Leeds v Richards

JurisdictionNew Zealand
JudgeR M BELL
Judgment Date03 June 2016
Neutral Citation[2016] NZHC 1191
Docket NumberCIV-2016-404-140
CourtHigh Court
Date03 June 2016

Under the Insolvency (Cross-border) Act 2006

In the Matter of a request for assistance to facilitate the enforcement of an order dated 19 December 2014 of the high Court of Justice of England and Wales

Between
Michael Thomas Leeds and Nicholas Stewart Wood
Applicants
and
Murray Richards
First Respondent
Steindle Williams Legal Limited
Second Respondent

[2016] NZHC 1191

CIV-2016-404-140

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

Application by the first respondent under s22 Trans-Tasman Proceedings Act 2010 (TTPA) for a stay of an application to enforce an order from the High Court of Justice of England and Wales on the grounds that an Australian court was a more appropriate forum — respondent had been adjudicated bankrupt in England — the County Court sought assistance under the Insolvency (Cross-border) Act 2006 with obtaining documentation from the respondent's former solicitors that was relevant to his bankruptcy — respondent was currently resident in Australia — whether an Australian court was the more appropriate forum under s24 TTPA (Order of stay of proceeding); who had the onus of showing the appropriate forum under s24.

Appearances:

S Bisley for Applicants

No appearance for Respondents

This judgment was delivered by me on 3 June 2016 at 1:00pm pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar

JUDGMENT OF ASSOCIATE JUDGE R M BELL
1

The applicants are the English joint trustees in bankruptcy of the estate of Mr Richards. Vivendi SA and Centenary Holdings III Ltd obtained judgment against Mr Richards in the Chancery Division of the High Court in England for £14,193,461.41 on 9 October 2013. 1 On Vivendi's application the English High Court adjudicated Mr Richards bankrupt on 19 December 2014. The applicants were appointed joint trustees on 5 February 2015. Judicial administration of the bankruptcy passed to the County Court at Croydon. On 16 November 2015 it issued a letter of request to this court to act in its aid and be auxiliary to it under s 8 of New Zealand's Insolvency (Cross-border) Act 2006. Specifically it sought the following assistance:

By originating application the trustees have sought orders in those terms.

  • 1 that the bankruptcy order and the appointment of the joint trustees be recognised in New Zealand;

  • 2 that the joint trustees may exercise the powers conferred on the Official Assignee under ss 165(1) and 171 of the Insolvency Act to obtain from Steindle Williams Legal Ltd information relevant to Mr Richards' bankruptcy; and

  • 3 that the joint trustees may apply to this court for further relief if assets are located in New Zealand and which require this court's assistance to realise or if examination powers are required to obtain further information.

2

The trustees have applied under s 8 of the Insolvency (Cross-border) Act:

8 High Court to act in aid of overseas courts

  • (1) This section applies to a person referred to in article 1(1) of Schedule 1.

  • (2) If a court of a country other than New Zealand has jurisdiction in an insolvency proceeding and makes an order requesting the aid of the High Court in relation to the insolvency proceeding of a person to whom this section applies, the High Court may, if it thinks fit, act in aid of and be auxiliary to that court in relation to that insolvency proceeding.

  • (3) In acting in aid of and being auxiliary to a court in accordance with subsection (2), the High Court may exercise the powers that it could exercise in respect of the matter if it had arisen within its own jurisdiction.

They rely on s 8 because they accept that Mr Richards' bankruptcy is not a foreign main proceeding or a foreign non-main proceeding under the Model Law on Cross-Border Insolvency. 2

3

The primary focus of the application is information and records held by Steindle Williams Legal Ltd. The trustees do not seek any order against Mr Richards directly. He has been joined to give him an opportunity to be heard on the application.

4

Mr Richards, the bankrupt, is a New Zealander but presently lives in Australia, apparently in Sydney. He refuses to say exactly where he lives. The trustees complain that he is unco-operative and for that reason they have objected to his automatic discharge from bankruptcy.

5

When Mr Richards gave evidence in England, he identified Steindle Williams Legal Ltd as lawyers who had acted for him. Steindle Williams Legal Ltd is an incorporated law firm in Auckland. It has entered an appearance. It neither opposes nor consents to the orders sought by the trustees. It advises that it does not now act for Mr Richards, and does not have his consent to provide any information to the joint trustees. Given the obligation of client-lawyer confidentiality, it will not disclose information except on court order. It leaves it to Mr Richards to run any opposition to the application.

6

As an Australian resident served with a civil proceeding issued out of a New Zealand court, Mr Richards has applied under s 22 of the Trans-Tasman Proceedings Act 2010 for a stay of the joint trustees' application on the grounds that an Australian court is a more appropriate forum. This decision is on that application.

Mr Richards
7

In the proceeding in which Vivendi obtained judgment, Newey J said: 3

Mr Richards comes from New Zealand. As a young man, he began studying accountancy and law, but he did not complete the course. Instead, he sought to become a motor racing driver, but that career was cut short by a severe accident. In 1966, he moved to Australia, where he became involved in the property business. 12 years later, he was convicted in Australia of conspiring to cheat and defraud a company called George Hudson Pty Ltd and its creditors and given a sentence of some ten years' imprisonment; the relevant events had taken place in 1971–1972, when Mr Richards was in his mid-20s. Mr Richards appealed against both conviction and sentence. The appeal was dismissed on 7 December 1979, but Mr Richards' evidence in the present proceedings was nonetheless that he did not commit the office of which he was convicted.

At all events, the conviction did not stop Mr Richards pursuing a business career. He acquired extensive experience in property and technology matters and company acquisitions; by his own account, he was a “serial entrepreneur”. Asked about his role, he said that it was essentially to find investment projects for people or companies.

8

Mr Richards says that he never had an English domicile or residence. He says that his only source of income is an Australian pension. The trustees do not necessarily accept that: they point to the missing £14M. Mr Richards does not accept his liability under the judgment Vivendi obtained against him, and does not accept that he has been effectively bankrupted. Mr Richards' refusal to disclose his address or whereabouts is consistent with his defeating and delaying his creditors

9

Mr Richards has not engaged a lawyer. He has specified his email address as the address for service, but has given an address at a Sydney firm of solicitors if the documents are to be served on him by hard copy.4 Associate Judge Doogue has also directed that Mr Richards may also be served at the office of the New Zealand barristers who assisted him in filing his stay application.

10

At one stage Mr Richards asked for the proceeding to be adjourned to a date after 18 July 2016 because he would lose his entitlement to Australian3Vivendi SA v Richards, above n 1, at [4] and [5].4 He is entitled to have an Australian address for service in trans-Tasman proceedings under the definition of “address for service” in r 1.3 of the High Court Rules.superannuation if he came to New Zealand. Judge Doogue asked for verifying information but Mr Richards did not provide it.

11

I offered him the opportunity to take part in the hearing remotely by telephone, 5 but he advised the Registrar that he is unable to do so even though he has been in effective telephone contact with the court registry. Notwithstanding his absence, I have considered his written submissions.

Trans-Tasman Proceedings Act 2010
12

This is a proceeding under the Trans-Tasman Proceedings Act 2010, Part 2, subparts 1 and 2. More specifically, it is a civil proceeding commenced in a New Zealand court. 6 It is not within any of the exclusions under s 12 (2). Accordingly, the trustees were entitled to serve Mr Richards with the application in Australia without first obtaining leave. 7

13

Under Part 2, subpart 2, a New Zealand court may decline jurisdiction on the grounds that an Australian court is the more appropriate forum. Mr Richards' application is within time under s 21(2) of the Act – within 30 working days after being served. Section 21(3) provides:

(3) The New Zealand court may only stay the proceeding if it is satisfied that an Australian court has jurisdiction to determine matters in issue and that it is the more appropriate court to determine those matters.

And s 24(1):

Order of stay of proceeding

  • (1) On an application under section 22, the New Zealand court may, by order, stay the proceeding if it is satisfied that an Australian court–

    • (a) has jurisdiction to determine the matters in issue between the parties to the proceeding; and

    • (b) is the more appropriate court to determine those matters.

14

In determining whether the Australian court is the more appropriate court, the New Zealand court must take into account the matters in s 24(2).

Is there an Australian court to determine the matters in issue?
15

Mr Richards has not adduced any evidence as to courts with a bankruptcy jurisdiction in Australia. I can, nevertheless, take notice that Australia does have bankruptcy courts and that Australia has enacted legislation adopting the Model Law on cross-border insolvency. 8 Further s 29 of the Bankruptcy Act 1966 (Cth) corresponds to s 8 of the Insolvency...

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    ...Proceedings Act 2010, s 3(1). 2 Skelton v Z487 Ltd [2014] NZHC 707 at [19]. 3 Trans-Tasman Proceedings Act 2010, s 21(3) and s 24(1). 4 Leeds v Richards [2016] NZHC 1191 at 5 Trans-Tasman Proceedings Act 2010, s 22(2) and s 24(2). 6 Trans-Tasman Proceedings Act 2010, s 27(1). 7 Trans-Tasma......

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