Mathiesen v District Court at Timaru

[2014] NZHC 1377

IN THE HIGH COURT OF NEW ZEALAND TIMARU REGISTRY

CIV 2014-476-33 [2014] NZHC 1377

BETWEEN

GABRIELLE PAULETTE MATHIESEN

and GORDON WALLACE CAMERON McNAB

Applicants

AND

DISTRICT COURT AT TIMARU First Respondent

OFFICIAL ASSIGNEE Second Respondent

Hearing:	18 June 2014
Counsel:	G P Mathiesen, in person, Applicant A R McRae for First Respondent G Slevin for Second Respondent
Judgment:	18 June 2014

(ORAL) JUDGMENT OF HEATH J

Solicitors:

Official Assignee, Christchurch
Crown Solicitor, Timaru
Copies to:

Applicants in person

MATHIESEN and McNAB v DISTRICT COURT AT TIMARU [2014] NZHC 1377 [18 June 2014]

The application

[1]      In circumstances I will describe shortly, Ms Mathiesen and Mr McNab each apply for a writ of habeas corpus to release them from detention pursuant to an order made by a District Court Judge earlier today.

[2]      The applications are made orally.   Given the circumstances I have decided that they should be heard on that basis.1

[3]      Mr  McNab  and  Ms  Mathiesen  were  brought  to  the  Court  to  make submissions on their application.   Each has said that the paper provided to me through the Registrar represents what they wish to say and they have nothing to add. On that basis neither Mr McRae, for the District Court at Timaru, nor Mr Slevin, for the Official Assignee, wish to be heard further.

[4]      Ms Mathiesen is an undischarged bankrupt.  She was adjudged bankrupt by this Court on 11 June 2013.  The debt on which she was adjudicated arose out of proceedings in the Family Court at Timaru brought by her husband.   They were relationship property proceedings.   Ms Mathiesen was ordered to pay a sum of

$326,152.97 to her husband.   Of that, $170,000 was to come from the Sweetpea

Family Trust and the other $156,152.97 from Ms Mathiesen.

[5]      No application has been made to set aside the judgment entered in the Family Court. Nor has any appeal been brought against it.  On that basis the High Court was entitled to rely on the certificate of judgment for the purposes of the bankruptcy proceedings.

[6]      I am aware that Ms Mathiesen has consistently challenge the order of adjudication on the basis that there was no power for the Court to make that order in relation to a debt that was said to be owing to her husband.  In other words, that it was not permissible for her husband to bring bankruptcy proceedings to enforce the debt.  However, no application has been made to annul the bankruptcy;2 nor has any

appeal been brought against the order of adjudication.   In those circumstances the

1      Habeas Corpus Act 2001, s 7(2).

2      Insolvency Act 2006, s 309(1)(a).

order is to be regarded as valid and enforceable.  It is not permissible for this Court to entertain a collateral challenge to the order of adjudication in a proceeding such as this.3

[7]      In any event, there is no rule of law of which I am aware that prevents a husband from enforcing an order for the payment of money from his spouse by way of bankruptcy proceedings.4

[8]      Both  Ms  Mathiesen  and  Mr  McNab  were  summonsed  by  the  Official Assignee to appear before a District Court Judge yesterday for examination.  That summons was issued under s 165 of the Insolvency Act 2006.  It is permissible under that  provision  for  the  Assignee  to  summon  a  person  with  knowledge  of  the bankrupt’s affairs or the bankrupt himself or herself to be examined either by the

Assignee or a District Court Judge.5   In some circumstances that may be done before

another Assignee.6

[9]      Usually an examination of this type takes place before the Official Assignee. But  in  cases  where it  is likely that  there will  be objection  to  the provision  of information, an examination before a District Court Judge is often sought.  That is what occurred in this case.

[10]     When Mr McNab and Ms Mathiesen attended yesterday before the District Court  Judge,  they  declined  to  answer  questions  in  relation  to  the  affairs  of Ms Mathiesen in which the Official Assignee was legitimately interested, as Official Assignee of her property.

[11]     Following some objections, Judge Farish gave a ruling in which she averted to a challenge to jurisdiction of the District Court to conduct the proceeding and as to

the validity of the summons served on both Mr McNab and Ms Mathiesen.

3      See Isaacs v Robertson [1985] AC 97 (PC) at 102 and McNab v Matthews [2014] NZHC 580 at paras [25]–[27].

4      A debt from a husband to a wife (or vice versa) fits within the definition of “provable debt” in s

232 of the Insolvency Act 2006.  There is no principled basis on which maintenance obligations (which are provable debts: as to which see s 182(1) Child Support Act 1991 and Re Beck, ex parte Beck (1904) 24 NZLR 491 (SC) at 496) can be distinguished from an obligation for one spouse to pay money to another under a relationship property order.

5      Insolvency Act 2006, s 165(1) and (2).

6      Ibid, s 165(1).

[12]     The first issue of jurisdiction was plainly resolved correctly.  As I have said, there  is  a  statutory power  for  the  Assignee  to  summon  a  person  interested  for examination before a District Court Judge.  That was done.  Once it was before the District Court Judge, the proceeding was under her control.

[13]     As to the second point, I agree with the District Court Judge’s reasoning so far as the validity of the summons was concerned.  She expressly recorded that there was no challenge to the manner in which service was effected.

[14]     After Mr McNab and Ms Mathiesen declined to answer questions they were detained until later in the day.  Eventually each was bailed overnight to appear in the District Court this morning at 10am.   They indicated that questions would not be answered or documents produced.  The Judge stood them down in custody until later in the day.   That is the circumstance in which the application for habeas corpus comes before me.

[15]     It is clear that a person who acts in contravention of a direction, in this to case to be examined, will generally commit a contempt of Court.7     That may be punished by imprisonment, though any term imposed must be proportionate to the breach.8   That stage has not yet been reached.

[16]     Judge Farish will be recalling the examination proceeding later in the day.  I suggest that Mr McNab and Ms Mathiesen reflect on my findings as to the validity of the bankruptcy order and co-operate with the District Court Judge.  If they do not, they  are  at  risk  of  a  finding  of  contempt  and  the  imposition  of  a  term  of

imprisonment to mark that contempt.9   No doubt, as she did yesterday, the Judge will

ensure that Mr McNab and Ms Mathiesen have access to a lawyer to advise them before any such step is taken, though I understand that each of them may have

declined legal assistance previously.

7      Siemer v Solicitor-General [2013] 3 NZLR 551 (SC) at paras [188], [229] and [230] (McGrath, William Young and Glazebrook JJ).

8      A District Court Judge, exercising civil jurisdiction, has power to commit for contempt for up to three months imprisonment: see s 112 District Courts Act 1947.

9      If such orders were made they may be challenged on appeal, not through the habeas corpus procedure.

[17]     It follows that there is no basis on which I can interfere with the lawful detention that has been imposed by the District Court Judge for failure to abide by her direction.  That being so, the applications for habeas corpus are each dismissed.

[18]     Mr McNab and Ms Mathiesen will now be returned to custody and await further call of their proceeding in the District Court.

P R Heath J