ANZ Bank New Zealand Limited v Martin [2015] NZHC 1107 (21 May 2015)

High Court of New Zealand

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ANZ Bank New Zealand Limited v Martin [2015] NZHC 1107 (21 May 2015)

Last Updated: 27 May 2015

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

CIV-2015-485-89 [2015] NZHC 1107

IN THE MATTER OF	The Insolvency Act 2006
IN THE MATTER OF	The bankruptcy of Colette Lorna Martin
BETWEEN	ANZ BANK NEW ZEALAND LIMITED Judgment Creditor
AND	COLETTE LORNA MARTIN Judgment Debtor

On the Papers: 21 May 2015

_{JUDGMENT OF ASSOCIATE JUDGE SMITH}

[1] ANZ Bank New Zealand Limited (the Bank) wishes to obtain an order under r 12.14 of the High Court Rules setting aside the summary judgment it obtained against Ms Martin in July 2013. It has not filed a formal application; it asks the Court to exercise its jurisdiction on the basis of a memorandum of counsel. Ms Martin has not been served with the Bank’s informal setting-aside application.

Background

[2] In March 2013, the Bank made an interlocutory application for summary judgment against Ms Martin and her husband, claiming amounts said to be owing to the Bank on certain loans or other financial accommodation provided to Mr and Ms Martin.

[3] The Bank did not then have a current address for Ms Martin, and on

10 June 2013 an order for substituted service was made dispensing with personal service, and directing that Ms Martin could be served by sending the relevant

ANZ BANK NEW ZEALAND LIMITED v COLETTE LORNA MARTIN [2015] NZHC 1107 [21 May 2015]

documents to her solicitor in Auckland, by email and by post, and by placing an appropriate notice in the Otago Daily Times newspaper.

[4] An affidavit of service was subsequently filed, sufficiently proving that service on Ms Martin had been effected in accordance with the order for substituted service.

[5] The summary judgment application was called in this Court at Wellington on

15 July 2013. There was no appearance by Ms Martin or her husband. Summary judgment was duly entered for the Bank in the sum of $100,000 against Ms Martin.

[6] The Bank subsequently learned that Mr and Ms Martin had moved to Western Australia. It sought to have the summary judgment registered in that state under the Foreign Judgments Act 1991 (WA).

[7] Ms Martin opposed the registration of the New Zealand judgment in Western Australia. She filed an affidavit in the Supreme Court of Western Australia stating she had not received any notice of the New Zealand proceeding. On that basis, the Supreme Court of Western Australia declined to register the New Zealand judgment. That decision was not opposed by the Bank.

[8] The Bank now applies to set aside the New Zealand judgment. The reason it does so is that it wishes to re-serve the New Zealand proceeding on Ms Martin, so that it can obtain another (New Zealand) judgment against her which can be registered and enforced in Western Australia.

[9] The Bank does not suggest that the amount for which it obtained judgment against Ms Martin was not due and owing by her. Nor did Ms Martin suggest in her affidavit sworn in the Supreme Court of Western Australia that the amount claimed by the Bank is not owing. She has made no application to this Court to set aside the judgment. The fact that she apparently did not have actual notice of the New Zealand Court proceeding was sufficient on its own for the Court in Western Australia to decline to register the New Zealand judgment.

Discussion and conclusion

[10] Rule 12.14 of the High Court Rules states:

12.14 Setting aside judgment

A judgment given against a party who does not appear at the hearing of an application for judgment under r 12.2 or 12.3 may be set aside or varied by the Court on any terms it thinks just if it appears to the Court that there has been or may have been a miscarriage of justice.

[11] It is open to a plaintiff to apply under r 12.14 to set aside a summary judgment it has obtained.¹

[12] The issues in this case, unlike other setting aside cases, do not arise because the party applying says that a judgment was entered when it should not have been. In such cases, there is a discretion to set aside the judgment ex debito justitiae, that is, to set aside the judgment without looking into the merits of the case. The usual reason this occurs is that the judgment in question was irregularly obtained. That was the position in Singapore Airlines v Mistry,² where after the judgment was entered, there was new evidence that made it clear that the Court which entered the summary judgment had done so under the misapprehension that the application had been properly served in accordance with the rules (when it had not).

[13] Here, while it appears Ms Martin did not in fact receive notice of the summary judgment application, there was no irregularity: the order for substituted service was complied with.

[14] In my view, any miscarriage of justice, in the sense required by r 12.14, must relate to the entry, or obtaining, of the judgment, and not to subsequent problems relating to its enforcement in other jurisdictions. In this case the judgment appears to be a perfectly valid New Zealand judgment, which would be enforceable as such in New Zealand. And it seems to me that a plaintiff who proceeds to a default judgment in circumstances where it is not clear that substituted service has been

_{effective in bringing the proceeding to the defendant’s attention must be taken to}

¹ _{Oranga Holdings Ltd v Duke [1995] 8 PRNZ 500 at 505.}

² Singapore Airlines v Mistry [2014] NZHC 1055.

have accepted the risk of encountering enforcement difficulties if it is later obliged to enforce the judgment in some other jurisdiction.

[15] If post-judgment enforcement difficulties cannot form the basis for any miscarriage of justice submission, as I consider to be the position, the Bank should not be in any better position in seeking to set aside the judgment than Ms Martin would have been if she had made the application. And if Ms Martin had made the present application I would need to have been satisfied that she had at least an arguable defence to the Bank’s claim – I would not have seen this as a situation where the summary judgment should be set aside without any consideration of the merits.

[16] To take any contrary view would, in my view, open the door to the risk that a debtor who had no defence to a claim (and whose success in evading personal service effectively required the plaintiff to obtain an order for substituted service) would be able to delay matters by applying to set aside a judgment solely on the basis that he or she did not have notice of the hearing.³

[17] While I have some sympathy with the difficulties the Bank now faces in enforcing its judgment, I do not think that this case falls within the limited number of cases which would justify the setting aside of a summary judgment on a plaintiff’s application. There is simply no evidence of a miscarriage of justice in the sense required by r 12.14.

_{Associate Judge Smith}

³ There is no evidence to suggest that Ms Martin is such a debtor – the point is purely conceptual.