Heartland Bank Ltd v Wilfred - [2022] NZHC 1328

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…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2022] NZHC 1328
Decision Date: 7 June 2022

CaseChat Overview and Summary

Heartland Bank Ltd sought leave to serve a bankruptcy notice on Ms Wilfred outside New Zealand, as well as substituted service, due to her residence in Canada and unknown whereabouts. Ms Wilfred owed Heartland Bank Ltd $1,164,125.56 after a judgment was obtained against her. The court had to decide whether it should grant Heartland leave to serve the bankruptcy notice outside New Zealand and whether it should dispense with personal service and allow substituted service. The court found that it was appropriate to grant leave under r 6.30 for the bankruptcy notice to be served out of New Zealand. The court also found that an order for substituted service should be made. Heartland had made reasonable efforts to locate Ms Wilfred to serve her, but it had not been possible. It was also clear that the bankruptcy notice could not be promptly served on Ms Wilfred as her whereabouts were unknown. It was likely that the documents would be brought to Ms Wilfred’s attention by either her solicitor or her husband if they were delivered to them. The court ordered that 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 be authorised. It also directed substituted service of the bankruptcy notice upon her in the following manner: by emailing a copy of the bankruptcy notice to Ms Wilfred’s solicitor and her last known email address; by delivering the bankruptcy notice personally to the judgment debtor’s husband; and service upon Ms Wilfred will be deemed to have been effected upon completion of these steps. Ms Wilfred has 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. Costs are reserved.

Orders