UDC Finance Limited v Shilton

[2019] NZHC 3395

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2019-409-000570

[2019] NZHC 3395

IN THE MATTER

of the Insolvency Act 2006

AND

IN THE MATTER

of the bankruptcy of JAMES LOUIS SHILTON

BETWEEN

UDC FINANCE LIMITED

Judgment Creditor

AND

JAMES LOUIS SHILTON

Judgment Debtor

Hearing:	Determined on the Papers
Counsel:	S C D A Gollin and D M Payne for Judgment Creditor
Judgment:	18 December 2019

JUDGMENT OF ASSOCIATE JUDGE PAULSEN

This judgment was delivered by me on 18 December 2019 at 2.00 pm pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar Date:

Solicitors:
Minter Ellison Rudd Watts, Auckland

UDC FINANCE LTD v SHILTON [2019] NZHC 3395 [18 December 2019]

[1]        The judgment creditor has filed bankruptcy proceedings against the judgment debtor in respect of a judgment obtained by it in the District Court at Christchurch on 12 June 2018 for more than $194,000.

[2]        A bankruptcy notice has been issued on the request of the judgment creditor in respect of the judgment but attempts at personal service of the bankruptcy notice upon the judgment debtor have not been successful.

[3]        The judgment creditor has applied for orders dispensing with personal service and authorising substituted service upon the judgment debtor of the bankruptcy notice and any further documents in this proceeding.

[4]        The application is made in reliance upon r 6.8 High Court Rules 2016. It is made on a without notice basis as, obviously, requiring the judgment creditor to proceed on notice would defeat the purpose of the application and cause undue delay and prejudice to the judgment creditor.1

[5]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:

(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.

1      High Court Rules 2016, r 7.46(3)(a).

(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).

[6]        The evidence before me is contained in affidavits of Clive Williams and Charlene Cooper. The evidence satisfies me as follows:

(a)the judgment creditor has made reasonable attempts to serve the judgment debtor with the bankruptcy notice at addresses in Rolleston and Christchurch where the judgment debtor was believed to have been living or working, but without success;

(b)the judgment creditor is unaware of where the judgment debtor presently resides or works;

(c)the judgment creditor’s employees and solicitors have been in contact with the judgment debtor by email and text message;

(d)the judgment debtor is aware that the judgment creditor is taking bankruptcy proceedings against him and has been provided with a copy of the bankruptcy notice by email;

(e)the judgment debtor has been requested to provide his residential address;

(f)the judgment debtor has failed to provide an address;

(g)the judgment debtor has acknowledged his indebtedness and has indicated that he will voluntarily have himself declared bankrupt, but it appears he has not done so;

(h)the applicant does not have the means to effect personal service of the bankruptcy notice upon the judgment debtor; and

(i)the bankruptcy notice cannot be promptly served upon the judgment debtor.

[7]        In these circumstances, the requirements of r 6.8 are met and it is appropriate that I dispense with personal service and order substituted service of the bankruptcy notice upon the judgment debtor.

[8]        The judgment creditor wishes to effect substituted service by email. It also proposes that the judgment debtor be notified by text message that the bankruptcy notice has been sent to his email address by way of substituted service. The evidence satisfies me that the both the email address and telephone number provided are presently used by the judgment debtor.

[9]        The judgment creditor also seeks an order that any requirement for personal service of further documents in this proceeding be dispensed with and served upon the judgment debtor in the same manner as the bankruptcy notice. No purpose will be served in requiring the judgment creditor to make further attempts to serve the judgment debtor when to date he has not cooperated in providing a residential address. It is appropriate that the orders sought are made.

Result

[10]The orders that I make are as follows:

(a)Personal service of the bankruptcy notice dated 18 October 2019 on the judgment debtor is dispensed with;

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

(i)emailing a copy of the bankruptcy notice and the sealed order for substituted service to the judgment debtor’s email address (being the address that is referred to in the draft order filed with the court); and

(ii)sending a text message to the judgment debtor to his cell phone number (being the number referred to in the draft order filed with the court) notifying him that the bankruptcy notice and the sealed order for substituted service have been sent to his email address.

(c)Service of the bankruptcy notice shall be deemed to be effected three working day after completion of the steps specified at paragraph 10(b);

(d)Any requirement for personal service of any further documents on the judgment debtor in these proceedings is dispensed with and service of such further documents shall be effected in the same manner as service of the bankruptcy notice described in paragraph 10(b) and (c).

[11]The costs of this application are reserved.

[12]      I reserve leave for the judgment creditor to apply for such further directions as may be required.

O G Paulsen Associate Judge