In re the Bankruptcy of MG Meredith [2003] WSSC 26 (3 February 2003)

IN THE SUPREME COURT OF SAMOA
HELD AT APIA

IN THE MATTER: of the Bankruptcy Ordinance 1908

AND: of the Bankruptcy of MUAGUTUTIA GEORGE MEREDITH,
Company Director of Matautu-uta near Apia, Samoa
JUDGMENT DEBTOR

AND:

IN THE MATTER: of the Petition
Bankruptcy issued by BON PACIFIC TRADING LTD
a company having its registered office at Level 4, 149 Parnell Rise,
Parnell, Auckland, New Zealand, Exporter
JUDGMENT CREDITOR

Counsel: Mr T.K. Enari for Judgment Debtor
Ms S. Hazelman for Judgment Creditor

Hearing Dates: 30 January 2003
Date of Decision: 30 August 2003

Reasons for Decision: 03 February 2003

REASONS FOR DECISION OF VAAI J

On the 12^th December 2000 the judgment creditor obtained summary judgment in the New Zealand District Court at Auckland against the judgment debtor in the sum of NZ$58,351.84; the judgment was registered in the Supreme Court of Samoa on the 23^rd August 2001 and the judgment debtor was served with a copy of the Order of Registration on the 10^th September 2001. In November 2002 the judgment creditor moved to enforce the judgment by commencing bankruptcy proceedings against the judgment debtor and on the 28^th December 2002 it served on the judgment debtor a Bankruptcy notice.

In June 2001 the judgment creditor also commenced separate proceedings in the Supreme Court of Samoa against Mapex Internal Limited (hereinafter referred to as “Mapex”) a company registered in American Samoa but conducting business in and through Apia, Samoa of which the judgment debtor is a principal. The claim against Mapex was due for hearing on the 30^th January 2003 but was withdrawn and discontinued on that day.

I now return to the Bankruptcy proceedings against the judgment debtor. In response to the Bankruptcy notice the judgment debtor filed a Notice of Motion for orders:

1. That the Notice of Bankruptcy be adjourned since die pending the hearing of the proceedings filed in the Supreme Court of Samoa.
2. The judgment of the District Court of New Zealand be set aside.
3. The judgment creditor be ordered to file and serve upon the judgment debtor its statement of claim by which the judgment was obtained........ in the District Court of Auckland and this court hear that statement of claim together with the proceedings filed in the Supreme Court of Samoa against Mapex.
   

The grounds relied upon by the judgment debtor are:

1. The judgment debtor has a good defence to the judgment registered in the Supreme Court.
2. The solicitor for the judgment debtor was misled by the solicitor for the judgment creditor and therefore failed to respond to the registration of the judgment.

100. Further grounds which are set out in the affidavit of the judgment debtor.
     

After hearing submissions on the 30^th January 2001 I declined to grant the orders sought by the judgment debtor and reserved my reasons. These are my reasons.

1. In his affidavit in support of the motion the judgment debtor says that he does not recall being served with any documents regarding the action filed in New Zealand.

I do not accept the allegation. In fact in another affidavit dated 29^th January 2003 and handed to the court on the 30^th January during the hearing of this motion the judgment debtor confirm that he was in fact served but he did nothing about those proceedings because he thought “it had nothing to do with New Zealand and because he made a counter proposal to the judgment creditor concerning the debt.” I am at loss in trying to comprehend what the judgment debtor is saying here; but I am satisfied on his own admission that he was served with the proceedings filed in the New Zealand District Court.

2. It is also alleged by the judgment in his affidavit that the action filed in New Zealand by the judgment creditor against the judgment debtor covers the same contract as the action filed in Samoa by the judgment creditor against Mapex and Mapex has a strong counterclaim against the judgment creditor.

Again this allegation cannot be sustained for very obvious reasons. In the first place the action filed in New Zealand was to enforce a written personal undertaking dated 30^th November 1998 by the judgment debtor to pay monies then undisputedly owing by Mapex to the judgment creditor. The judgment debtor is not disputing the existence of his undertaking. Secondly at the time the judgment debtor gave the written undertaking to the judgment creditor there already existed a dispute between the judgment creditor and judgment debtor over the quality and merchantability of some of the goods supplied to the judgment debtor by the judgment creditor and the value of the goods under dispute were not included in the undertaking signed by the judgment debtor. Mr Sharma for the judgment creditor has filed an affidavit in reply and explained in detail (and exhibiting annexures) the details of the debt claimed in the New Zealand Court. The affidavit produced by the judgment debtor on the hearing dated failed to address the explanations given by Mr Sharma. In my view it is a deliberate omission. In fact after the execution on the 30^th November 1998 of his personal undertaking to pay outstanding debt by Mapex the judgment debtor by fax dated 8^th December 1998 advised the judgment creditor of his inability to meet his obligations and requested a revised monthly payment under his personal undertaking.

Thirdly the action filed in Samoa is against Mapex for the value of goods supplied and were not included in the written undertaking by the judgment debtor. The goods supplied were for different projects undertaken by Mapex in American Samoa and by the judgment debtors other companies in Apia, Samoa. The goods were supplied pursuant to several orders placed and several invoices accompanied their deliveries. As a consequence I do not accept allegation in paragraph 7 of the judgment debtor's affidavit of the 24^th December 2002 that the action in New Zealand is to do with the same contract and order for materials as the action against Mapex filed in Samoa.

3. The first and second ground relied upon by the judgment in the Notice of Motion cannot be substantiated by the undisputed facts and must also fail. Section 6 Reciprocal Enforcement of Judgment Act 1970 provides the grounds upon which the registered foreign judgments may be set aside. Since 10^th September 2001 when the Order of Registration of Foreign judgment was served on the judgment debtor he took no steps to set aside that judgment in fact it was not until the bankruptcy proceedings were served on the judgment debtor that he decided to challenge the registration of foreign judgment. Neither of the grounds under section 6 has been made out. Neither can the judgment debtor maintain that the solicitor for the judgment debtor was misled by the solicitor for judgment creditor. The evidence is so candidly clear that the action filed in New Zealand and the action filed in Samoa are totally different. If anyone did any misleading it was the judgment debtor misleading his own solicitor. For the reasons given the Notice of Motion is dismissed and the question of costs is reserved.

JUSTICE VAAI