Official Assignee v Bassett HC Auckland CIV 2005-404-4380

[2007] NZHC 1811

IN BANKRUPTCY

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV 2005-404-4380

IN THE MATTER OF      the Insolvency Act 1967

AND IN THE

MATTER  of the estate of Lawrence Nelson Bassett

BETWEEN  THE OFFICIAL ASSIGNEE Plaintiff

ANDLAWRENCE NELSON BASSETT First Defendant

ANDWILLIAM HENRY HAWKEN Second Defendant

Hearing:         8 June 2007

Appearances: Mr D  Vizor for Plaintiff

Mr  Macrae for Defendants

Judgment:      8 June 2007

ORAL JUDGMENT OF ASSOCIATE JUDGE DOOGUE

Solicitors:

Mr D J Vizor, Bell Gully, Solicitors, P O Box 4199,Auckland –[email protected]

Mr Macrae, Armstong Murray, P O Box 33-1028, Takapuna – [email protected]

THE OFFICIAL ASSIGNEE  V  BASSETT AND ANOR HC AK CIV 2005-404-4380  8 June 2007

Background

[1]      This case concerns whether or not a bankrupted person, the first defendant, had made a voidable gift of property under s 54 of the Insolvency Act 1967.  I gave a judgment in this matter 3 November 2006.  In that judgment I referred to the various competing contentions that the parties made and recorded the position of the Official Assignee as being that shortly before his adjudication Mr Bassett directed his solicitors to pay the sum of $105,000 to himself and to the second defendant, Mr W Hawken,  as  trustees  for  a  certain  trust.    My  conclusion  was  that  after  hearing evidence that there was a gift of property and that it was voidable.

[2]      The procedural background has been unfortunate.  I heard evidence on this matter on 30 October, as I have recorded.  I directed at the conclusion of the hearing that the plaintiff was to file further written submissions in the matter by 1 November

2006 and the defendant to file submissions in reply by 3 November.  The plaintiff’s filed their further submissions, but before the defendants’ counsel filed his I released my judgment.  This occurred on 3 November 2006.  I had overlooked that I had not received the further written submissions.   I had heard oral submissions from both parties at the trial.

[3]      Since  then  there  have  been  a  series  of  procedural  steps  which  it  is  not necessary to canvas in detail, but I need to record that as a result of what happened I recalled my judgment and accordingly the determination that I made 3 November

2006 was vacated.

[4]      That meant that there was still an issue to be determined.   The defendants have submitted that I should not be the Judge who makes that further determination. They have asked me to “recuse” myself.

Principles

[5]      I was referred to the decision in Man O’War Station Ltd v Auckland City

Council [2001] 1 NZLR 552, which was a case concerned with whether or not a

Tribunal with responsibility for determining a matter should desist from doing so because of the presence of bias.   In the Man O’War Station Ltd case the Court of Appeal referred to the speech of Lord Goth of Chieveley in R v Gough [1993] AC

646.  The Man O’War Station Ltd case establishes that the test is whether there was a real danger or possibility that a reasonable person knowing of the circumstances might consider that legal bias was present.

Discussion

[6]      It is necessary to keep firmly in mind what the judgment, which I eventually issued, was concerned with.   It was in part, of course, concerned with matters of legal principle, but the critical aspects of the judgment were concerned with reaching conclusions as to the truthfulness of the explanation that the defendants advanced to explain why the payments of $105,000 were made.  I made comments in my decision that I did not regard Mr Bassett as being a satisfactory witness.  I gave prominence to the  inconsistencies  between  his  evidence  and  such  records  as  there  were.    My adverse conclusions about him as a witness were attributable first to the fact that he had accepted that he would concoct fraudulent accounts to conceal the true position. I also considered that he had demonstrated a lack of candour about giving evidence on one aspect of the case. He gave an improbable explanation.

[7]      I referred to the fact that the Official Assignee invited me to draw inferences. I concluded that those inferences would have to be based on the facts that had been established in the case.  I concluded that Mr Bassett’s account of the facts could not be accepted.

[8]      Mr  Vizor  made  the  submission  to  me  that  I  had  already  heard  oral submissions and so the defendants had been heard on material matters before I gave my judgment.  He also said that it was quite usual for a Court to come to a view on credibility of witnesses during the course of a case, and the fact that they did so did not vitiate the judgments they later issued.

[9]      In my judgment having regard to the conclusions which I expressed in fairly firm language in the course of my judgment, it would be a reasonable perception on

the part of a reasonable person that I would not be able to approach matters again on the basis that Mr Bassett and/or Mr Hawken were potentially reliable witnesses. Making findings of credibility is not just a matter of assessing abstract submissions that are made.  The Court forms impressions and makes judgments which are partly intuitive and partly reached by reference to the surrounding circumstances.

[10]     I personally do not think it would be defensible for me to embark upon a further hearing of this matter given the assessment that I have made in the past, particularly of Mr Bassett.  There is no point in having a further hearing of the matter unless it is a fair one.

[11]     I accordingly decline to further hear the matter myself.  Obviously, I regret that that is going to result in a waste of effort on the part of the parties and counsel to date, and it is also going to increase the expense of the litigation.   While those matters are regrettable and while they are important, they have to take second place to the necessity to do justice between the parties.

[12]     The matter of costs up to the point of the first judgment, and indeed of the subsequent  procedural  steps  that  have  been  taken,  are  reserved.    They  can  be reviewed by the Judge who ultimately deals with the plaintiff’s application.

Further steps

[13]     The Registrar is to allocate this matter to another Judge to deal with.   A hearing time of one day is to be provided.   It is likely that oral evidence will be required.

[14]     Bearing in mind that the new Judge will come to the matter afresh, without any understanding of the background, synopses on each side would be helpful to be filed and served 10 working days prior to the date of hearing.

[15]     The defendants (who are the applicants) are to prepare a paginated bound volume of the pleadings that are to be relied upon in the proceeding.

[16]     Either party requiring cross-examination is to give written notice of which deponents are required for cross-examination not less than 15 working days prior to

the date of fixture.

J P Doogue

Associate Judge