BPE Trustees (no 1) Limited v Bassett-Burr

[2019] NZHC 2880

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

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

CIV-2019-485-531

[2019] NZHC 2880

BETWEEN

BPE TRUSTEES (NO. 1) LIMITED

First judgment creditor

QUENTIN HAINES PROPERTIES LIMITED
Second judgment creditor

AND

ROY WILLIAM BASSETT-BURR

Judgment debtor

Hearing:	5 November 2019
Counsel:	D G Dewar for judgment creditors Judgment debtor in person
Minute:	6 November 2019

JUDGMENT OF ASSOCIATE JUDGE JOHNSTON

[1]    In a judgment dated 30 August 2019, Churchman J awarded costs in the sum of $22,919.25 in favour of the judgment creditors, BPE Trustees (No. 1) Ltd and Quentin Haines Properties Ltd, against the judgment debtor, Mr Roy Bassett-Burr.

[2]    In reliance on that judgment, on 6 September 2019, the judgment creditors served a bankruptcy notice on Mr Bassett-Burr. It is relevant to note that the bankruptcy notice, whilst signed on the judgment creditors’ behalves by their solicitor, Mr J D Dallas, did not include at its foot an address for service on the solicitor, although it did include his email address. The backing sheet also provided a post office box as an address for service. In the body of the document the registered offices of the judgment creditors were recorded.

BPE TRUSTEES (NO. 1) LIMITED v BASSETT-BURR [2019] NZHC 2880 [6 November 2019]

[3]    Mr Bassett-Burr, who is acting for himself in this matter, is seeking an order setting the bankruptcy notice aside. The substantive basis for that application is not altogether clear. Certainly Mr Bassett-Burr has raised concerns about the underlying judgment and has apparently appealed against that judgment. However, the judgment has been sealed and Mr Bassett-Burr has not applied for a stay. In dealing with this matter, I am obliged to treat it as conclusive.

[4]    In terms of s 17(4)(a) of the Insolvency Act 2006 a judgment debtor seeking to apply for an order setting a bankruptcy notice aside has 10 working days after service of the bankruptcy notice within which to file and serve an application. It is clear law that this time limit is a strict one.1 If an application is not filed and served within 10 working days, then the court will not entertain the application. Of course, that does not mean that the judgment debtor cannot defend any application for adjudication in bankruptcy if such an application follows. All it means is that the judgment debtor is treated as having committed an act of bankruptcy and must then persuade the court to exercise its discretion not to adjudicate him or her bankrupt.

[5]    The position in this  case  is  that  the  10  working-day  period  expired  on  27 September 2019. Mr Bassett-Burr filed his application on the last available day, 27 September 2019, and was intending to serve a copy on the judgment creditors’ solicitor. It was only after having filed the original of the document that he re-looked at the service copy and observed that there was no formal address for service on the front page. Mr Bassett-Burr does not appear to have noticed the post office box listed on the back page. He concluded that it was open to him to treat the front page as inviting any application to be served on the judgment creditors’ solicitor by email. The judgment creditors accept this was a course of action open to Mr Bassett-Burr.

[6]    However, in order to effect service in that way, Mr Bassett-Burr was obliged to return to his home and email the documentation from there. He says that he was struck traffic and encountered other problems of a technological nature. The net result of all of this is that whilst he did email his application on 27 September 2019, he did

1      See Re Memelink, ex parte SANCO (NZ) Ltd HC Wellington CIV-2008-485-2691, 10 March 2009; and Re Dillon, ex parte Blueprint Developments Ltd HC Auckland B2164/89, 27 March 1990.

not do so until after 5.00 pm. Mr Dallas’ records show that it was received by him at

5.53 pm.

[7]    Mr Dewar submits that, the time period being strict, Mr Bassett-Burr’s application was served out of time — 53 minutes late.

[8]    The issues for determination are whether the bankruptcy notice was defective and if not whether Mr Bassett-Burr served his application within time.

[9]    Mr Bassett-Burr levelled more than one criticism at the judgment creditors’ bankruptcy  notice.   Most  are  highly  technical.   The  only  serious  criticism  is  Mr Bassett-Burr’s claim that it did not include Mr Dallas’ address for service.

[10]   The form of a bankruptcy notice is provided for in form B2 in the first schedule to the High Court Rules. This does not require an address for service on the front page, which is entirely understandable because a bankruptcy notice is not an originating documentation in court proceedings in any conventional sense. However, at the bottom of the section of the notice entitled “Notes”, the notice must specify either the name and address of the creditor or the name and address for service of the solicitor.

[11]   In my view, the judgment creditors’ bankruptcy notice in this case was not irregular. It included Mr Dallas’ name and specified a post office box for service at the bottom of the Notes section as required.

[12]   In any event, I cannot see how the judgment debtor could have been affected or prejudiced in this case. The judgment debtor says that he concluded that the correct course of action was to email his application (and other documentation) to the judgment creditors’ solicitor. For their part, the judgment creditors accept that as having been an approach open to the judgment debtor. They just say that having adopted that course the judgment debtor was out of time.

[13]In the end, I think that must be correct.

[14]   The only other question concerns whether the 10 working days for filing and service of the judgment debtor’s application expired at 5 pm as Mr Dewar submits or at midnight as Mr Bassett-Burr (inferentially at least) contends. Rule 6.6(3) of the High Court Rules provides that where a document is served electronically after 5 pm on a working day, it must be treated as served on the first subsequent working day. Regrettably from Mr Bassett-Burr’s perspective, he did not meet that time limit. And, as the time limit is a strict one, the Court has no discretion to extend it.

[15]   The net result is that Mr Bassett-Burr did not file his application within time and it is therefore ineffective.

[16]   I also record that even if Mr Bassett-Burr’s application had not been out of time, he has failed to identify any cross claim against the judgment creditors, as required by s 17(1)(d)(ii) of the Insolvency Act. As such, there would have been no grounds on which to set aside the bankruptcy notice.

[17]   I dismiss Mr Bassett-Burr’s application for an order setting aside the judgment creditors’ bankruptcy notice accordingly.

[18]   As already said, that does not prevent him from defending any proceeding that may follow for an order adjudicating him bankrupt. In particular, if the appeal against Churchman J’s decision has yet to be determined by that stage, Mr Bassett-Burr may be entitled to halt adjudication proceedings pursuant to s 42(2)(a) of the Insolvency Act.

Associate Judge Johnston

Solicitors:
Thomas Dewar Sziranyi Letts, Lower Hutt for judgment creditors