Ward v Ward - [2021] NZHC 510

IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY

I TE KŌTI MATUA O AOTEAROA KIRIKIRIROA ROHE

CIV-2019-419-000230

[2021] NZHC 510

UNDER The Insolvency Act 2006

IN THE MATTER OF

The bankruptcy of RUSSELL STUART WARD

BETWEEN

CHRISTOPHER ALLAN WARD and DIANE LORRAINE JAMES

Substituted Judgment Creditors

AND

RUSSELL STUART WARD

Judgment Debtor

Hearing: 8 March 2021

Appearances:

L Hunt, as agent for A Kalinowski, for Substituted Judgment Creditors

Judgment Debtor in Person

Judgment:

15 March 2021

JUDGMENT OF ASSOCIATE JUDGE P J ANDREW

Introduction

[1]This is a bankruptcy proceeding with a lengthy history.

WARD v WARD [2021] NZHC 510 [15 March 2021]

[2] On 30 November 2020, the then supporting creditors, Mr Christopher Allan Ward and Mrs Diane Lorraine James (the siblings of the judgment debtor), were substituted as judgment creditors. They seek to have their brother, Mr Russell Ward, adjudicated bankrupt on the basis that he has failed to pay them costs in the sum of
$13,145.

[3] Those costs were awarded to the substituted judgment creditors in the judgment of Gault J in proceedings CIV-2018-419-374 and CIV-2019-419-81 of 30 April 2020.1
[4] In his substantive judgment of 14 January 2020 (dealing with both proceedings),2 Gault J made an order by way of summary judgment that Mr Russell Ward vacate a property at Vardon Road. He dismissed Mr Russell Ward’s application as plaintiff for summary judgment against his siblings.

[5] These proceedings were called before me in the Bankruptcy List on Monday, 8 March 2021. I stood the matter down and later in the day heard argument from the parties as to whether the Court should, as Mr Russell Ward seeks, grant a stay of these bankruptcy proceedings pending the determination of what is said to be a set-off in the unresolved proceedings CIV-2018-419-374 and CIV-2019-419-81.

[6]This is my judgment on the issue of a stay.

Relevant legal principles

[7]Section 38 of the Insolvency Act 2006 reads:

Court may halt application

(1)The Court may at any time halt the creditor's application for adjudication.

(2)The Court may halt the application on the terms and conditions (if any), and for the period, that the Court thinks appropriate.

[8] Section 38 does not set out the particular matters that the Court must take into account when considering whether to halt an application. Associate Judge Bell held

1 Ward v Ward [2020] NZHC 844.
2 Ward v Ward [2020] NZHC 11.

in Re Koroniadis, ex parte Bank of New Zealand3 that it seems clear Parliament intended the discretion provided by s 38 to be flexible and it would be inappropriate for the courts themselves to formulate fixed rules as to the exercise of the discretion.

[9] I agree with Bell AJ that the section allows the Court to take into account the varying circumstances of each case.

Analysis and decision

[10] The critical issue I must determine is whether there is any real merit in the set- off proceedings that Mr Ward relies upon, namely CIV-2018-419-374 and CIV-2019- 419-81.

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Ward v Ward

Details

AGLC: Ward v Ward [2021] NZHC 510
Case: [2021] NZHC 510
Decision Date: 15 March 2021

CaseChat Overview and Summary

In the High Court of New Zealand, Associate Judge P J Andrew was tasked with deciding on the application for a stay in bankruptcy proceedings brought by the substituted judgment creditors, Mr Christopher Allan Ward and Mrs Diane Lorraine James, against their brother, Mr Russell Stuart Ward. The substituted judgment creditors sought to have Mr Ward adjudicated bankrupt due to his failure to pay them costs amounting to $13,145. These costs were awarded in previous proceedings. The core issue before the court was whether there was any real merit in the set-off proceedings that Mr Ward claimed existed in other ongoing litigation, which could potentially halt the bankruptcy proceedings.

The court considered the merits of the set-off claims in the unresolved proceedings CIV-2018-419-374 and CIV-2019-419-81. The claims in CIV-2018-419-374, which Mr Ward alleged were against his siblings, were largely against the estate and potentially time-barred, with the right to bring the claim vested in the Official Assignee during Mr Ward's previous bankruptcy. Additionally, there were evidential difficulties in prosecuting these claims. The court found that the proceeding CIV-2019-419-81, in which the substituted creditors were plaintiffs, could not provide a set-off because Mr Ward was a defendant in that action. The court also highlighted the real possibility that Mr Ward, being self-represented, might not prosecute the set-off claims in a timely or effective manner.

Given the lengthy history of the proceedings, the court concluded that Mr Ward had been granted numerous opportunities to challenge the basis for the bankruptcy and secure legal representation. Despite Mr Ward's payment of the original judgment debt, the substituted creditors had been waiting for payment of their costs for over 12 months. The court decided to dismiss the application for a stay, providing Mr Ward with a final opportunity to pay the outstanding judgment debt plus costs by a specified date. If the payment was not made by that date, orders of adjudication would take effect.

The court's decision emphasized the importance of concluding these proceedings, noting that further indulgence was granted due to Mr Ward's age and family circumstances but warning that similar leniency might not be extended to future creditors. The substituted creditors were directed to inform the court if Mr Ward failed to make the required payment, upon which the adjudication orders would take effect. If the payment was made, the proceedings would be rescheduled.

Orders