Westpac New Zealand Limited v Heslip
[2025] NZHC 2021
•22 July 2025
IN THE HIGH COURT OF NEW ZEALAND TIMARU REGISTRY
I TE KŌTI MATUA O AOTEAROA TE TIHI-O-MARU ROHE
CIV-2025-476-003
[2025] NZHC 2021
UNDER of the Insolvency Act 2006 IN THE MATTER
of the bankruptcy of DANIEL ALLEN HESLIP
BETWEEN
WESTPAC NEW ZEALAND LIMITED
Judgment Creditor
AND
DANIEL ALLEN HESLIP
Judgment Debtor
Hearing: 21 July 2025 Appearances:
C T Joliffe for Judgment Creditor Judgment Debtor appears in person
Judgment:
22 July 2025
JUDGMENT OF ASSOCIATE JUDGE PAULSEN
This judgment was delivered by me on 22 July 2025 at 4.00 pm pursuant to Rule 11.5 of the High Court Rules.
Registrar/Deputy Registrar Date:
WESTPAC NEW ZEALAND LIMITED v HESLIP [2025] NZHC 2021 [22 July 2025]
[1] This is a creditor’s application by Westpac New Zealand Ltd (Westpac) for an order adjudicating Daniel Heslip (Daniel) bankrupt. The creditor’s application is founded on a costs judgment (the costs judgment) obtained by Westpac against Daniel in the High Court at Timaru on 27 August 2024.1
Daniel opposes the creditor’s application. His grounds for doing so are that:
(a)the costs judgment is disputed or otherwise unreasonable and unjust;
(b)he has counterclaims and/or set-offs against Westpac which exceed the amount of the costs judgment;
(c)the creditor’s application is premature and an abuse of the court process given his unresolved claims against Westpac; and
(d)he has the means to satisfy the costs judgment.
Background
[3] Daniel is the son of Glen Heslip (Glen) who was the owner of properties at Talbot Road and Fairlie-Tekapo Road, Fairlie over which Westpac held registered mortgages.
[4] Glen was adjudicated bankrupt on 7 November 2022. He also defaulted in his obligations to Westpac which took steps to sell his properties at mortgagee sale. The auctions took place on 11 July 2024 with settlement scheduled for 8 August 2024.
[5] On 24 July 2024, Daniel lodged caveats against the titles to the properties. The caveats claimed an interest in the properties pursuant to lease agreements between Daniel and Glen. The first was a residential lease agreement, said to have been entered into on 1 January 2021 in relation to the property at Fairlie-Tekapo Road. The second, dated 1 August 2021, was a lease agreement in respect to the Talbot Road property.
1 Westpac New Zealand Ltd v Heslip [2024] NZHC 2417.
[6] Westpac made an application for removal of the caveats which was opposed by Daniel. Westpac’s application to remove the caveats came before the High Court on 27 August 2024 for hearing. Daniel did not appear. In a results judgment, Associate Judge Lester found that Westpac was entitled to an order for removal of the caveats and costs.2 Judgment was sealed on 28 August 2024, including for an amount of
$12,009.50 for costs.
[7] In a reasons judgment of 29 August 2024, Associate Judge Lester found that Daniel’s unregistered leases were not binding on Westpac as mortgagee because it had never consented to them.3 In respect to an argument that s 58 of the Residential Tenancies Act 1986 preserved residential tenancies even when a mortgagee becomes entitled as against the landlord to possession of the premises, Associate Judge Lester found the section had no application when Westpac had not gone into possession and the properties were not being sold with vacant possession.4
[8] Daniel filed an appeal to the Court of Appeal from Associate Judge Lester’s judgment but did not pursue the appeal. On 29 November 2024, the Court of Appeal notified Westpac that the appeal was treated as abandoned. It was only following the abandonment of the appeal that Westpac took steps to recover the costs judgment.
[9] Westpac obtained the issue of a bankruptcy notice against Daniel, which was served upon him on 27 January 2025. Daniel applied to set aside the bankruptcy notice but his application was struck out by Associate Judge Lester on 31 March 2025.5
[10] Westpac’s creditor’s application was filed on 15 April 2025 and served upon Daniel on 23 April 2025. Daniel filed a notice and affidavit in opposition to the creditor’s application on 16 May 2025.
[11] The creditor’s application first came before the Court on 19 May 2025, when Daniel appeared with a support person. I made directions that Daniel was to file any further affidavits no later than 2 June 2025. He did not comply with that direction.
2 Westpac New Zealand Ltd v Heslip, above n 1.
3 Westpac New Zealand Ltd v Heslip [2024] NZHC 2452.
4 At [20]–[21].
5 Westpac New Zealand Ltd v Heslip HC Timaru CIV-2025-476-003, 31 March 2025 (Minute).
He filed a further affidavit on 9 June 2025 but did not seek leave to do so out of time, and I understand did not serve it upon Westpac. Nonetheless, nothing in the affidavit affects the result of this application.
The relevant law
[12] Section 13 of the Insolvency Act 2006 (the Act) provides for the circumstances when a creditor may apply for a debtor’s adjudication in bankruptcy. Those circumstances are 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.
[13] Notwithstanding the grounds for making an order of adjudication are satisfied, the Court may in the exercise of its discretion refuse to make such an order. For present purposes, s 37 of the Act is relevant which provides 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.
[14] Guidance as to the approach the Court should take when hearing a creditor’s application can be found in Baker v Westpac Banking Corporation, which although decided under former legislation is still applicable:6
The principles governing the exercise of the discretion under s 26 to grant or refuse an order of adjudication in bankruptcy are well settled and have been discussed by this court in recent years in Ellis v NZI Finance Ltd and McHardy v Wilkins & Davies Marinas Ltd (in receivership). It is proper for the court to consider not only the interests of those directly concerned — the petitioner, other creditors, the debtor — but also the wider public interest. A creditor who establishes the jurisdictional facts set out in s 23 is not automatically entitled to an order. On the other hand, it is for an opposing debtor to show why an order should not be made. The court will give proper weight to the commercial judgment of the petitioner but the oppressive use of the bankruptcy process may be a ground for refusing an order. Another ground may be the undoubted absence of assets but that will not necessarily preclude an order given the range of interests involved including the public interest in the continuing oversight of a bankrupt’s affairs and the disqualifications that go with bankruptcy. In the end the court must balance the various considerations relevant to the case and determine whether the debtor has succeeded in showing that an order ought not to be made.
[15] In Re Tootell, ex parte Rabobank Australia Ltd, Associate Judge Osborne accepted the following principles applied in relation to an adjudication application:7
(a)The creditor has the onus of establishing the allegations in its application.
(b)The Court may in its discretion refuse to adjudicate a debtor bankrupt (notwithstanding the jurisdiction is established) if it is just and equitable not to make an order or there is any other sufficient reason not to make an order.
(c)The debtor has the onus of satisfying the Court that either it is just and equitable or that some other sufficient reason exists for the Court not making an order of adjudication.
6 Baker v Westpac Banking Corporation CA212/92, 13 July 1993 at 4, cited in Re Commissioner of Inland Revenue, ex parte Brown [2016] NZHC 1232 at [14].
7 Re Tootell, ex parte Rabobank Australia Ltd [2013] NZHC 2975 at [6].
(d)The Court is not to refuse an order of adjudication on the grounds of expediency or convenience.
[16] Associate Judge Osborne also referred to the decision of Master Williams QC in Re Epirosa, ex parte Diners Club (NZ) Ltd, where the factors considered relevant to the exercise by the Court of its discretion included:8
(a)What are the wishes of all affected parties, including the applying creditor, other creditors and the debtor?
(b)Does the debtor have the ability to meet his or her debts over time and, if so, does that meet the requirements of achieving finality within a reasonable period?
(c)What were the circumstances in which the debt was incurred, and do those circumstances suggest that the creditor is acting unreasonably in pursuing adjudication?
(d)Will adjudication be pointless?
(e)Will the debtor, if adjudicated, be rendered unable to support himself or herself?
(f)Does the debtor have such a standing in the community that significant issues of stigma or embarrassment will result?
Analysis
[17] All the requirements under s 13 for the making of an order for adjudication are met in this case, because:
(a)Westpac obtained a judgment exceeding $1,000;
(b)the costs judgment is for a certain amount and immediately payable;
8 Re Epirosa, ex parte Diners Club (NZ) Ltd HC Wellington B498/91, 6 March 1992.
(c)Daniel committed an act of bankruptcy on 12 February 2025 by failing to comply with the terms of the bankruptcy notice; and
(d)the creditor’s application was filed on 15 April 2025 and within three months of Daniel’s act of bankruptcy.
[18] That is not an end of the matter as the Court may, in the exercise of its discretion, refuse to make an order for adjudication notwithstanding that the requirements of s 13 are met. It is for Daniel to show why an order should not be made.
[19] The primary ground advanced by Daniel appears to be that the costs judgment is not valid because he legitimately lodged the caveats to protect his interests in the properties under the lease agreements.
[20] The Court will generally not investigate whether an underlying judgment upon which a creditor’s application is based is sound, but has the ability to do so in circumstances where it is sufficiently clear that there is a flaw in the underlying judgment or the manner in which it was obtained. In such cases the Court may respond by giving time for reassessment of that judgment elsewhere or by exercising its discretion to not make an adjudication order.
[21] Here, there is no basis to challenge the costs judgment. Daniel appears to misunderstand the reasons why Associate Judge Lester ordered the removal of his caveats. The issue was not whether Daniel had a caveatable interest in the properties under his leases, but whether he could maintain his caveats as against Westpac as mortgagee in circumstances where Westpac’s mortgages pre-dated the leases and Westpac had not consented to them. There is nothing to suggest that Associate Judge Lester’s judgment was wrong in law or obtained by reason of some procedural defect.9 Also, Daniel had an opportunity to challenge the judgment, he filed an appeal from it but did not pursue that appeal. In those circumstances I consider the costs judgment is beyond challenge.
9 Re Wise, ex parte Benecke HC Auckland B227/95, 21 June 1995.
[22] Daniel made submissions that the costs award was excessive. However, it was made on a standard 2B basis and, again, there is nothing to suggest that was inappropriate.
[23] Daniel argues that he has counterclaims and set-offs against Westpac which include loss of income, asset value and damages for mishandling the sale of the properties, yet he has failed to articulate a rational basis for any claim against Westpac and has not pursued any such claim. There is nothing before me to suggest that Westpac had done anything that would have prevented it from proceeding with the sale of the properties or that it mishandled the sales.
[24] Daniel also says Westpac was wrong to close Glen’s bank accounts and that its actions in doing so without appropriate notice or explanation “disrupted [Daniel’s] ability to meet financial obligations and respond to [Westpac’s] claim in a timely and effective manner”. I understand Glen’s accounts were closed in May 2025, well after the costs judgment was obtained. The closure of the accounts did not prevent Daniel from responding to Westpac’s application to remove the caveats or prevent him from paying the costs judgment.
[25] Daniel says he has the ability to resolve matters with Westpac through “refinancing private investment or litigation outcomes”. At the hearing he asked for the opportunity to pay the costs judgment by instalments but provided no details of such a proposal. In over a year since the costs judgment was obtained, Daniel has made no proposal or any payments. Daniel has also put no evidence before me of his financial circumstances from which any assessment of his ability to pay by instalments within a reasonable timeframe can be assessed.
[26] In his written submissions, Daniel has raised new matters. First, he says a complaint to the Banking Ombudsman against Westpac has been upheld in respect to breaches of compliance requirements in the operation of Glen’s accounts. If that is the case, that is a matter between Glen and Westpac. Also, despite me giving Daniel the opportunity to provide the Banking Ombudsman’s decision, he sent to the Court only a document headed “Acceptance Form” for a payment of $250 to Glen in
satisfaction of his complaint against Westpac. There is nothing to suggest the Banking Ombudsman’s decision has any relevance to the application before me.
[27] Daniel also argues Westpac is bringing this application to silence him. There is no evidence of that. In circumstances where Daniel has failed to make any payment of the costs judgment, I am satisfied there is nothing at all unjust, unreasonable or premature about the steps Westpac has taken against Daniel.
[28] There is before the Court a letter from a support person for Daniel, Hugh August, an ordained Elder of the Presbyterian Church, who has asked the Court not to adjudicate Daniel bankrupt. He attests to Daniel’s honesty, hardworking nature and commitment to doing what is right. He states that Daniel has taken the step of contacting budget advisory services to gain assistance in working towards an outcome that could resolve this matter without the need for an order of adjudication. However, it is telling that although that letter was provided to the Court for the hearing on 19 May 2025 (over two months ago) Daniel has not made a payment proposal to Westpac.
[29] I understood Daniel to say that Westpac is his only creditor and that in those circumstances it was not appropriate to make an adjudication order. However, Daniel has not filed any evidence as to his present financial circumstances or future prospects. I cannot therefore accept his assertion that he does not have other creditors, nor can I be satisfied that the making of an order for adjudication would serve no purpose.
[30] Westpac has satisfied me the grounds for making the order for adjudication are made out. Daniel has not satisfied me that he has the ability to pay his debts, that there is any basis upon which the Court should not make an order adjudicating him bankrupt on the just and equitable ground, or that other sufficient reason exists for the Court not to make such an order.
Result
[31]I order:
(a)The judgment creditor’s application is granted and Daniel Heslip is adjudicated bankrupt.
(b)The judgment creditor is entitled to costs on a 2B basis plus disbursements as fixed by the Registrar.
(c)This order is timed at 4.00 pm on 22 July 2025.
O G Paulsen Associate Judge
Solicitors:
Anthony Harper, Christchurch
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