Lister v Lister

[2018] NZHC 1743

IN THE HIGH COURT OF NEW ZEALAND INVERCARGILL REGISTRY

I TE KŌTI MATUA O AOTEAROA WAIHŌPAI ROHE

CIV- 2018-425-000010

[2018] NZHC 1743

UNDER

the Insolvency Act 2006

AND

IN THE MATTER OF

the bankruptcy of DEBRA ANNE GRETA LISTER

BETWEEN

LANCE IAN LISTER, LINDA LOUISE LISTER and ROBYN ETHEL FRONTIN MATTHEWS
Judgment Creditors

AND

DEBRA ANNE GRETA LISTER

Judgment Debtor

Hearing:

(By telephone conference) 13 July 2018

Appearances:

D A G Lister (judgment debtor) in person

C P Hallowes for Wilson Home Trust (Respondent on an application for joinder)
(Judgment creditors excused)

Judgment:

13 July 2018

JUDGMENT OF ASSOCIATE JUDGE OSBORNE

(on joinder application)

Introduction

[1]    The judgment creditors have issued a bankruptcy notice against Debra Lister pursuant to a judgment debt. Ms Lister applies for an order joining the Wilson Home Trust (previously known as the Wilson Home for Crippled Children) (a charitable

Lister v Lister [2018] NZHC 1743 [13 July 2018]

trust)   (“the  Trust”)   to   “this bankruptcy  proceeding”.     The Trust opposes the application.

Short history

A disputed property

[2]    The Trust is the registered proprietor of an apartment in Royal Oak, Auckland. It came to be so through this route:

(a)Ms Lister’s aunt, the then-registered proprietor, died in 1995 leaving a life interest in the apartment to Ms Lister’s father and the apartment itself (in remainder) to the Trust;

(b)Ms Lister’s father died in 2011. The creditors are the current executors and trustees of his estate;

(c)Litigation ensued as Ms Lister commenced various proceedings, including a challenge to the aunt’s will and an application for further provision from the father’s estate. All Ms Lister’s claims failed1, the Trust being found to be the legal and beneficial owner of the apartment.2

(d)On 15 May 2018 title to the apartment was transferred to the Waitemata Health Board as trustee of the Trust.

The costs judgment

[3]    The High Court on 15 March 2017 ordered Ms Lister to pay costs and disbursements of $45,928.75 to the creditors as trustees of the father’s estate.3 The creditors’ bankruptcy notice refers to that judgment debt.

1      Lister v Pegg Ayton Gordon Trustee Ltd [2014] NZHC 1956; Lister v Pegg Ayton Gordon Trustee

Ltd [2014] NZHC 2553; Lister v Mathews [2016] NZHC 1540.

2      Lister v Pegg Ayton Gordon Trustee Ltd [2014] NZHC 2553 at [20]; Lister v Mathews [2016] NZHC 1540 at [6].

3      Lister v Lister [2017] NZHC 445.

[4]    Ms Lister was also ordered to pay costs and disbursements to the Trust. The Trust has not sought to recover that debt from Ms Lister.

Why “join” another creditor?

Ms Lister’s explanation of the proposed joinder

[5]    Before considering whether a separate creditor may be “joined” to a bankruptcy notice, I  identify for what reason Ms  Lister seeks  to join the Trust.    Ms Lister records that the Trust has been joined as a party in the earlier (ordinary) proceedings. Ms Lister refers to the Court’s power of joinder (with or without application) under r 4.56(2) High Court Rules.

[6]    Ms Lister asserts that throughout the previous Court process the creditors and the Trust had been “acting in full unison in all of their actions”. Ms Lister asserts that the Trust has “demonstrated a pure vigour in securing its Court costs”, referring to the Trust’s attempt to obtain an order that its costs be paid from the father’s estate.

[7]    The implication of Ms Lister’s submission is that, given that the Trust has seen fit to pursue its entitlement to costs alongside the creditors, it should now also stand alongside the creditors in the enforcement of costs through bankruptcy procedures.

Absence of merit of joinder

[8]    Ms Lister’s application for an order joining the Trust to the bankruptcy notice must fail, if for no other reason, because it lacks merit. It is for a creditor to decide whether to take steps to enforce its debt. There is no role for the Court review that decision-making. If a creditor chooses not to enforce a debt, that is usually seen as the debtor’s good fortune.

Absence of legal basis for joinder to a bankruptcy notice

[9]    Even had the Trust decided to pursue enforcement of its debt through a bankruptcy notice and subsequently an adjudication application, neither it of its own motion by Court order could it join on to another creditor’s bankruptcy notice or adjudication proceeding.

[10]   As Mr Hallowes identified in his submissions, the statutory regime under the Insolvency Act 2006 and under the High Court Rules provides, in relation to the issuing of bankruptcy notices, for only a single debtor and a single creditor. The provisions of ss 17 to 28 of the Insolvency Act cannot be read in any other way. Nor can one read in any other way the forms for request for issue of bankruptcy notice and the bankruptcy notice itself (Forms B1 and B2 in schedule 1 to the High Court Rules), which are the required forms under r 24.8 High Court Rules.

[11]   Thus if a Court’s costs order is against two persons, separate bankruptcy notices are required against each. Similarly, if two separate persons obtain costs orders (whether through one or more judgments), each creditor has to request and have issued its own separate bankruptcy notice.

[12]   The requirement for a bankruptcy notice to be that of a single judgment creditor is mirrored in the rules as they apply on any ensuing adjudication application. I adopt what was stated in Havenleigh Global Services Ltd v Henderson:4

[34] Section 44 of the Act is to be construed as empowering the Court to substitute as applicant in the proceeding one creditor for another, in the sense that the second now stands in place of the first. The section is not to be construed as allowing the addition of a second creditor, while the first creditor remains an applicant.

[13]   That will apply equally in this case if, the creditors having commenced an adjudication application, there was to be a suggestion that another creditor might be joined as creditor. Joinder will not be available. A second creditor may be substituted but not added.

[14]   Ms Lister is therefore unable to point to any legal basis upon which the Court might order joinder of the Trust either at this bankruptcy notice point or at the point of an ensuing adjudication application.

4      Havenleigh Global Services Ltd v Henderson [2010] NZAR 714 at [34].

Outcome

[15]   The foregoing review of the legal basis of Ms Lister’s joinder application is sufficient to dispose of it. It must be dismissed.

[16]   As Ms Lister devoted the overwhelming proportion of her synopsis to a submission that the Courts have previously got it wrong in relation to her various claims, I briefly refer to those submissions.

[17]   Ms Lister is clearly aggrieved at a number of outcomes – her removal as one of the executors and trustees of her father’s estate; her failure to obtain family protection relief; and her failure in her claims as to who owned certain property. The Trust now has indefeasible title to the apartment. All relevant appeal periods in relation to judgments delivered have expired. But it appears that Ms Lister may yet be considering the possibility of appeal.

[18]   Ms Lister’s concerns over the substantive outcomes to date would take her joinder application no further even if jurisdiction to join the Trust to a bankruptcy proceeding existed (which it does not). Legitimate concerns over the validity of a substantive judgment might inform the ultimate outcome of an insolvency proceeding but they have no relevance to who should be the creditor relying on a bankruptcy notice and pursuing an order of adjudication.

[19]   In reserving this judgment I requested from both Mr Hallowes and Mr Lister submissions as to the costs they would seek depending on whether the application succeeded or was dismissed.

[20]   Given that the Trust has succeeded, the submissions as to that eventuality apply. Mr Hallowes invokes the primary principle that costs follow the event Ms Lister opposes any award of costs and seeks costs on a 2B basis.5 Ms Lister referred back to her submissions as to the unlawfulness of the transfer of the property, a result she describes as “orchestrated by the legal profession”.

5      High Court Rules, Category 2 under r 14.3(1) and band B under r 14.5(2).

[21]   I am satisfied that the just outcome in this case is that Ms Lister pay the Trust’s costs on a 2B basis. Ms Lister has been the unsuccessful party and there is no reason to depart from r 14.2(1)(a) of the High Court Rules, being the primary principle.

Orders

[22]I order:

(a)The debtor’s application for joinder dated 17 May 2018 is dismissed.

(b)The debtor is to pay to the Wilson Home Trust costs on a 2B basis together with disbursements to be fixed by the Registrar.

Associate Judge Osborne

Solicitors:

Schnauer and Co Ltd, North Shore City Saunders Robinson Brown, Christchurch Copy to:

D A G Lister