West v West

[2020] NZHC 261

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2019-404-1512

[2020] NZHC 261

BETWEEN

GEOFFREY ALLAN WEST and DAVID JOHN CAMERON WEST

Judgment Creditors

AND

ALLAN JACK WEST

Judgment Debtor

Hearing:

21 November 2019

Appearances:

D Kerr for the Judgment Creditors

No appearance for the Judgment Debtor

Judgment:

25 February 2020

JUDGMENT OF ASSOCIATE JUDGE SARGISSON

This judgment was delivered by me on 25 February 2020 at 3.00 p.m. pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar Date.......................................

Solicitors:

Bannister & Von Dadelszen Lawyers, Auckland

WEST v WEST [2020] NZHC 261 [25 February 2020]

[1]    Geoffrey and David West seek an order for the adjudication of their father, Allan West.

[2]    They are judgment creditors of their elderly father for $11,486 pursuant to a costs award made by me in a failed caveat proceeding, which he has not paid.1 They served him with a bankruptcy notice on 8 August 2019 to enforce the award, which he did not comply with; the result was that he has committed an act of bankruptcy pursuant to 17 of the Insolvency Act 2006.

[3]    On 27 August 2019, the application for adjudication (made in reliance on the act of bankruptcy) was filed within the time allowed under s 13(b) and supported in the usual way by a brief verifying affidavit.

[4]    The circumstances giving rise to the application are most unusual. Not only is Mr West the father of the applicants, he is not far off being a centenarian, being well into his 98th year. His sons (who are themselves getting on in years) have benefitted from his extraordinary generosity — he stripped himself of his assets by gifting his sons two valuable properties worth several millions — at a time when he was suffering from ill health at a very old age, and not expected to recover. None of this is disputed, as counsel for the sons quite reasonably acknowledged.

[5]    But the relationship between father and sons subsequently deteriorated and Mr West embarked on fruitless litigation — the caveat proceeding and other separate proceedings (the separate proceedings) aimed at setting aside the gifting2 — which has cost himself and his sons dearly, and evidently been very irksome and distressing for them.3 The ongoing dispute now manifests itself in this bankruptcy proceeding. The sons say they have had enough and want the judgment debt paid or their father’s affairs put in the hands of the Official Assignee in the hope that something might be recovered

1      West v West [2019] NZHC 1605.

2      And related discovery issues.

3      West v West [2017] NZHC 3110; West v West [2018] NZHC 2723; and West v West [2018] NZHC 2787.

towards the judgment debt. Their counsel has repeatedly referred to the collateral benefit of adjudication — putting an end to Mr West’s threats of ongoing litigation.

[6]    Mr West is clearly angered, to put it mildly, by his sons resorting to bankruptcy proceedings. He has managed, despite his advanced age, to file his own notice of opposition, but there is no affidavit among the plethora of memoranda filed along with and after the filing of the notice of opposition, and he has not availed himself of the opportunities given to him by the Court to instruct counsel and to appear in support of his opposition.

[7]    The matter came before me on 24 October 2019. I adjourned it — as did Associate Judge Andrew before me, to enable Mr West to instruct counsel and to appear — and I directed counsel for the sons to file a memorandum to expand upon brief submissions made on 24 October 2019 as to their reasons for seeking adjudication.4 In the minute issued on 29 October, I recorded the following:

[6]        … it is a serious matter to adjudicate an individual of Mr West's very advanced age. The Court must be satisfied that the adjudication will serve a serious and proper purpose. Counsel for the judgment creditors submits that the jurisdictional requirements for an order of adjudication are made out - plainly that is correct - and further submits that there are at least two other reasons why the Court should exercise its discretion to make an order of adjudication. He submits:

(a)Mr West may well have some resources that could be applied to the judgment debt, and to satisfy another significant costs judgment made in favour of the judgment creditors which remains unpaid. An investigation by the Official Assignee is justified; and

(b)An order of adjudication would put a “brake” on the “wave after wave” of pointless litigation that Mr West has been intent on pursuing against his sons arising out of his change of heart about the gifts.

[7]        At the conclusion of today’s brief hearing I indicated to counsel for the judgment creditors that I would take time to reflect on the application - involving, as it does, a discretion - and would either issue an order of adjudication, or issue a minute setting out further directions. On careful reflection, I think it is appropriate in the circumstances that:

(a)Mr West be given one further opportunity to appear, or to instruct counsel to appear for him;

4      The first call was before Associate Judge Andrew on 10 October 2019.

(b)Counsel for the applicants file a brief memorandum in writing setting out why they say the application will serve a proper “braking” purpose, and any case authorities that they rely on in support. The memorandum is to be filed and served at least 3 working days prior to the next hearing.

[8]       I also observed that if there was no appearance by or for Mr West, then he must expect an order of adjudication.

[9]       Again, on 21 November 2019, Mr West did not appear. But he emphasised in further documents filed — a medical certificate among them — that he was too frail and unwell to come to court. He also reiterated matters referred to in his notice of opposition and other documents filed. Broadly, he set out his belief that the attempt to adjudicate him was unconscionable — indeed, an act of malice — and:

(a)recounted that his sons benefited from great generosity when — aged and suffering serious ill-health he was not expected to recover from — he gave them his real estate which they now value at over $3 million;

(b)denied that he owes money to anyone, based partly on his expectation that the costs award may yet be set aside when the outcome of an appeal he has brought is known;5 and

(c)said he manages to just get by on his War Disablement Pension but otherwise is impecunious because of the gifting to his sons.

[10]     At the hearing on 21 November 2019, counsel for the sons abandoned the submission that adjudication would be an appropriate means of putting a brake on Mr West’s threats to pursue his sons by “wave after wave” of litigation. He appeared to accept that there are other proceedings more appropriate to deal with such behaviour if warranted.

5      Mr West has not appealed or sought a stay of the caveat judgment or the costs order on which this bankruptcy proceeding is based. In relation to the separate proceedings the Court of Appeal has dismissed Mr West’s appeal of the High Court’s decision dismissing his application for particular discovery (West v West [2019] NZCA 225); and the Supreme Court has dismissed his application for leave to appeal (West v West [2019] NZSC 109).

[11]     But he submitted that even acknowledging Mr West is frail and in ill-health — as to be expected in someone of such great age — and has given his sons virtually his entire property, there is no basis upon which the Court might exercise its discretion under s 37(c) of the Act to refuse to adjudicate. He argued that the jurisdictional requirements for an order of adjudication are made out and that there is insufficient material before the Court to justify a finding that it would “not be just or equitable” to adjudicate Mr West. He argued further that it may well be that Mr West has no assets of any significance, and merely gets by from week to week on his pension as claimed, but that it is for Mr West to discharge the onus of demonstrating that in fact he is impecunious. In these circumstances, he submitted, the Court cannot not rule out that adjudication might have some utility. The Official Assignee might unearth some funds towards the judgment debt and other costs that Mr West has been ordered to pay in the wider litigation against his sons.

Assessment

[12]Section 37 states:

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.

[13]     Mr West’s  sons have established the jurisdictional requirements laid out  in   s 13 for an order for his adjudication. He owes his sons a judgment debt (execution of which has not been halted by any court); the debt meets the threshold of $1,000 and payment is well overdue; he has committed an act of bankruptcy by failing to comply with the bankruptcy notice served upon him; and he committed an act of bankruptcy within three months before the application for adjudication was filed.6

6      See ss 13 and 17 of the Insolvency Act 2006.

[14]     The sons might also be right that an investigation by the Official Assignee could conceivably unearth some funds owned by Mr West’s which could be applied to reduce or even meet the judgment debt.

[15]     However, this is a most unusual case, and I am satisfied that it is just and equitable  not  to  make  an  order  of  adjudication.  As  I  said  in  my  minute  of   24 October 2019, “it is a serious matter to adjudicate an individual of Mr West’s very advanced age”. His sons acknowledge, through counsel, that he is frail and in poor health, and at almost 100 years old there can be no expectation, from a statistical perspective, that he will survive for much longer or indeed for the duration of an investigation by the Official Assignee — even assuming an investigation proceeds smoothly. Adjudication will inevitably be an extreme and unsettling event for him, made worse because the context is one of a bitter dispute between immediate family

— father and sons pitted against each other — against a background of past acts of exceptional generosity. It will, as night follows day, ramp up the enormous tension between Mr West and his sons. The latter will almost certainly face even greater vitriol than that experienced to date, which their counsel describes as intolerable. Further, it is difficult to see any positive purpose would be served by adjudication that with a modicum of patience could not be achieved through the administration of Mr West’s estate.

[16]     Further, if Mr West’s litigious conduct continues – which seems unlikely as he has exhausted all possible avenues open to set aside the gifting – it remains open to his sons to apply to have him treated as a vexatious litigant.

Result

[17]     I am satisfied it is just and equitable not to make an order of adjudication, and in the exercise of the Court’s discretion, pursuant to s 37(c), I refuse to adjudicate  Mr West bankrupt.

[18]There will be no orders for costs.

Associate Judge Sargisson