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The outcome of a disputes tribunal hearing left me with roughly

 
christhelawyer's Avatar
  • Answered by:christhelawyer
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Customer Question

The outcome of a disputes tribunal hearing left me with roughly $10,000 bill to a former landlord. This happened back in 2009.

I've been called by a Legal Process Server who wishes to serve me a bankruptcy notice along with a certificate of judgement.

The Bankruptcy notice was originally processed on the 30th of May 2012.

The legal process server however has no idea where to serve the above documents and is threatening to put it forth for substituted service.

I'm trying to understand my exposure if I choose to accept the notice and if I choose to not accept the notice.

In unrelated business I am also a director/shareholder of other privately held companies with very public brands. If the chance of substituted service could be granted in the form of NZ Herald public notice page then I'll go ahead and receive the documents.

I'm trying to gauge if a high court judge would in fact risk the potential damage to character associated with a public notice page for a sum as small as 10k.

I'd like the insight of your best suited professional.

 



Already Tried:
I'm looking for additional prospectives

Submitted: 316 days and 18 hours ago.
Category: New Zealand Law
Value: NZ$123
Status: CLOSED

Accepted Answer

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Expert:  christhelawyer replied316 days and 17 hours ago.


christhelawyer :

Hi Welcome to JustAnswer. My first response will follow shortly. Please feel free to follow up if anything is not clear

christhelawyer :

Unfortunately they have an absolute right to lodge such a notice and immunity from any action by you because of the effect of this. The reason for this, is that they are obliged to serve the document under the High Court Rules, and do so within strict time limits. If they cannot do so, they must either withdraw the notice (which they wont) or make an application to the high Court by a without notice application, for an order that the notice be served by adverisement in the paper, which is a valid method of substituted service.

Customer :

Are you aware of any financial thresholds for advertising in the paper?

Customer :

Have there been any instances of record where the advertisement in public notices page has been viewed as harsh or unworthy of the amount being pursued?

christhelawyer :

An affidavit in support of the application is filed which describes the attempts to serve this in person. If the court registrar is satisfied that they have tried, and not succeeded then an order will be made for service by advertisement. This court order is what gives then the authority, and is why they have immunity. There is no limit on the amount for this to happen in the High Court Rules. All they need is a valid judgment, and the notice.

christhelawyer :

No. once the notice is valid, and service cannot be effected personally, they have an obligation to serve by alternative methods.

Customer :

what would be viewed as "satisfied that they tried"?

Customer :

is there legislation that defines this?

christhelawyer :

The process server would sign an affidavit describing the attempts made to serve, and probably use your refusal to disclose your physical location, and the attempts to find you. the court registrar makes the decision.

christhelawyer :

The reference is the High Court rules 6.8

christhelawyer :

6.8 Substituted service If reasonable efforts have been made to serve a document by a method permitted or required under these rules, and either the document has come to the knowledge of the person to be served or it cannot be promptly served, the court may— (a) direct— (i) that instead of service, specified steps be taken that are likely to bring the document to the notice of the person to be served; and (ii) that the document be treated as served on the happening of a specified event, or on the expiry of a specified time: (b) when steps have been taken for the purpose of bringing, or which have a tendency to bring, the document to the notice of the person on whom it is required to be served, direct that the document be treated as served on that person on a specified date: (c) subject to any conditions that the court thinks just to impose, dispense with service of a document on a person and give to the party by whom the document is required to be served leave to proceed as if the document had been served.

Customer :

Ok that's actually quite ambiguous..I would have thought they're be a clearly defined scope of what constitutes an attempt to serve.

Customer :

I haven't not disclosed where I am I'm just indicated that I'm broadly out of the area

Customer :

Now what would make the notice invalid?

christhelawyer :

It is not ambiguous. You have an obligation to cooperate with service or face an application like this. Judges get very humourless when people avoid service. It is not just that you are being evasive about your location, but service of documents is a critical part of the court process, and parties are obliged to get on with service and cannot delay. Likewise you are obliged to cooperate.

christhelawyer :

Porter v Freudenberg [1915] 1 KB 857 (CA) at 887, provides a useful review of the principles applicable to substituted service (especially at 888, where the terms of the rule were said to be of very wide application, providing a discretion which the Court was not inclined to limit

christhelawyer :

(a) At least two calls should be made. (b) The calls should be made at the defendant’s known permanent or temporary residence or at the defendant’s business address if the claim relates to the defendant’s business. If the defendant has left the address given in the notice of proceeding, this should be stated in the affidavit. If a copy of the document to be served is left, it must be in a sealed envelope addressed to the defendant. (c) The calls should be made on weekdays and at reasonable hours. (d) Each call should be on a separate day. (e) The second call should be made by appointment by letter sent to the defendant by ordinary prepaid letter post, giving not less than 2 days’ notice, enclosing a copy of the document to be served, and offering an opportunity of making a different appointment. (f) On keeping the appointment, the process server should inquire whether the defendant has received the letter of appointment with the copy document, and, if it is stated that the defendant is away, inquiry should be made whether letters are being or have been forwarded to an address within the jurisdiction; the object is to show that the defendant has received communications sent to him or her. (g) The affidavit in support of the application should cover all these matters and should further state whether the letter of appointment has been returned or not, and any answer received should be exhibited. A copy of the document served should accompany the affidavit.

Customer :

Ok...I think we define ambiguous differently....I'm in support of your statement....ahhh that last part is much better thank you!

Customer :

The second call should be made by appointment by letter sent to the defendant by ordinary prepaid letter post, giving not less than 2 days’ notice, enclosing a copy of the document to be served, and offering an opportunity of making a different appointment.

Customer :

would the above line hasn't happened...I'd imagine we should insist it does

christhelawyer :

So as you can see this must be done properly but the application is examined by the registrar. The test I describe is more of a comprehensive test, but the problem is, if you want to contest this application (which is always made without notice) then you would have to go on the record to do so, and to do this, would need to provide an address for service, which would cure the problem for them.

Customer :

ok...I'm also under the impression that the notice needs to be renewed every 30 days or its invalid and it also can't be in existence for longer than 90 days unless extraordinary circumstances can be shown...

Customer :

I'm thinking if I require them to mail the letter and offer an appointment we'll be able to keep the wheels in motion for another couple of weeks.

Customer :

So far they've only called by one of my offices...which I own but don't work from; they've never left any documents and when I requested he do so today on the phone told me know he wasn't obliged to

Customer :

and sorry for the typos I'm not proofreading...just going with a stream of conciousness style flow so please let me know if you need any clarification

christhelawyer :

That is why they are under pressure to serve. The service periods are actually in working days now and not the same periods you describe, but works out as similar periods. The passage I cite is the full test and the details are a case about this, not the actual high Court rule. I would not recommend insisting on the full rigour of this case because the registrar can reach a decision that the attempts made have been adequate.

Customer :

Ok; I understand that

Customer :

do they have to notify me if they choose to use substituted service?

Customer :

clearly the server will have to share with the court that he has contact with me its just seeing me in person that's been difficult?

christhelawyer :

Sorry this is still in months-24.9 Service of bankruptcy notice in New Zealand (1) A bankruptcy notice that is to be served in New Zealand must be served within 1 month from the date of its issue. (2) If, however, the Registrar is satisfied that reasonable efforts have been made to comply with subclause (1) and service has not been effected, the Registrar,— (a) on the request in writing of the judgment creditor made not later than 1 month after the end of that period, may extend the time by 1 month or by successive periods of 1 month: (b) must mark the notice with the word “renewed” and the date of the renewal. (3) A notice must not, without a Judge's consent, be extended for a period exceeding 3 months from the date on which the notice was first issued.

Customer :

ok so it was first issued on the 30th of May

Customer :

so we'd already be 40 days in

Customer :

how long would it typically take them to make a ruling that substituted service is accepted?

christhelawyer :

They do not have to tell you they are applying-they can apply to the High Court without notice-this means they do not serve copies, as opposed to an application on notice, where they do serve the application and affidavit. The process server would likely describe the conversations with you

christhelawyer :

This takes only a few days

christhelawyer :

Are you aware you can apply to set aside the notice, after it has been served?

christhelawyer :

You would be better accepting service and using this

Customer :

ok; how would I do that at a high level?

christhelawyer :

But you would need a proper basis for the application, and if you apply and the application is dismissed the High Court costs can mount up quickly and are added on to the amount to pay. To apply, you would need to make an application under the High Court rules to set aside the notice, with an affidavit in support, which sets out the grounds. this is given a hearing date when filed, and served on the creditor. At the first call of the application a hearing date for the application would be allocated

christhelawyer :

The creditor would file a notice of opposition

christhelawyer :

The scale of costs would quickly add to the amount as the daily rate for costs for this are $1990

Customer :

there is already a disputes tribunal judgement against me

Customer :

would that have any bearing on the set aside notice?

christhelawyer :

That is why I describe above, you need a proper basis for the application. They must first seal the Disputes Tribunal order as a District Court judgment, then file this in the High Court as a certificate of judgment. If you did not appeal this at the time, then it would be hard to see why this should not be paid

Customer :

I did appeal it at the time and we did the disputes tribunal a second time with a similar outcome...at that stage we didn't have any further remedy...the amount was still heavily contested which is why I chose not to pay the guy

Customer :

would they view the fact that we did appeal the disputes tribunal judgement as reason to look at it again?

christhelawyer :

That would add to the strength of their position not yours.

Customer :

ok

Customer :

I've got a better understanding as to where we're sitting

Customer :

what is the cheapest way to settle?

christhelawyer :

Pay the amount in the notice, or make an offer. They do not have to accept a partial offer however

christhelawyer :

In your position, they may want all or proceed to the end

Customer :

what if I pay the amount from the disputes tribunal ruling before I receive the notice?

christhelawyer :

They are entitled to the costs of the notice.

Customer :

sure they recognize I have the capacity to pay....I had been hopeful that they wouldn't want to expend the energy to push over the past few years

Customer :

ok and wouldn't there have to be a ruling stating that?

christhelawyer :

If you get served, they would then apply for your bankruptcy. There are cases where a solvent but obdurate debtor has successfully defended a bankruptcy application on the basis that bankruptcy is not a debt collection process. But if they cannot find assets in your name to seize by a distress warrant or a charging order they are justified in using this. Costs are automaticly added when they file the notice-you do not have to apply

Customer :

They've never served me with a distress warrant or charging order...are they able to jump straight to a bankruptcy notice?

christhelawyer :

If they cannot find assets in your name, yes.

Customer :

there are clearly shares held by me on the share register...wouldn't that be an asset in my name?

christhelawyer :

Yes

Customer :

ok so wouldn't the natural steps be to file a distress or charging order?

Customer :

why would a judge allow a bankruptcy notice if the creditor's solicitors hadn't been able to show I didn't have any assets?

christhelawyer :

This would not be at the notice phase. Once the notice has been served, and the time has expired to pay, they then file and serve an application for bankruptcy. You can defend this on the basis i describe above, but there is a risk this would not succeed, as with all litigation.

Customer :

ok so jumping straight from a disputes tribunal ruling in 2009 to a bankruptcy notice in May 2012 wouldn't be seen as a bit over the top? Potentially cruel and unjust?

christhelawyer :

They may well say that shares in small privately held company are of no value to a creditor because of the premeptive rights of purchase attaching to such shares, or that they had no knowledge of what the shares were worh at all.

Customer :

Ok....wouldn't they have to state that somewhere though?

christhelawyer :

No. In their shoes I would have filed the notice in 2009. And in opposition to the claim about the shares, when they defend the application they would say they looked at the shares but decided not to apply for a charging order for the reasons I cite above.

Customer :

Ok....thank you....I've been pleased with the sharing of your knowledge

Customer :

how's your comfort level with franchise law and the medical services industry?

christhelawyer :

I would be happy to answer another question on those areas.

Customer :

I'm comfortable with you fulfilling my expectations on this set of questions....I'd like to be able to utilize your service more often moving forward

Customer :

do you guys over document creation as well?

Customer :

*offer

christhelawyer :

No, this is more for general advice such as we discussed above. I can answer questions in general terms about something you are drafting

Customer :

Ok I got it; thank you.

Customer :

I've gone ahead and taken the 7 day trial and if I find I use it I'm happy to subscribe to your service

christhelawyer :

Great and thank you

Customer :

You're welcome; enjoy the evening.

Expert TypeLawyer
Category: New Zealand Law
Pos. Feedback: 98.1 %
Accepts: 7958
Answered: 7/5/2012

Experience: LLB MMgt FAMINZ 32 years qualified as lawyer

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