Wanganui District Council v Page HC Wanganui CIV-2010-483-134
[2011] NZHC 856
•24 February 2011
IN THE HIGH COURT OF NEW ZEALAND WANGANUI REGISTRY
CIV-2010-483-134
IN THE MATTER OF THE INSOLVENCY ACT 2006
AND IN THE MATTER OF THE BANKRUPTCY OF ADRIAN NEIL PAGE
BETWEEN WANGANUI DISTRICT COUNCIL Judgment Creditor
ANDADRIAN NEIL PAGE Judgment Debtor
Hearing: 23 February 2011 (Heard at Wanganui)
Counsel: S.A. McDonald - Counsel for Judgment Creditor
A. Page - Judgment Debtor in person
Judgment: 24 February 2011 at 2:00 PM
JUDGMENT OF ASSOCIATE JUDGE D.I. GENDALL
This judgment was delivered by Associate Judge Gendall on 24 February 2011 at
2.00 pm under r 11.5 of the High Court Rules.
Solicitors: Armstrong Barton, Solicitors, PO Box 441, Wanganui
WANGANUI DISTRICT COUNCIL V ADRIAN NEIL PAGE HC WANG CIV-2010-483-134 24 February 2011
Introduction
[1] Before the Court is an application by the judgment creditor seeking an order to adjudicate the judgment debtor bankrupt in terms of s. 13 Insolvency Act 2006.
[2] The judgment creditor contends that the judgment debtor committed an act of bankruptcy by failing to comply with a Bankruptcy Notice served upon him claiming the sum of $12,000.00. This was based upon an order for costs of this sum made against the judgment debtor in the Environment Court on 11 March 2010.
[3] The Bankruptcy Notice was served on the judgment debtor on 29 May 2010.
[4] Around 14 June 2010 the judgment debtor filed an application which purported to be an application to set-aside the Bankruptcy Notice.
[5] On 18 August 2010 following a hearing on 11 August 2010 I dismissed the application to set-aside the Bankruptcy Notice.
[6] The application was dismissed on the basis that it did not take the proper form, it was not filed within the statutory time period and also it was not served within that time period.
[7] A matter overlooked at the time and in my judgment has now been properly raised. It transpires that due to the fact that the Queens Birthday holiday intervened in the period in question, the application itself may have been filed in time. Notwithstanding this, however, there is no question that the application was not served within the statutory time period which is a mandatory requirement. In addition, the form in which the application was made did not follow the rules.
[8] My judgment with respect to the application to set-aside the Bankruptcy
Notice must therefore stand. It was not challenged on review or repeal.
[9] In the meantime, the substantive bankruptcy proceeding was served on the judgment debtor on 21 September 2010. On 6 December 2010 the judgment debtor filed a formal Notice of Opposition to the present adjudication application.
[10] This matter was then called before me on 8 December 2010 when I set this matter down for formal hearing yesterday, 23 February 2011.
Parties’ Arguments and My Decision
[11] The present application is brought pursuant to Section 13 Insolvency Act
2006 which provides as follows:
13 When creditor may apply for debtor’s adjudication
A creditor may apply for a debtor to be adjudicated bankrupt if
(a) The debtor owes the creditor $1,000 or more or, if 2 or more creditors join in the application, the debtor owes a total of $1,000 or more to those creditors between them; and
(b) the debtor has committed an act of bankruptcy within the period of 3 months before the filing of the application; and
(c) the debt is a certain amount; and
(d) the debt is payable either immediately or at a date in the future that is certain.
[12] In the present case the $12,000.00 costs judgment which has not been the subject of an appeal or review by the judgment debtor clearly exceeds the $1,000.00 threshold provided in s 13(a) Insolvency Act 2006.
[13] In addition, the judgment debtor has committed an act of bankruptcy within the period of 3 months before the filing of the present adjudication application on 8
September 2010 in that he has failed to comply with the Bankruptcy Notice served on him on 29 May 2010 either within the time allowed within the notice or within the additional 5 working day period allowed in my judgment of 18 August 2010.
[14] Further, the $12,000.00 costs debt has been outstanding for nearly one year, it is payable immediately and it is clearly a certain amount.
[15] I am satisfied therefore that the requirements of s 13 Insolvency Act 2006 have been satisfied here.
[16] The judgment debtor’s opposition to the present application effectively relies upon s 37 Insolvency Act 2006. This section sets out the basis upon which the Court at its discretion may refuse to adjudicate a judgment debtor bankrupt as follows:
37 Court may refuse adjudication
The Court may, at its discretion, refuse to adjudicate the debtor bankrupt if-
(a) the applicant creditor has not established the requirements set out in section
13; or
(b) the debtor is able to pay his or her debts; or
(c) it is just and equitable that the court does not make an order of adjudication; or
(d) for any other reason an order of adjudication should not be made.
[17] Turning to consider these grounds, as I have noted at [14] above, s 37(a) does not apply here. Turning to s 37(b) there is no evidence of any kind before the Court from the judgment debtor or otherwise to show that he is able to pay his debts. The ground set out in s 37(b) also is not met here.
[18] That leaves the remaining two grounds under s 37(c) and (d) for consideration. These provide that, where a judgment debtor is able to establish that it is just and equitable that the Court does not make an order of adjudication or for some other sufficient cause an order for adjudication ought not to be made, the Court may refuse to make an order for adjudication.
[19] Despite the various grounds advanced by and upon which the judgment debtor purported to have the judgment creditor’s Bankruptcy Notice set aside in August 2010, the grounds advanced before me here to oppose the present adjudication application differed somewhat.
[20] I have already dealt with the first ground affecting the timing of the application to set-aside the Bankruptcy Notice in dismissing it at [8] above.
[21] The next ground which raised entirely new matters appeared to be a claim from the judgment debtor that he had been overcharged by the judgment creditor in
relation to rates levied in respect of certain properties he owns and he suggested that this overcharging would “easily pay the $12,000.00 being demanded”.
[22] This matter however, in my view, is quickly disposed of. It is specifically addressed in the effectively uncontradicted affidavit evidence of Mr Paul Drake a legal officer of the Judgment Creditor. In Mr Drake’s detailed affidavit filed herein dated 23 December 2010, the judgment creditor accepts that following a rates review, it was discovered that the city water supply rate for the properties under consideration was incorrectly assessed to a minor degree since 1 July 2009. As a result of the error, it was calculated that the judgment debtor was entitled to a rates credit of $32.05 for the period he jointly owned 86 Ikitara Road and that he was entitled to a rates credit of $86.10 for the period he had solely owned the property. Otherwise, Mr Drake deposes that no rates overcharges have been made.
[23] The judgment debtor has put nothing before the Court to challenge this evidence of Mr Drake. In addition, it would seem there are substantial rates arrears for the 86 Ikitara Road and 151 Waikupa Road properties owned by the judgment debtor. The rates credit of $118.15 Mr Drake has confirmed is to be credited to the outstanding rates arrears for the judgment debtors’ properties. This still apparently leaves a total debt for unpaid rates of $2,988.99. That amount, of course, is not part of the present proceeding.
[24] Since the judgment debtor has owned his three properties, Mr Drake’s uncontradicted evidence is that the total rates he has paid is $7,465.27. The argument by the judgment debtor that his rates over payment would effectively cancel out the judgment debt which totals $12,000.00 has no credible basis therefore and is dismissed.
[25] The next ground of opposition which I understand the judgment debtor endeavoured to advance here appears to relate to certain criminal proceedings he is presently facing. Although the relevance of this is difficult to assess, it would seem that the judgment debtor is facing criminal proceedings for breaching abatement notices and interim and substantive enforcement orders in relation to the property at
86 Ikitara Road. He has elected trial. A trial date has yet to be set. The Court has
apparently appointed amicus curiae in relation to these criminal proceedings. An application under s344A of the Crimes Act 1961 challenging the validity of a search warrant has been filed and served in relation to those criminal proceedings.
[26] As I understand it, the judgment debtor relies on the admissibility of evidence application in respect of these criminal proceedings as a basis to challenge the present application for adjudication.
[27] The judgment debtor however was represented by counsel in the earlier Environment Court proceedings. An evidential challenge was not made in relation to the evidence relied on in those Environment Court proceedings.
[28] The judgment debtor, as I understand it, has not appealed the making of the Environment Court Enforcement Order, or the associated order for costs. As I see it, the judgment debtor has not established that the criminal proceedings have any relevance to the Environment Court proceedings. I fail to see how the criminal proceedings have any bearing on the enforcement of the order for costs in relation to those Environment Court proceedings.
[29] In my view, the judgment creditor’s application for adjudication is not a venue for the judgment debtor to relitigate the merits of the judgment creditor’s case in respect of the Environment Court or Criminal Court proceedings. The judgment debtor has review and appeal rights in relation to these matters which he has elected not to pursue.
[30] Next, in his affidavit in support of the notice of opposition dated 6 December
2010 at paragraph 6, the judgment debtor seems to assert that he is pursuing a claim of $15,000 against the judgment creditors. A claim for negligence was apparently filed by Mr Page against the Wanganui District Council last year. On 3 December
2010, however, this claim was dismissed, in full, by Referee JS Dryden.
[31] The judgment debtor has not put before the Court details of any other outstanding Dispute Tribunal claims or any other civil claims by him against the judgment creditor. I dismiss this ground of opposition as well.
[32] Finally, the judgment debtor appears here to make a number of allegations against Wanganui District Council staff, in particular a Mr Shane McGhie. On this, he has apparently filed complaints with the Ombudsman and New Zealand Planning Institute (NZPI).
[33] As I understand the position, the judgment creditor has conducted two investigations into the allegations by the judgment debtor against Mr McGhie. No evidence was found to substantiate his claims.
[34] In any event, and as I noted at [22] of my earlier judgment in this matter dated 18 August 2010, there is no ability for the Ombudsman or the NZPI to financially compensate the judgment debtor in relation to his complaint. For that reason the judgment debtor’s outstanding complaints do not form a sufficient basis to refuse the present application for adjudication.
[35] As I understand the position, the judgment debtors have not filed any appeals or reviews in relation to the order for costs issued by the Environment Court which forms the basis for the present application. There are no relevant or outstanding cross-applications or cross-claims by the judgment debtor against the judgment creditor.
[36] In this case, I conclude that the arguments by the judgment debtor are without merit and fall well short of satisfying the onus upon him to establish that it is just and equitable, or that there is some other sufficient cause, that the application for an adjudication order should not be made.
Conclusion
[37] For the reasons I have outlined above, I am satisfied that the judgment
creditor’s application for an adjudication must succeed.
[38] Orders are now made therefore as follows:
(a) An order is made adjudicating the judgment debtor, Adrian Neil Page, bankrupt;
(b)Costs are awarded to the judgment creditor on this application on a Category 2B basis together with disbursements as fixed by the Registrar; and
(c) These orders are timed at 2.00 pm today, 24 February 2011.
‘Associate Judge D.I. Gendall’
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