Conroy Removals Limited v Sameer [2019] NZHC 527 (21 March 2019)

Last Updated: 25 March 2019

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2017-409-535 [2019] NZHC 527

UNDER	The Insolvency Act 2006
IN THE MATTER OF	the bankruptcy of Madhu Sameer
BETWEEN	CONROY REMOVALS LIMITED Judgment Creditor
AND	MADHU SAMEER Judgment Debtor

Hearing:	(Determined on the Papers)
Counsel:	S Munro and C O’Brien for Judgment Creditor M Sameer – self represented Judgment Debtor
Judgment:	21 March 2019

JUDGMENT OF ASSOCIATE JUDGE LESTER

(as to lifting of stay)

Summary

[1] On 17 April 2018, Associate Judge Matthews dismissed an application by the judgment debtor to set aside a bankruptcy notice obtained by the judgment creditor on 11 August 2017.¹ The judgment debtor appeals that decision and has obtained a stay of the bankruptcy proceeding regarding the hearing of the appeal. The judgment creditor has applied to lift the stay.

¹ Conroy Removals Ltd v Sameer [2018] NZHC 698.

CONROY REMOVALS LTD v SAMEER [2019] NZHC 527 [21 March 2019]

[2] The bankruptcy notice demanded the sum of $18,846.51, comprising the sum of $9,045.51 being an order of the Disputes Tribunal dated 14 December 2016 as well as the amount due under a costs award made in the District Court on 27 July 2017, in respect of an unsuccessful appeal by the judgment debtor against the order of the Disputes Tribunal.

The Disputes Tribunal judgment

[3] The judgment obtained by the judgment creditor in the Disputes Tribunal related to costs incurred by the judgment creditor having uplifted and stored a shipping container which was shipped by the judgment debtor from California (United States of America) to Christchurch (New Zealand) and which contained the judgment debtor’s property.

[4] The judgment debtor was in dispute with her USA shipping company by the time the container arrived in New Zealand. In order to avoid penalty charges from the Port company that would accrue if the container was not uplifted, and to allow the judgment debtor to obtain her goods, it was agreed that the judgment debtor would pay the judgment creditor directly who would then arrange for the container to be delivered. The judgment creditor uplifted the container. When it was opened in the judgment debtor’ presence, it was discovered that it was required to be fumigated which was then completed.

[5] A dispute then arose as to whether the judgment debtor refused delivery of the container, or whether the judgment creditor refused to deliver the container. The goods were then stored by the judgment creditor. The judgment debtor brought a claim in the Disputes Tribunal against the judgment creditor for damages she said resulted in the judgment creditor’s alleged refusal to deliver up the chattels. The judgment creditor counterclaimed for the storage costs.

[6] It is clear from the Dispute Tribunal’s decision as a whole that it was concerned with a contract made between the parties in relation to how the judgment creditor would deal with the judgment debtor’s goods.
[7] The Disputes Tribunal held that there was a contract between the judgment debtor and judgment creditor under which the judgment creditor offered to collect the container and deliver the goods to the judgment debtor. The Disputes Tribunal concluded that the judgment debtor was contractually obliged to pay the storage costs that accrued after the judgment debtor refused to take delivery and judgment was entered against the judgment debtor.

[8] The judgment debtor’s appeal of the Disputes Tribunal decision was dismissed in a decision of the District Court dated 26 June 2017.

Application to set aside bankruptcy notice dismissed

[9] In Associate Judge Matthews’ judgment of 17 April 2018, he set out the grounds for the challenge to the bankruptcy notice which were largely a challenge to the findings in the Dispute Tribunal.²

[10] Associate Judge Matthews noted that the judgment debtor had issued proceedings in the United States against that shipping company and various other parties. Those claims, as recorded by Associate Judge Matthews, are wide ranging.

The appeal

[11] On 21 May 2018, an appeal was lodged by the judgment debtor against Associate Judge Matthews’ decision.

[12] The judgment debtor applied for a stay of the bankruptcy proceeding pending the hearing of her appeal.

[13] On 31 July 2018, a Minute was issued by Associate Judge Osborne, as he then was, which recorded:

I order that further steps in this proceeding are stayed pending the determination of the appeal in CA 279/218. It is a condition of this stay that Ms Sameer diligently prosecutes her appeal and meets by due date all timetable requirements in relation to the appeal. Leave is reserved to the

² Conroy Removals Ltd v Sameer, above n 1 at [5].

judgment creditor to seek a review of the stay, if appropriate, upon three days’ notice.

[14] The Court of Appeal by notice dated 20 November 2018 advised that the appeal was deemed abandoned as at 1 November 2018 pursuant to r 43 of the Court of Appeal (Civil) Rules 2005. This rule requires an appellant to file the case on appeal and apply for the allocation of a fixture within three months of the appeal being brought.

[15] As a result of the deemed abandonment, the judgment creditor sought by memorandum that the stay ordered by Associate Judge Osborne be rescinded and that the adjudication application be set down. The judgment debtor opposed on the basis that she had applied for an extension of time to file the case on appeal and as at 14 December 2018 the outcome of that application was unknown. The Court adjourned the review of the stay until a response to the judgment debtor’s application was received.

Legal principles applicable to a stay

[16] Rule 20.10 of the High Court rules 2016 applies to stays pending an appeal. There is no extant appeal as the appeal filed on 21 May 2018 is deemed to have been abandoned. As the stay lasted until “the determination of the appeal”, the stay came to an end when the appeal was determined through the deemed abandonment.

[17] McGechan on Procedure notes that the effect of r 43 of the Court of Appeal (Civil) Rules 2005 being triggered is that an appellant instead of being able to appeal as of right “requires the exercise by this Court of a positive discretion”.³

[18] Accordingly, while the judgment debtor has applied for an extension of time to file her case on appeal, that of itself does not mean there is an extant appeal.

3. McGechan on Procedure (online ed, Thomson Reuters) at [CR43.02], citing Russell v Commissioner of Inland Revenue [2006] NZCA 381; (2006) 22 NZTC 19,807 (CA) at [10].

[19] In the absence of an appeal, a stay may be granted under r 17.29. A stay may be granted under this rule on the grounds that a substantial miscarriage of justice would be likely to result if the judgment was enforced.

[20] Under r 17.29, the onus is on the applicant to establish that a stay is justified. The effect of there being no stay is that the application to adjudicate the judgment debtor will be set down for hearing. If the judgment debtor wishes to continue with any claim she believes she has against the judgment creditor she will be free to do so. There is no suggestion that the judgment creditor would not be able to meet any judgment resulting.

[21] The judgment debtor’s memorandum of 13 March 2019 in response to the judgment creditor’s memorandum requesting that the stay be rescinded does not engage with the criteria for a stay. The judgment debtor’s memorandum concludes with a request that the stay continue until there is a decision from the Court of Appeal.

[22] In the summary to the judgment debtor’s memorandum, she says:

The appeal concerns denial of the High Court to grant me time to file cross claim against [the judgment creditor] and its agents. Therefore, the newly-discovered documents establish a basis for cross claims.

Present application

[23] The judgment creditor has filed a memorandum dated 11 March 2019. It records that on 4 December 2018 the judgment debtor applied to the Court of Appeal for an extension of 90 days to 4 March 2019 to file the case on appeal. The judgment creditor’s counsel refers to that application as being the “first extension of time”.

[24] The first extension of time application is opposed.

[25] On 2 March 2019, the judgment debtor filed a memorandum in the Court of Appeal which, amongst other things, sought a further extension of 60 days to file a case on appeal in the event leave was not granted to file a document styled “Memorandum for summary adjudication” in the Court of Appeal (“second extension of time”).
[26] Judgment creditor’s counsel advises that the Court of Appeal has not yet responded to either the first extension of time application or the second extension of time application made on 2 March 2019.

[27] The judgment creditor applies to have the stay rescinded on the ground that the judgment debtor has failed to diligently prosecute her appeal which was a condition of the stay ordered by Associate Judge Osborne. The argument is that, whether or not the Court of Appeal had responded to the first extension of time application, the judgment debtor should still have got on and completed the case on appeal within the time that she sought.

[28] The judgment debtor has responded to that claim with a lengthy memorandum dated 13 March 2019 that relies to a large extent on having located a document that she says she did not previously have, that being the Bill of Lading in respect of the shipment of her goods from California to New Zealand. The judgment debtor submits that the Bill of Lading meant that the shipment of goods from the USA to New Zealand was governed by USA law.

[29] I treat this document as an application for a stay pending the Court of Appeal dealing with the judgment debtor’s applications for extended time and her appeal of extensions being granted.

[30] I do not intend to recite all the matters in the judgment debtor’s memorandum which she says spin off the Bill of Lading only recently come into her possession. This is because the Bill of Lading is irrelevant to the storage contract found to exist between the parties. The contract which the Disputes Tribunal held to exist was made in New Zealand and was a contract relating to the fumigation of a shipping container and the subsequent storage of the goods. The terms of the Bill of Lading under which the judgment debtor’s goods were shipped to New Zealand is irrelevant to that separate contract.

[31] Nor does the Bill of Lading take any further the claim that the judgment creditor was party to a conspiracy against the judgment debtor. The suggestion that the judgment debtor was involved in improper conduct with regard to judgment debtor
was rejected by Associate Judge Matthews and in the Disputes Tribunal appeal. That the judgment creditor is named as consignee on the Bill of Lading only reflects that it was their job to receive the container, complete importation documentation and deliver it to the judgment debtor. Being named as the consignee does not of itself make the judgment creditor liable for the actions of the shipper or the moving company in the USA.

[32] The stay is at an end because the appeal has been determined. I note the effect of abandonment, that is whether it is treated as a dismissal, has not been fully determined.⁴ In terms of the stay ordered, I consider the appeal was “determined” by the abandonment whether or not it is treated as dismissed for the purposes of the Court of Appeal (Civil) Rules. If I am wrong in that view, then as I have said, I do not consider the condition of the stay was satisfied.

[33] The condition of the stay ordered by Associate Judge Osborne was unequivocal. The judgment debtor did not prioritise compliance with the mandatory timetables under the Court of Appeal Rules, nor did she comply with the self-imposed 90 day extension that she sought in the first extension of time.

[34] Nor do I consider that declining a stay would cause a substantial miscarriage of justice. The judgment debtor can pursue such claims as she thinks fit. If she does not pay the judgment debts then the Official Assignee would have the right to pursue any claims that are worthy of being pursued.

[35] The judgment debtor’s application for a stay of the bankruptcy proceedings against her is declined. The stay ordered by then Associate Judge Osborne on 31 July 2018 lapsed when the appeal was determined by the deemed abandonment.

⁴ Humphries v Carr [2009] NZCA 608.

The adjudication application is set down for hearing at 10am on Tuesday 16 April 2019 in the High Court at Christchurch. In terms of the stay as ordered, I consider the appeal was “determined” by the abandonment whether or not it is treated as dismissed by the Court of Appeal.

Associate Judge Lester

Solicitors:

Anderson Lloyd, Christchurch

Madhu Sameer, self-represented Judgment Debtor, Christchurch