Mathiesen v Mathiesen
[2013] NZHC 1925
•1 August 2013
IN THE HIGH COURT OF NEW ZEALAND TIMARU REGISTRY
CIV-2011-476-000295 [2013] NZHC 1925
IN THE MATTER of the Insolvency Act 2006 IN THE MATTER
of the bankruptcy of GABRIELLE PAULETTE MATHIESEN
BETWEEN
GABRIELLE PAULETTE MATHIESEN Judgment Debtor
AND
JAN HENRIK MATHIESEN Judgment Creditor
Hearing: 16 July 2013 (at Timaru); 19 July 2013 (by telephone) Appearances:
Judgment Debtor in Person with Mr Payne as McKenzie Friend, Applicant
N M Willcocks for Judgment Creditor, Respondent
Judgment:
1 August 2013
JUDGMENT OF ASSOCIATE JUDGE OSBORNE
on application for suspension of bankruptcy adjudication
Introduction
[1] Ms Mathiesen was adjudicated bankrupt on 11 June 2013.
[2] She initially desired to pursue what she filed and described as “an injunction for stay to stop the sealing and publication of bankruptcy adjudication”. She wished to pursue an appeal against the underlying judgment of the Family Court (by which Ms Mathiesen was ordered to pay to Mr Mathiesen $156,152.97 by way of part of a balance of relationship property entitlement). Ms Mathiesen had filed an application
for leave to appeal to the Supreme Court in relation to the Family Court judgment.
MATHIESEN v MATHIESEN [2013] NZHC 1925 [1 August 2013]
[3] Ms Mathiesen is self represented. The Court explained on 24 June 2013 and again on 16 July 2013 that the jurisdiction to suspend an order for adjudication lies in s 416 Insolvency Act 2006. Ms Mathiesen had not filed any appeal in relation to the bankruptcy adjudication itself.
Application for suspension of adjudication under s 416 Insolvency Act 2006
[4] On 18 July 2013 Ms Mathiesen filed an application for suspension of her adjudication.
[5] On 17 July 2013 (the previous day) she had forwarded to the Court of Appeal a form of notice of appeal against the adjudication order.
The suspension jurisdiction – s 416 Insolvency Act 2006
The section
[6] Section 416(1) Insolvency Act 2006 establishes the jurisdiction of this Court
(and of the Court of Appeal) to suspend an adjudication. It provides:
416 Suspension of adjudication pending appeal
(1) If an appeal has been filed against an order of adjudication, the bankrupt or any other interested person may apply to the court or the Court of Appeal for an order suspending the adjudication until the appeal is decided.
[7] Section 416(2) provides the Court may attach conditions to the suspension. Section 416(3) provides for orders to be made by this Court or by the Court of Appeal once an appeal is decided (whether or not adjudication has been suspended in the interim). The Court’s power under s 416(3) will extend (where an appeal succeeds without interim suspension of adjudication) to the making of an order akin an order of annulment under s 309(1)(a) of the Act.
The threshold requirement - the filing of an appeal
[8] Section 416(1) of the Act thus provides for orders of suspension if an appeal has been filed against an order of adjudication. In order to obtain an order of
suspension, the bankrupt must come within the provisions of s 416. Tipping J in Re
Kim Maxwell Ltd said of the predecessor section (s 9 Insolvency Act 1967):1
…in bankruptcy law there is no equivalent to either a temporary or a permanent stay of the bankruptcy otherwise then for the purposes of appeal: see s 9 of the Insolvency Act 1967 which speaks not so much of a stay pending appeal but of a suspension of the adjudication until the disposal of the appeal.
[9] It is implicit in s 416 of the Act that the appeal in question must be an effective and valid appeal. An intended appeal does not meet the wording of the provision.
[10] Similarly, where a litigant does not appeal as of right within the time allowed for that purpose and therefore has to apply for an extension of time, 2 a valid appeal will not come into existence unless and until the Court grants an extension of time in which to appeal. Apart from the legal logic of that, there is a practical logic – the successful creditor ought not to be faced with the costs of considering and opposing a suspension application, if the application is not supported by a valid appeal.
The period for appeal as of right
[11] Section 414(2) entitles an aggrieved person to appeal to the Court of Appeal from a decision under the Insolvency Act.
[12] As s 414(2) does not specify a period within which the appeal must be brought, the appeal against adjudication must be brought within 20 working days after the adjudication decision is given.3
Application of the threshold requirement in this case
[13] The Court’s adjudication decision in this case was given on 11 June 2013.
[14] The 20 working day period for appeal expired on 9 July 2013. Associate
Judge Matthews had in the meantime on 24 June 2013 issued a Minute, partly in
1 Re Kim Maxwell Ltd [1992] 1 NZLR 69 at 75
2 Whether under Court of Appeal (Civil) Rules 2005, r 29A or otherwise.
3 High Court Rules, r 20.4(2)(b).
response to Ms Mathiesen’s “application for an injunction/stay” in which his Honour set out the requirements under s 416 of the Act. He recorded that an adjudication can be suspended only where an appeal has been filed. He noted that, notwithstanding Ms Mathiesen’s filing of her “application for an injunction/stay”, the Court did not have jurisdiction to suspend the adjudication. Having regard to Ms Mathiesen’s self- representation and the fact that she may not have been aware of the statutory framework, his Honour adjourned the proceeding to 16 July 2013.
[15] It appears from the documents provided by Ms Mathiesen that the first document she provided to the Court of Appeal in relation to her adjudication in bankruptcy was a document sent to the Court of Appeal on 17 July 2013 and entitled:
Application for an appeal against High Court Associate Judge Matthews’ bankruptcy adjudication against me of 11 June 2013, in conformance with High Court Associate Judge Osborne’s Minute of 16 July 2013.
[16] On 16 July 2013 I finally adjourned the matters raised by Ms Mathiesen to hearing by way of telephone conference on 19 July 2013 to enable Ms Mathiesen to make any further submissions as to jurisdiction.
[17] I recorded in my Minute of 16 July 2013:
I have explained to Ms Mathiesen today that the challenge to the underlying judgment does not cut across the effectiveness of the adjudication order. That order having been made can only be affected for the time being by the sort of order identified in s 416 of the Act (or reversed or modified on appeal).
In these circumstances, the Court is without jurisdiction to grant an order of the nature sought by Ms Mathiesen in her 14 June 2013 application. That observation notwithstanding, it was clear that Ms Mathiesen, in coming to Court today, did not fully appreciate the consequences of the observations made by Associate Judge Matthews in the 24 June 2013 minute. As I understand it, she had not had notice of the fact that the Court would be dealing with the matter in that way that day.
I consider it appropriate that there be a final opportunity for Ms Mathiesen to address the Court on any remaining concerns she has as to jurisdiction, and that she have the opportunity to present submissions as to jurisdiction one final time.
[18] Ms Mathiesen then filed the additional documents to which I have referred, being an application for suspension under s 416 and the documents sent to the Court of Appeal.
[19] By reason of the statutory regime under the Insolvency Act, and particularly by reason of the provisions of s 416, Ms Mathiesen has not met the threshold requirement for a suspension order. There is no appeal at this point from the adjudication order. At the most, Ms Mathiesen appears to have filed an application for an extension of time to appeal.
Outcome
[20] Ms Mathiesen’s earlier (14 June 2013) “Application for an Injunction/Stay” invites the Court to exercise a jurisdiction that it does not have in relation to bankruptcy proceedings. It must be dismissed.
[21] Ms Mathiesen’s more recent (17 July 2013) “Application for an urgent order suspending bankruptcy adjudication” cannot succeed at present, because there is no appeal on which to base a suspension order.
[22] In relation to the latter application, the Court has two choices. First, the Court might dismiss the application on the jurisdiction threshold issue. Secondly, the Court might adjourn the application to allow for the possibility that the Court may permit Ms Mathiesen extended time for her appeal, thereby enabling her to meet the threshold requirement for a suspension order.
[23] I am conscious from the extent of the Court’s file in relation to this bankruptcy proceeding that the creditor will have already incurred substantial costs in relation to a substantial number of attendances which he would not normally have incurred on an adjudication proceeding. By the nature of the jurisdiction, it must be doubtful whether, even if he is awarded costs in relation to continuing attendances, he will recover them.
[24] On the other hand, Ms Mathiesen is self-represented. She has shown from an early point a determination to challenge the adjudication order made against her on
11 June 2013. I have found that she cannot succeed at this point because of a jurisdictional threshold requirement. If the Court of Appeal were to provide her with an appeal path, the jurisdictional threshold requirement would be satisfied. In the circumstances, it is likely to minimise recurring costs if I adjourn her suspension application for a significant period rather than leave her to bring a fresh application later, if and when she has leave to appeal.
[25] In the meantime, by refusing to suspend the adjudication, the focus of the statutory framework under Part 7 of the Insolvency Act will have been achieved. The Official Assignee will be free to begin the investigation and administration of Ms Mathiesen’s estate.
[26] Ms Willcocks for Mr Mathiesen as creditor, noted the effect of the Family Court judgment. Ms Mathiesen was required to pay the stipulated sum to Mr Mathiesen on account of the disproportionate value of relationship property which Ms Mathiesen had retained. Ms Mathiesen has failed to pay all but a small portion of the Family Court order. It is close to four years since the Family Court order was made. It is more than two years since the unsatisfied bankruptcy notice was served upon Ms Mathiesen, Ms Willcocks submits that it is appropriate that the investigation of Ms Mathiesen’s estate not be further held up. Mr Mathiesen is entitled to believe that an investigation by the Assignee may bring to light assets from which the debt to him may be met in whole or in part.
[27] I accept the thrust of Ms Willcocks’ submissions. An important aspect of this decision is that it will enable the Official Assignee to begin the process of protecting the interests of Ms Mathiesen’s creditor or creditors.
Other considerations under s 416 Insolvency Act
[28] Ms Mathiesen continues to focus, as she has throughout, upon the substance and merits of the underlying Family Court judgment (or more correctly as she views it, the lack of merit). This bankruptcy proceeding was greatly extended in time as Ms Mathiesen pursued leave to appeal the underlying judgment to the Court of Appeal. Ultimately, the application for a new adjudication order was able to be
brought to a conclusion when the Court of Appeal gave judgment dismissing Ms
Mathiesen’s leave application.
[29] In giving its judgment, the Court of Appeal made comment both on the merits and prejudice caused by delay to the extent that the Court could assess those. The Court recognised the difficulty of making a detailed assessment of merit. It noted that Mr Mathiesen would have two particular matters reconsidered in the Family Court.
[30] I have already determined that Ms Mathiesen’s application does not meet the threshold requirement for the making of a suspension order. It would therefore be premature and unnecessary to assess the merits.
[31] In Lindsay v Vaucluse Holdings Ltd,4 the Court of Appeal observed that appeal rights and procedures in relation to an adjudication order are not lost through the refusal of suspension. The Official Assignee may pursue appeals, if they have merit, in the names of bankrupts. That observation applies equally to this case.
[32] In the event that an extension of time to appeal is granted in relation to Ms Mathiesen’s estate, and there is a need to reconsider the suspension of her adjudication in bankruptcy, it will become necessary for the Court to assess the various factors which the Court considers when moving to the merits of an application for suspension. I refer to Kroon v Westpac Banking Corporation5 and Re
Parlane ex parte Young.6 Having regard to the tentative conclusions already
expressed by the Court of Appeal on 22 May 2013, it may be doubtful, even if time to appeal is extended in relation to the matters Ms Mathiesen wishes to pursue, that the weighing of the relevant factors will justify a suspension order.
[33] I do not overlook a submission made by Ms Mathiesen to the effect that the
Family Court judgment was obtained by fraud and that “fraud unravels all”. There
was a dearth of evidence put before me on that issue, which was primarily raised
4 Lindsay v Vaucluse Holdings Ltd CA272/99, 13 December 1999.
5 Kroon v Westpac Banking Corporation HC Auckland, CIV-2006-404-4720, 15 May 2007.
6 Re Parlane ex p Young HC Auckland CIV-2010-404-5478, 25 July 2011.
through submission. I therefore leave it to be considered at a later date if it is properly raised in evidence and able to be responded to through that method.
[34] Finally, I note Ms Mathiesen’s reference to the fact that she is disadvantaged in her presentation of her case through her dyslexia and the state of her health generally. I have determined this application by reference to a failure to meet a jurisdictional threshold. If the Court at a later point has to move to a consideration of the recognised factors which go into an assessment of the merits of any suspension order, the opportunity would be there for Ms Mathiesen to present all evidence relevant to the factors to be considered. It is probable that the Court would allow her to continue to be assisted by a McKenzie Friend as she has been for some time. The Court would then, in this case as in any other, reach its determination on the evidence and submissions before it.
Orders
[35] I order:
(a) Ms Mathiesen’s “application for injunction/stay” dated 14 June 2013
is dismissed;
(b) Ms Mathiesen’s application for suspension of her adjudication dated
18 July 2013 is refused for the time being but is adjourned for mention in the List at Timaru at 11.00 am, 10 September 2013, when the Court is likely to determine the application finally, but with leave reserved to either party to have the application brought on for earlier determination on three days’ notice;
(c) The costs of both applications are reserved.
Solicitors:
Gresson Dorman & Co, Timaru
Judgment Debtor – G P Mathiesen, Timaru
Associate Judge Osborne
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