Westpac New Zealand Limited v Gardiner

[2013] NZHC 1122

IN THE HIGH COURT OF NEW ZEALAND PALMERSTON NORTH REGISTRY

CIV-2011-454-586
CIV-2011-454-890

CIV-2011-454-891 [2013] NZHC 1122

BETWEEN  WESTPAC NEW ZEALAND LIMITED Plaintiff/Respondent

ANDDENNIS JOSEPH GARDINER First Defendant/First Appellant

ANDHUTIA MONICA GARDINER Second Defendant/Second Appellant

ANDZANE JOSEPH GARDINER Fourth Defendant/Third Appellant

Hearing:         16 May 2013

(Heard at Palmerston North)

Counsel:         D. Sheppard - Counsel for Plaintiff/Respondent

G. Cruden and L.W. Goodman - Counsel for Defendants/Appellants

Judgment:      16 May 2013

ORAL JUDGMENT OF ASSOCIATE JUDGE D.I. GENDALL

Solicitors:           Simpson Grierson, Solicitors, Private Bag 92518, Auckland

Goodmans, Solicitors, PO Box 14239, Palmerston North

WESTPAC NEW ZEALAND LIMITED V DJ GARDINER HC PMN CIV-2011-454-586 [16 May 2013]

Introduction

[1]      Before the Court in the List today is an application by the first, second and fourth defendants all seeking a stay of proceedings (and orders made) against them brought by the plaintiff Westpac New Zealand Limited.

[2]      That application for stay was filed on 6 May 2013 together with a supporting affidavit of Gregor James Woollaston dated 6 May 2013 and a memorandum from counsel for the defendants dated 13 May 2013.

[3]      The first defendant, Dennis Joseph Gardner and the second defendant, Hutia

Monica Gardiner were adjudicated bankrupt by order of this Court made on 8 April

2013.

[4]      As I understand the position, the application for a stay which is before this Court is first, an application for stay of these adjudication orders made against the first and second defendant on 8 April 2013 and secondly, an application for a stay with respect to other proceedings against all three defendants which have been before this Court.

Directions

[5]      So far as that formal application before the Court is concerned, this requires an early hearing.  Although this is a Palmerston North matter, hearing time is available in the Wellington High Court on Thursday next, 23 May 2013 at 10.00 am.

[6]      A direction is now made that this application before the Court (opposed by Westpac New Zealand Limited) is now set down for hearing in the High Court at Wellington  commencing  at  10.00  am  on  Thursday,  23  May  2013  (1/2  day  is allowed).

[7]      And, so far as that particular application is concerned, it does seem to me that certain amendments to the application are required.

[8]      Before me, Mr Cruden counsel for the defendants sought an order amending the orders sought in the application and in para 9 of his 13 May 2013 memorandum filed in this proceeding to the following effect:

9.          The orders sought are:

(1)        Stay  of  the  proceedings  in  relation  to  the  judgment  appealed against including the stay and/or suspension of those proceedings including the bankruptcy orders.

(2)       Stay of enforcement in relation to the judgment appealed against including the stay and/or suspension of that judgment including the bankruptcy orders.

(3)        Costs of and occasioned by the application be costs in the appeal.

[9]      These amendments are appropriate and an order is now made amending those orders sought outlined at para 9 of the memorandum from counsel dated 13 May

2013, to add the underlined words noted in [8] above.

[10]     In addition, however, and following a cursory consideration of the formal Notice  of  Application  filed  by  the  defendants  here,  in  my  view  some  further alteration to that application is also required.

[11]     The application itself at para 5 states that it is made in reliance upon r 20.10

High Court Rules and s 42(2) Insolvency Act 2006.

[12]     As I understand the position, s 42(2) Insolvency Act 2006 relates to the Court’s ability to halt or refuse a creditor’s application for an order for adjudication based  upon  an  appeal  which  a  debtor  has  made  against  the  judgment  order underlying the Bankruptcy Notice upon which that application is founded.  But, in the present case, the first and second defendants have already been adjudicated bankrupt and a concern must arise as to whether s 42(2) Insolvency Act 2006 indeed has any application here.

[13]     Instead, in my view, the defendants may well wish to consider the provisions of s 416 Insolvency Act 2006.   These provide for an application to suspend a bankruptcy adjudication when  an appeal has been filed in the Court of Appeal against the order for adjudication.

[14]     That appears to me to be precisely the situation which is occurring here, the defendants having appealed to the Court of Appeal against the 8 April 2013 bankruptcy adjudication order made against them in this Court.  In my view an amendment to the defendants’ present application to rely in addition upon s 416

Insolvency Act 2006 would seem to be appropriate.

[15]     That said, I now make the following additional directions with respect to the hearing of the defendants’ present application which is to take place on 23 May

2013:

(a)      By 5.00 pm on Friday, 17 May 2013 the defendants are to file and serve any amended interlocutory application in this matter they may wish to bring, together with any further affidavit or affidavits in support.

(b)By 5.00 pm on Tuesday, 21 May 2013 Westpac New Zealand Limited which has indicated it is opposing the present application before the Court, is to file and serve any amended Notice of Opposition to the defendants’ (amended) application, together with any affidavit or affidavits in support.

(c)      By 1.00 pm on Wednesday, 22 May 2013 the defendants are to file and serve any reply affidavit/s.

[16]    That disposes of directions for the substantive hearing of the defendants’ application before the Court, which as I have noted above is to take place as a matter of urgency on Thursday next, 23 May 2013 in Wellington.

Interim Orders

[17]     Also before me today, however, Mr Cruden for the defendants sought what was effectively a range of interim orders.   These interim orders were to stay the proceedings in relation to the judgments appealed against, and in particular to stay the 8 April 2013 bankruptcy orders made against the first and second defendants.

[18]     The Official Assignee it seems has confirmed that she did not intend to be represented at the call of this matter today, 16 May 2013 and that she would simply abide any decision made by this Court.

[19]     Westpac New Zealand Limited, however, has opposed the making of any of the interim orders which were sought by the defendants (with one exception to which I will refer at [26] following).

[20]     With respect to that interim order application, it needs to be noted that in so far as the bankruptcy bankruptcy orders here are concerned, those orders were made on 8 April 2013 and the present application in this Court seeking a “Stay” was not filed until 6 May 2013.  It is acknowledged that in the meantime a rather detailed Notice of Appeal against the bankruptcy decision was filed in the Court of Appeal.

[21]     Notwithstanding this,  from  8 April  2013  the  Official Assignee  has  been properly engaged in the management of the affairs of the bankrupts, the first and second defendants.  That of course has been in part at least to protect the various interests of the creditors of the first and second defendants.

[22]     As I have noted above, this Court has accommodated the need for an urgent hearing of the defendants’ stay or suspension application with an early hearing in Wellington next week.

[23]    And, before me today Mr Sheppard, for Westpac New Zealand Limited, contended that there is no evidence before the Court as to any prejudice that would be suffered by the first or second defendants if indeed the interim order they seek suspending or halting their bankruptcy adjudication is not made. What is clear to me is the fact that the first and second defendants had been adjudicated bankrupt by this Court and the administration of their affairs by the Official Assignee has been conducted for well over one month now.  I understand from Mr Cruden, counsel for the defendants that the first and second defendants suggest that they have no assets.

[24]     The need for an interim order here, even if the Court had jurisdiction to make such an order, in my view should not be exercised in this case.  To grant an interim

order, before a full consideration of the defendants’ entire application is undertaken, and in particular bearing in mind s 416 Insolvency Act 2006, would in my view, create an undesirable and entirely messy arrangement for the Official Assignee and her continuing management of the defendants’ affairs, not to mention a possible detrimental effect to the interests of all affected creditors.

[25]     For  all  these  reasons,  I  reject  the  application  by  the  first  and  second defendants for an interim order to be made here.

[26]    There is one exception to that aspect, however.  This relates to the fourth defendant, Zane Joseph Gardiner only.

[27]     On this aspect, before me Mr Sheppard indicated that Westpac New Zealand Limited would not oppose an interim order being made here staying the summary judgment order which it has obtained against Zane Joseph Gardiner in these proceedings until further order of this Court is made.  That stay would effectively be only for a period of approximately one week, until a decision on the substantive application is given by this Court after the 23 May 2013 hearing in the Wellington High Court.

[28]     That  said,  an  interim  order  is  now  made  staying  any  proceedings  for execution  of  the  summary  judgment  order  obtained  by  Westpac  New  Zealand Limited against the fourth defendant, Zane Joseph Gardiner, until such time as a further order of this Court is made.

[29]     Costs with respect to the matters before me today are reserved.

‘Associate Judge D.I. Gendall’