Wiltshire Investments Limited v Symons HC Auckland CIV-2011-404-423
[2011] NZHC 1023
•23 August 2011
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
CIV-2011-404-423
BETWEEN WILTSHIRE INVESTMENTS LIMITED Applicant
ANDROBERT MICHAEL SYMONS Respondent
CIV-2011-404-424
AND BETWEEN WILTSHIRE INVESTMENTS LIMITED Applicant
ANDROBERT MICHAEL SYMONS Respondent
Hearing: 23 August 2011
Appearances: M A Karam for applicant
H Lees for respondent
Judgment: 23 August 2011
(ORAL) JUDGMENT OF LANG J
[on applications to set aside bankruptcy notices]
WILTSHIRE INVESTMENTS LTD V SYMONS HC AK CIV-2011-404-423 23 August 2011
[1] On 16 July 2010 Associate Judge Bell entered judgment in favour of Wiltshire Investments Limited (“Wiltshire Investments”) against Mr Robert Symons and Mr Gregory Symons for a total sum of $2,269,395.89.1 The Court of Appeal upheld that judgment on 19 August 2011.2
[2] On 2 February 2011, at the request of Wiltshire Investments, this Court issued bankruptcy notices against the Symons brothers based on the judgment debt. The Court subsequently renewed the bankruptcy notices for periods of one month with effect from 2 March and 2 April 2011.
[3] Attempts to serve both debtors were unsuccessful. As a result, Wiltshire Investments filed applications for substituted service on 29 March 2011. Associate Judge Christiansen granted those applications on 4 April 2011. He directed that the bankruptcy notice was to be served on Mr Gregory Symons by:
(a) Delivering the bankruptcy notice to Mr Symons’ home address at 35
Annalong Road, Point View, Howick; and
(b) Delivering a copy of the bankruptcy notice to Mr Symons’ solicitors,
Quay Law, for the attention of Mr Ian Mellett.
[4] The Judge’s direction that the bankruptcy notices were to be served on Quay Law and Mr Symons’ home address was based on evidence from Ms Jacinta Page, a legal secretary employed by Wiltshire Investments’ solicitors. In an affidavit filed in support of the applications for substituted service, she deposed that Quay Law had been acting for the Symons brothers in relation to the claim by Wiltshire Investments. That firm also represented the Symons brothers in relation to their appeal to the Court of Appeal, which was awaiting hearing at the time the application for substituted service was filed.
[5] Ms Page also pointed out that Mr Symons had been served with court documents at his home address on several occasions during the 12 month period
1 Wiltshire Investments Ltd v Symons HC Auckland CIV-2010-404-1011, 26 July 2010.
2 Symons v Wiltshire Investments Ltd [2011] NZCA 397
prior to the applications for substituted service. She annexed copies of service reports from a process server to substantiate these assertions.
[6] Wiltshire Investments duly served the bankruptcy notice in accordance with the directions given in the order for substituted service.
[7] Mr Gregory Symons has now applied for an order setting aside the bankruptcy notice issued against him. He contends that he was living in Australia when the bankruptcy notice was issued, and that Wiltshire Investments failed to obtain the leave of the High Court to serve him overseas as it was required to do under s 17(3) of the Insolvency Act 2006.
[8] Mr Gregory Symons also applies for an order that the bankruptcy notice be set aside on the basis that he has a counterclaim and/or claim for set-off against Wiltshire Investments that equals or exceeds the amount claimed in the bankruptcy notice. Mr Robert Symons joins with his brother in applying to set aside the bankruptcy notice issued against him on this ground.
[9] Two issues therefore need to be determined. The first relates to the validity of service of the bankruptcy notice on Mr Gregory Symons pursuant to the order for substituted service. The second relates to the alleged counterclaim and/or claim for set-off that both debtors wish to advance against Wiltshire Investments.
Was Mr Gregory Symons validly served with the bankruptcy notice?
[10] Section 17(3) of the Insolvency Act 2006 provides:
17 Failure to comply with bankruptcy notice
…
(3) The debtor must have been served with the bankruptcy notice in New Zealand, unless the Court gave permission for the service of the notice on the debtor outside New Zealand.
[11] Mr Symons’ assertions regarding his place of residence on 29 March 2010 need to be tested against the evidence available to the Court at the time that it made the order for substituted service.
[12] In support of the application for substituted service Wiltshire Investments filed an affidavit by its process server, Mr Anthony Barrow. On 4 February 2011 he received instructions from the solicitors acting for Wiltshire Investments to serve the bankruptcy notices on the Symons brothers. He deposes that he took the following steps to effect service on Mr Gregory Symons:
3.1On Tuesday, 8 February 2011 at 11.05 am I went to Mr Symons’ address at 35 Annalong Road, Point View, Howick, Auckland (Howick Property). I spoke to Mr Symons’ wife, who told me that Mr Symons was away at school camp. She was vague about when he would be back and said that she thought it would be later in the week.
3.2`I returned to the Howick Property later that night, at 8.25 pm, and spoke to Mr Symon’s wife again. I was unsure as to whether she was telling me the truth earlier because she was so vague. She said he was not back and would probably not be back until the weekend.
3.3The following week, on Tuesday 15 February 2011 at 5.50 pm I visited the Howick Property again and spoke to Mr Symons’ wife. She told me that Mr Symons was away in Australia on business. She did not know when he would be back.
3.4 At 5.51 pm on 15 February 2011, I rang Mr Symons’ mobile 021 661
277 and spoke to him. Mr Symons said that he was overseas and would make himself available to have the documents served at some time in the future. He said that his main priority, and his brother’s main priority, was to ensure that the process cost Alan Wiltshire (a director of Wiltshire Property Investments Limited) as much as possible, and to cause maximum inconvenience. The call lasted for 5 minutes and 30 seconds. He had my phone number from previous dealing I have had with him.
…
[13] In his first affidavit filed in support of the application to set aside the bankruptcy notice Mr Gregory Symons deposed that he has “been mainly living in Sydney, Australia, since December 2010”. He also said that he had business interests in Australia that he was presently pursuing.
[14] Mr Symons amplified this explanation in a further affidavit sworn on 15 June
2011. In this he deposed:
…
2.The reason for my relocation to Australia is that the company I am involved in, Wag The Dog Agency Limited, has expanded its operations to Sydney. Annexed hereto and marked “A” is a true copy of the registration of Wag The Dog Agency Pty Limited on the Australian Business Register, which confirms registration on 18
January 2011. I moved to Sydney to assist in the company’s market
entry.
3.I have only been living in Sydney this year. My family are scheduled to move there in late June 2011. My three children are enrolled in Sydney schools, and due to start in the third term.
4.In his affidavit sworn on 28 March 2011, Anthony Barrow states that in a discussion with me on 15 February 2011 I said to him that I was overseas and would make myself available to have the documents served at some time in the future. He further states that I said that “the main priority of Robert and I was to ensure the process cost Alan Wiltshire as much as possible, and to cause maximum inconvenience.”
5.This is not correct. I made no effort to avoid Mr Barrow. I did speak with him on or around 15 February 2011, and that the call would have gone for approximately 5 minutes and 30 seconds. I did not indicate to Mr Barrow that I was avoiding service or that I would make myself available to be served in New Zealand at some time in the future. I told him that I had moved to Sydney.
6.At no stage did Mr Barrow enquire as to my location in Australia for the purpose of serving me with the documents. I did say that I had no concern for the cost to Mr Wiltshire in getting the documents served on me using the correct procedures.
7. I would have provided my residential details in Australia if asked.
[15] It is significant that Mr Symons said in his first affidavit that he was living “mainly in Sydney” in 2010. He did not say at that time that he was no longer living in New Zealand.
[16] More importantly, it is clear that as at February 2011 Mr Symons was living for at least some of the time at his residential address in Howick. His wife did not tell Mr Barrow at any stage that Mr Symons had left New Zealand to live in Australia on a permanent or semi-permanent basis. Rather, her advice to Mr Barrow on 8 February 2011 was to the effect that Mr Symons was away at a school camp, and that she did not know exactly when he would be back.
[17] The fact that one week later, on 15 February 2011, Mrs Symons told Mr Barrow that her husband was in Australia “on business” is also significant. That statement would lead any reasonable person to conclude that Mr Symons was in Australia temporarily, and for a particular reason. That proposition is implicit in any statement that a person is away somewhere on business. It is also implicit that, once the person has completed his or her business, he or she will be returning home. Mrs Symons confirmed that that was the case so far as her husband was concerned during her conversation with Mr Barrow on 15 February 2011.
[18] The fact that Mr Symons told Mr Barrow that he would make himself available to have the documents served at some time in the future also suggests that he planned to return to New Zealand in the near future. Moreover, Companies Office records in relation to Mr Symons’ company record his present residential address as being 35 Annalong Road, Point View, Howick.
[19] Taking the evidence as a whole, I do not consider that it establishes that Mr Symons was living overseas on a permanent or semi-permanent basis when Wiltshire Investments applied for the order for substituted service on 29 March 2011. That being the case, Associate Judge Christiansen was entitled to make the order, and service of the bankruptcy notice in accordance with that order constitutes valid service on Mr Symons.
Counterclaim and/or claim to set-off against Wiltshire Investments
[20] The Symons brothers contend that they have a counterclaim and/or claim to set-off against Wiltshire Investments that equals or exceeds the amount claimed in the bankruptcy notice. This argument arises out of a complicated series of events concisely summarised in the judgment of the Court of Appeal.3 In short, the Symons brothers say that they have a claim against Wiltshire Investments arising out of the circumstances in which Wiltshire Investments settled litigation against a company
called Hats Holdings Limited.
3 At [9] to [14].
[21] It is not necessary to go into any further detail regarding the factual basis for the proposed counterclaim and/or claim to set-off. A debtor can only seek to have a bankruptcy notice set aside because of the existence of a cross claim against the creditor unless that cross claim was one that the debtor was unable to raise as a defence in the action giving rise to the judgment upon which the bankruptcy notice is
based.4 The Symons brothers expressly raised this defence in their opposition to the
application by Wiltshire Investments for summary judgment against them, but the Associate Judge rejected their argument on the point.5 The Symons brothers did not pursue the point in their appeal to the Court of Appeal. For that reason it must now be taken to have been finally resolved in favour of Wiltshire Investments.
Result
[22] Both applications are dismissed.
Costs
[23] There is no reason why costs should not follow the event. Wiltshire
Investments is entitled to costs on a Category 2B basis in each proceeding together with disbursements as fixed by the Registrar.
Lang J
Solicitors:
Hornabrook Macdonald Lawyers, Auckland
Rogers & Rutherford, Auckland
Counsel:
M A Karam, Auckland
4 S 17(7)(b) Insolvency Act 2006.
5 At [44].
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