HEENAN v ALSTON [2016] NZHC 1613

HEENAN v ALSTON [2016] NZHC 1613 [18 July 2016]IN THE HIGH COURT OF NEW ZEALANDCHRISTCHURCH REGISTRYCIV-2012-409-000803[2016] NZHC 1613BETWEEN DAVID STANLEY HEENANApplicantAND PATRICIA ANNE ALSTONRespondentHearing: 13 July 2016Appearances: Applicant in personA J Davis for the RespondentJudgment: 18 July 2016JUDGMENT OF NATION J[1] Mr Heenan was declared a vexatious litigant on 19 August 2009.1[2] On 1 October 2015, Mr Heenan was adjudicated bankrupt. By notice dated 18 November 2015, the Official Assignee disclaimed any interest in respect of MrHeenan's rights of action against the respondent. Pursuant to s 118 of the Insolvency Act 2006, that disclaimer brought to an end all rights of both the Official Assignee and Mr Heenan in relation to a claim that Mr Heenan had wished to pursue in the Disputes Tribunal against the respondent.[3] On 3 December 2015, Mr Heenan filed an application with the High Court for an order under s 119(2) of the Insolvency Act, vesting in him the property disclaimed by the Official Assignee on 18 November 2015. He also sought leave to apply for the order under s 88B(2) of the Judicature Act 1908. In his application, Mr Heenan said he wished to pursue his counterclaim against Mrs Alston in the District Court.1 Attorney-General v Heenan [2009] NZAR 763 (HC) at [140].[4] The respondent filed a notice of opposition and affidavit in opposition on 23 February 2016. Her counsel filed submissions and a bundle of documents on 15 June 2016.[5] In his application, Mr Heenan said he was relying on s 119(2) of the Insolvency Act, s 88B of the Judicature Act, the minute of Fogarty J dated 15 March 2013 in CIV-2012-409-000803 and evidence before the Court in that proceeding.[6] Proceedings CIV-2012-409-000803 and Fogarty J's minute related to MrHeenan's application for leave to file a counterclaim in the Disputes Tribunal. Mrs Alston had obtained an order in the Disputes Tribunal that Mr Heenan must pay her $2,333.50. The Disputes Tribunal had refused to accept his counterclaim for $3,407.05 because Mr Heenan had been declared a vexatious litigant. In his minute of 15 March 2013, Fogarty J said the Disputes Tribunal should not have determined Mrs Alston's claim before the High Court had determined whether Mr Heenanshould have leave to file his counterclaim. He directed the Tribunal should hear MrHeenan's counterclaim and stayed the order which they had made for Mr Heenan to pay $2,333.50. In his minute, Fogarty J did not refer to the fact that Mr Heenan had been declared a vexatious litigant or discuss what impact, if any, that should have had on his ability to pursue that counterclaim.[7] Mr Heenan subsequently attempted to file a counterclaim before the Disputes Tribunal for $56,066.87. The referee in the Disputes Tribunal declined to hear thatclaim because it was outside the Disputes Tribunal's jurisdiction.[8] In the hearing before me on 13 July 2016, Mr Heenan confirmed that this is the claim which he is wishing to pursue. To do so, given his bankruptcy, his right of action to make such claim has to be vested in him.[9] Mr Heenan's application for leave to file the counterclaim was originallyscheduled for hearing in the High Court on 27 October 2015. That hearing was vacated after Mr Heenan was declared bankrupt on 1 October 2015.[10] Mr Heenan told me that he had attempted to obtain leave from the High Court to issue proceedings for $56,066.60 but had been denied leave.[11] On 11 September 2013, Gendall J required Mr Heenan to make an application on notice for leave to proceed with "an application for special leave tobring proceedings against Shawn Bernard Alston for share of $56,066.60". On 23June 2015, Gendall J issued a minute in relation to papers which Mr Heenan had purported to file with the Court including a document dated 22 June 2015 "to sueShawn Bernard Alston, committal and/or both". Gendall J directed that nodocuments were to be received by the Court as Mr Heenan had not filed an application for leave to file such proceedings. Mr Heenan has on a number of occasions endeavoured to file documents relating to a claim involving Mrs Alston. The Court staff have been directed not to accept those documents because there have not been appropriate applications for leave. In a minute of 18 October 2013, MacKenzie J declined Mr Heenan leave to commence proceedings against Mrs Alston and her son. In a minute of 4 November 2013, Fogarty J directed Registry staff not to process an application to combine litigation in proceedings between Mr Heenan and the Alstons with separate proceedings which Fogarty J had given him leave to pursue.[12] On 27 June 2016, Mr Heenan filed a document in these proceedings. On its face, the document is described as: seeking leave to annul this fraudulently obtained bankruptcy involving aconspiracy to defraud and applicantion [sic] seeking leave to quashing this vexatious litigant status which was obtained by forgery, perjury and fraud involving some 14 judges, their employers and millions of dollars.[13] At the time Mr Heenan filed this document with the High Court, he advised itwas "not an application, rather a memorandum in response to documents filed by the respondents" for the hearing on 13 July 2016. Mr Heenan confirmed to me this was his response to the submissions and documents filed on behalf of the respondent in these proceedings.[14] Included in the accompanying document are a number of scandalous allegations made against the respondent, her son, various lawyers, various judges ofdifferent courts and clerks of the High Court. It appeared from that document that Mr Heenan is wanting to pursue a claim from a number of parties for $205,000, being a 50 per cent share of the sale price from a property at which he lived with therespondent, and $134,000 in damages from the respondent's son for alleged assaults and damage to property.[15] At the hearing on 13 July 2016, Mr Heenan presented to the Court a"memorandum seeking leave to annul this fraudulently obtained bankruptcy". In that document Mr Heenan refers to his having "fraudulently been made a vexatiouslitigant", states an Associate Judge was "grossly involved in two massive property fraud matters" and that justice was "deliberately denied". The document refers to a counterclaim for $56,066.87 and asks the Court to "ORDER OUR COUNTERCLAIM FOR $56,066.87 to be enforced against Patricia Anne Alstonforthwith".[16] Mr Heenan also presented to the Court a document entitled "Counterclaims, set-offs, or cross-demands". On it the applicants are described as Mr Heenan and the Heenan Family Trust. The named respondents include Mrs Alston, her son, MrsAlston's solicitor, a clerk of the High Court and a Judge of the High Court. Within the document is an affidavit sworn on 12 July 2016 in which Mr Heenan makes a number of assertions. Mr Heenan told me that in this document I would find details as to the nature of the claim which Mr Heenan is wishing to pursue against Mrs Alston. He asked me to read the document carefully, which I have done.[17] The affidavit includes a number of scandalous allegations. For instance, he says the Judge who decided that Mr Heenan's notice of claim and caveat over aproperty owned by Mrs Alston could not be sustained was a party to lies in affidavitsfiled in support of Mrs Alston's case, and that Mrs Alston's counsel, in initially claiming $26,517 in costs but reducing that claim to $9,602, had shown"unequivocal proof of conspiracies involving fraud and conspiracies to defraud". MrHeenan sought orders from the High Court that:(a) he be able to sue the lawyer, Mrs Alston and a clerk of the High Court, each for the sum of $8,839, one third of that "corrupt order of $26,517";(b) he be able to sue Mrs Alston, her lawyer and a Judge of the High Court for $205,000, being half the sale proceeds from a property which Mrs Alston owned at Halswell;(c) he be able to sue Mrs Alston for $40,000 for what he claimed to be lies in her affidavits in connection with the caveat proceedings;(d) he has a right to sue Mrs Alston's son for $134,200 for perjury, damageto some property and for alleged assaults; and(e) an order striking out the previous order that he pay costs of $9,602 arising out of a judgment which had been given by Whata J in the High Court on 16 December 2014.[18] Mrs Alston's counsel made submission to me only in relation to Mr Heenan'sapplication under s 119 of the Insolvency Act for an order vesting in him his rights of action against Mrs Alston.[19] Under s 119(3) of the Insolvency Act, the High Court has a discretion to vest any right which Mr Heenan had to bring a claim as the bankrupt. The High Courtneeds to be satisfied that it would be "fair" for the claim to be vested in him.[20] Insofar as Mr Heenan is wishing to pursue a claim against the respondent, I do not consider it would be fair to vest in him any right to make such a claim.[21] The claim he wishes to pursue largely relates to a claimed entitlement in respect of a property he lived in with the respondent. He claimed to have a relationship property interest in that property. That claimed entitlement was carefully considered in a judgment of Whata J in the High Court of 8 September 2014.2 He held that Mr Heenan did not have a prima facie case to support the basic proposition that he was in a de facto relationship with the respondent for the purpose of the Property (Relationships) Act 1976 or that he made anything more than a minor contribution to the up-keep or betterment of the property or otherwise that might2 Heenan v Alston [2014] NZHC 2133.justify a proprietary or relationship property claim in relation to her home. On that basis, Whata J made an order removing a notice of claim over the title to that property.[22] Through those proceedings, Mr Heenan was ordered to pay costs of $9,602 to the respondent. He was bankrupted because of his refusal or inability to pay those costs. It would be unfair to vest in Mr Heenan any right he may have to bring a claim against the respondent when he has not paid costs due to that respondent, the reason for his bankruptcy. There would also be considerable unfairness to the respondent to vest in him a claim which he would then pursue against the respondent without any ability to provide security for costs that she might incur in defending those proceedings.[23] The counterclaim which Mr Heenan had originally wished to pursue in the Disputes Tribunal, against both Mrs Alston and her son (although the son had not made any claim in the Disputes Tribunal) was for just $3,407.50. It is apparent from the way in which Mr Heenan has attempted to serve proceedings since then that:(a) without providing any evidential basis, he has wished to pursue a claim for damages, relating not just to the way property was dealt with during an alleged relationship but grievances he has through the way issues between him and Mrs Alston have been resolved by the Courts;(b) he has shown that he is incapable of pursuing any proceedings in a manner that conforms with the High Court Rules;(c) he has sought to involve, in a dispute between himself and Mrs Alston, unrelated parties including judicial officers and a clerk of the High Court;(d) in attempting to pursue such proceedings, he has made allegations that are outrageous and scandalous.[24] As a result of Fogarty J's minute, the Disputes Tribunal's order that MrHeenan pay Mrs Alston $2,333.50 remains stayed. As a result of his bankruptcy, Mr Heenan's obligations with regard to such a debt have now been subsumed in hisbankruptcy. Mrs Alston has not been paid the costs of $9,602 she was entitled to pursuant to the costs order made by the High Court.[25] In all these circumstances, I find that it would be oppressive to the respondent to vest in Mr Heenan personally his right of action against Patricia Anne Alston. His application under s 119 is thus denied.[26] It is apparent from the affidavit of 12 July 2016, which I have already referred to, that Mr Heenan for himself personally and for the Heenan Family Trust wishes to pursue proceedings against Mrs Alston and four other respondents. I am however prepared to deal with that affidavit as a without notice application for leave under s 88B of the Judicature Act to issue proceedings as summarised in MrHeenan's affidavit.[27] The claim is not in a form which accords with the High Court Rules. The factual basis for the assertions he makes is not clearly set out. His document includes allegations of outrageous and scandalous conduct without referring to the particular facts on which such assertions are based. He seeks to pursue a claim for damages resulting from claimed interest in a property under the Property (Relationships) Act 1976 when the High Court has already held that he would have had no such entitlement under that Act.[28] Mr Heenan is a vexatious litigant. Having regard to s 88B(2) of the Judicature Act 1908, I deny leave to Mr Heenan, both personally and as the agent or trustee of the Heenan Family Trust to to bring any proceedings arising out of the matters referred to in his affidavit of 12 July 2016.[29] Given Mr Heenan's repeated attempts in the past to file documents contrary to directions that have been made by the Court, I direct that the Court staff are not to accept any document that fails to comply strictly with the High Court Rules or which seeks to pursue any claim against Patricia Anne Alston, Shawn Bernard Alston or thethree other people he named as defendants in the document entitled "Counterclaim, set-off or cross demands" and the accompanying affidavit of 12 July 2016 or arising out of the matters referred to in those documents.[30] Mr Heenan's applications are declined. Mrs Alston's counsel acknowledged that, with Mr Heenan's bankruptcy, making an order for costs would be of no practical benefit. For that reason, I make no order as to costs.Solicitors:Clark Boyce, ChristchurchCopy to: Mr D S Heenan (self-represented).