Heartland Bank Ltd v Wilfred
[2022] NZHC 1328
•7 June 2022
IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY
I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE
CIV-2022-409-000218
[2022] NZHC 1328
UNDER the Insolvency Act 2006 IN THE MATTER
of the Bankruptcy of Carolyn Ruth Dare Wilfred
BETWEEN
HEARTLAND BANK LIMITED
Judgment Creditor
AND
CAROLYN RUTH DARE WILFRED
Judgment Debtor
Hearing: On the papers Counsel:
C R Vinnell for Judgment Creditor
Judgment:
7 June 2022
JUDGMENT OF ASSOCIATE JUDGE PAULSEN
This judgment was delivered by me on 7 June 2022 at 3.30 pm pursuant to Rule 11.5 of the High Court Rules
Registrar/Deputy Registrar Date:
HEARTLAND BANK LTD v WILFRED [2022] NZHC 1328 [7 June 2022]
[1] Heartland Bank Ltd (Heartland) obtained summary judgment against Carolyn Ruth Dare Wilfred (Ms Wilfred) on 22 July 2021 in an amount of $1,164,125.56.1 Heartland has obtained the issue of a bankruptcy notice in respect of the judgment which it wishes to serve upon Ms Wilfred, but Ms Wilfred lives in Canada and her exact whereabouts are unknown.
[2]In the application before me, Heartland seeks:
(a)leave to serve the bankruptcy notice upon Ms Wilfred overseas;
(b)leave to serve any other documents issued by it against Ms Wilfred in this proceeding overseas;
(c)that personal service of the bankruptcy notice be dispensed with and substituted service of the bankruptcy notice be effected upon Ms Wilfred by:
(i)emailing a copy of the bankruptcy notice (and the order dispensing with personal service) to her lawyer, Jesslyn Maurier, with a request that she brings this order and the bankruptcy notice to the attention of Ms Wilfred;
(ii)emailing a copy of the bankruptcy notice (and the order dispensing with personal service) to Ms Wilfred’s last known email address;
(iii)couriering the bankruptcy notice to Ms Wilfred’s husband who resides locally; and
(d)that Heartland be granted leave to make further application to dispense with personal service of documents filed in this proceeding by way of updating affidavit and memoranda.
1 Heartland Bank Ltd v Kiwi Flavour Infusions Ltd HC Christchurch, CIV-2021-409-7.
[3] Section 17(3) of the Insolvency Act 2006 provides in relation to bankruptcy notices issued under that Act:
The debtor must have been served with the bankruptcy notice in New Zealand, unless the Court gave permission for the service of the notice on the debtor outside New Zealand.
[4]Rule 24.9 of the High Court Rules 2016 provides as follows:
24.9Service of bankruptcy notice in New Zealand
(1)A bankruptcy notice that is to be served in New Zealand must be served within 6 months from the date of its issue.
(2)The creditor may before or after the expiry of the period referred to in subclause (1) apply to the court for an order extending the period of service.
(3)The court may extend the period for service for a further 3 months from the expiry of the period referred to in subclause
(1) if the court is satisfied that
(a) reasonable efforts have been made to effect service; or
(b) for any other good reason an extension of the period for service is desirable.
(4)A bankruptcy notice must be served in accordance with Part 6 (service).
[5] A bankruptcy notice is not an originating document to which rr 6.27-6.29 apply.2 The service rule which applies to a bankruptcy notice served outside New Zealand is r 6.30 High Court Rules which provides:
6.30 Service of other documents outside New Zealand
Any document other than an originating document required by any rule to be served personally may be served abroad with the leave of the court, which may be given with any directions that the court thinks just.
[6] In Westpac New Zealand v Bolton,3 when considering an application to serve a bankruptcy notice outside New Zealand, Associate Judge Bell looked to any future bankruptcy application by the creditor relying on non-compliance with the bankruptcy notice.4 He had regard to the criteria under r 6.28(5) of the High Court Rules when considering whether leave would be granted to serve an adjudication application out
2 Westpac New Zealand v Bolton [2014] NZHC 693, (2014) 22 PRNZ 183 and Commissioner of Inland Revenue, ex parte Spicer [2016] NZHC 1344 at [7].
3 Westpac New Zealand v Bolton, above n 2.
4 Westpac New Zealand v Bolton, above n 2.
of New Zealand.5 The Associate Judge then considered whether it was appropriate for any bankruptcy of the debtor to be administered in New Zealand. If he was satisfied on those factors, he would generally give leave for service overseas of the bankruptcy notice and any creditor’s application at that time. This approach has been followed recently by Associate Judge Lester in Re Dziamska, ex parte Southpac 2015 Ltd (in liq)6 and Re Archibald, ex parte Pacific Plumbing Services Ltd (in liq).7
[7] Here, Heartland is a New Zealand company that obtained judgment against Ms Wilfred pursuant to her guarantee of advances made in this country. Ms Wilfred has a close connection to New Zealand in that her husband resides here and she has business interests here. I am satisfied, given the connection of both Heartland and Ms Wilfred with New Zealand, and the circumstances giving rise to her liability to Heartland under its judgment, that it would be appropriate to grant leave under r 6.30 for the bankruptcy notice to be served out of New Zealand.
[8] However, Heartland also seeks an order authorising substituted service of the bankruptcy notice. On the authority of Re Copland, ex parte Goodwin,8 a substituted service order under r 6.8 can be made in respect of a bankruptcy notice.9
[9]Rule 6.8 deals with substituted service and it provides as follows:
6.8Substituted service
(1)If reasonable efforts have been made to serve a document by a method permitted or required under these rules, and either the document has come to the knowledge of the person to be served or it cannot be promptly served, the court may
(a) direct
(i)that instead of service, specified steps be taken that are likely to bring the document to the notice of the person to be served; and
(ii)that the document be treated as served on the happening of a specified event, or on the expiry of a specified time:
5 At [14].
6 Re Dziamska, ex parte Southpac 2015 Ltd (in liq) [2022] NZHC 530.
7 Re Archibald, ex parte Pacific Plumbing Services Ltd (in liq) [2022] NZHC 1163.
8 Re Copland, ex parte Goodwin [2013] NZHC 652 and Goodwin v Copland [2014] NZCA 568 at [20].
9 See also Re Franck, ex parte Asteron Life Ltd (2009) 19 PRNZ 446 (HC).
(b) when steps have been taken for the purpose of bringing, or which have a tendency to bring, the document to the notice of the person on whom it is required to be served, direct that the document be treated as served on that person on a specified date:
(c) subject to any conditions that the court thinks just to impose, dispense with service of a document on a person and give to the party by whom the document is required to be served leave to proceed as if the document had been served.
(2)If a direction is given under subclause (1)(a) in respect of a document, the document must be treated as having been served at the place
(a) at which the document is likely to have come to the notice of the person to be served; or
(b) where that person was or is likely to have been on the happening of the event or the expiry of the time specified under subclause (1)(a).
[10] To obtain an order for substituted service of a document it is generally necessary to show:
(a)that reasonable efforts have been made to serve the document;
(b)that either the document cannot be promptly served or it has come to the knowledge of the person to be served; and
(c)that the proposed method of substituted service would be likely to bring the document to the notice of the person to be served.
[11]Here, in terms of these three matters, I note as follows.
Reasonable efforts to serve
[12] Heartland was not able to serve Ms Wilfred in New Zealand when it commenced its summary judgment proceeding against her and obtained its judgment. It believes that the position remains as previously disclosed by it to the Court when it obtained substituted service of the summary judgment proceeding. I am satisfied on the evidence:
(a)Ms Wilfred is living in Ontario, Canada but her exact whereabouts are unknown;
(b)Ms Wilfred is currently unable to return to New Zealand;
(c)In May 2021, Heartland’s solicitors engaged a process server in Canada to locate Ms Wilfred but the process server was unable to locate her and she does not appear to have any public or social media presence that would allow her to be located;
(d)Heartland’s solicitors have been in regular contact with Ms Wilfred’s Canadian solicitor and it is understood that Ms Wilfred is attempting to sell shares in a family-owned company in Canada to pay Heartland;
(e)Ms Wilfred’s solicitor is in contact with Ms Wilfred but is not authorised to accept service of the bankruptcy notice on her behalf; and
(f)Ms Wilfred will not co-operate to accept service of the bankruptcy notice.
[13] In the circumstances, I am satisfied that reasonable efforts have been made to attempt to locate Ms Wilfred to serve her and this has not proved possible.
Documents cannot be promptly served
[14] It is clear the bankruptcy notice cannot be promptly served on Ms Wilfred as her whereabouts are unknown. I am also satisfied that Ms Wilfred is aware Heartland wishes to serve a bankruptcy notice upon her and has not authorised her solicitor to accept service.
Would service in the manner proposed bring the bankruptcy notice to Ms Wilfred’s notice?
[15] Ms Wilfred is in contact with her solicitor. Her husband lives near Christchurch and there is evidence that she is wishing to return to New Zealand but
has been unable to get entry. It seems very likely that the documents would be brought to her attention by either her solicitor or her husband if they are delivered to them. It is also intended to send the bankruptcy notice to an email address that it is known Ms Wilfred has used previously.
[16] It is appropriate in these circumstances that an order for substituted service be made.
Result
[17] There shall be an order authorising service of the bankruptcy notice and any creditor’s application in this proceeding upon Ms Wilfred outside of New Zealand under r 6.30 of the High Court Rules 2016.
[18] I dispense with personal service of the bankruptcy notice upon Ms Wilfred and direct substituted service of the bankruptcy notice upon her in the following manner:
(a)by emailing a copy of the bankruptcy notice (and the order dispensing with personal service) to Ms Wilfred’s solicitor Jesslyn G Maurier of Bennett Jones at the email address in para 1.3 (a) of the notice of application;
(b)by emailing a copy of the bankruptcy notice (and the order dispensing with personal service) to Ms Wilfred at her last known email address being the email address in para 1.3 (b) of the notice of application;
(c)by delivering the bankruptcy notice (and the order dispensing with personal service) personally to the judgment debtor’s husband, Harmon Wilfred;
(d)in respect of (a) and (c) above, the bankruptcy notice is to be accompanied by a letter from Heartland’s solicitors’ requesting that the bankruptcy notice be drawn to Ms Wilfred’s attention forthwith;
(e)service upon Ms Wilfred must be effected within six months of the date of this order;
(f)service upon Ms Wilfred will be deemed to have been effected upon completion of (a), (b), (c), (d) and (e) above.
[19] Pursuant to s 17(4)(b) of the Insolvency Act 2006, Ms Wilfred is to have 20 working days following the completion of service of the bankruptcy notice to comply with the requirements of the bankruptcy notice or to make application to set it aside. Heartland will need to obtain the issue of an amended bankruptcy notice accordingly.
[20] I grant leave to Heartland to make any further applications to effect service of documents in this proceeding upon Ms Wilfred by substituted service by way of memoranda and updating affidavits, without the need for a formal application.
[21]Costs are reserved.
O G Paulsen Associate Judge
Solicitors:
Anthony Harper Lawyers, Christchurch
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