Smith v King

[2021] NZHC 2089

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2021-409-000310

[2021] NZHC 2089

UNDER

the Insolvency Act 2006

IN THE MATTER

of the bankruptcy of Geoffrey King

BETWEEN

RAYMOND BRUCE SMITH

Judgment Creditor

AND

GEOFFREY KING

Judgment Debtor

Hearing:	On the papers
Counsel:	B M Russell and I L Eaton for Judgment Creditor
Judgment:	12 August 2021

JUDGMENT OF ASSOCIATE JUDGE PAULSEN

This judgment was delivered by me on 12 August 2021 at 3.00 pm pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar Date:

SMITH v KING [2021] NZHC 2089 [12 August 2021]

[1]                 On 29 June 2021, the judgment creditor obtained judgment in this Court against the judgment debtor (Mr King) and Anthea Keenan in the amount of

$32,667.74.1    On 16 July 2021, the judgment creditor filed a request for the issue of a bankruptcy notice against Mr King in respect of the judgment. A bankruptcy notice was duly issued on 19 July 2021.

[2]                 The judgment creditor now applies for an order dispensing with personal service of the bankruptcy notice and any other documents relating to the bankruptcy of Mr King and that service be deemed to be effected in the following manner:

(a)by emailing an electronic copy of  any documents  to  be served on  Mr King to his email address; and

(b)by leaving any documents on the path inside the gate of Mr King’s home address.

[3]                 A bankruptcy notice must be served by any of the methods set out in r 6.1 High Court Rules 2016. For present purposes the only relevant method is by way of personal service.2 However, the Court may, under r 6.8, make an order dispensing with service of any document on a person or directing that a document will be treated as served once specified steps have been taken that are likely to bring the document to that person’s notice. Rule 6.8 provides:

6.8 Substituted service

(1)If reasonable efforts have been made to serve a document by a method permitted or required under these rules, and either the document has come to the knowledge of the person to be served or it cannot be promptly served, the court may—

(a)direct—

(i)      that instead of service, specified steps be taken that are likely to bring the document to the notice of the person to be served; and

(ii)     that the document be treated as served on the happening of a specified event, or on the expiry of a specified time:

1      Smith v King [2021] NZHC 1557.

2      High Court Rules 2016, r 6.1(1)(a).

(b)when steps have been taken for the purpose of bringing, or which have a tendency to bring, the document to the notice of the person on whom it is required to be served, direct that the document be treated as served on that person on a specified date:

(c)subject to any conditions that the court thinks just to impose, dispense with service of a document on a person and give to the party by whom the document is required to be served leave to proceed as if the document had been served.

(2)If a direction is given under subclause (1)(a) in respect of a document, the document must be treated as having been served at the place—

(a)at which the document is likely to have come to the notice of the person to be served; or

(b)where that person was or is likely to have been on the happening of the event or the expiry of the time specified under subclause (1)(a)(ii).

[4]The background to this application is as follows:

(a)Upon the issue of the bankruptcy notice the judgment creditor’s solicitors instructed Mr Verdi van Beek, an experienced licensed private investigator, to serve the bankruptcy notice upon Mr King. Mr van Beek has previously been engaged to serve documents upon Mr King and it appears Mr King has been cooperative and allowed service by leaving documents on the path of his home address.

(b)On 23 July 2021, Mr van Beek emailed Mr King and advised him he had a bankruptcy notice to serve in respect of the judgment and that the bankruptcy notice had to be handed to Mr King personally. Mr van Beek asked for a suitable time when he could meet Mr King at his gate to hand the document to him.

(c)Mr van Beek received no immediate response to the email. Previously Mr King had responded in a timely manner to such correspondence.

(d)Mr van Beek attempted personal service of the bankruptcy notice at Mr King’s home on 24 July 2021 at 1.45 pm. The pedestrian gate was chained and padlocked like it always had been and the garage door was closed. Mr van Beek had no access to the property.

(e)On 25 July 2021, Mr van Beek emailed Mr King again and advised that if he did not wish to accept personal service of the bankruptcy notice the judgment creditor’s lawyers would apply for substituted service and extra costs would be  incurred.  He  expressed  the  view  it  was  in Mr King’s interests to accept personal service.

(f)Later that day, Mr King emailed Mr van Beek, from the email address that Mr van Beek had been using, expressing unhappiness at what he categorised as threatening emails from Mr van Beek. He did not make arrangements to accept service of the bankruptcy notice but required Mr van Beek to keep away from his property stating: “You are trespassed!”.

(g)On 26 July 2021, Mr van Beek sent an email to Mr King apologising if his email had been upsetting to him. Further emails passed between Mr van Beek and Mr King that day. At 10.28 am on 26 July 2021, Mr van Beek sent an email to Mr King which included: “So where to from here? Are you willing to meet me to accept personal service?”. Mr King replied: “Please read the email I sent U ….. Good Morning”.

(h)Mr van Beek expresses the view that Mr King is avoiding service of any documents relating to his bankruptcy and that he considers the best way of effecting service is by emailing any documents to Mr King’s email address and leaving the documents on the path inside the gate of Mr King’s home.

Discussion

[5]                 This application has been made on a without notice basis, which is appropriate.3 The judgment creditor would have no greater success serving this application upon Mr King as it has serving the bankruptcy notice. To require service of the application would therefore be futile.

3      Rule 7.46(3)(a).

[6]The evidence satisfies me of the following:

(a)Mr van Beek is unable to obtain access to Mr King’s property to serve the bankruptcy notice because the pedestrian gate is chained and the garage door closed.

(b)Notwithstanding this, Mr van Beek has attempted personal service of the bankruptcy notice at Mr King’s home address without success.

(c)Requests have been made of Mr King by email to make arrangements to accept personal service of the bankruptcy notice which he has received and acknowledged.

(d)Despite previously being cooperative in relation to the service of documents, Mr King has not agreed to accept personal service of the bankruptcy notice.

(e)Mr King has refused Mr van Beek any rights of entry to his property.

(f)Mr King is avoiding service of the bankruptcy notice.

(g)That service of the bankruptcy notice in the manner which is proposed is likely to bring the document to Mr King’s attention as he is a user of email and Mr van Beek has corresponded with him on his personal email address, and in the past documents have been left for Mr King at his home address.

[7]                 In the circumstances described above, I consider the grounds for making an order for substituted service of the bankruptcy notice are made out.

[8]                 However, I am not prepared to make a direction for substituted service of any other documents in the proceeding at this stage. I hope that following service of the bankruptcy notice Mr King will cooperate regarding service of other documents. Should he not do so, a further application for substituted service should be made.

Result

[9]The orders I make are as follows:

(a)Personal service of the bankruptcy notice issued in this proceeding upon Mr King is dispensed with.

(b)Substituted service of the bankruptcy notice is to be effected by:

(i)emailing an electronic copy of the bankruptcy notice, the sealed order for substituted service and this judgment to Mr King at his email address, being the email address set out in para 1(a)(i) of the notice of application; and

(ii)leaving the bankruptcy notice, the sealed order for substituted service and this judgment in a sealed envelope addressed to  Mr King inside the gate of Mr King’s home address, being the address at para 1(a)(ii) of the notice of application; and

(iii)before leaving the documents at Mr King’s home address in compliance with [9(b)(ii)] above, Mr van Beek is to send an email to Mr King advising him of the date and time that he will be doing so to give Mr King an opportunity to receive the documents in person (or to have them collected on his behalf); and

(iv)the bankruptcy notice will be deemed to be served two working days following completion of the steps in [9(b)(i), (ii) and (iii)] above.

[10]             The judgment creditor has sought costs on this application. In accordance with the usual practice costs shall be reserved. I note, however, that if the judgment creditor is forced to make a further application for substituted service because of steps taken

by Mr King to avoid service, it does not follow the same approach to costs will be taken.

O G Paulsen Associate Judge

Solicitors:
Lane Neave, Christchurch