Jenssen v Ministry of Commerce CA288/00 [2001] NZCA 465 (11 December 2001)

Last Updated: 12 June 2023

IN THE COURT OF APPEAL OF NEW ZEALAND CA 288/00

BETWEEN JENS WILLIAM JENSSEN

Appellant

AND MINISTRY OF COMMERCE

Respondents

Hearing: 21 November 2001

Coram: Gault J Heron J Gendall J

Appearances: John W Jenssen representing the Appellant in person G L Lang for Respondents

Judgment: 11 December 2001

JUDGMENT OF THE COURT DELIVERED BY GENDALL J

[1] The appellant (“Jenssen”) claimed damages from the Ministry of Commerce alleging negligence on the part of the Official Assignee in his bankruptcy on the basis that appeal rights that he had personally, and on behalf of the estate of his father J D Jenssen, to the Quota Appeal Authority pursuant to the Fisheries Act 1983, were not pursued by the Official Assignee.

[2] These proceedings were also initially brought in respect of claims on behalf of a Jenssen family company, New Zealand Fisheries Ltd. The status of Jenssen to claim on behalf of his father’s estate was said to be on the basis of his being a beneficiary. Jenssen is the father of John Jenssen who we have allowed to argue the appeal on his father’s behalf, despite not being qualified to appear as counsel in this Court.

[3] The proceedings brought in the High Court in respect of the company were struck out by Durie J in the High Court at Wellington and that decision was upheld on appeal by this Court on 17 February 2000. That cause of action alleged negligence on the part of the Official Assignee in his role as provisional liquidator of the company, but on the uncontested facts the proceedings could not succeed against the Official Assignee in that role, as it was the permanent liquidators who decided to abandon the company’s appeal to the Quota Appeal Authority. Further, the proceedings on behalf of the company were not issued until August 1999 and were statute barred because any damage suffered arose no later than April 1991 when the appeal was abandoned and the Jenssen family knew of this at least by 17 May 1991.

[4] Those remaining parts of the statement of claim with causes of action against the Official Assignee in his capacity as administrator of the estate of Jenssen in bankruptcy were remitted to the High Court for trial. This took place before Ellis J who dismissed the claims of Jenssen personally and on behalf of his father’s estate, finding that it had not been established that the Official Assignee was negligent in his capacity as assignee in Jenssen’s bankruptcy, in not pursuing appeals to the Quota Appeal Authority. Further, it was held that even if negligence had been established, the claims were statute barred as the statement of claim was filed more than six years after the alleged cause of action arose. The present appeal is against that judgment.

Background Facts

[5] The general factual background is recorded in the judgment of this Court in Jenssen & Ors v Ministry of Commerce (CA279/99, 17 February 2000). We record the essential matters.

[6] Jenssen and his father were shareholders in a number of companies, one being New Zealand Fisheries Ltd. The father died on 21 November 1981. The company, Jenssen personally, and his father’s estate, pursued claims to fishing quota based upon the catch history relating to three fishing vessels. Under s28E of the Fisheries Act 1983 those engaged in fishing were entitled to quota if certain qualifying conditions existed as at 18 September 1986. One of the criteria was

whether an applicant held a fishing permit as at that date or during the previous 12 months. It was common ground that Jenssen, the estate and the company did not qualify on that basis. However, an applicant might still have secured a quota if he or it could show sufficient commitment to or dependence on the taking of the species of fish in question. It was agreed that the three applicants could only qualify on that ground. It was on that basis that three appeals against decisions declining the applications were lodged to the Quota Appeal Authority on 17 October 1986,.

[7] The company was placed in liquidation on 29 November 1989, and the role of the Official Assignee as provisional liquidator has been dealt with by the Court of Appeal in the judgment to which we have previously referred. The appellant was adjudicated bankrupt on 13 August 1990. At that stage the appeals that had been filed with the Quota Appeal Authority had not been heard, and they were never to be heard. It was because of this that Jenssen contended the Official Assignee was negligent and breached his duty towards him personally and in his capacity as a beneficiary in the estate of his father. At trial the Judge proceeded on the basis that Jenssen had sought to appeal to the Quota Appeal Authority on his own behalf and also in his capacity as a beneficiary in his father’s estate.

[8] The trial Judge recorded some factual matters. The appeals were adjourned in late 1989 and were scheduled to be called again on 19 March 1990. They were then adjourned sine die at the request of the Jenssen family. Counsel had been retained. However by then the company was in liquidation and the Official Assignee was no longer acting as provisional liquidator, the winding up having been stayed on 19 January 1990. Later, when Jenssen was adjudicated bankrupt on 13 August 1990 he provided a statement of his affairs to the Official Assignee which did not disclose the existence of his (and the estate’s) unresolved appeals to the Quota Appeal Authority. The liquidators formally withdrew the company’s appeal on 20 June 1991, and Jenssen was notified of that fact.

[9] The evidence in the High Court was that counsel who had formerly represented the Jenssen family interests spoke to the Secretary of the Authority on 2 July 1991 and told that officer that the other appeals of Jenssen and his father’s

estate were not to proceed further. Consequently the Authority treated all appeals as being withdrawn.

[10] Nothing further happened about the appeals until Jenssen wrote to the Minister of Justice in January 1993 making various complaints, although he did not specifically refer to quota appeal rights. The Official Assignee then inquired of the Quota Appeal Authority about any unresolved appeals. On 23 March 1993 he was advised by the Authority that the appeals had been disposed of, through having been withdrawn by the appellant’s counsel almost two years earlier. A report was made to the Secretary of Justice which stated that appeals to the Quota Appeal Authority were not declared in the appellant’s statement of affairs as items of property, or proceedings in respect of property, and that knowledge by the Official Assignee of fishing quota appeals was understood by him to relate to the company and be a matter for the liquidator of the company, and consequently not forming part of the bankrupt’s estate. That is not surprising given the fact that the Official Assignee, as provisional liquidator of the company, was aware of the company’s appeal to the Authority and it was the permanent liquidators who decided to abandon the appeal and not the Official Assignee.

[11] On 5 April 1993 the Minister of Justice wrote to Jenssen saying:

“Records of the liquidator of NZ Fisheries Ltd have been examined, and enquiries of the Quota Appeal Authority have now been made.

A search of the liquidator’s file has failed to provide any additional information while a recent inquiry of the Quota Appeal Authority reveals that you lodged an appeal in your name on 17 October 1986 at the same time that appeals were lodged by NZ Fisheries Ltd in the D J Jenssen [sic] estate. Your appeal was subsequently withdrawn by legal counsel, Mr John McLinden, barrister of Wellington, on 2 July 1991. As the date for lodging any claims has lapsed, the Official Assignee is unable to take any action with regard to this quota...

As a consequence, if you disagree with any act or decision of your Official Assignee then your proper course is to seek a review of such act or decision by application to the High Court as is provided by section 86 of the Insolvency Act.”

[12] In the High Court, the Judge found that within a day or two of 5 April 1993 [by mistake referred to as “5 April 1995” in the judgment] Jenssen knew that the Official Assignee was not taking any action in relation to the withdrawn appeals. He found as a fact that the Official Assignee, not knowing of the existence of the appeals or that they had been withdrawn by counsel for the Jenssen family on 2 July 1991, could not be liable in negligence. He held that through the withdrawal of the appeals in this manner, the Official Assignee was prevented from pursuing them. The Judge found that any knowledge related only to the company’s appeal, the pursuit of which had been left to the decision or judgment of the permanent liquidator. The Judge found that when the Official Assignee first learnt of the existence of the appeals of Jenssen they had been withdrawn two years earlier and it was beyond the Assignee’s power to do anything. The date for lodging any claim had long since passed and even if the Official assignee wished to reopen the appeals, or pursue claims to a quota allocation, no statutory power existed for him to do so.

[13] Section 28ZGA of the Fisheries Act 1983, which came into force on 18 December 1992 but applied retrospectively as at 16 September 1992, would have presented a major obstacle to the appellants as it prohibited any Court reviewing any decision of the Director General or Quota Appeal Authority as it related to the allocation of quota. In his decision the Judge did not find it necessary to decide that question but expressed the view obiter that the section, so closely related to the earlier litigation, precluded the Official Assignee from seeking quota after 16 September 1992.

[14] The Judge found that even if there had been negligence on the part of the Official Assignee the appellant’s cause of action was barred by reason of s4 of the Limitation Act 1950. He held that any cause of action arose no later than the end of April 1993, being the date on which the appellant became aware of the damage and the fact that the Official Assignee would be taking no action regarding quota appeals. Consequently any proceedings were statute barred after the end of April 1999. The proceedings were not issued until 26 August 1999, and although there is (see paragraph 6 of the earlier judgment of the Court of Appeal, page 17, February 2000) some reference in earlier decisions to that commencement date being 11 August

1999, this is of no consequence given that, if the Judge is correct, the time for issuing proceedings expired no later than 30 April 1999.

Submissions of Appellant

[15] On behalf of his father, John Jenssen presented extensive detailed written submissions which are prolix and cover matters outside and not directly relevant to the substance of the appeal. For present purposes the issue is not whether the quota appeals would have succeeded, nor whether the Ministry acted wrongly, but whether the Judge erred in concluding that the Official Assignee was not negligent in his management of the bankrupt’s affairs, and further, whether the proceedings were statute barred.

[16] It was contended that the Official Assignee was negligent in not pursuing “inherited rights of fishing quota entitlements” due to Jenssen personally and/or through his father’s estate. It was argued that the Jenssen family fishing interests were harmed through the Minister of Fisheries locking them out of the fishing industry and although the Fisheries Act 1983 allowed rights of appeal to the Quota Appeal Authority, which were pursued, Jenssen was prevented from pursing those rights on appeal before he was adjudicated bankrupt. That point can be disposed of shortly. Anything that may have occurred through the acts or decisions of others prior to the bankruptcy could not be said to found an action in negligence against the Official Assignee and, as we have said, the issue is not whether the Ministry erred but whether the Official Assignee was negligent in not pursuing the Jenssen family claims.

[17] John Jenssen submitted that the appeal rights vested in the Official Assignee, and counsel no longer could act for Jenssen so as to withdraw the appeals on 2 July 1991 and thus any withdrawal was invalid. Whether counsel acted with proper instructions or not, the fact remained that the appeals were withdrawn by events outside the ambit of the Official Assignee’s control.

[18] It was contended that the Official Assignee was, or should have been, aware of a newspaper article said to have been published on 21 January 1994 claiming to

have been official wrong-doing in relation to the allocation of fishing quota. We cannot see that as having any relevance in this appeal, even assuming the article to be accurate. It was argued that the Official Assignee and Crown Solicitor were inhibited, or tainted, by conflict of interest or bias because the Crown Solicitor in the guise of the Official Assignee would not sue the Crown in the guise of the Ministry of Fisheries. This is surmise only and no evidential foundation exists to support such submission.

[19] Emphasis was placed upon the claim that the Official Assignee knew of the existence of the appeal in 1991 because he, as provisional liquidator, transmitted the company’s appeal to the permanent liquidator. But that submission overlooks the factual finding of the Judge that such knowledge of the Official Assignee related to appeals by or on behalf of the company, and it is for that reason that they were transmitted to the permanent liquidator.

[20] It was claimed on behalf of Jenssen that his son had delivered to the front counter of the Official Assignee’s office when the Assignee was acting as provisional liquidator of the company, a copy of a letter addressed to the Secretary of the Quota Appeal Authority which read:

“I am instructed by Harrison Murphy & Partners through their barrister Mr McLinden to request an adjournment of the Quota Appeal hearing for Mr J W Jenssen, J D Jenssen estate and for NZ Fisheries Ltd, which is for the time being in the hands of the Official Assignee.

They ask me to inform you that they will apply for a new hearing date as soon as the legal litigation has been resolved.”

[21] Counsel submitted that by delivering a copy of the letter in this way the Assignee in his capacity as provisional liquidator in 1989 constituted knowledge by the Official Assignee, after Jenssen was adjudicated bankrupt in August 1990. The Judge rejected that as a matter of fact. In its terms the letter, so far as it referred to the Official Assignee, related to the interest of the company.

[22] It was contended that there existed in boxes of many documents obtained by the Official Assignee pursuant to a warrant under s65 of the Insolvency Act 1967 on

3 September 1990, evidence which would have alerted the Official Assignee to the existence of the appeals. But no such documents were produced in evidence in the High Court and the best the appellant could do was to refer to his affidavit verifying discovery, which does not assist him on matters of proof.

As to the Limitation Act 1950

[23] We turn first to deal with the limitation issue because that disposes of the appeal.

[24] Although it is not precisely clear from his written submissions, John Jenssen sought to overcome the limitation problem by arguing that proceedings could not be brought until such time as Jenssen was discharged from bankruptcy, namely on 13 August 1993. He says that is because until that time the Official Assignee could not commence proceedings because it would have involved suing himself “for not suing the barrister who withdrew the appeals”. He argues that the proceedings against the Assignee could only have been commenced by Jenssen once the discharge from bankruptcy occurred. This submission introduced a new feature to the appeal, which was not what the case before the High Court was about, namely that the Official Assignee had an obligation to sue the barrister for the Jenssen family. But that was not the alleged act, or default in respect of which these proceedings were brought.

[25] Further the appellant presented a complex argument to the effect that demands for damages were made at various times over an extended period occurring within a six year period of the date upon which the proceedings were issued. But that does not assist him because the point, well known, is simply that the cause of action in negligence arises at the latest upon a plaintiff discovering the essential facts which make up the cause of action including some damage.

[26] It is beyond doubt that the letter of the Minister to Jenssen, dated 5 April 1993, made it clear to him that the Official Assignee did not treat any Quota Appeal Authority rights as assets of the estate. Mr Jenssen did not then dispute this. Receipt of that letter provided all the factual information necessary to support a cause of action.

[27] On 15 September 1995 John Jenssen, on behalf of his father wrote to the Quota Appeal Authority stating amongst other things that after Jenssen was adjudicated bankrupt in 1990:

“The assignee contacted my father’s then legal representative and requested that he withdraw all quota appeals which had been set down for a hearing three days after my father was adjudicated a bankrupt .... As I am representing my father’s interest I wished to ask the Authority to reopen and set the matters for appeal down for an urgent hearing ....”

[28] Argument presented to the Court that it was only after John Jenssen received all documents and investigated them that a cause of action arose is not the law.

[29] Although it was not precisely expressed in this way, argument on behalf of Jenssen relied upon a perceived conflict of interest on the part of the Official Assignee in taking action against himself, as well as an inability on the part of the bankrupt to take proceedings until after he is discharged. The conflict point is without merit as the Official Assignee could take proceedings in that capacity against the Crown, the Ministry of Fisheries, or anyone, so as to assert property rights. In any event, any cause of action Jenssen had was not to pursue appeal rights but rather to bring an action personal to him in negligence as against the Official Assignee. He was not under a disability whether in terms of s2(2) of the Limitation Act 1950 or otherwise and any claim that he had was a claim to the loss of a chance. If he was within the limitation period he could sue the Official Assignee irrespective of his status. All necessary ingredients of the cause of action existed at the end of April 1993. These proceedings could not be brought, even with leave, after the expiration of six years from the date on which the cause of action accrued (s4 Limitation Act 1950) and accordingly leave could not be granted after the end of April 1999 some three months at least before the proceedings were issued.

[30] These proceedings against the Official Assignee were not issued until after the Court of Appeal on 25 May 1999 had upheld the striking out of claims brought by Jenssen against the Attorney-General and Minister of Justice. Those claims were based upon the allegation that the Jenssen family and companies were wrongfully refused fishing permits. It was only then that, as a second thought, attention was

turned to suing the Official Assignee but even at that time the limitation period for these proceedings had expired.

[31] The limitation defence was unanswerable and had to succeed.

[32] That is sufficient to dispose of the appeal. Nevertheless we shortly deal with the finding by the Judge that negligence had not been proven.

As to negligence

[33] As we have noted, the Judge concluded that the Official Assignee was prevented from learning of the existence of the Quota Appeal rights by reason of their withdrawal by counsel and, further, through the non disclosure by Jens Jenssen of such entitlement in his statement of affairs. Whether such withdrawal of the appeals by the family’s barrister was with or without instructions is irrelevant.

[34] In order for negligence to be established it had to be proved at trial that the Official Assignee owed to the bankrupt a duty of care and that he failed to take reasonable steps to pursue appeal rights, or claims to quota entitlements, which offered the chance at least of success so as to benefit creditors and eventually the bankrupt. The Judge’s finding that the Official Assignee was unaware of the existence of the appeals until such time when any action would have been futile was justified on the evidence before him. Obviously there could be no negligent failure to act if there was no knowledge of matters on which action was required.

[35] Apart from the delivery of the letter dated 11 December 1989, there was no evidence adduced to show the Official Assignee had in his possession documents or information to put him on notice of any rights and which required him to take action. The Judge’s finding that the delivery of the letter to the Assignee when acting as provisional liquidator did not as a matter of fact put the Assignee on notice for the purposes of the bankruptcy was a factual finding open to the Judge on the evidence.

[36] The Judge was not called upon to determine whether, in the circumstances of this case the Official Assignee owed a duty of care to the bankrupt such having not

been argued before him. The Official Assignee is a statutory officer of the Court whose decisions may be challenged by persons aggrieved, including the bankrupt, pursuant to s86 of the Insolvency Act 1967. The extent, if any, of the duty of care is owed to the bankrupt where statutory review is provided did not need to be considered by the Judge. It is not necessary for us to deal with it in this appeal but is an issue that may well be open for argument on another occasion.

[37] There was no evidence adduced in the High Court to justify a conclusion that the Assignee was negligent, and further, it is beyond any doubt, that the proceedings were barred by statute.

[38] It follows that the appeal must be dismissed. The respondent is entitled to costs in the sum of $5,000 together with disbursements as fixed by the Registrar including counsel’s reasonable travel and accommodation expenses.

Solicitors:

Elvidge & Partners, Napier for Respondents