New Zealand Law Society v Ellis
[2025] NZHC 2137
•1 August 2025
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2025-404-514
[2025] NZHC 2137
UNDER the Insolvency Act 2006 IN THE MATTER OF
the bankruptcy of Brian Robert Ellis
BETWEEN
THE NEW ZEALAND LAW SOCIETY
Judgment Creditor
AND
BRIAN ROBERT ELLIS
Judgment Debtor
Hearing: 31 July 2025 Counsel
P Shackleton for the Judgment Creditor W C Pyke for the Judgment Debtor
Date of Judgment:
1 August 2025
JUDGMENT OF ASSOCIATE JUDGE BRITTAIN
This judgment was delivered by me on 1 August 2025 at 3 pm.
Pursuant to Rule 11.5 of the High Court Rules.
…………………..
Registrar/Deputy Registrar
Solicitors:
Snedden Law, Auckland Meredith Connel, Auckland
Counsel:
W C Pyke, Barrister, Auckland
THE NEW ZEALAND LAW SOCIETY v ELLIS [2025] NZHC 2137 [1 August 2025]
Introduction
[1] The judgment debtor, Brian Ellis (Mr Ellis), is a former lawyer. In 2018, after proceedings before the Lawyers and Conveyancers Disciplinary Tribunal (the Tribunal), he was struck off the Roll. The Tribunal made three costs orders against Mr Ellis, dated 3 August 2018, 2 November 2018 and 8 June 2020. The total of the costs orders is $103,741.63.
[2] Mr Ellis has recently paid the costs order dated 8 June 2020. He has not paid the costs orders from 2018, which total $93,848.63.
[3] On 20 December 2024, this Court issued a bankruptcy notice to the judgment creditor, the New Zealand Law Society (NZLS), requiring payment of the three costs orders. NZLS served the bankruptcy notice on Mr Ellis on 13 March 2025. The bankruptcy notice served did not include copies of the three orders of the Tribunal on which it was based, due to oversight.
[4] On 25 March 2025, Mr Ellis filed an application in this Court for an order setting the bankruptcy notice aside. The application was served on NZLS on 26 March 2025. The application is opposed and determined in this judgment.
[5]The application raises three issues:
(a)Is the bankruptcy notice invalid because it is not founded on a sealed judgment of a court?
(b)Is there a limitation defence?
(c)Is the failure by NZLS to serve copies of the Tribunal orders together with the bankruptcy notice a defect that can be cured under s 418 of the Insolvency Act 2006?
Is the bankruptcy notice invalid because it is not founded on a sealed judgment of a court?
The statutory framework
[6]Section 29(1) of the Insolvency Act relevantly provides:
29 Form of bankruptcy notice
(1)The bankruptcy notice must—
(a)be in the prescribed form; and
(b)require the debtor, in relation to the judgment debt or the sum ordered to be paid under a final order,—
to pay the amount owing, plus costs; or
(ii)to give security for the amount owing that satisfies the court or the creditor; or
(iii)to compromise the amount owing on terms that satisfy the court or the creditor; and
(c)state what are the consequences if the debtor does not comply with the notice; and
(d)be served on the debtor in the prescribed manner.
Rule 24.8 of the High Court Rules 2016 (HCR) provides:
24.8 Issue of bankruptcy notice
(1)A request for the issue of a bankruptcy notice must be in form B 1.
(2)The Registrar may approve the issue of a bankruptcy notice if—
(a)the request is founded on a judgment or order of a court; and
(b)the Registrar has no knowledge that payment of the debt has occurred.
(3)A bankruptcy notice must be in form B 2 and a certified copy of the judgment or order on which the bankruptcy notice is based must be attached to it.
(4)The bankruptcy notice must state the amount of any costs claimed.
[8] Form B 2 of sch 1 to the HCR prescribes the form of a bankruptcy notice, including that a certified copy of the judgment or order on which the bankruptcy notice is based must be attached to the bankruptcy notice.
[9] The Court’s usual practice when a judgment creditor is proceeding on a judgment or order of the High Court is well settled. The judgment creditor is required to seal a copy of the judgment or order of the Court, which is provided to the Registry together with a request for the issue of a bankruptcy notice under r 24.8 of the HCR. That is consistent with the requirements in rr 11.11 and 11.13 of the HCR for judgments to be sealed before a step is taken on a judgment, unless the Court grants leave.
[10] The practice in respect of District Court judgments is also well settled. Under s 120 of the District Court Act 2016, a District Court judgment may be removed into the High Court. However, that step is not required to obtain a bankruptcy notice. Rule 24.8(3) and Form B 2 of the HCR confirm that a certified copy of a District Court judgment or order is required. Rule 11.6 and Form 35 of the District Court Rules 2014 confirm that a certificate issued by the District Court for evidential purposes only will suffice.
[11] The Tribunal is constituted under the Lawyers and Conveyancers Act 2006 (LCA). Under ss 242 and 249 of the LCA, the Tribunal has jurisdiction to make various orders when a charge is proved in the Tribunal, including an order for payment of costs.
[12] The LCA and the Lawyers and Conveyancers Act (Disciplinary Tribunal) Regulations 2008 (the Regulations) do not expressly provide for the Tribunal to seal its own orders. However, the Tribunal has the power to determine its own procedure,1 and the Tribunal’s practice is to seal its orders.
[13]Section 258 of the LCA provides:
258 Enforcement of orders of Disciplinary Tribunal
(1)Where the Disciplinary Tribunal, acting in accordance with this Act or any rules made under this Act, makes an order or otherwise exercises any power in respect of any person who is or was a practitioner, that order or other exercise of any power has effect whether or not that person remains a practitioner.
1 Lawyers and Conveyancers Act 2006, s 252.
(2)If the Disciplinary Tribunal, acting in accordance with this Act or any rules made under this Act, orders any person who is or was a practitioner or an incorporated firm or an employee of a practitioner or an incorporated firm to pay a fine, expenses, or other monetary amount to the New Zealand Law Society or the New Zealand Society of Conveyancers, that amount is recoverable from that person by the society to which it is ordered to be paid as a debt due to that society, whether or not that person remains a practitioner or an incorporated firm or an employee of a practitioner or an incorporated firm.
(2A)If the Disciplinary Tribunal, acting in accordance with this Act or any rules made under this Act, orders the New Zealand Law Society or the New Zealand Society of Conveyancers or any person to pay a fine, expenses, or other monetary amount to any other person, that amount is recoverable in any court of competent jurisdiction from that society or person by that other person as a debt due to that person.
(3)If the Disciplinary Tribunal makes an order under this Part, not being an order to which section 255 applies, the order may be filed in an office of the High Court or, in the case of an order to pay any amount referred to in subsection (2) or (2A), in the office of any court of competent jurisdiction.
(4)On the filing of the order it takes effect as if it were an order of the court in which it was filed to the like effect made within its jurisdiction.
[14] The LCA and the Regulations do not include any express provision providing for the Tribunal to issue certificates of orders made by the Tribunal.
The argument for Mr Ellis
[15] The arguments advanced for Mr Ellis can be distilled into two key propositions:
(a)there is no evidence that the Tribunal orders have been filed in the High Court; and
(b)once the Tribunal orders have been filed in the High Court, rr 11.11 and
17.9 of the HCR require the High Court to seal the Tribunal orders as High Court orders before a bankruptcy notice can be issued.
[16] The High Court file for this proceeding confirms that on 19 December 2024, by email, NZLS’ solicitors filed a request for the issue of the bankruptcy notice and
copies of the Tribunal orders, certified as true copies of the original orders by a Justice of the Peace.
[17] The Court is entitled to take cognisance of this filing and no independent verifying evidence of the filing is required. Mr Ellis’ first argument is rejected.
[18] Mr Ellis’ primary argument is that the Tribunal orders should have been sealed by the High Court as High Court orders.
[19]Rule 11.11 of the HCR provides:
11.11 Judgments to be sealed, dated, and served
(1)A Registrar must seal judgments with the seal of the court.
(2)A judgment must be sealed—
(a)in accordance with any direction given by the Judge relating to the sealing of the judgment; or
(b)if no direction is given, at any time after the judgment is given.
(3)Except with the leave of the court, a judgment must not be sealed until any application under rule 11.9 for the recall of the judgment is determined.
(4)A sealed judgment must state—
(a)the date on which the judgment is given; and
(b)[Revoked]
(5)A party who has a judgment sealed must immediately serve a sealed copy of it on—
(a)every other party who has given an address for service; and
(b)any other person who, although not a party, is affected by the judgment.
[20]Rule 17.9 of the HCR provides:
17.9 When leave to issue enforcement process necessary
(1)The court’s leave is required before issuing an arrest order or a sequestration order.
(2)The court’s leave is required to issue an enforcement process—
(a)if judgment has not been sealed; or
(b)if 6 years have elapsed since the date of the judgment (which for a judgment that is an arbitral award entered as a judgment has the meaning given to it by subclause (2A)); or
(c)if any change has taken place (whether by death or otherwise) in the parties entitled or liable to enforcement under the judgment; or
(d)if the judgment is against the assets of a deceased person, enforcement is sought against those assets, and that person’s executor or administrator has taken possession of those assets after the date of the judgment; or
(e)if a person is entitled to relief under the judgment only if that person has fulfilled a condition, and that person alleges that condition has been fulfilled; or
(f)if goods sought to be seized under an enforcement process are in the possession of—
(i)a receiver appointed by the court; or
(ii)a sequestrator.
(2A) Date of the judgment in subclause (2)(b) for a judgment that is an arbitral award entered as a judgment means the date on which the award became enforceable by action in New Zealand.
(3)If the court grants leave to issue an enforcement process (under this rule or otherwise) and the process is not issued within 1 year after the date of the order granting leave, that order expires but that does not prevent the making of a new order granting leave.
[21] Counsel for the applicant, Mr Pyke, referred to Xing v Wang,2 where Associate Judge Lester held that a bankruptcy notice is an enforcement process for the purposes of r 17.9.3 However, there are decisions of the High Court which are to the contrary. For example, in Riddiford v New Zealand Law Society,4 Miller J said:5
It is true that a Creditor’s Petition is a means of enforcing a judgment. But bankruptcy requires a judicial decision, made after a hearing and on proof of an act of bankruptcy. Part 16 of the High Court Rules establishes procedures for the issue and service of Bankruptcy Notices and the issue, service, and hearing of Creditor’s Petitions. There is provision for appeal. Accordingly, a Creditor’s Petition is more than just machinery by which the Court enforces its orders.
2 Xing v Wang [2023] NZHC 1273.
3 At [33].
4 Riddiford v New Zealand Law Society HC Wellington CIV-2005-4845-879, 15 December 2005.
5 At [18].
[22] I prefer Miller J’s analysis. Further, rr 11.11 and 17.9 of the HCR do not apply in the current situation where NZLS has filed orders of the Tribunal in the High Court under s 258(3) of the LCA. Section 258(4) of the LCA is a deeming provision — orders of the Tribunal are deemed to take effect as High Court orders on the filing of the Tribunal orders in the High Court. There is no express requirement in s 258 of the LCA or the HCR requiring the Court to seal the Tribunal’s orders as its own.
[23] In the present case, the orders of the Tribunal were sealed by the Tribunal and filed in the High Court as required. From then on, the orders took effect as orders of the High Court and nothing more was required.
[24] Bankruptcy notices are issued by a Registrar of the High Court. A Registrar may do so if satisfied that the request for the issue of a bankruptcy notice is founded on an order of the Tribunal that has been filed in the High Court. Unlike District Court judgments or orders, there are no prescribed formalities for the certification of a Tribunal order. In the present case, the orders were certified as true copies by a Justice of the Peace. The Registrar was entitled to issue the bankruptcy notice, which was valid.
Is there a limitation defence?
[25] Mr Pyke argued that, under s 258(2) of the LCA, the costs orders are a debt due to NZLS and money claims subject to the limitation periods in pt 2 of the Limitation Act 2010. A claim to enforce the outstanding costs orders from 2018 is out of time.
[26] The provisions of the Limitation Act do not assist Mr Ellis. Although s 258(2) of the LCA provides that any monetary amount payable by a practitioner to NZLS is recoverable as a debt due to NZLS, it is not necessary for NZLS to bring a debt recovery proceeding in a court. NZLS has exercised its right under s 258(4) of the LCA to file the Tribunal orders in this Court, which entitles NZLS to enforce the Tribunal orders as deemed orders of this Court.
[27] Part 2 of the Limitation Act, which prescribes limitation defences to money claims, does not apply to a claim on a judgment.6 Under s 35 of the Limitation Act, the limitation period for a claim to enforce a judgment is six years. A bankruptcy proceeding is a claim to enforce a judgment.7
[28] Section 35(2) of the Limitation Act defines judgment to include arbitral awards entered as judgments and foreign judgments, but is silent as to orders. Rule 11.1 of the HCR defines judgment for the purpose of pt 11 to include an order of the court. Rule 17.2 of the HCR provides that a court order, other than an interlocutory order, may be enforced in the same way as a judgment. The Tribunal orders are judgments for the purpose of s 35 of the Limitation Act.
[29] The six-year limitation on actions to enforce a judgment does not apply in the present case. Section 35(4) of the Limitation Act provides that the limitation period does not apply to enforcement of a judgment using enforcement processes in the HCR, or to an application for a debtor to be adjudicated bankrupt based wholly or in part on the judgment. Mr Ellis does not have a limitation defence.
Is the failure by NZLS to serve copies of the Tribunal orders together with the bankruptcy notice a defect that can be cured under s 418 of the Insolvency Act 2006?
[30]Section 418 of the Insolvency Act provides:
418 Defects in proceedings
(1)A proceeding under this Act must not be invalidated or set aside for a defect (which includes misdescription, misnomer, or omission) in a step that must be taken as part of, or in connection with, the proceeding, unless a person is prejudiced by the defect.
(2)The court may order the defect to be corrected, and may order the proceeding to continue, on the conditions that the court thinks appropriate in the interests of everyone who has an interest in the proceeding.
[31] NZLS accepts that the form of the bankruptcy notice served on Mr Ellis was defective, because it did not attach the Tribunal orders.
6 Limitation Act 2010, s 12(3)(d).
7 Riddiford v New Zealand Law Society, above n 4, at [12].
[32] A failure to attach copies of the relevant certificates of judgment or judgments to a bankruptcy notice is an omission that may be cured under s 418.8
[33] Counsel for Mr Ellis referred to Prescott v Auckland Council,9 where the Court declined to cure a similar defect under s 418. However, that case is distinguishable because the judgment debtor had failed to apply to set aside the bankruptcy notice in time, suffering prejudice as a result.
[34] In the present case, the bankruptcy notice that was served referred to the three Tribunal orders by reference to their dates, and the cumulative amount due under the three orders. Mr Ellis would have been in no doubt about the orders that NZLS required to be paid. Mr Ellis filed his application to set aside the bankruptcy notice in time and suffered no prejudice.
Orders
[35] The failure of the judgment creditor to attach the orders of the New Zealand Lawyers and Conveyancers Disciplinary Tribunal dated 3 August 2018, 2 November 2018 and 8 June 2020 to the bankruptcy notice served on the judgment debtor on 13 March 2025 is deemed corrected, and the service of the bankruptcy notice was valid.
[36] The judgment debtor’s application to set aside the bankruptcy notice is declined.
[37] The judgment debtor shall pay the judgment creditor’s costs on the application to set aside the bankruptcy notice on a 2B basis together with disbursements as fixed by the Registrar.
Associate Judge Brittain
8 Watti v Sharma HC Auckland CIV-2009-404-6367, 30 September 2011; and Commissioner of Inland Revenue v Langkilde [2025] NZHC 342.
9 Prescott v Auckland Council [2017] NZHC 2698.
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