Supreme Court decision in Austin, Nicols, & Co Inc v Stichting Lodestar, the Court is entitled to make its own assessment as to whether the original decision is wrong and deference to the Associate Judge’s decision is not required.5
Discussion
[23] Mr Henderson before me provided a number of different documents purporting to be his submissions on this review. However, each submission, as I see
it, emphasised slightly different matters and sought what might seem to be different
3 Havenleigh Global Services Ltd v Henderson Ruling No. 2 [2015] NZHC 1762.
4 High Court Rules, r 2.3(4).
5 Austin Nichols & Co Inc v Stichting Lodestar [2007] NZSC 103 at [4].
relief. It is therefore somewhat unclear as to what Mr Henderson is ultimately seeking in this review. I will address each general submission in turn but before doing so I note generally that in his overall submissions Mr Henderson appears to focus on:
(a) What he suggests was an “unequivocal undertaking the Assignee’s counsel had provided to the Court that her report was complete”; and
(b) His allegation that the Slevin email shows that Mr Marshall and
Mr Slevin hold evidence that would assist the Court here.
[24] Turning now to Mr Henderson’s first submission, as best I can tell, this makes allegations against the Assignee and her legal counsel at the time. Mr Henderson appears to allege that the Assignee has breached an undertaking by not providing what he says is material evidence that should be adduced in the public examination process. In his submission, Mr Henderson argues that “the Assignee has not submitted one piece of evidence, one affidavit or one witness in the entire examination.” All the Assignee has provided, Mr Henderson appears to say, is “information”. Mr Henderson also alleges that policy documents in relation to s 149 of the Act have not been adduced.
[25] However, there is nothing before this Court, as I see it, to support these allegations made by Mr Henderson against the Assignee. On the basis of all the material which is now before the Court, they can only be seen as unfounded. I am satisfied the Assignee has complied with her statutory obligation to provide a proper s 176 report. Nowhere in the Act is the Assignee required to submit evidence which is not considered to be relevant or appropriate for the tasks to be undertaken.
[26] And, it does seem that Mr Henderson’s allegations against the Assignee’s conduct are a common theme throughout previous hearings, according to decisions relating to the public examination process. This does not seem to be the first time he has made such claims. In his pre-examination ruling made on 22 July 2015, as
Ruling No. 2, Associate Judge Osborne held:6
6 Havenleigh Global Services Ltd v Henderson Ruling No. 2, above n 3, at [100].
[100] In his submission, Mr Henderson clarified (what was perhaps implicit in his application) that he had a concern that the Assignee may have cherry- picked the contents of her report. More particularly, she may have omitted material which did not support or in fact contradicted the conclusions in her report. Although a concern as to such withholding of information is an understandable concern for a layman to have, it is not a concern (in the absence of a specific example of perceived withholding) which can weigh with the Court. The Assignees are officers of the Court. The statutory regime of reporting is predicated on the frankness and integrity of the Assignee in assembling a body of information which is at once comprehensive and reliable. Although such a step was strictly unnecessary, Mr Palmer was able, in the course of his submissions, to proffer to the Court the Assignee’s confirmation that she and her officials have withheld information which would tend to rebut the conclusions stated in her report.
[27] While allegations of this kind are not strictly within the direct ambit of this review, I make the observation that, there is no evidence, as I see it, before the Court of any kind to substantiate any of Mr Henderson’s allegations. I do not accept Mr Henderson’s belief that the Assignee or counsel representing the Assignee were doing anything other than undertaking their proper role throughout the public examination process. I am in agreement with Associate Judge Osborne’s conclusion and reasoning as to why the email may not have been part of the information provided in the first place.
[28] Furthermore, there is nothing before the Court which satisfies me that there are documents in existence to indicate a “policy” adopted by the Assignee as Mr Henderson endeavours to suggest necessarily flows from the Slevin email. This email, on which Mr Henderson appears to rely to a large extent, in reality says little more than is outlined in s 149 of the Act itself.
[29] The real point of the Slevin email, and indeed also Mr Marshall’s file note, is simply that no consent is required where a bankrupt in terms of s 149(4) of the Act is not involved in the management or control of a business. The theme of the second submission advanced by Mr Henderson, as I understand it, is generally similar to the first. Mr Henderson makes further allegations against the Assignee, alleging that some kind of ulterior motive for the Assignee’s actions exists here. I find these allegations are quite unfounded here. Mr Henderson also elaborates in detail as to the relevance of the Slevin email. He seeks discharge from bankruptcy due to this alleged incompetency.
[30] However, beyond admitting the Slevin email, which Associate Judge Osborne has already ordered, there is nothing more that this review can do in terms of relief. Of assistance here is the assurance, I understand, Associate Judge Osborne has impliedly advanced when he held that the Slevin email and all other evidence in regards to Mr Henderson’s prior contact person Mr Marshall, will be considered in assessing Mr Henderson’s conduct in this matter.
[31] With regard to the relief by way of an immediate discharge from bankruptcy sought by Mr Henderson in his submissions, in my judgment, this is simply wishful thinking on his part. There is no jurisdiction, in the ambit of this review, to discharge Mr Henderson from bankruptcy. Mr Henderson must comply with the proper procedures as set out in the Act to achieve a discharge.
[32] In my view, Mr Henderson’s next submission adds little other than perhaps to repeat the allegations that he has already made against the Assignee. He does complain about the extensive number of documents and reports that the Assignee has produced in the public examination process, and the time required and his capacity to properly assimilate and understand them himself. As I see it, however, this can only be seen as irrelevant to the current review proceeding relating to Ruling No 12.
[33] As a useful aside here, I note the Assignee’s submission before me that this review and the basis for the application relating to the decision under review, being Ruling No. 12, is nothing more than an attempt to re-litigate matters dealt with in Associate Judge Osborne’s earlier Ruling No. 2.
[34] In Ruling No. 2 Associate Judge Osborne considered applications by Mr Henderson in the context of his public examination, after he had received the Assignee’s report, to cross-examine certain witnesses and for the Assignee to produce certain documents.
[35] Associate Judge Osborne in his decision addressed the nature and purpose of a public examination, the status of the Assignee’s report and the inquisitorial nature of the process and then concluded at [91]:
[91] The Court’s ancillary powers in the conduct of a public examination, consistently with the bankrupt’s natural justice rights, may extend to permitting additional steps if the Court considers them necessary to fairly enable the bankrupt to answer the Assignee’s report:
(a) In addition to receiving the bankrupt’s answers to questions which either the Court puts or permits to be put, the Court may permit bankrupts themselves or on the questioning of their counsel to give additional evidence in response to the Assignee’s report.
(b) While there is no general right of discovery or right to have a subpoena issued in relation to the public examination, the Court may request the Assignee as an officer of the Court to provide supplementary documents or to attend (or to have an officer attend) to provide such further information and/or evidence as the Court may consider it requires to enable the examination to be completed comprehensively and fairly.
[36] Mr Henderson’s application to cross-examine witnesses was adjourned for review at the conclusion of his examination and in doing this Associate Judge Osborne noted at para [96]:
The Court in the conduct of the examination might exercise powers to call for additional, relevant information if satisfied that such information exists which, if produced, will enable the Court fairly to bring the examination to an end.
[37] The Court rejected Mr Henderson’s “catch-all” application for general discovery. As to his concerns that the Assignee may have cherry-picked the contents of her report or omitted material that did not support or indeed contradicted the conclusions in the report, Associate Judge Osborne met this at para [100] of his decision with the comments I have outlined above at para [26]. I need not repeat those comments here.
[38] And, more fundamentally, I am satisfied here that the documents sought by Mr Henderson in his High Court application, even if they do exist (and there appears to be some real doubt as to this), are not required to be supplied, because there is no general right of discovery in a public examination.
[39] Of course, there always remains the ancillary power the Court has to require the Assignee to produce documents or explanations if that would assist the Court in conducting the public examination. However, in the present case
Associate Judge Osborne in hearing the public examination has not exercised that discretionary power at this point, for detailed reasons he has outlined.
[40] It is also significant in relation to the present review application that Mr Henderson at no time, as I understand it, has made any request to have Mr Marshall and/or Mr Slevin summonsed to the public examination to be available for examination by him. This course of action might well have been seen to be fundamental to assist Mr Henderson in the complaints he has advanced. And, there is no question that, the Associate Judge clearly has ancillary powers in terms of 165 of the Act to summons these individuals as “others” if this was thought to be desirable.
Result
[41] For all these reasons, I find that given:
(a) No significant fresh evidence, arguments or new authorities have been introduced and put before me for the first time on this review; and
(b)Mr Henderson here has been quite unable to satisfy the burden on him of persuading the Court that the Ruling No. 12 decision of Associate Judge Osborne (which as I have noted above was a fully reasoned one following a defended hearing involving thorough argument from the same opposing parties) was wrong, or that it rested on unsupportable findings of fact, or that it applied wrong principles of law;
Mr Henderson’s present review application must fail. Associate Judge Osborne did not err in any material way in giving his Ruling No. 12 decision.
[42] The application for review before me is therefore dismissed.
[43] As to costs, Mr Henderson is an undischarged bankrupt. And, before me the Assignee did not endeavour to seek any order for costs on her successful opposition to this application. Costs therefore are simply to lie where they fall.
...................................................
Gendall J
Copies to:
Phillip Cornege, Hamilton
Mr Henderson
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