Herbert v Barber HC Palmerston North CIV-2011-454-113
[2011] NZHC 1690
•21 November 2011
IN THE HIGH COURT OF NEW ZEALAND PALMERSTON NORTH REGISTRY
CIV-2011-454-113
IN THE MATTER OF the bankruptcy of CHRISTINE ELIZABETH BARBER
BETWEEN ALAN MERVYN HERBERT, SUSAN VILORA HERBERT, SUZANNE LYNNE COTTLE AND ROBIN STEWART COTTLE
Judgment Creditors
ANDCHRISTINE ELIZABETH BARBER Judgment Debtor
Hearing: 18 November 2011
(Heard at Palmerston North)
Counsel: P. Drummond - Counsel for Judgment Creditor
J.R. Reid - Attorney for Judgment Debtor
Judgment: 21 November 2011 at 4:00 PM
JUDGMENT OF ASSOCIATE JUDGE D.I. GENDALL
This judgment of Associate Judge Gendall was delivered on 21 November 2011 at
4.00 pm under r 11.5 of the High Court Rules.
Solicitors: Bluett Legal Limited, Solicitors, PO Box 517, Hamilton
Gilbert Walker, PO Box 1595, Shortland Street, Auckland
AM HERBERT, SV HERBERT, SL COTTLE AND RS COTTLE V CE BARBER HC PMN CIV-2011-454-113
21 November 2011
Introduction
[1] Before the Court are two applications:
(a) An application by the judgment creditor filed 8 July 2011 seeking an order to adjudicate the judgment debtor bankrupt;
(b) An application filed on behalf of the judgment debtor on 26
September 2011 purporting to be an “Application for Review of
Registrar’s decision and for Extension of Time”.
[2] Both applications are opposed.
[3] Mr Drummond appeared before me today as counsel for the judgment creditor. Mr J R Reid appeared for the judgment debtor under a power of attorney he holds for her together with an “Authority to Act” document she has signed for him to appear on her behalf. The judgment creditor effectively consented here to Mr Reid appearing on behalf of the judgment debtor and matters proceeded on this basis.
Background
[4] From 31 October 2006 to 3 November 2006 and on 7 March 2007 and from
19 March to 21 March 2007 at the Palmerston North High Court, Her Honour Justice Mallon heard proceedings brought by the judgment debtor as plaintiff against seven separate defendants, arising out of a land transaction which occurred in late November 1998.
[5] Subsequently, Her Honour Justice Mallon gave her decision in that proceeding. That decision, apart from ordering the return to the judgment debtor as plaintiff of an amount of real estate agent’s commission totalling $18,000.00 plus GST received by the first defendant Suzanne Lynne Cottle, otherwise gave judgment against the plaintiff in favour of the defendants.
[6] In addition, Her Honour Justice Mallon awarded costs against the judgment debtor in favour of the judgment creditors as I understand it for the sum of
$62,486.87.
[7] Subsequently, a Bankruptcy Notice issued by the judgment creditors against the judgment debtor for this $62,486.87 was served upon the judgment debtor on 27
May 2011 pursuant to a substituted service order of this Court.
[8] The judgment debtor did not respond to the Bankruptcy Notice in the time required and, as I have noted above, on 8 July 2011 the judgment creditors filed the present application for an adjudication order.
[9] On 30 August 2011 that adjudication application was served on the judgment debtor, again pursuant to an order for substituted service made in this Court.
[10] On 29 September 2011 the judgment debtor through Mr Reid filed her Notice of Intention to Oppose the judgment creditor’s application together with a supporting affidavit.
[11] Previously, on 8 October 2009 the judgment debtor had applied to the Court of Appeal seeking an extension of time in which to file an appeal (which was now some 18 months out-of-time) against the decisions of Her Honour Justice Mallon. That application was declined by the Court of Appeal however in a written judgment given 22 March 2010.
[12] It is clear that by taking no steps to apply to set-aside the Bankruptcy Notice within the required time and in failing to pay the sum demanded the judgment debtor committed an act of bankruptcy.
[13] But, on 26 September 2011 as I have noted the judgment debtor did file an application for review of the decision of the Registrar of this Court, whereby on 14
December 2010 he sealed the orders for costs made against the judgment debtor in the judgment of Her Honour Justice Mallon.
[14] It is appropriate here to consider first the application for review of the
Registrar’s decision and I now do so.
Application for Review of Registrar’s Decision
[15] On 14 December 2010 the Registrar of this Court took the routine step of sealing the earlier judgment of this Court of Her Honour Justice Mallon given principally in favour of the judgment creditors as defendants. In doing so, effectively as I see it, the Registrar made no decision which is reviewable here. He simply sealed the earlier Court judgment and orders made under that judgment in terms of a request from the judgment debtors as defendants.
[16] What the judgment debtor appears to be seeking here in reality is a revisiting of the earlier costs decision of Her Honour Justice Mallon in this Court.
[17] No successful appeal of that costs decision has been made. The earlier application for leave to appeal that decision out of time to the Court of Appeal was rejected.
[18] As to the judgment debtor’s ancillary point advanced before me that the costs judgment should have specifically noted that the judgment debtor was entitled to off- set the real estate agent’s commission of $18,000.00 plus GST which Her Honour Justice Mallon had ordered was to be paid to her by the first defendant, it is clear that no set-off with respect to this debt is available against the other judgment creditors as defendants in that proceeding.
[19] It is clear also that the judgment debtor has not at any time pursued the first defendant in the earlier proceeding, Suzanne Lynne Cottle for a refund of this
$18,000.00 plus GST commission. This right of course still remains.
[20] Even at this point, if the $18,000.00 plus GST amount due from the first defendant, Suzanne Lynne Cottle is taken into account and deducted from the judgment debt claimed against the judgment debtor, a substantial debt well in excess of the required minimum amount of $1,000.00 still remains.
[21] For all these reasons I find that there is no substance in the judgment debtor’s application for review of the Registrar’s decision to seal the earlier judgment of this Court, and I dismiss that application.
Adjudication Application
[22] Turning now to the present adjudication application before the Court, it is clear from s 13 Insolvency Act 2006 that this application is properly brought by the judgment creditors. The judgment debtor clearly owes to the judgment creditors the Court ordered costs debt which even on her own submission exceeds a net debt of
$1,000.00. She has committed an act of bankruptcy as noted above and I am satisfied this occurred within the period of 3 months before the filing of the present application as required in s 16 Insolvency Act 2006. On its face therefore the judgment creditors are entitled to the order they seek here.
[23] I turn now to consider the judgment debtor’s response to the present application from her Notice of Opposition. On this I note that in Paragraph 2(a)(i) she states:
“I was only the nominal plaintiff in the proceeding which resulted in legal costs being awarded in favour of the judgment creditors.”
[24] The judgment debtor claims that the property at the heart of that proceeding was only co-owned by her. But, the judgment debtor deposes in paragraph 2 of her affidavit in support of the opposition being the sole registered proprietor of the farm at 129 Buller Road, Levin (the subject of the High Court proceedings). Proceedings could not have been initiated by anyone but the judgment debtor in her capacity as registered proprietor of the farm. And, in that litigation, the judgment debtor was represented by very experienced counsel Mr JO Upton QC and Ms Strachan.
[25] Next at para 2(a)(ii) of her Notice of Opposition the judgment debtor contends:
“I was denied the opportunity to make submissions on the debt by the negligence of my legal representatives”.
[26] But, as I have noted above, throughout that litigation the judgment debtor was represented by experienced Queen’s Counsel. And, in any event the allegation of negligence on the part of the judgment debtor’s legal counsel is not an available ground for opposing the making of an adjudication order.
[27] Then, at paragraph 2(a)(iii) the judgment debtor argues:
“The Court failed to give consideration to set-offs for successful causes of action and refund of monies illegally withheld from me for 12 years.”
[28] On this it would seem that the judgment debtor is attempting to revisit the merits of the High Court decision which was dealt with by way of the judgment of Mallon J along with the subsequent unsuccessful appeal to the Court of Appeal.
[29] Next, at paragraph 2(a)(iv) of her Notice of Opposition, the judgment debtor says that:
“Proceedings which may have bearing on the debt are extant in the Court of
Appeal.”
[30] But, as I see the position, the Court of Appeal has considered and determined the matter. Accordingly the costs payable under the High Court judgment costs sum remains due and owing by the judgment debtor.
[31] Judicial review of the decision of Mallon J has been attempted on behalf of the judgment debtor but this was struck out in this Court by William J on 17 May
2011. Judgments of this Court are not amenable to judicial review. Nor, in the absence of extraordinary circumstances not present here, can earlier decisions of this Court be challenged or set aside in subsequent proceedings” Redcliffe Forestry Venture Limited & Ors v CIR (CIV-2009-404-5991, 26 February 2010, Venning J). A party which is dissatisfied with the Court’s decision has its remedy in an appeal. This Court has no jurisdiction to grant the judgment debtor’s request that it “quash” Justice Mallon’s costs judgment.
in her affidavit in support of her Notice of Opposition that affidavit being sworn 29
September 2011:
On this, paragraph 4 states:
“... I was not informed that the Court was considering an application for costs by the judgment creditors.”
[33] But, this claim by the judgment debtor conflicts with that of this Court where
Mallon J made the following comments:
“There are no submissions from the plaintiff. Counsel for the seventh defendant advises that the solicitors and counsel for the plaintiff have no instructions from the plaintiff. The plaintiff has had an opportunity to make any submissions she wishes to make on costs and accordingly I propose to deal with the costs on the material before me.” [paragraph 3, Judgment of Mallon J. dated 17 September 2008].
[34] The judgment debtor then goes on to state at paragraph 9 of her affidavit as follows:
“Most of the decisions relating to the sale and litigation were made by David (my ex-husband) while I was in England caring for my elderly parents.”
[35] On this aspect, the Court of Appeal Judgment dated 22 March 2010 states:
“... her husband remained in New Zealand during this period and that he held a power of at torney from her. Mrs Barber could have arranged for him to take the necessary steps.” [paragraph 11 Court of Appeal Judgment dated 11 March 2010].
[36] Lastly, at paragraph 4 of her affidavit, the judgment debtor deposes:
“... I did not receive set-offs for successful causes of action and refund of the real
estate agent’s commission in which I was entitled ...”
[37] The judgment debtor was ordered by this Court in Mallon J’s decision to pay costs and disbursements now totalling $62,486.87. An order was also made that commission paid to the judgment creditor Suzanne Lynne Cottle was to be refunded ($18,000.00 plus GST - $2,250.00 (12.5% GST) = $20,250.00). This does not effect the amount of the judgment awarded to the remaining judgment creditors however.
37 Court may refuse adjudication
The Court may, at its discretion, refuse to adjudicate the debtor bankrupt if –
(a) the applicant creditor has not established the requirements set out in section 13; or
(b) the debtor is able to pay his or her debts; or
(c) it is just and equitable that the Court does not make an order of adjudication; or
(d) for any other reason an order of adjudication should not be made.
[39] In this case, as I have outlined above, there can be no doubt that the judgment creditors have established the requirements set out in s 13 Insolvency Act 2006 – see para [22] above.
[40] As to the judgment debtor’s financial position and her ability to pay her debts, the only evidence before the Court on these aspects appears to be set out at para 10 of her affidavit dated 29 September 2011 which states:
Financial Circumstances
10. I am a beneficiary and have casual employment at an on-call job. I have no savings and have no money to pay the debt.
[41] For all the reasons outlined above I am satisfied that the debtor on her own admission is clearly insolvent, and she has committed an act of bankruptcy within the period of 3 months before the present application was filed in terms of s 16
Insolvency Act 2006. In addition, it is clear she has no proper defences available to her and she has been unable to establish that it is just and equitable to refuse an order of adjudication here. The present application must therefore succeed.
Orders
[42] An order is now made that the judgment debtor Christine Elizabeth Barber is adjudicated bankrupt.
[43] Costs are awarded to the judgment creditors on a category 2B basis together with disbursements as fixed by the Registrar.
‘Associate Judge D.I. Gendall’
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