Sneddon Solicitors Nominee Company Limited v Finlay [2014] NZHC 2606 (23 October 2014)

Last Updated: 19 December 2014

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV 2013-404-004000 [2014] NZHC 2606

IN THE MATTER OF	The Insolvency Act 2006
AND	The Bankruptcy of PETER RONALD FINLAY
BETWEEN	SNEDDEN SOLICITORS NOMINEE COMPANY LIMITED Judgment Creditor
AND	PETER RONALD FINLAY Judgment Debtor

CIV 2013-404-004002

IN THE MATTER OF The Bankruptcy of DARYOUSH MAHMOUDI GHALEH

BETWEEN SNEDDEN SOLICITORS NOMINEE COMPANY LIMITED

Judgment Creditor

AND DARYOUSH MAHMOUDI GHALEH Judgment Debtor

Hearing:	23 October 2014
Appearances:	J M Keating for the Judgment Creditor P R Finlay in person the Judgment Debtor [CIV 4000]
Judgment:	R E Lawn for the Judgment Debtor [CIV 4002] 23 October 2014

_{ORAL JUDGMENT OF ASSOCIATE JUDGE CHRISTIANSEN}

SNEDDEN SOLICITORS NOMINEE COMPANY LIMITED v P R FINLAY AND D M GHALEH [2014] NZHC 2606 [23 October 2014]

[1] This hearing is scheduled to consider the judgment creditors adjudication applications. Those are opposed by Mr Finlay and Mr Ghaleh. The opposition case of each is essentially the same.

[2] On 13 August 2014 I set these two matters down for hearing today. At that time Mr Finlay was not represented by counsel. Mr Ghaleh was represented by Mr Lawn.

[3] Submissions for the judgment creditor were received on 13 October 2014. No submissions have been received by or on behalf of the judgment debtors. Ten minutes prior to the hearing being called the Court received copies of a statement of asset and liabilities, and a proposal prepared on behalf of Mr Ghaleh. It is clear that Mr Lawn received very recent instructions in regard to those two documents and not insignificant effort has been made in their preparation.

[4] Ms Keating for the judgment creditor advised she had received a copy of those documents just 30 to 45 minutes earlier but was able in that time to obtain a letter from a solicitor acting for a trust that was shortly to issue summary judgment proceedings against Mr Ghaleh in his personal capacity in connection with an outstanding loan of about $280,000. Significantly the documents provided in support of Mr Ghaleh’s creditor’s proposal makes no mention of this debt.

[5] On 14 October 2014 Mr Finlay filed a memorandum seeking an adjournment of today’s fixture. The memorandum said he was without legal counsel and that his rights had therefore been compromised; that he was having difficulty obtaining alternative counsel. He claims Ms Parlane his lawyer, had to withdraw because of threats made to her by counsel for the judgment creditors.

[6] Ms Parlane was on the record as acting for Mr Finlay in his earlier application to set aside the bankruptcy notice served on him. Service of that bankruptcy notice was the precursor to the present adjudication applications.

[7] The Court’s record includes copies of recent emails between the Court and

Ms Parlane and the judgment creditor’s solicitors and Ms Parlane. In a letter to the

Court Ms Parlane advised that she had not had instructions from Mr Finlay “for some time now”.

[8] In an email dated 7 October 2014 to Ms Parlane, the judgment creditor’s solicitor advised that unless Mr Finlay’s opposition was withdrawn immediately then costs would be sought against Ms Parlane personally.

[9] In response Ms Parlane asked the solicitor to clarify on what basis costs would be claimed against her personally. She said Mr Finlay had been representing himself for “quite some time”.

[10] Regardless, it is clear Ms Parlane has been without instructions for a lengthy period of time. Indeed it seems throughout the management of the adjudication application, Mr Finlay has been self represented. It was he who prepared and filed an affidavit in opposition on 25 June 2014. That document noted Mr Finlay’s residence as the address for service. On 12 August 2014 Mr Finlay filed a memorandum he had prepared in relation to the fixing of a date to hear the adjudication application. This matter was called on 26 June 2014 and 13 August

2014. On neither occasion was Ms Parlane in attendance.

[11] It does not appear Ms Parlane has at all been connected to the adjudication application. The Court records indicate Ms Parlane was last involved on behalf of Mr Finlay when an application was filed in September 2013 to set aside the bankruptcy notice served on Mr Finlay. Ms Parlane appears also to have assisted Mr Finlay with the filing of an affidavit in support of his setting aside application in November 2013. Ms Parlane is also on the record as having represented Mr Finlay in November 2013 in the High Court upon the setting aside application.

[12] In this background of matters the request by Mr Finlay to adjourn today’s hearing is refused. No submissions have been filed by Mr Finlay addressing the matters raised by his opposition to the adjudication application.

[13] Nor have submissions been filed on behalf of Mr Ghaleh. Save for matters

relating to Mr Finlay’s complaints about lack of representation, and in respect of Mr

Ghaleh’s attempts to advance a creditors proposal nothing new is raised by the oppositions to the adjudication applications that has not been dealt with by the applications to the High Court and the appeal to the Court of Appeal.

The judgment

[14] Lang J entered judgment against the judgment debtors on 8 November 2011. The judgment provided time to allow the judgment debtors to reach an accommodation with the plaintiff. No accommodation was reached and the judgment was sealed in July 2013.

Application to set aside bankruptcy notices

[15] After bankruptcy notices were served Mr Finlay applied to set aside his on grounds, inter alia:

(a) That he had a claim against third parties, that constituted the set off under s 179(1)(d) of the Insolvency Act 2006;

(b) The bankruptcy notice was defective;

(c) The judgment creditor had security for the debt that was worth at least

$1,000 more than the debt.

[16] The applications to set aside were heard on 25 November 2013 before

Courtney J.

[17] Whilst Mr Ghaleh was not a party to that hearing he did on 27 November

2013, being the day before the adjudication application against him was to be heard, file a notice of opposition on the same grounds as Mr Finlay’s application to set aside the bankruptcy notice.

[18] On 7 February 2014 Courtney J dismissed Mr Finlay’s setting aside application. The learned Judge was not prepared to accept Mr Finlay’s valuation of the properties in question. The learned Judge also dismissed Mr Finlay’s claim

against third parties in relation to a failed sale and purchase agreement for the land. Her Honour said there was no information to suggest a judgment obtained against such third parties would result in money being available to extinguish the debt.

[19] Mr Finlay then lodged an appeal with the Court of Appeal. That Court reviewed the merits of Mr Finlay’s grounds of appeal and held that “his appeal falls into the category of hopeless”.

The adjudication application

[20] It was opposed for the reason that the High Court judgment was then subject to an appeal to the Court of Appeal. That appeal has now been determined. The appeal was unsuccessful. The findings of the High Court have been upheld. Mr Finlay’s reasons for appeal comprising those same reasons for his opposition to the adjudication applications, have been rejected.

[21] As already identified, the Court considers Mr Finlay’s complaints about lack of representation to be ill founded. Mr Ghaleh’s creditor’s proposal has been forthcoming at literally the last minute. It seems clear the proposal does not include a substantial creditor which has, through its solicitor advised Ms Keating it would not support the proposal. Ms Keating confirmed that the judgment creditor would not support the proposal either. It seems plain the proposal would not receive sufficient support for approval.

[22] The opposition is without merit. The debts for which judgment was entered remain unpaid. The clear evidence is that the judgment debtors are insolvent. There is no basis upon which the Court should consider exercising its discretion to refuse the orders sought.

[23] There are orders accordingly adjudicating Mr Finlay and Mr Ghaleh bankrupt.

[24] The time of those orders is: 2:59pm.

[25] Costs are awarded to the judgment creditor on a 2B basis together with disbursements approved by the Registrar. Those costs are payable from the

_{bankrupts’ estates.}

Associate Judge Christiansen