Official Assignee at Hamilton v Scott
[2013] NZHC 2903
•30 October 2013
IN THE HIGH COURT OF NEW ZEALAND TAURANGA REGISTRY
CIV-2012-470-815
CIV-2012-470-816 [2013] NZHC 2903
BETWEEN THE OFFICIAL ASSIGNEE AT HAMILTON
Applicant
ANDLEWTYN MICHAEL SCOTT First Respondent
WOOD WALTON TRUSTEES (2010) LIMITED
Second Respondent
ALH TRUSTEE CO LIMITED Third Respondent
WOOD WALTON TRUSTEES (2011) LIMITED
Fourth Respondent
ASB BANK LIMITED Fifth Respondent
Hearing: 29 October 2013
Appearances: S N Cameron for Applicant
L M Scott in person
No appearance by second to fifth respondents
Rulings: 30 October 2013
RULINGS OF LANG J [on pre-trial issues]
THE OFFICIAL ASSIGNEE AT HAMILTON v LEWTYN MICHAEL SCOTT [2013] NZHC 2903 [30 October
2013]
[1] On 29 October 2013 I was scheduled to consider applications by the Official Assignee’ for orders under ss 206 and 207 of the Insolvency Act 2006. Instead, I spent the entire hearing dealing with preliminary issues raised by Mr Scott. For that reason it was not possible to deal with the substantive applications.
[2] In no particular order and with one exception, I now record my rulings in relation to the points that Mr Scott raised. The exception relates to Mr Scott’s application for review of Associate Judge Doogue’s decision on 15 March 2013 granting Mr Gowing leave to withdraw as Mr Scott’s counsel. That application will be the subject of a separate judgment issued at a later date.
Material obtained using ancillary orders
[3] The present proceedings were preceded by another proceeding, in which the Official Assignee sought freezing orders in respect of the assets that are now the subject of the present proceeding (“the freezing order proceeding”). Heath J granted that application in a judgment delivered on 5 October 2012.1 Heath J also made ancillary orders permitting the Official Assignee to obtain a wide range of documentary material.2
[4] Mr Scott argues that the Official Assignee is not entitled in the present proceedings to rely upon material obtained from any source as a result of the ancillary orders made by Heath J. He maintains that the Official Assignee obtained those orders unlawfully, because he failed to advise Heath J of possible defences Mr Scott might have to the application.
[5] Mr Scott says he has now obtained evidence that will enable him to mount a further challenge to an earlier proceeding in which he was ordered to pay costs of more than $400,000.3 This led largely to the indebtedness that resulted in his bankruptcy. Mr Scott also believes that he has viable claims based in fraud and
negligence against virtually all of the lawyers who are his creditors. He considers
1 Official Assignee v Scott HC Tauranga CIV 2012 470 778, 5 October 2002.
2 Ibid, at [36] – [37].
3 Scott v Scott HC Tauranga CIV 2004 470 094 and CIV 2004 470 957, 25 March 2010.
the Official Assignee ought to have disclosed this fact to the Judge who issued the freezing and ancillary orders.
[6] I do not uphold Mr Scott’s argument on this point. The Official Assignee obtained the material in question using orders issued lawfully by this Court. If Mr Scott wished to challenge the orders, he should have done so within the context of the proceeding in which they were made. The Court made time available to hear Mr Scott’s argument that the freezing orders should be rescinded. Mr Scott failed, however, to comply with timetable orders requiring him to file documents in opposition to the application. For that reason Venning J ultimately vacated the fixture. Mr Scott therefore had the opportunity to have this issue determined by the Court, but elected not to take it. As a result, the Official Assignee is entitled to rely in the present proceeding on material obtained using the ancillary orders.
Failure by the Official Assignee to file and serve copies of affidavits
[7] Mr Scott also argues that the present proceedings should be struck out because the Official Assignee failed to comply with his obligation4 to file affidavits in support of the originating applications. Furthermore, he maintains that the Official Assignee has never served him with copies of the affidavits of Marie King and Thomas Clothier. These were filed in the freezing order proceeding, but the Official Assignee now relies upon them in the present proceedings.
[8] The answer to the first submission is that the originating applications expressly rely upon the affidavits sworn by Ms King and Mr Clothier in the freezing order proceeding. The second submission is answered by the affidavits of service filed in the present proceedings. These record that at 7.35 am on 10 October 2012 a process server served the present proceedings, including copies of the two affidavits in question, personally on Mr Scott. The process server records that Mr Scott accepted the documents without protest. As a result, regardless of whether or not Mr Scott received the documents in his capacity as trustee or bankrupt, he has been
served with copies of them. There is nothing in this point.
4 Under r 19.10 of the High Court Rules.
The status of the Official Assignee
[9] Mr Scott also sought to challenge the Official Assignee’s status based on an obvious error in the oral judgment of the Associate Judge when he made an order adjudicating Mr Scott bankrupt on 22 July 2011.5 In his oral judgment, the Associate Judge referred to Mr Scott as Mr “L N” Scott, whereas Mr Scott’s correct initials are “L M”. This error was one that could easily have been rectified by the Associate Judge recalling his judgment under the so-called “slip” rule so as to enable him to correct an error caused by inadvertence. The issue is placed beyond doubt in any event by the fact that the sealed order correctly records the order of adjudication as
having been made in respect of Lewtyn Michael Scott. This point, if it amounts to one, would also need to be determined in the context of an appeal against the order made against the Associate Judge rather than in the present proceeding. This Court is entitled to proceed on the basis of the sealed orders of the Court.
Application for annulment of bankruptcy
[10] Mr Scott also sought to make an oral application for an order that his bankruptcy be annulled. The Insolvency Act 2006 contains detailed provisions regarding the manner in which an application for an annulment must be made.6 It would be highly inappropriate for this Court to make such an order based on an oral application during a hearing convened for a completely different purpose. For that reason I declined to consider Mr Scott’s oral application for an annulment.
Application for review of order of adjudication
[11] Finally, Mr Scott advanced an oral application for an order reviewing the decision of the Associate Judge adjudicating him bankrupt.7 He relied in this context upon the Court’s powers of review contained in s 26P of the Judicature Act 2008. This permits a Judge to review a decision made in Chambers by an Associate Judge.
[12] As I advised Mr Scott during the hearing, however, orders of adjudication are made within the originating jurisdiction conferred on Associate Judges by s 26I(2) of
5 Simpson v Scott HC Tauranga CIV 2010 470 690 22 July 2011.
6 Insolvency Act 2006, s 309.
7 Simpson v Scott, above n 5.
the Judicature Act 2008. They are made in open Court, and not in Chambers. Section 26P(2) of the Judicature Act 1908 requires any challenge to decisions made in that jurisdiction to be by way of general appeal to the Court of Appeal.8 This Court has no power to hear an application for review of an order adjudicating a debtor bankrupt.
Next event
[13] The only matters remaining to be determined are the substantive applications filed by the Official Assignee. Within the context of those applications, the Court will need to determine the relevance and admissibility of some matters contained in the two affidavits filed by Mr Scott.
[14] There is a degree of urgency, because a property that is the subject of the proceedings is due to be the subject of a mortgagee sale on 14 November 2013. The Official Assignee is anxious to obtain orders in the present proceeding that may enable him to intervene in that process so as to be able to sell the property in a sale that is not a forced sale. The Official Assignee believes that this will enable him to obtain a better price for the property than will be the case if it is sold by the mortgagee.
[15] I am conscious that this proceeding has already been the subject of two earlier adjournments. It is important that it be resolved as quickly as possible. For that reason I will hear the substantive applications on Monday and Tuesday, 4 and 5
November 2013 (two days allocated).
[16] I record that Mr Scott has indicated he wishes to cross-examine the Official Assignee’s deponents. Counsel for the Official Assignee will give notice to Mr Scott no later than Wednesday 30 October 2013 as to whether or not she wishes to cross-
examine him.
Lang J
8 See in this context Talyancich v Index Developments Ltd [1992] 3 NZLR 28 at 36.
Solicitors:
Almao Douch, Hamilton
Copy to: LM Scott
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