Haines House Removals Ltd and Ors v Jamieson and Ors Hc Ak

• Jurisdiction: New Zealand
• Judge: Duffy J
• Judgment Date: 22 August 2012
• Neutral Citation: [2012] NZHC 2114
• Docket Number: CIV-2012-404-003969 CIV-2011-404-003878
• Court: High Court
• Date: 22 August 2012

BETWEEN

Haines House Removals Ltd

Plaintiff

and

Kathleen Mary Jamieson

First Defendant

The Registrar General of Land

Second Defendant

BETWEEN

Haines House Removals Ltd

Appellant

and

The Official Assignee

Respondent

BETWEEN

The Official Assignee

Plaintiff

and

Kathleen Mary Jamieson as Trustee of the Spearhead Trust

First Defendant

Kathleen Mary Jamieson As Trustee Of The Castello Trust

Second Defendant

[2012] NZHC 2114

CIV-2012-404-003969

CIV-2012-404-003287

CIV-2011-404-003878

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

Interlocutory applications by defendant in her capacity as trustee to allow the trust to be heard in an appeal and to permit the trust access to the court file of the appeal — plaintiff had appealed a decision of the Official Assignee to discontinue proceedings against the defendant under s86 Insolvency Act 1967 (“IA”) (appeal from decision of Assignee) — plaintiff claimed that trust owed defendant a debt which was in turn recoverable by the OA for the benefit of the defendant's creditors — trust said it would confine its arguments to addressing the prejudice it would suffer should the OA's decision to discontinue the proceedings against the trust be set aside and the Court could adopt a procedure whereby it heard the trust's arguments first — whether trust needed to be an aggrieved person under s86 IA to be added as an intervenor.

counsel:

R C Mark, for Haines House Removals Ltd

D W Grove for Kathleen Jamieson

P C Murray for the Official Assignee

R C Mark P O Box 172 Kerikeri 0245 for Haines House Removals Ltd

D W Grove PO Box 130 ShortlandStreet Auckland 1140 for Kathleen Jamieson

REASONS JUDGMENT OF Duffy J

1 There are two interlocutory applications before the Court for hearing. They have been brought on urgently, as they directly affect an appeal to be heard by this Court on Thursday, 23 August 2012.

2 The appeal is brought by Haines House Removals Ltd (Haines), pursuant to s 86 of the Insolvency Act 1967, against a decision of the Official Assignee to discontinue proceedings against Kathleen Jamieson as the trustee of the Spearhead Trust. Haines contends that this trust owes Ms Jamieson a debt, which in turn is recoverable by the Official Assignee for the benefit of Ms Jamieson's creditors, including Haines. The appeal is being brought against a background of two other proceedings involving Haines and Ms Jamieson.

3 The interlocutory applications are brought by Ms Jamieson in her capacity as trustee of the Spearhead Trust. For ease of reference, I shall refer to her and the Spearhead Trust as if they were one and the same (the trust). The first application is an application to the Court permitting the trust to be heard in the appeal. The second application is an application permitting the trust access to the court file of the appeal. Both applications are opposed by the Official Assignee and by Haines.

4 It is common ground that the only need for the trust to access the court file of the appeal is if it is to appear and be heard in the appeal. Thus, if its application for intervention should fail, so should its application to access the court file.

5 The Official Assignee and Haines contend that some of the material on which the outcome of the appeal will hinge is material that is legally privileged and confidential in relation to the other proceedings in which they have common interests as against the trust. The concerns about disclosure of confidential and legally privileged material have arisen because before the Official Assignee decided to discontinue the proceedings against the trust, he and Haines had common interests in the proceeding against the trust. Consequently, they have shared legally privileged material in accordance with the privilege that parties having a common interest in proceedings can enjoy. They do not want the trust to see this material, as if the Official Assignee's decision to discontinue the proceedings against the trust is set aside, they will want to use this material as part of their case against the trust in that proceeding. Thus, they argue that the need to protect the confidential and legally privileged character of the material on the appeal file is a reason to refuse the trust an opportunity to be heard in the appeal.

6 Resolution of the application to access the court file of the appeal has been simplified by the stance taken by the trust during the course of the hearing. In this regard, the trust modified its application for access to the court file of the appeal. It said that if it were granted leave to intervene in the appeal, it would confine its arguments to addressing the prejudice it would suffer should the Official Assignee's decision to discontinue the proceedings against the trust be set aside. The trust said that the parties' concerns regarding it becoming aware of material that was confidential and legally privileged could be met by the Court adopting a procedure whereby it heard the trust's arguments first, with the parties having the opportunity to respond to those arguments, and then the trust and its counsel would withdraw from the hearing. In this way, the confidential and legally privileged material that the parties would be traversing for the purpose of the appeal would remain unknown to the trust and its counsel.

7 The resistance that the Official Assignee and Haines display towards the trust having access to the court file on the appeal is understandable. I anticipate that the Official Assignee will want to refer to some of the confidential and legally privileged material to support his decision to discontinue the proceedings against the trust, whereas Haines will want to refer to other aspects of this material to support its argument that the Official Assignee has a sound case against the trust. If the trust had access to this material and the appeal were successful, the Official Assignee and Haines will have effectively disclosed their hand in the case that each would be bringing against the trust. However, I consider that the process suggested by the trust would meet this concern.

8 It follows that if the trust were to be permitted to intervene in the appeal, it would be on the limited basis that its arguments were confined to addressing the prejudice the trust would suffer if the decision to discontinue were set aside on appeal. Its arguments would be addressed to the Court first, with the parties having an opportunity to respond. The trust and its counsel would then depart from the courtroom. This arrangement would occur with the trust's consent. It also disposes of the arguments the Official Assignee and Haines make against the trust's participation in the appeal that draw on the difficulties this would cause regarding its access to the confidential and legally privileged information.

9 I now turn to consider the more complex issues that arise from the trust's request to intervene and be heard in the appeal.

Background

10 Ms Jamieson owed a debt to Haines when Haines supplied and delivered a house to Sunnyside Road for Ms Jamieson in November 2002. The final payment was due on 23 May 2003, but Ms Jamieson did not pay the agreed price for the house.

11 Ms Jamieson is trustee of two trusts, the Spearhead Trust and the Castello Trust. Each of these trusts own property. The Sunnyside Road property was originally purchased in Ms Jamieson's name but transferred to the Castello Trust after the house had been relocated onto the property.

12 Eventually, Haines obtained summary judgment against Ms Jamieson for the debt it was due. Haines then commenced bankruptcy proceedings against Ms Jamieson, leading to her being adjudicated bankrupt in September 2007.

13 Haines was closely involved with the Official Assignee from the commencement of the bankruptcy proceedings because Haines believed that Ms Jamieson was financially able to pay the debt, but had transferred assets into the two trusts to avoid paying the debt.

14 In September 2010, the Official Assignee filed an objection to Ms Jamieson's application for discharge from bankruptcy, on the basis that Ms Jamieson was owed money by her trusts. The Official Assignee was prepared to commence summary judgment proceedings against the trusts, but said that Haines would have to fund the proceedings. A deed was signed to that effect.

15 The proceedings against both trusts were filed in August 2011. Haines did not pay immediately when the Official Assignee asked for payment to support the proceedings against the trusts.

16 On 7 February 2012, the Official Assignee's claim against the Castello Trust was struck out, leaving only a claim against the Spearhead Trust.

17 On 24 May 2012, Haines was informed of the decision to discontinue the proceedings against the Spearhead Trust, hence the appeal.

Right to be heard

18 This appeal is brought under s 86 of the Insolvency Act 1967, because Ms Jamieson's bankruptcy occurred before the Insolvency Act 2006 came into force. Section 86 states:

86 Appeal from decision of Assignee

If the bankrupt or any creditor or any other person is aggrieved by an act or decision of the Assignee, he may, within 21 days from the date of that act or decision or within such further period as the Court allows, apply to the Court, and the Court may confirm, reverse, or modify the act or decision complained of, and make such order as it thinks fit.

19 The meaning of “aggrieved” was interpreted by Tipping J in Gay v Bruns CA193/98, 17 June 1999, who found that this required there to be a detrimental effect of a substantive kind to the person before he or she could bring an appeal (at [6]). The person must be “legally worse off in some substantive or procedural way as a result of the decision” (at [5]). In a similar vein,...