Keller v Daisley - [2022] NZHC 2080

IN THE HIGH COURT OF NEW ZEALAND WHANGAREI REGISTRY

I TE KŌTI MATUA O AOTEAROA WHANGĀREI-TERENGA-PARĀOA ROHE

CIV-2022-488-000017

[2022] NZHC 2080

BETWEEN PAUL GERRARD KELLER, KAREN ELIZABETH KELLER, and ARK
CONTRACTORS LIMITED
Judgment Creditor

AND

MALCOLM JAMES DAISLEY

Judgment Debtor

CIV-2022-488-000018

BETWEEN

PAUL GERRARD KELLER, KAREN ELIZABETH KELLER, and ARK
CONTRACTORS LIMITED
Plaintiff

AND

MALCOLM JAMES DAISLEY

Defendant

CIV-2022-488-000019

BETWEEN

ARK CONTRACTORS LIMITED
Judgment Creditor

AND

MALCOLM JAMES DAISLEY

Judgment Debtor

Hearing: 16 August 2022

Appearances:

J Browne and J Cartwright for the Judgment Creditor E Smith for the Judgment Debtor

Judgment:

23 August 2022

JUDGMENT OF ASSOCIATE JUDGE GARDINER

KELLER & Ors v DAISLEY [2022] NZHC 2080 [23 August 2022]

This judgment was delivered by me on 23 August 2022 at 2.30 p.m. pursuant to Rule 11.5 of the High Court Rules.

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

Introduction

[1]This is an application to set aside three bankruptcy notices.

[2] The judgment debtor, Mr Daisley, says that two of the bankruptcy notices are defective, he has a cross-claim against the judgment creditors and/or the Court should exercise its inherent jurisdiction to set aside or stay the bankruptcy notices as an abuse of process.

[3] The judgment creditors, Mr and Mrs Keller and Ark Contractors Limited (Ark), say that the bankruptcy notices are valid, Mr Daisley has no cross-claim against them, and it was reasonable to issue and serve the bankruptcy notices.

[4]The issues to be determined are:

(a)Are two of the bankruptcy notices defective?

(b)Does Mr Daisley have a cross-claim?

(c)Should the bankruptcy notices be set aside or stayed as an abuse of process?

Background

[5] The background to the dispute between the Kellers and Mr Daisley leading to the bankruptcy notices is set out in the judgment of the Court of Appeal:1

1 Keller v Daisley [2021] NZCA 351.

[1] A business transaction between the Daisley interests and the Keller interests in 2009/2010 quickly turned sour. It spawned three sets of proceedings, which were heard before Walker J in the High Court over some three weeks in 2019 and 2020. From each of those decisions, the unsuccessful parties appeal to this Court.

[2] The main dispute concerns the performance of agreements entered into on the eve of the first of four mortgagee sales of four properties owned by the Daisley interests. As contemplated by that arrangement, the Kellers established Ark Contractors Ltd (Ark). Ark purchased the four properties, using equity provided by the Kellers and bank funding. Ark was to be owned by the Kellers and the Daisleys, with shareholdings set by reference to initial equity contributions (the funds introduced by the Kellers, and the Daisleys’ remaining equity in the properties).

[3] The parties signed an agreement setting out the essential elements of this arrangement on 2 December 2009 (the Ark agreement). Shortly afterwards, Mr Daisley claimed that this agreement had been entered into under duress. There was a re-negotiation in the period leading up to the date by which Ark needed to complete a purchase of the…

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.

Continue reading Keller v Daisley

Details

AGLC: Keller v Daisley [2022] NZHC 2080
Case: [2022] NZHC 2080
Decision Date: 23 August 2022

CaseChat Overview and Summary

The matter before the court was an application to set aside three bankruptcy notices. The bankruptcy notices related to three separate judgments, each ordering the judgment debtor, Mr Daisley, to pay money to the judgment creditors, Mr and Mrs Keller and Ark Contractors Limited. Mr Daisley sought to set aside the bankruptcy notices on the basis that two of the notices were defective, that he had a cross-claim, and that the issuance of the notices constituted an abuse of process. The judgment creditors opposed the application. The court found that the bankruptcy notices were not defective, that Mr Daisley did not have a cross-claim, and that there was no abuse of process. The court dismissed the application and ordered Mr Daisley to pay the judgment creditors' costs. The key legal issues were whether the bankruptcy notices were defective, whether Mr Daisley had a cross-claim, and whether the bankruptcy notices constituted an abuse of process. The court found that the bankruptcy notices were valid because the judgments they related to ordered Mr Daisley to pay costs to the judgment creditors jointly. The court also found that Mr Daisley did not have a cross-claim because his shareholding in Ark Contractors Limited was not a money claim against the judgment creditors. Finally, the court found that there was no abuse of process because the judgments underlying the bankruptcy notices were not being challenged and had been in place for over 10 months.

In summary, the court dismissed Mr Daisley's application to set aside the bankruptcy notices. The bankruptcy notices remain in effect and Mr Daisley must pay the judgment creditors the amounts ordered by the judgments, unless he satisfies the court that he has a triable cross-claim or the court exercises its inherent jurisdiction to prevent an abuse of process. However, the court found that neither of those grounds applied in this case.

Orders