Wootton v Wootton

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE

CIV-2021-485-122

[2021] NZHC 863

IN THE MATTER of the Insolvency Act 2006

AND

IN THE MATTER

of the bankruptcy of Margaret Ann Wootton

BETWEEN

PHILLIP GARRY WOOTTON

Judgment Creditor

AND

MARGARET ANN WOOTTON

Judgment Debtor

Hearing: (On the papers)

Appearances:

E J Collins for the Judgment Creditor

M A Wootton for the Judgment Creditor (self-represented)

Judgment:

22 April 2021

JUDGMENT OF ASSOCIATE JUDGE LESTER

(Costs)

This judgment was delivered by me on 22 April 2021 at 4.00 pm pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar 22 April 2021

WOOTTON v WOOTTON [2021] NZHC 863 [22 April 2021]

[1]This judgment is to be read alongside my earlier judgment of 30 March 2021.1

[2] In summary, the judgment debtor tendered to the judgment creditor a part payment by way of a bank cheque. If accepted, the payment would have reduced the debt to below the level for bankruptcy proceedings to be commenced. The cheque was received by the judgment creditor but not rejected for a number of weeks. The judgment debtor only learnt of the rejection of the bank cheque when it was returned to her accompanied by a bankruptcy notice for the full amount of the judgment debt.

[3] My earlier judgment concerned in part a challenge by the judgment debtor to the Registrar’s decision to accept the filing of the bankruptcy notice given the judgment debtor had tendered the bank cheque in part payment. As there was no basis for the Registrar to be aware of the tendered payment, the challenge to the Registrar’s decision was dismissed.

[4] That left the issue of costs on the bankruptcy notice, with the judgment debtor challenging the claim for costs given the late rejection of the bank cheque.

[5] The judgment creditor has filed a memorandum and affidavit explaining the reason for the delay in rejecting the part payment. Nonetheless, there was a delay of some weeks. However, the issue appears to be somewhat academic. I say that as the judgment debtor has filed a document called a Notice of Payment which provides evidence that she has paid the costs claimed in the bankruptcy notice. The judgment debtor has paid those costs despite her earlier request that those costs be fixed.

[6] The judgment debtor, having agreed to pay (and indeed having paid) the costs claimed in the bankruptcy notice, I fix costs and disbursements in the sum of $668 as claimed in the bankruptcy notice. As that amount has been paid, that costs award is now satisfied.

[7] I only make a further brief comment about matters raised in the judgment debtor’s affidavit of 16 April 2021. There is a complaint that the judgment creditor’s affidavit was sworn before a solicitor from a firm in the same building as the judgment

1 Wootton v Wootton [2021] NZHC 658.

creditor’s solicitor. The fact both firms are in the same building does not without more, impact on the independence of the solicitor taking the affidavit. The other matters raised do not call for a comment by me. Only the issue of costs remained alive. Such have been fixed and paid.

[8] This proceeding is now at an end. For the avoidance of doubt, no costs are awarded for steps after the issue of the bankruptcy notice.

Associate Judge Lester

Solicitors:
Collins & May Law, Lower Hutt

And to:
Ms M A Wootton, self-represented judgment debtor

In the case of Wootton v Wootton, the dispute arose from bankruptcy proceedings involving the judgment debtor, Margaret Ann Wootton. The judgment creditor, Phillip Garry Wootton, sought to enforce a judgment debt against the debtor, who had tendered a part payment by bank cheque. The cheque was initially received by the creditor but was not rejected for several weeks. The debtor only became aware of the rejection when the cheque was returned to her, accompanied by a bankruptcy notice for the full amount of the judgment debt. The High Court of New Zealand was tasked with resolving the dispute, particularly concerning the costs associated with the bankruptcy notice.

The central legal issue before the court was whether the judgment creditor's delay in rejecting the part payment warranted any adjustment to the costs claimed in the bankruptcy notice. The debtor argued that the delay in rejecting the cheque, which was intended to reduce the debt below the bankruptcy threshold, should result in a reduction of the costs. The court had to consider the impact of the creditor's delay on the debtor's rights and the appropriateness of the costs claimed.

Associate Judge Lester addressed the issue by examining the facts surrounding the creditor's delay in rejecting the cheque. Despite the creditor's explanation for the delay, the judge acknowledged that there was a significant lapse before the cheque was ultimately rejected. However, the debtor had already paid the costs claimed in the bankruptcy notice, effectively rendering the issue of costs moot. The judge fixed the costs as claimed, amounting to $668, and noted that since the debtor had already paid this amount, the costs award was satisfied. The judge also dismissed the debtor's concerns about the independence of the solicitor who swore the creditor's affidavit, finding no basis for questioning the solicitor's impartiality.

The court concluded by confirming that no further costs would be awarded for steps taken after the issuance of the bankruptcy notice. This decision brought the proceedings to an end, with the debtor having already settled the costs in question. The final orders of the court were that the costs fixed in the bankruptcy notice were satisfied, and no further costs were to be awarded for subsequent steps.

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established

IN THE MATTER	of the Insolvency Act 2006
AND
IN THE MATTER	of the bankruptcy of Margaret Ann Wootton
BETWEEN	PHILLIP GARRY WOOTTON Judgment Creditor
AND	MARGARET ANN WOOTTON Judgment Debtor