Havenleigh Global Services Limited v Henderson

[2015] NZHC 3069

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH  REGISTRY

CIV 2010-409-000559 [2015] NZHC 3069

IN THE MATTER OF

the Insolvency Act 2006

AND

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:	3 December 2015 (by telephone conference)
Appearances:	J Foster and C R Vinnell for Official Assignee D I Henderson (Bankrupt) in Person T Cooley as counsel assisting the Court
Ruling:	4 December 2015

RULING (NO. 10) OF ASSOCIATE JUDGE OSBORNE

as to further evidence

HAVENLEIGH GLOBAL SERVICES LIMITED v HENDERSON [2015] NZHC 3069 [4 December 2015]

Introduction

[1]      Mr  Henderson  seeks  leave  to  adduce  further  evidence  at  his  public examination  under  the  Insolvency Act  2006.    He  also  seeks  an  order  that  the Assignee provide certain information to him.

Leave to adduce further evidence

The application

[2]      Mr Henderson applies for two orders namely:

(a)      an order allowing Mr Henderson to adduce further evidence in his public examination by providing to the Court a number of transcripts of interviews conducted under oath by the Assignee;

(b)an order allowing Mr Henderson to adduce further evidence by way of affidavit in respect of various parties who have been examined by the Assignee pursuant to s 165 and whose interview transcripts identify that they will be able to assist the Court in his public examination.

Background to the application

[3]      In relation to Mr Henderson’s bankruptcy, the Assignee has issued notices

and consequently conducted examinations under s 165 of the Act.

[4]      Before Mr Henderson’s public examination commenced, I ruled on an earlier application by Mr Henderson relating to copies of notices and records of examinations.1    I ruled that it would be inappropriate to require production of that

material to Mr Henderson (in relation to his public examination).2

[5]      Subsequently, in relation to other matters (Mr Henderson is being prosecuted by the Ministry of Business, Innovation and Employment), the Court authorised the

Assignee to release records of examination to Mr Henderson for the purposes of his

1      Havenleigh Global Services Ltd v Henderson (Pre-Examination Ruling (No.2)) [2015] NZHC

1762.

2 At [98].

defence of the charges he faced.  Mr Henderson has subsequently obtained copies of the records on that basis.

[6]      In  the meantime, the public examination had largely run its course with substantial completion of the Court’s examination of Mr Henderson and evidence given by him.  At that point, the examination was adjourned for final submissions to begin two days ago.

[7]      Pursuant to the Court-directed timetable, the Assignee filed her submissions. Mr Henderson has not filed submissions.  Mr Henderson has pursued a review of an interlocutory ruling I had made. As a consequence of these matters, the date for final submissions has been adjourned.

[8]      In the meantime, Mr Henderson had obtained timetable directions as to the filing of any additional evidence.   Mr Henderson’s additional evidence was to be filed before the Assignee’s submissions were due.  It was not so filed.

[9]      In November, Mr Henderson signalled a wish to adduce further narrative evidence.  I directed that he submit any affidavits or briefs of evidence he wished to adduce.3

[10]     Mr  Henderson  also  signalled  a  wish  to  put  in  evidence  records  of examinations which the Assignee had not produced in support of her report.   Mr Henderson  stated  that  parts  of  those  examinations  tended  to  rebut  assertions contained in the Assignee’s report.  I directed that Mr Henderson file by 1 December

2015 any records of examination which he submitted contain material tending to rebut assertions in the Assignee’s reports (with such passages to be marked with yellow highlighter).4

[11]     Mr Henderson’s formal application dated 1 December 2015 did not attach

any further narrative evidence or records of examination.

3      Havenleigh  Global  Services  Ltd  v  Henderson  HC  Christchurch  CIV-2010-409-559,  17

November 2015 (Minute); Havenleigh Global Services Ltd v Henderson HC Christchurch CIV-

2010-409-559, 26 November 2015 (Minute).

4      Havenleigh Global Services Ltd v Henderson (Minute of 26 November 2015), above n 3.

[12]     Mr Vinnell, for the Assignee, immediately filed a notice of opposition to the application, on grounds to which I will return.

[13]     I have been provided by the Registrar with a bundle of what appear to be five records of examination which, I am informed, Mr Henderson left at the Registry yesterday.  None has any highlighting.  The records range from a few pages to 34 pages.

The potential relevance of rebuttal material

[14]     When I made my Pre-examination Ruling (No. 2) rejecting Mr Henderson’s application for discovery of records of examination, I did so for reasons stated in that ruling.5    In the course of that hearing, Mr Palmer QC (appearing for the Assignee) proffered to the Court the Assignee’s confirmation that the Assignee and her officials had withheld no information which would tend to rebut conclusions stated in her report.6

[15]     Mr Henderson has referred back to that assurance in seeking leave to adduce additional evidence in the form of examination records.  Hence my direction as to the highlighting of any passages which tended to rebut the contents of the Assignee’s report.

Grounds of opposition

[16]     In her opposition, the Assignee noted that (through Mr Henderson’s failure to comply with the directions as to identification of inconsistent material) the Court and the Assignee are not in a position to know precisely what further evidence Mr Henderson proposes to adduce.  Accordingly, the Court is in no position to assess whether the basis of Mr Henderson’s application (that he now has material which tends to rebut what is in the Assignee’s report) is valid.

[17]     Mr Henderson has today emphasised the pressure he has been under to deal with the volume of material received, including the records of examination provided

5      Havenleigh Global Services Ltd v Henderson, above n 1, at [98].

6 At [100].

to him on 5 November 2015.  Mr Henderson observes that he is under pressure to prepare both in relation to the criminal proceedings and the public examination (his submissions to be filed on 22 January 2016 and oral submissions to be heard commencing 24 February 2016).  He indicates that, in addition to the five records of examination he provided to the Registry yesterday, he is still going through other records to determine whether there is any material in those which he wishes to put before the Court.

[18] To the extent that he might then speak to examinees about giving evidence, he repeats as he has said previously that he has felt constrained in speaking to examinees for two reasons – first, because of the conditions which I have imposed in relation to discussing their private examination and, secondly, because many of them are reluctant to discuss any matters with him because of warnings they say were given to them by the Assignee about discussing anything. Mr Henderson, in a bullet- point synopsis for today’s hearing, referred to an understanding he had from the case management conference on 23 November 2015 that the Court was to issue a Minute that could be shown to examinees making it clear that they were free to talk to Mr Henderson, save that he could not reference or discuss their transcript. I have pointed out to Mr Henderson that precisely that information was contained in the Court’s Minute (2) dated 17 November 2015 at [22]. I have made clear to Mr Henderson that the restriction I have imposed in not discussing the examination relates to the use of the records in the context of this public examination. My directions do not apply to the criminal proceeding in relation to which any directions need to be sought from a Judge in the context of that proceeding. Mr Henderson informs me that a date for the hearing of the criminal proceedings has yet to be allocated. Consequently, the restrictions I placed in the context of the public examination need not impact on Mr Henderson’s preparation of evidence for the criminal proceeding, this public examination with its February 2016 hearing being the imminent event.

[19]     Having regard to Mr Henderson’s failure to provide transcripts with any (yellow-highlighted) identification of passages which he submits contain rebuttal material, I would have been strongly inclined to dismiss the application on this basis alone.  The Court’s directions in relation to identifying the particular material relied

on had been clear.  There was no objection to the specific requirements at the time the directions were made.   It should not be for the Court or other parties to trawl through  lengthy  and  not-so-lengthy  records  of  examination  in  order  to  assess whether any material tends to rebut the Assignee’s report.

An additional volume of evidence

[20]     That  said,  Ms  Foster  at  this  morning’s  conference  adopted  a  helpful

compromise position.

[21]     The Assignee’s final written submissions for the public examination have

already been filed in accordance with the timetable.

[22]     Ms  Foster  indicated  that  if  the  five  records  of  examination  (being  from persons surnamed Raso, Wilson, Buck, Ferguson, and Tubbs) were all to come in accompanied by six other examination records from examinees who were examined on issues referred to in the records produced by Mr Henderson, the Assignee would not oppose the introduction of that material.  Ms Foster’s position is that the Court could then for itself fairly assess the material available from the examinations on the particular topics.

[23]     Ms Foster would file and submit an additional volume of documents (being the 11 records of examination), paginated as with previous folders.  She would at the same time file an addendum to her final submissions already filed in which any relevant material in the transcripts would be identified and placed in the context of the Assignee’s case and submissions.   Ms Foster indicated that she could file and serve the additional volume and submissions by 11 December 2015, so that Mr Henderson would have it well in advance of the timetable date for his submissions on 22 January 2015.

[24]     The approach suggested by Ms Foster is helpful and I will adopt it.

[25]     In relation to the order sought by Mr Henderson in relation to records of examination, I partly grant the order in the following terms:

(a)      By 11 December 2015, the Assignee is to file and serve an additional paginated volume of documents comprising the five records of examination provided by Mr Henderson to the Registry together with six additional records of examination to which the Assignee wishes to refer.

(b)At the same time, the Assignee shall file and serve an addendum to her submissions dealing with any significance of the records of examination in the context of submissions already filed.

Remaining records of examination

[26]     I  understand  from  Mr  Henderson  that  there  may  be  other  records  of examination which were provided to him in relation to the criminal proceedings, which he has yet to digest in terms of their possible tendency to rebut the Assignee’s report and case.

[27]     It is not possible for the Court (or other counsel) to determine whether there is any appropriate basis to admit records of examination which are not before the Court in any form.

[28]     If Mr Henderson comes to a point of identifying such additional material, I am prepared to consider an extension of the items of record of examination which may be admitted in evidence.   I would do so having regard to rulings previously made in the public examination.

[29]     Before  the  examination  commenced,  the Assignee  made  a  concession  in relation to Mr Henderson being able to adduce further evidence before the commencement of the public examination.  To the extent that matters might arise in the course of the public examination which fairly and justly required consideration of admission of further evidence, I have previously by my Pre-examination Ruling (No. 2) identified an ancillary power of the Court to admit further evidence.7   In that

ruling, I observed:

7      Havenleigh Global Services Ltd v Henderson, above n 1.

[95]      Mr Henderson’s applications (for production of MBIE witnesses for cross-examination and for discovery of documents) are not appropriate subject-matter for orders of this Court before the public examination of the bankrupt himself has taken place.  There is nevertheless power in the Court to call for further information (whether through individuals or in the form of documents) if the Court is satisfied that such further information will be relevant to the subject-matter of the examination and will enable the Court to comprehensively and fairly conclude the examination.  In this case, the only process before the Court is the bankrupt’s public examination following the Assignee’s  objection  to  automatic  discharge.    The  appropriate  time  to exercise the Court’s ancillary powers will be when, upon the examination of the bankrupt himself, the scope of any factual issues relating to the subject- matter of the examination has been clarified.   It would be contrary to the inquisitorial, investigative scheme of the Act if the Court were to call for additional information from persons and sources other than the bankrupt himself when the extent of any uncertainty in relation to the subject-matter of the examination has yet to be identified.

[30]     The Court  will  only be  in  a  position  to  consider any further records  of examination if Mr Henderson properly identifies the records and the passages relied upon.  They can then be assessed having regard to the Pre-examination Ruling set out above.  At present, Mr Henderson has not established a basis upon which further records of examination might assist the Court to reach fair and just conclusions in relation  to  the  issues  arising  from  the Assignee’s  report  and  the Court’s  public examination.     He  has  not  produced  other  records  of  examination  let  alone highlighted and explained what he may assert is rebutting material.

[31]     There will be a brief, final opportunity for Mr Henderson by the following directions:

(a)      I direct:

(i)To the extent Mr Henderson’s application in relation to records of public examination has not been granted, I adjourn the application, with leave to Mr Henderson to file and serve by

21 December 2015 (time being strict) a memorandum which attaches any additional record of examination which Mr Henderson wishes to have admitted in the public examination, with the record of examination having highlighted within it particular passages which are said by Mr Henderson to tend to rebut material in the Assignee’s report or case.

(ii)The covering memorandum is to contain a succinct statement by reference to each highlighted passage of what in the Assignee’s case the material is said to rebut.

[32]     It is unlikely that the Court would be able to deal with such memorandum before the Christmas vacation if filed by Mr Henderson on 21 December 2015. Accordingly, unless Mr Henderson is able to agree on an informal basis with counsel for the Assignee how his additional request should be resolved, he is to proceed in filing  his  closing  submissions  on  22  January  2016  on  the  basis  that  the  only additional evidence is that directed to be filed by the Assignee by 11 February 2016. If any additional categories have to be considered at a conference in early February, and the Court orders the admission of further records, the parties will be able to address that in supplementary submissions,

Evidence of further witnesses

[33]     Mr Henderson’s proposal to adduce the evidence of further witnesses falls to be dismissed upon the basis of his failure to support the application, as directed, with details of what those witnesses would say.  In this regard, the application before the Court is essentially an empty application.

[34]     Even had Mr Henderson attached copies of the briefs or material which additional “witnesses” might give, the Court would have been left having to assess what help those witnesses might provide depending upon the form of the “evidence” Mr Henderson intended to rely on.  Mr Henderson is aware from previous rulings and minutes of how the Court is likely to approach untested evidence.  Accordingly, the form in which Mr Henderson proposed to provide any intended evidence, if he had provided copies of it, would have been an important matter for the Court’s consideration on the present application.  As it is, that particular issue does not arise because nothing has been filed.

[35]     The date for any additional evidence from further witnesses on the part of Mr Henderson (including his own evidence) has already passed.   I do not extend the time for the filing of such evidence.

[36]     However, should Mr Henderson have briefs or affidavits of witnesses whose testimony he believes to be relevant, he may include those in any memorandum, provided that it is filed and served no later than 21 December 2015.   The memorandum is to identify what briefs/affidavits are attached and is to include Mr Henderson’s request for leave to adduce such evidence.   The memorandum is to explain whether the particular witness would be called to give evidence and available for cross-examination or whether Mr Henderson seeks to rely on some lesser form of evidence.

[37]     In  the  circumstances,  I  adjourn  that  part  of  Mr  Henderson’s  application

relating to the evidence of additional witnesses.

Discovery

[38]     The third order Mr Henderson seeks by his application is an order that the

Assignee is to provide to Mr Henderson immediately:

(a)      copies  of  all  s  165  summonses  issued  during  the  course  of  his bankruptcy;

(b)      copies of all s 171 notices during the course of his bankruptcy;

(c)      copies of all transcripts of examinations conducted by the Assignee pursuant to s 165 during the course of his bankruptcy; and

(d)copies of all material gained through s 171 notices during the course of his bankruptcy.

At today’s conference, Mr Henderson asked to add a fifth category to the documents

sought being:

(e)      copies of all communications which touch in any way on any s 165 summons, s 171 notices or examinations resulting therefrom, and any of the persons examined.

[39]    My Pre-examination Ruling (No. 2) dealt with a similar application for discovery.  While my formal order was that the interlocutory applications at that time were adjourned, that order was made in the light of there being no general right of discovery,8 and upon the basis that the Court would consider the exercise of ancillary powers at the conclusion of the hearing in relation to any request based on a tight focus on the issues raised in the public examination.9

[40]     The state of Mr Henderson’s application leaves the request for orders in the nature of discovery unsustainable in a parallel way to that of the application in relation to further witnesses.   Rather than being a request tightly focused on the issues which were raised in the public examination, the third aspect of Mr Henderson’s application is essentially an application akin to general discovery of the nature which was refused in the Pre-examination Ruling.

[41]     The appropriate course is to dismiss the discovery application in its entirety.

[42]     I dismiss that aspect of Mr Henderson’s application (paragraph [1](c)) which involved discovery.

Outcome

[43]     The interlocutory application in relation to discovery is dismissed, with the remaining aspects of the application adjourned for mention at 10.00 am, 24 February

2016 but with leave to the parties to have any aspect brought on by telephone conference if appropriate.

Disposal of records of examination

[44]     I direct the Registrar to dispose of the five records of examination informally submitted by Mr Henderson.  (They will now come in formally through the Volume

8      At [95] – [97].

9 At [92].

to be filed by the Assignee).

Associate Judge Osborne

Solicitors:

Anthony Harper, Christchurch

Kensington Swan, Auckland

Copy to Mr D I Henderson, Christchurch