Havenleigh Global Services Limited v Henderson

[2016] NZHC 1113

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

CIV 2010-409-559 [2016] NZHC 1113

IN THE MATTER

of the Insolvency Act 2006

IN THE MATTER

of the Bankruptcy of David Ian Henderson

BETWEEN

HAVENLEIGH GLOBAL SERVICES LIMITED AND FM CUSTODIANS LIMITED

Judgment Creditors

(Substituted Creditors)

AND

DAVID IAN HENDERSON Judgment Debtor

Hearing:	24 May 2016
Counsel:	Applicant in Person S M Kinsler and S K Shaw for Official Assignee
Judgment:	25 May 2016

JUDGMENT OF SIMON FRANCE J

Introduction

[1]      Mr Henderson is a bankrupt who is presently subject to a Public Examination process under the Insolvency Act 2006. The taking of evidence is complete.  Closing submissions were scheduled for three days commencing 13 June 2016.   However that has been deferred because on 20 April 2016 Mr Henderson made an application for the presiding Judge, Associate Judge Osborne, to recuse himself.

[2]      Mr Henderson has also applied for that application to be transferred to this

Court pursuant to s 26N(2) of the Judicature Act 1908 which provides:

HAVENLEIGH GLOBAL SERVICES LTD & OR v HENDERSON [2016] NZHC 1113 [25 May 2016]

26N   Transfer of proceedings from [Associate Judge] to Judge

…

(2)       Where any proceedings are to be dealt with or are being dealt with by [an Associate Judge], a Judge may, at any time before the conclusion of those proceedings, on application made on notice by any party to the proceedings, order that the proceedings or any part thereof be transferred to a Judge if that Judge is satisfied that it is desirable that the proceedings or that part thereof be dealt with by a Judge.

[3]      Mr Henderson acknowledges that the standard practice is for the challenged Judge to decide the recusal application but submits that for three reasons a different approach should apply here:

(a)      the standard practice is flawed because it makes the challenged Judge a  judge  in  his  or  her  own  cause.     Section 26N(2)  affords  an opportunity to  avoid  this  flawed  practice  and  should  therefore  be utilised;

(b)it  would  be  efficient  because  if  the  application  is  unsuccessful  a review to this Court is inevitable;

(c)      the recusal application is unusual because of the clear concerns that emerge from the events on which the application is based.  The case for recusal is sufficiently obvious that it equally would be incorrect for the challenged Judge to determine the challenge.

[4]      I address each in turn.

The standard practice

[5]      The standard practice is well established.  It has its critics but that does not undermine the fact that it represents the established approach to dealing with such applications.  In Erris Promotions Ltd v Commissioner of Inland Revenue the Court

of Appeal observed:1

1      Erris Promotions Ltd v Commissioner of Inland Revenue (2003) 16 PRNZ 1014 (CA) at [22].

Although in practice a Judge may seek a colleague’s views, ultimately the decision must be for the particular Judge.  There is no authority for another Judge in the same jurisdiction to rule on the issue …

[6]      The  principle  that  a  challenged  Judge  initially  decides  the  challenge  is reflected in many documents.  For example, the New Zealand Guidelines for Judicial Conduct2 at para 29 provide:

The question of disqualification is for the judge.   The Judge should not accede too readily to suggestions of bias.

[7]      In Muir v Commissioner of Inland Revenue,3  the Court cited the Guide to Judicial   Conduct   promulgated   in   2007   by  the   Chief   Justices   of  Australia. Paragraph 3.5(c) provides:4

Disqualification is for the Judge to decide in light of any objection, but trivial objections are to be discouraged.

[8]      Ms Shaw,  who  argued  this  aspect,  notes  these  rules  complement  another fundamental principle, namely the obligation on a Judge to sit unless disqualified.5

[9]      Section 26N(2) provides, by chance, a solution to a fundamental difficulty in the area.  It is noted in the Erris passage that there is no jurisdiction for a Judge “in the same jurisdiction” to hear a recusal application directed at another Judge. However, only as regards an associate Judge is this difficulty potentially avoided by use of s 26N(2).

[10]     I do not consider this would be an appropriate use of s 26N.   Despite its opponents, there are good reasons for the current approach, but more importantly for present purposes, it is the settled practice.   In terms of the s 26N statutory test, it would not be desirable to transfer the proceedings so as to remove the capacity of the challenged Judge to determine in the normal way an application that he recuse

himself.

2      “Guidelines    for    Judicial    Conduct”     (March    2013)    Courts    of    New    Zealand

v Commissioner of Inland Revenue [2007] 3 NZLR 495 (CA).

4      Chief Justices of Australia “Guide to Judicial Conduct” (2nd ed, Australasian Institute of Judicial Administration Incorporated, March  2007).    The  parallels  to  the  subsequent  New Zealand Guidelines are clear.

5      See Muir, above n 3 at [35] citing JRL; ex parte CJL (1986) CLR 342 at 352.

The High Court will hear a review anyway

[11]     This submission cannot be accepted for two reasons.  First, it presupposes the recusal application will not succeed. That cannot be known until it is heard.  Second, even if appeal is inevitable, it is important to have the views of the challenged Judge. By-passing this stage in the process would significantly hinder subsequent review.

The grounds of challenge demonstrate the recusal application will not be properly heard

[12]     I made it plain to the parties I would not consider the merits of the recusal application.  Mr Henderson believes he has identified material that clearly makes out his case.  I do not comment on this except to observe there are obvious replies that can be made.  Where the respective merits of these competing positions lie will be determined when the application is heard.

Conclusion

[13]     The  application  to  transfer  the  recusal  application  to  the  High  Court  is declined.

[14]     Costs are reserved and are to be fixed following the determination of the substantive application.   To assist I indicate as regards this application I am not

aware of anything that suggests costs should not follow the event on a 2B basis.

Simon France J