Rules 6.27 and 6.28 of the High Court Rules 2016 (the HCR) set out the process for when you want to commence to serve proceedings on a defendant or respondent overseas.
Rule 6.27 sets out the scenarios where you do not require leave of the court to serve proceedings on a defendant overseas. However, it’s important to keep in mind that even though you may not need leave, you will still be required to serve the documents on the defendant in accordance with the service rules that are applicable to that country and/or state/region.
If the claim you intend to commence against a defendant does not fall within those listed in rule 6.27, you will then need to apply for leave of the court to serve an originating document out of New Zealand. This application is made under rule 6.28 and 6.29 of the HCR, and the court will consider the grounds listed at rule 6.28(5) when considering whether to grant leave or not.
These grounds are as follows:
- The claim has a real and substantial connection with New Zealand; and
- There is a serious issue to be tried on the merits; and
- New Zealand is the appropriate forum for the trial; and
- Any other relevant circumstances which support an assumption of jurisdiction.
So, is the process for serving a bankruptcy notice on a judgment debtor the same as the process above? The short answer is no; however, the process is still similar.
In Commissioner of Inland Revenue v Raynal[1] the Commissioner filed a without notice application for leave to serve a bankruptcy notice out of New Zealand. In its analysis, the court held that a bankruptcy notice, although issued by the court, is not a document commencing a civil proceeding or a document by reference to which a person becomes a party to a civil proceeding because it does not by itself trigger any process for the exercise of the court’s civil jurisdiction. The consequence of non-compliance with the notice by the debtor is that he may face a bankruptcy application.
Section 17(3) of the Insolvency Act 2006 provides that a debtor must be served with a bankruptcy notice in New Zealand unless the court gives permission for service of the notice on the debtor outside New Zealand.
At the time the Commissioner made the without notice application, the debtor was residing in Australia. This meant that the court also had to consider section 13 of the Trans-Tasman Proceeding Act 2010 (the TTPA). It appeared inconsistent that leave was required to issue a bankruptcy notice, but leave would not be required for a bankruptcy application, because these applications fall within section 13(3) of the TTPA.
However, rule 24.11 of the HCR provides that a bankruptcy application must be commenced by filing an originating application in Form B3. The reference to filing the application as an ‘originating application” means that under the rules the issue of the bankruptcy notice, and the bankruptcy application are technically two separate proceedings. This meant that the bankruptcy notice did not fall within the definition of an “initiating document” in the TTPA. The Court went on to say that leave was required for service of a bankruptcy notice in Australia.
The court held that the application for leave to serve the bankruptcy notice out of New Zealand was to be considered pursuant to rule 6.30 of the HCR, which relates to service of “other documents” outside of New Zealand.
The court then referred to Westpac New Zealand Limited v Boulton[2], where Associate Judge Bell held that the appropriate test to determine whether leave should be granted to serve a bankruptcy notice out of New Zealand, is the test under rule 6.28(5) of the HCR, with one exception. This exception being that because a bankruptcy notice is not a civil proceeding, the court must look ahead to any future bankruptcy application by the creditor relying on non-compliance with the bankruptcy notice. The court must also consider whether it is appropriate that leave be granted for that bankruptcy application and whether it is appropriate for the bankruptcy of the debtor to be administered in New Zealand.
If the grounds under rule 6.28(5), as well as the additional grounds referred to by Associate Judge Bell have been made out, the judgment creditor is likely to have his application for leave granted.
Therefore, although an application for leave to serve a bankruptcy notice out of New Zealand is made under different rules, i.e. rules 6.30 and 24.1 of the HCR, the same test, which is applicable to applications for leave under rule 6.28 in respect of serving an initiating document out of New Zealand will apply, along with the two additional grounds referred to by Associate Judge Bell above.
[1] The Commissioner of Inland Revenue v Raynal [2023] NZHC 1664 [30 June 2023].
[2] Westpac New Zealand v Boulton [2014] NZHC 693.
