Highmark Homes Limited v Watkins - [2023] NZHC 353

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2021-404-002268

[2023] NZHC 353

UNDER the Insolvency Act 2006

IN THE MATTER

of the bankruptcy of N M Watkins

BETWEEN

HIGHMARK HOMES LIMITED

Judgment Creditor

AND

NICOLA MAREE WATKINS

Judgment Debtor

Hearing: 17 February 2023

Appearances:

D Hayes for the Judgment Creditor

N M Watkins, Judgment Debtor in Person

Judgment:

1 March 2023

JUDGMENT OF ASSOCIATE JUDGE GARDINER

This judgment was delivered by me on 1 March 2023 at 10.30 a.m. pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar Date.......................................

Solicitors:

Hunwick Law Ltd, Hamilton D Hayes, Hamilton
Copy to: N M Watkins

HIGHMARK HOMES LTD v WATKINS [2023] NZHC 353 [1 March 2023]

Introduction

[1] Nicola Watkins was, until 14 November 2017, an employee of Highmark Homes Limited (Highmark). The employment relationship ended in acrimonious and disputed circumstances.

[2] During the employment relationship, Highmark assisted Ms Watkins to build a house on land she owned at Wheatstone Road, including providing financial assistance when Ms Watkins ran short of funds. After the employment relationship ended, Highmark brought a claim against Ms Watkins in the Disputes Tribunal (the Tribunal) to recover just under $22,000 it had advanced to Ms Watkins. Ms Watkins counterclaimed. The Tribunal determined that it had jurisdiction to hear Highmark’s claim for the debt, but not matters relating to the parties’ employment relationship. The Tribunal dismissed Ms Watkins’s counterclaim and ordered Ms Watkins to pay Highmark a total of $23,996, being the original outstanding advance plus interest.

[3] Ms Watkins’ appeal of that decision was dismissed by the District Court on 23 August 2021.1 Accordingly, Ms Watkins’ appeal rights in respect of the Tribunal’s decision were exhausted.

[4] Highmark served Ms Watkins with a bankruptcy notice relating to the Tribunal’s order on 1 February 2022. Ms Watkins did not apply to set aside the bankruptcy notice, and on 29 March 2022, Highmark applied for an order that Ms Watkins be adjudicated bankrupt. The application is opposed by Ms Watkins.

[5] The application for adjudication was originally set down to be heard on 20 October 2022. The hearing was adjourned to allow time to receive rulings from the Employment Relations Authority (the ERA) on two claims Ms Watkins had made against Highmark. The first was a claim that she was unjustifiably disadvantaged in her employment because Highmark stood her down for family reasons. She also claimed to be entitled to wage arrears owed for sick pay being paid as annual leave, and that her final pay was incorrectly calculated. In her second claim Ms Watkins sought to raise a personal grievance for unjustified dismissal. In a preliminary

1 Watkins v Highmark Homes [2021] NZDC 16179.

determination, the ERA found that she had not raised the personal grievance for unjustified dismissal within the statutory timeframe.2 In that same determination, leave to raise grievances out of time was not granted.3

[6] By application lodged…

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: [2023] NZHC 353
Decision Date: 1 March 2023

CaseChat Overview and Summary

Nicola Watkins, former employee of Highmark Homes Limited, was in dispute with the company over her termination and related financial claims. Highmark had assisted Ms Watkins in building a house on her land, which led to a claim by Highmark against Ms Watkins for the recovery of an outstanding debt of just under $22,000. The Disputes Tribunal ruled in favour of Highmark, and the subsequent appeal by Ms Watkins was dismissed by the District Court. Highmark then served Ms Watkins with a bankruptcy notice relating to the Tribunal's order, which she did not challenge, leading to Highmark's application for her adjudication of bankruptcy. Ms Watkins opposed the application, hoping to obtain a judgment through the Employment Relations Authority (ERA) that would extinguish the debt.

The primary legal issue was whether Highmark’s application for adjudication should be deferred or whether Ms Watkins should be adjudicated bankrupt. The court considered whether Ms Watkins' application to reopen the ERA investigation provided sufficient grounds to defer the bankruptcy application or to exercise its discretion to refuse to order her bankrupt. Ms Watkins argued that new evidence showed Highmark had committed perjury and mishandled her evidence, leading to erroneous decisions. However, the court was not persuaded that these reasons provided a sound basis to defer the bankruptcy proceeding or to refuse adjudication. The new evidence did not cast doubt on the Tribunal’s order, and Ms Watkins was essentially attempting to relitigate claims already determined by the Tribunal and the ERA. The court concluded that it was not in the interests of justice to deny Highmark the judgment sum to which it was entitled for an indefinite period.

The court decided that Ms Watkins should be adjudicated bankrupt, but deferred making the order until a later date to allow her an opportunity to pay the outstanding judgment sum to Highmark. If the judgment sum was not paid by that date, Ms Watkins should expect that an order would be made declaring her bankrupt. The court urged Ms Watkins to accept the finality of the Tribunal decision and take steps towards resolving the dispute with Highmark.

Orders