Jones v New Zealand Bloodstock Finance & Leasing Limited

[2023] NZHC 572

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2022-404-1770

[2023] NZHC 572

IN THE MATTER

of an application to set aside a bankruptcy notice

BETWEEN

GREGORY JOHN JONES

Applicant

AND

NEW ZEALAND BLOODSTOCK FINANCE & LEASING LIMITED

Respondent

Hearing:	(On the papers)
Counsel:	Applicant self-represented F A King for Respondent
Judgment:	21 March 2023

JUDGMENT OF ASSOCIATE JUDGE LESTER

JONES v NEW ZEALAND BLOODSTOCK FINANCE & LEASING LIMITED [2023] NZHC 572

[21 March 2023]

[1]    The plaintiff, Mr Jones, has applied to set aside a bankruptcy notice dated   23 September 2022.

[2]    On 10 November 2022, Associate Judge Andrew (as he then was), made directions in relation to Mr Jones’ application. Mr Jones was to, by 24 November 2022, file and serve a memorandum addressing the nature of the evidence he intended to give at the March 2023 hearing. Mr Jones was to file and serve his written submissions and  a  common  bundle  by  26 February 2023,  with  the  creditor,  New Zealand  Bloodstock  Finance  &   Leasing  Ltd,    to  file   its  submissions  by 3 March 2023. The hearing was scheduled for 13 March 2023.

[3]    On 10 February 2023, Mr Jones, having not filed the memorandum directed by Associate Judge Andrew, filed a further application seeking leave to call oral evidence at the hearing of his application to set aside the bankruptcy notice pursuant to rr 7.27 and 9.75 of the High Court Rules 2016 (the Rules), an order for the appointment of an  expert  under  r 9.36,  together   with   an   order   adjourning   the   hearing  on 13 March 2023 to a date after 3 April 2023.

[4]    While those orders were opposed, Associate Judge Gardiner, in a Minute dated 22 February 2023, granted an adjournment of the application to set aside the bankruptcy notice to 20 April 2023 at 10 am. The Judge noted there would be no further adjournment of that hearing.

[5]    As to the balance of Mr Jones’ application, Judge Gardiner recorded a decision would be made on the papers and that if oral submissions were considered necessary, a telephone conference would be arranged.

[6]    The two remaining aspects of Mr Jones’ 10 February 2023 application were referred to me as I am allocated to the hearing on 20 April 2023.

[7]    On 2 March 2023, I timetabled submissions for this application requiring    Mr Jones to file any submissions within five working days, that is, by 9 March 2023. In a memorandum dated 7 March 2023, Mr Jones sought further time to file his submissions and referred to r 7.34 of the High Court Rules 2016 that deals with the

hearing of interlocutory applications. In a Minute of 10 March 2023, I extended the time for Mr Jones’ submissions to 15 March 2023, and confirmed Mr Jones’ application to call oral evidence would be dealt with on the papers as per the existing directions. Mr Jones did not file submissions by 15 March 2023 and none were received prior to the finalisation of this judgment on 21 March 2023.

The grounds relied on to set aside the bankruptcy notice

[8]    Mr Jones’ application at para [2] relies on the following grounds to set aside the bankruptcy notice and for a separate stay of the proceedings pursuant to s 42 of the Insolvency Act 1986. Those grounds are:

(a)As to order 1(a)

-     The Bankruptcy Notice is defective as it states a sum in respect of the Judgment which is incorrect; and

-     The application has a cross-claim against the creditor that:

(i)Is equal to greater than the Judgment debt; and

(ii)The Applicant could not use this cross-claim as a defence in the action or proceeding in which the Judgment was obtained;

(b)As to order 1(b), any application for adjudication should be halted until the Applicant’s appeal in relation to the Judgments is heard.

(c)As to all orders, it is just and equitable and in the interests of justice to make the orders sought.

Mr Jones’ evidentiary application

[9]Mr Jones, in his application of 10 February 2023, sought the following orders:

(a)an order for leave to call oral evidence pursuant to rr 7.27 and 9.75 of the High Court Rules; and

(b)an order for the appointment of an expert to assist the Court pursuant to r 9.36 of the High Court Rules.

[10]   Mr Jones also sought that his applications be determined prior to the hearing of his application to set aside the bankruptcy notice, hence Associate Judge Gardiner

directed the application be dealt with on the papers. Mr King, counsel for the respondent, notes that Mr Jones was given until 24 November 2022 to provide details of the evidence he wished to advance. However, the present application was made some two months later. It would be inappropriate for that delay to hold up the determination of the status of the respondent/creditor’s bankruptcy notice.

[11]   Mr Jones’ application is in broad terms. The grounds on which the orders are sought are as follows:

(a)As to all the orders sought they are in the interests of justice .

(b)As to Order (a) in respect of Rules 7.27 and 9.75 of the High Court Rules that special circumstances exist in respect of the calling of oral evidence.

(c)As to the order pursuant to Rule 9.36 that there are important questions in the proceeding which could be resolved by an expert’s report.

[12]No particulars or elaboration of these grounds are provided in the application.

Mr Jones’ applications in more detail

[13]Rule 7.27 of the Rules provides:

7.27     Evidence normally given by affidavit

(1)Evidence relating to interlocutory applications is given by affidavit.

(2)Despite subclause (1), in special circumstances, a Judge may accept

oral evidence.

(emphasis added)

[14]   The authors of McGechan at HR7.27.01 note that the Rule does not empower a judge to make “a  pre-emptory order which  would have the  effect  of forcing”     a reluctant deponent to attend to give oral evidence.1

1      Jessica Gorman and others McGechan on Procedure (online ed, Thomson Reuters) at [7.27]. See Plymouth Hotel Ltd v Broadcasting Corporation of New Zealand,  HC Wellington, A564/85,     2 May 1986; and Churchill Group Holdings Ltd v Aral Property Holdings Ltd, HC Auckland CIV-2001-404-2302, 20 August 2009.

What evidence does Mr Jones seek be given orally?

[15]   In his affidavit in support of the application, which I apprehend was intended to fulfil the role of the memorandum directed by Associate Judge Andrew, Mr Jones refers to the evidence he wishes to call.

[16]   Mr Jones refers to affidavit evidence given in a list of other proceedings and he says:

It is my intention to raise in support of my application all the evidence referred to in the various sets of proceedings that I have become involved in and referred to above.

[17]   The above includes six affidavits referred to in the summary judgment proceedings that found the debt relied on for the issue of the bankruptcy notice in this matter, together with affidavits from other proceedings.

[18]   In his affidavit, Mr Jones says he believes it is necessary to hear evidence from Peter Westend, Brian O’Shea, Luke McDonald and a member of the Magic Millions sale company, as well  as  Mr Clarke  (a  horse  valuer),  and  Dr  Craig  Lawrence  (a veterinarian from Cambridge Vet Services). It is not clear to me whether Mr Jones wishes to call someone from Scone Equine Clinic or Associate Professor Francois Renee Bertin in relation to the Pierro Saltatio filly. Other individuals are referred to in Mr Jones’ affidavit but he does not say whether he wishes to call them, for example, a Mr David Ellis.

[19]Rule 9.75 of the Rules, which is also relied on by Mr Jones, provides:

9.75     Person refusing to make affidavit

(1)If a person having information relevant to a proceeding or an interlocutory application refuses to make an affidavit as to that information, a party may apply for an order directing the person to appear and be examined on oath before the court, or any person the court appoints, as to that information.

(2)The court may—

(a)make any orders the court thinks just for the attendance of that person before the court, or before the person named in the order, for the purpose of being examined, and for the production of any documents specified in the order; and

(b)impose any terms the court thinks just, as to the examination and the costs of and incidental to the application and examination.

[20]   There is no evidence from Mr Jones that he has called upon any of the witnesses he would like to give evidence to provide an affidavit so as to bring r 9.75 into play.   Such is a pre-condition for the exercise of the Court’s jurisdiction under   r 9.75.2

[21]   McGechan at HR9.75.01 notes that r 9.75 does not compel execution of an affidavit. The order the Court makes is for appearance and examination on oath. The authors note that implicit in the requirement for examination on oath is that a transcript of the sworn testimony will  be taken.  The authors note  the transcript  is  viewed as a substitute for an affidavit, should be treated as filed, and therefore available for use by either party.

[22]   While Mr Jones does not say so, it would seem that he seeks an order under   r 7.27 of the Rules for oral evidence and will then ask the Registry to issue subpoenas for those he wants to attend Court. Rule 9.75 does not require the reluctant deponent to appear at the interlocutory hearing – their evidence is taken prior with the transcript taking the place of their affidavit.

[23]   If I am correct that Mr Jones intends to request the issuing of a subpoena, such are issued under r 9.52(1), which provides:

(1) Orders of subpoena in form G 25 to  require  the  attendance  of  witnesses at the trial to testify or to produce documents, or both, may be obtained by any party, at any time after the filing of the statement of claim.

[24]   The rule refers to the witnesses at trial and to subpoenas being available any time after the filing of a statement of claim.

[25]   My speculation that Mr Jones is planning to apply for subpoenas may be entirely misplaced. However, the rules relied on by Mr Jones in his application are

2      McGechan at HR 9.75.02 notes there is a positive requirement to establish a refusal to swear an affidavit. See European Stone Surfaces Ltd v Italian Surfaces NZ Ltd (2006) 18 PRNZ 165 at [10]-[11].

not capable of achieving what he apparently wants to happen at the hearing of his application, that is, that named individuals be ordered to attend at the hearing of the application to set aside the bankruptcy notice and be examined by Mr Jones.

[26]   As noted, r 7.27 does not provide an avenue for forcing a reluctant deponent to attend and give evidence at an interlocutory hearing. Rule 9.75 has no application, for the reasons already given. Rule 9.52 does not apply to interlocutory hearings.3 Here, there is neither a trial nor a statement of claim. If Mr Jones had been planning to apply for a subpoena, in my view, such would not have been available.

Decision

[27]   I do not see jurisdiction in the Rules relied on by Mr Jones to make the types of orders he seeks which contemplate that witnesses will appear on 20 April 2023 and in effect, be cross-examined by him.

[28]   Mr Jones has been well aware of the factual allegation he wants to rely on in his application. They were referred to in the judgment that founds the bankruptcy notice in this proceeding, being the judgment of Jagose J of 5 June 2020 and in the largely unsuccessful appeal from that judgment released by the Court of Appeal on 25 August 2022. In late 2021, Mr Jones issued proceedings in the Auckland High Court under CIV-2021-404-002267, which covers broadly the same grounds he relies on to challenge the bankruptcy notice.

[29]   The Rules do not  contemplate that  the Court can order the attendance  of     a witness at the hearing of an interlocutory application to set aside a bankruptcy notice in order for their evidence to be taken viva voce. The respondent does not wish to call any such witnesses. While Mr Jones wishes to examine witnesses, I apprehend he does not want to call them as his own witnesses, rather, he wants to cross-examine them.

3      See European Stone Surfaces Ltd v Italian Surfaces Ltd, above n 2, applying A v Botrill (1999) 14 PRNZ 94; and Mailley v Shaw [2021] NZHC 759. In Mailley v Shaw, Associate Judge Bell did say a subpoena might be used to require a witness to attend where a proposed witness has not given an affidavit when a Judge decided to accept oral evidence. At paras [4] and [5], his Honour said r 9.52 applied to trials and interlocutory applications are not trials. Cross on Evidence at EVA

150.4 provides that the High Court has declined jurisdiction to give leave to serve a New Zealand subpoena for the purposes of interlocutory proceedings.

[30]   I decline to make the orders sought at paras 1(a) and 1(b) of Mr Jones’ application of 10 February 2023.

[31]   Mr Jones is to file and serve his written submissions in support of his application to set aside and a common bundle of documents 10 working days prior to the hearing date, with the respondent filing and serving its submissions five working days prior.

Associate Judge Lester

Solicitors:

Greg Jones, Auckland
McKenna King Dempster, Hamilton