Prescott v Police
[2025] NZHC 638
•26 March 2025
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2020-404-002232
[2025] NZHC 638
BETWEEN PETER-RICHARD PRESCOTT
Applicant / Judgment Debtor
AND
NEW ZEALAND POLICE
Respondent / Judgment Creditor
Hearing: 18 March 2025 Appearances:
Applicant in Person
A Goosen for the Respondent (via VMR)
Judgment:
26 March 2025
JUDGMENT OF ASSOCIATE JUDGE COGSWELL
This judgment was delivered by me on 26 March 2025 at 3.30 p.m. pursuant to Rule 11.5 of the High Court Rules.
Registrar/Deputy Registrar Date.......................................
Solicitors:
Crown Law, Wellington
PRESCOTT v NEW ZEALAND POLICE [2025] NZHC 638 [26 March 2025]
[1] The applicant seeks annulment of his bankruptcy under s 309(1)(a) of the Insolvency Act 2006 (Act).
[2] The judgment debt on which the bankruptcy adjudication was based arises from costs orders made in favour of the petitioning creditor, the New Zealand Police, arising from several unsuccessful applications for judicial review, appeals, recall and other applications made by the applicant, stemming from a fine he received for a traffic infringement in 2016.
[3]The application is opposed by the respondent, the New Zealand Police.
[4] The Official Assignee was served with the application as required by s 309(2) of the Act and abides the decision of the Court. It notes that it has incurred $34,313 in fees and costs, much of which have been incurred in dealing with the applicant’s various Court challenges to his adjudication.
Background
[5]The background leading to the current application is:
(a)On 20 July 2016, a speed camera recorded that a car registered in the applicant’s name was travelling above the speed limit.
(b)The applicant was sent an infringement notice. He denied the charge.
(c)On 27 October 2016, the applicant failed to appear before Justices of the Peace (JPs), who heard and determined the charge in the applicant’s absence. The JPs imposed a fine of $80 and court costs of $30. The applicant appealed the decision of the JPs.
(d)On 21 March 2018, the District Court dismissed the applicant's appeal.1
(e)Rather than seek leave to bring a second appeal, Mr Prescott applied to judicially review the District Court decision. Jagose J struck out
1 Police v Prescott [2018] NZDC 5372.
the applicant's application and ordered the applicant pay the respondent costs and disbursements in the sum of $6,943.96.2
(f)The applicant then unsuccessfully applied to have the High Court recall its judgment.
(g)Next, the applicant applied to the Court of Appeal for an extension of time to appeal the High Court judgment and for a stay of the costs order. On 22 August 2019, the Court declined both applications and ordered the applicant pay the respondent a further $5,798 by way of costs and disbursements.3
(h)The applicant then unsuccessfully applied for leave to appeal to the Supreme Court. The Supreme Court declined leave and awarded a further $2,500 in costs to the respondent.4
(i)The applicant then sought leave to appeal the District Court decision out of time. That application was granted by the High Court on 5 June 2020.
(j)On 27 August 2020, Lang J granted the applicant's application to bring a second appeal and allowed the appeal.5
(k)The applicant then applied to the High Court, Court of Appeal and Supreme Court to recall the earlier decisions concerning his failed attempt to judicially review the District Court judgment. Those applications were declined.6
(l)On 8 December 2020, the Police served a bankruptcy notice on the applicant. That notice stated that the applicant owed the Police
2 Prescott v Police [2019] NZHC 175.
3 Prescott v Police [2019] NZCA 380.
4 Prescott v Police [2019] NZSC 133.
5 Prescott v Police [2020] NZHC 2191.
6 Prescott v Police [2021] NZHC 483; Prescott v Police [2021] NZCA 24; and Prescott v Police
[2021] NZSC 18.
$6,943.96 in relation to the costs award made against him in Jagose J's decision.
(m)An application by the applicant to set aside the bankruptcy notice was dismissed by Associate Judge Bell on 5 May 2021.7 The Associate Judge awarded costs of $12,308.50 and disbursements of $160.8
(n)On 14 September 2021, the Police served a creditor's application for an adjudication order on the applicant dated 2 August 2021. That application stated that the applicant owed the police $27,710.46.
(o)On 28 February 2022, Associate Judge Gardiner adjudged the applicant bankrupt and made a further order for costs.9 The applicant then filed an appeal against the order adjudicating him bankrupt.
(p)On 9 May 2022, the applicant filed an application to suspend the adjudication of his bankruptcy pending the determination of his appeal.
(q)On 8 July 2022, the Court of Appeal declined the applicant’s application for an order suspending his adjudication.10
(r)The applicant also applied to the Court of Appeal for an order seeking a rehearing of, or reversing, his bankruptcy order. That appeal was deemed abandoned.
(s)On 14 October 2022, Associate Judge Gardiner declined the applicant’s application under s 414(1) of the Act to rescind his bankruptcy order.11
(t)The applicant now applies under s 309(1)(a) of the Act to annul his bankruptcy order.
7 Police v Prescott [2021] NZHC 1004.
8 Police v Prescott HC Auckland CIV-2020-404-2232, 27 May 2021 (costs minute of Associate Judge Bell) at [6].
9 Police v Prescott [2022] NZHC 306.
10 Prescott v Police [2022] NZCA 302.
11 Prescott v Police [2022] NZHC 2669.
[6] On review, it is apparent that the grounds relied on by the applicant in this application are similar to the grounds he relied on in the application for an order rescinding the adjudication under s 414(1) of the Act.
Section 309(1)(a) of the Insolvency Act 2006
[7]Section 309(1)(a) of the Act provides:
309 Court may annul adjudication
(1)The court may, on the application of the Assignee or any person interested, annul the adjudication if—
(a)the court considers that the bankrupt should not have been adjudicated bankrupt; or
…
[8] The applicant is an interested person, and so has standing to make this application.
[9] The Court has a discretion to annul an adjudication on the grounds that it should not have been made.12 The courts have consistently held that this section should be interpreted narrowly. The Court in MinterEllisonRuddWatts v Hampton held that in respect of this provision it is “settled that the Court should be parsimonious in the exercise of its power to annul. The Court narrowly construes this jurisdiction.”13
[10] The authorities establish that there are generally three grounds on which annulment applications have succeeded under s 309(1)(a). They are where there was some defect in the procedure, abuse of process, or where subsequent evidence shows that not all of the true facts were before the Court making the adjudication order, and that this would have affected the outcome.14
[11] The section does not provide a forum for a bankrupt to relitigate the merits of the application for adjudication.15
12 M v H [2024] NZCA 243, [2024] 3 NZLR 44 at [118].
13 MinterEllisonRuddWatts v Hampton [2013] NZHC 2434 at [27].
14 Re Wills, ex parte Willis [2017] NZHC 2586 at [39]; and Burchell v Commissioner of Inland Revenue [2019] NZHC 2173 at [62].
15 Re Willis, above n 14, at [38]; and Burchell, above n 14, at [61].
[12] The Court will not annul an adjudication merely because the exercise of a Court’s discretion to bankrupt a debtor is alleged to have been wrongly exercised.16 Significantly, in MinterEllisonRuddWatts v Hampton the Court made it clear that it would not interfere with an adjudication by order of annulment simply because the Judge may have decided matters differently on the date of adjudication.17
The grounds relied on in the application under s 309(1)(a)
[13] The present application is based on an allegation that the process of the adjudication hearing was procedurally unfair and prejudicial to the applicant due to the existence of a hearing deficiency that prevented him from fully participating in the hearing.
[14] The applicant submits that he had difficulty in hearing the submissions put forward by the Police at the adjudication hearing. He says that he raised this with the Court but that no satisfactory steps were taken to remedy the issue.
[15] The applicant calls in aid of his application principles derived from s 27(1) of the New Zealand Bill of Rights Act 1990 (NZBORA) and Article 14 of the International Covenant on Civil and Political Rights.
[16] He also refers to various related authorities which, together with the NZBORA and the International Covenant on Civil and Political Rights support the proposition that the principles of natural justice dictate that a person must be given a fair opportunity to be heard and a reasonable opportunity to present their case. That is accepted.
[17] The applicant says that he should not have been adjudicated bankrupt due to a breach of natural justice arising from his inability to fully participate in the adjudication hearing because of his hearing difficulties.
16 Robinson v ASB Bank Ltd [2022] NZHC 627 at [113].
17 Above n 13, at [34].
[18] At this hearing the applicant confirmed that he does not challenge the debt on which the bankruptcy petition was founded. That is a proper admission to make, as s 309(1)(a) of the Act does not provide jurisdiction for a bankrupt to challenge the debt on which a bankruptcy is founded. The right to such a challenge vests in the Official Assignee.18
[19] The fact that, ultimately, the applicant was successful in appealing his original conviction does not affect the validity of the costs orders against him.
[20] The Court of Appeal dealt with that issue in the applicant’s application to suspend adjudication of bankruptcy. As the Court of Appeal stated:19
[12] We acknowledge that Mr Prescott was successful in setting aside the original infringement notice on appeal. However, the costs orders against Mr Prescott were made on the basis that he brought unnecessary judicial review proceedings. This conclusion is unaffected by whether his appeal against the infringement notice was successful.
The bankruptcy adjudication hearing
[21] The applicant was adjudicated bankrupt on the application of the Police on 28 February 2022.
[22] The adjudication order followed a defended hearing of the judgment creditor’s application for bankruptcy, during which Mr Prescott raised four grounds of objection to the application for adjudication:20
(a)the Court does not have jurisdiction to adjudicate him bankrupt;
(b)the requirements of s 13 of the Insolvency Act 2006 are not met;
(c)there are active appeals that warrant the application being stayed or refused; and
18 Keung v Official Assignee [2020] NZHC 32 at [60]; and Burchell, above n 14, at [60].
19 Above n 10.
20 Above n 9, at [3].
(d)he has other proceedings and alleged claims which must be “set off” against the judgment debt owing to the Police.
[23] The adjudication judgment considered each ground of objection and dismissed all of them.
[24] On the alleged cross claims,21 the Court noted that the applicant had signposted those potential claims at the earlier hearing of his application to set aside the bankruptcy notice.
[25] In the decision of Associate Judge Bell on that application, the Court recorded that the applicant did not rely on the alleged cross claims to set aside the bankruptcy notice. The Court informed the applicant that if he wished to rely on them in any subsequent bankruptcy proceedings, he would need to provide good evidence.
[26]His Honour stated:22
I take his submissions about his other claims as a forewarning that he may raise [those claims] later, if the police apply to bankrupt him. Mr Prescott did not adduce any evidence in support of those claims. If he does wish to raise cross-claims against the police on a bankruptcy application, he will need to show a good evidential basis for them.
[27] In the defended application for adjudication, the applicant alleged cross claims against the debt owing to the Police in the following terms:
(a)two proceedings brought by him against the Police and others;
(b)District Court proceedings against Ms Tumahai;
(c)a counterclaim “to be completed”;
(d)a “Police breach of contract to be completed”; and
(e)an “action against Prosecuting Sergeant Coffey, to be completed”.
21 Cross claims being defined in s 17(7) of the Act as a counterclaim, set-off, or cross-demand.
22 Above n 7, at [15].
[28] At the adjudication hearing, the Court observed the earlier warning to the applicant that any cross claims needed to be supported by evidence and noted that the applicant did not adduce any evidence to substantiate the cross claims referred to in his notice of opposition, despite having filed three affidavits in support of that opposition and a further bundle of documents during the hearing.
Later steps
[29] As set out above, the bankruptcy order has been followed by applications challenging both the order and its implementation.
[30] The applicant applied to the Court of Appeal for an order suspending adjudication of his bankruptcy.23 The Court of Appeal declined that application and awarded costs to the Police.
[31]That decision is significant in relation to this application.
[32] It found that this Court was correct to reject the applicant’s set-off argument because it lacked merit; it held that even if there was some substance to the allegations against the Police, the applicant was unlikely to receive damages equalling or exceeding his debt and that the appeal had no prospect of success.
[33] Further, in declining the applicant’s application to suspend the bankruptcy order the Court of Appeal also dealt with the ground raised by the applicant that a hearing disability prejudiced his ability to conduct the opposition to his bankruptcy adjudication application. The Court of Appeal said:24
[10] In our assessment the High Court was right when it refused to accept Mr Prescott’s set-off argument. Even if there is merit in his allegations against the police, the alleged breaches of his rights are unlikely to lead to the award of any significant sum of damages that would equal or exceed his debt.
[11] Furthermore, there is no merit in the argument Mr Prescott was unable to respond to the creditor’s oral submissions. Even if we assume for present purposes that Mr Prescott had a disability that made him unable to respond, we have already found there is no merit in the set-off argument he proposed to raise.
23 Above n 10.
24 Above n 10.
[34] Notably, these comments were made with the benefit of the IPCA letter of 27 January 2022, discussed below.
Discussion
[35] The applicant’s focus in his s 309(1)(a) application was on a “violation” of his constitutional rights because he could not fully participate in the adjudication hearing.
[36] The applicant’s position is that at the defended adjudication hearing counsel for the Police made submissions to the Court that he was unable to hear or respond to. That, he says, deprived him of the opportunity to properly or fully present his case and this was a failure in procedure and process.
[37] The applicant focussed his argument on the overriding principles established by s 27(1) of the NZBORA, Article 14 of the International Covenant on Civil and Political Rights and related authorities. They collectively support the proposition that persons have the right to have Courts observe the principles of natural justice.
[38] An application under s 309(1)(a) considers procedural fairness as part of the inquiry into whether there was a defect in the procedure or an abuse of process justifying annulment. Accordingly, reference to more general principles of natural justice do not take the matter any further.
[39] I have carefully considered the submissions made by the applicant, but do not consider that anything about the conduct of the defended adjudication hearing reached the standard required to annul the bankruptcy order.
[40]There are a number of reasons for that.
[41] First, the applicant was never deprived of an opportunity to raise cross claims in opposition to the bankruptcy application.
[42] The applicant had earlier signalled the existence of such claims, but had not established any of them at the date of the adjudication hearing. This is despite the earlier warnings given to him by the Court at the application to set aside the bankruptcy
notice against him that he would need to provide such evidence if he wished to use it to oppose the adjudication application.
[43] All of the facts necessary to support the alleged cross claims were in existence at the date of the adjudication hearing; no further evidence was required for the applicant to articulate and bring such claims as he considered he held.
[44] The applicant’s claimed hearing deficiencies did not interfere with his ability to properly prepare his adjudication opposition and substantiate his alleged cross claims. The applicant had known for many months that evidence was required to support any such argument.
[45] Nothing that counsel for the Police did or said prevented the proper preparation of the alleged cross claims to oppose the adjudication application or the applicant’s ability to present that case to the Court.
[46] The applicant has not pointed to any ground relied on by the Police in the adjudication hearing that he could not respond to or was embarrassed by. The adjudication decision sets out the arguments fulsomely.
[47] Second, the validity of cross claims that the applicant alleges have already been considered and rejected by the Court of Appeal in its declinature of the applicant’s application to suspend implementation of the adjudication order.
[48] The Court of Appeal considered the grounds raised and determined that they lacked merit, had a low prospect of success, and that even assuming some success, the applicant was unlikely to receive damages equalling the costs award which is the subject of the bankruptcy notice.
[49] There was no attempt at the adjudication hearing to quantify the alleged cross claims, or to bring to the Court’s notice whether they would equal or exceed the amount of the judgment debt. As I said earlier, the applicant had more than adequate time to prepare that evidence and had been warned by the Court that he needed to do so. He simply failed to bring the requisite evidence to establish the cross claims.
[50] That failure has no connection to the alleged hearing difficulties the applicant now submits prevented him from fully presenting his case.
[51] No evidence of a hearing impediment was provided to the Court at the hearing. At the time of the hearing the applicant was not under any independently verified impediment confirmed by medical evidence. The applicant only sought professional advice after the adjudication hearing was completed.
[52] The Court took appropriate steps in the course of the hearing to deal with what was at that time a complaint by the applicant that he was struggling to hear the petitioning creditor’s counsel.
[53]There was no process failure sufficient to justify annulment.
[54] The alleged inability to participate in the hearing arises, not from the alleged hearing impediment, but from the fact that:
(a)the applicant was unable to challenge the judgment debt on which the bankruptcy notice was founded; and
(b)he did not have any meritorious cross claims that were sufficient to satisfy the Court that an order of adjudication was not otherwise appropriate.
[55] Third, the “judgment of Judge Doherty” is advanced by the applicant to support his argument that he has cross claims. He says that he did not have that at the adjudication hearing, notwithstanding that it is dated six days before the hearing.
[56] That document is not a judgment nor is it subsequent evidence that shows that not all of the true facts were before the Court when making the adjudication order. The applicant knew of the facts he wishes now to rely on at the date of the hearing.
[57] Rather it is a letter from the Independent Police Conduct Authority dated 27 January 2022 that considered the complaints the applicant had with the conduct of the officer and prosecutor leading to his initial conviction. The letter concludes that
the Police officer involved did not commit any misconduct or neglect of duty and that the matter was closed.
[58] That letter is a long way from evidence supporting a claim that the applicant has cross claims that would have equalled or exceeded the outstanding costs judgment the bankruptcy notice was based on. No evidence as to the quantum of the alleged cross claims has been provided.
[59] Subsequently, the Court of Appeal in dismissing the applicant’s application to review the Registrar’s decision to decline to dispense with security for costs had this to say about the alleged cross claims:25
[12] However, the debt on which he was adjudicated bankrupt is only loosely connected to his claim for damages. He persisted in the face of clear warnings, in pursuing an untenable application for judicial review, and it is that which led to his liability in costs. It is not a liability so closely connected to his claim for damages as to justify an equitable set-off; responsibility for the debt rests with him alone. It is simply an “asset”; in the form of an alleged entitlement to damages, that would exceed the amount of the judgment debt if fully successful. And as this Court previously held, that is very unlikely. Bill of Rights Act damages are set at modest levels…
[60] The respondent submits that even if the applicant could establish grounds for an annulment, the applicant’s delay in applying for annulment counts against relief being granted.26 The applicant has been bankrupt since 2022.
[61] He would otherwise have been discharged from his bankruptcy by now, but for the fact that he has refused to provide a statement of his affairs to the Official Assignee and so he will only be eligible for automatic discharge three years after doing that.27
[62] Even if the Court had been minded to grant the annulment application, the delay in applying would have counted against that discretion being exercised in the applicant’s favour.
25 Prescott v Police [2022] NZCA 387.
26 Keung v Official Assignee [2020] NZHC 32 at [72]–[74].
27 Section 290 of the Act.
Result
[63] The applicant has failed to make out the grounds for an annulment of his bankruptcy.
[64]He is unable to establish that there:
(a)was some defect in the procedure;
(b)was an abuse of process;
(c)is subsequent evidence that would have affected the outcome of the adjudication proceedings; or
(d)that there is any other reason for the Court to conclude that he should not have been adjudicated bankrupt.
[65]For those reasons, the applicant’s application for annulment is declined.
[66]The respondent is entitled to costs.
[67] If it seeks costs, the respondent may file a memorandum of no more than five pages seeking costs and the applicant may respond with a memorandum of no more than five pages.
[68]I will determine costs on the papers.
Associate Judge Cogswell
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