HABIB V PRIMUS FINANCIAL SERVICES TRADING AS FORD CREDIT HC ROT CIV 2007-463-59

HABIB V PRIMUS FINANCIAL SERVICES TRADING AS FORD CREDIT HC ROT CIV 2007-463-59 11 July 2007IN THE HIGH COURT OF NEW ZEALAND ROTORUA REGISTRY CIV 2007-463-59BETWEEN PHILLIP GEORGE HABIB Appellant AND PRIMUS FINANCIAL SERVICES TRADING AS FORD CREDIT Respondent Hearing: 9 July 2007 Appearances: Appellant in person No appearance for respondent D Baltakmens as amicus curiae Judgment: 11 July 2007JUDGMENT OF ALLAN JSolicitors: Crown Law, PO Box 2858, Wellington (Ms D Baltakmens) Parties P Habib, 247B Taharepa Road, Taupo Primus Financial Services (AEL Law J Hogan PO Box 8142, Auckland)[1] This is an appeal by Mr Habib against a sentence of 80 hours community work imposed upon him in the District Court at Taupo on 15 September 2006 for contempt of Court, in failing to comply with the terms of an order for examination made under s 84B of the District Court Act 1947.Background[2] On 18 February 2006, the respondent filed in the Taupo District Court a statement of claim for recovery of a shortfall said to be owing by Mr Habib to the respondent, following seizure and sale of a motor vehicle that was subject to a hire purchase agreement between the parties. [3] On 3 May 2006, the respondent entered judgment by default against the appellant for $8141.98. [4] On 18 May 2006 the respondent applied to the District Court for an order for examination of the appellant as to his means. [5] On 6 June 2006, the appellant, having appeared, refused to be examined as to his means by the Registrar, who then referred the matter to a District Court Judge. After a delay the matter came before Judge Weir in the Taupo District Court. Mr Habib again appeared unrepresented, and declined to be examined as to his means. The Judge took that stance to amount to a contempt of Court. In a brief oral judgment he said:[5] The issue here simply is that they now want to perfect their judgment. They have tried to do that by getting you along to fill out a statement of income and expenditure to see what you can afford to pay, and you have refused to do that. What they have done now is taken contempt proceedings against you, which they are entitled to do. What that means is that if you refuse to co-operate and refuse to be examined, then they have sought that I sentence you to community work, which I will do. That will not get rid of the debt however. It is simply an added punishment on top of the debt that you owe to this company. That is what the position is. [6] [7] [8] I have noted the information that you have refused to submit to an order for examination and also you refuse to submit to the jurisdiction of the Court. You are now accordingly sentenced to 80 hours of community work. [9] Now, Mr Habib, it is not going to make the matter go away,. What is going to happen is that they will continue to go after you. You are going to have to do community work now and if you refuse to do the community work, a warrant will be issued for your arrest, then you will finish up in jail. That is over to you. Costs of $120 on today's appearance.Procedural matters[6] The respondent has indicated that it will abide the decision of the Court and has been excused from further attendance. [7] On 19 March 2007, Venning J directed the Solicitor General to appoint an amicus to assist the Court. Ms Baltakmens appears as amicus today. I am greatly indebted to her for her assistance in dealing with a matter which raises an issue of substance, albeit quite unconnected with the issues Mr Habib sought to raise on the appeal.Appeal grounds[8] Mr Habib, who is again unrepresented in this Court, sought to argue a range of matters which arise not infrequently in the Courts. Although it was difficult to follow his arguments with any confidence, they can broadly be encapsulated as raising Maori sovereignty issues. I endeavour to summarise them as best I can. The summary is necessarily incomplete because a number of matters raised by Mr Habib appear to have no possible relevance to the issues arising in the appeal, and to lack any semblance of coherence. That may have been because Mr Habib relied almost entirely, it seemed to me, on written material produced for him by others. [9] Mr Habib's first argument was that he was entitled to have the claim heard by a Magistrate sitting with a native assessor, pursuant to the provisions of the Native Circuit Courts Act 1858. Under that statute resident Magistrates could be appointed within "Native Districts". They had jurisdiction (along with Maori assessors andjuries) to enforce locally made by-laws and the common law. The Native Land Court, established in the 1860s, assumed jurisdiction over land rights and title. [10] The Native Circuit Courts Act was repealed in 1891. The Native Land Court was ultimately replaced by the Maori Land Court, now constituted under the Te Ture Whenua Maori Act 1993. The Maori Land Court has jurisdiction under s 18 of the Te Ture Whenua Maori Act over matters relating to Maori land. It has no jurisdiction over general civil matters such as debt proceedings, with which the court is presently concerned. There is no substance in Mr Habib's first argument. [11] Next he argued that no court whatever has jurisdiction over a person who is a member of a Maori incorporation. He says that such persons can be dealt with only by their kaumatua, even where a serious criminal offence has been committed. That argument is apparently based upon the inclusion of the word "incorporation" in the Treaty of Waitangi. Mr Habib says he has formed himself into a Maori incorporation, and that he is thereby independent of the jurisdiction of our courts. He does not say precisely how that result follows from the fact of incorporation. This argument is self-evidently unsustainable, if only because the provisions of the Treaty of Waitangi cannot be enforced in our courts, except insofar as a statutory recognition of Treaty rights can be found: Hoani Te Heuheu Tukino v Aotea District Maori Land Board [1941] AC 308; New Zealand Maori Council v Attorney General[1987] 1 NZLR 641 at 655. [12] Mr Habib next said that the Maori Appellate Court was seized with jurisdiction to supervise the proceedings of the District Court (and as I understood him of this Court) and he requested me to state a case for the opinion of the Maori Appellate Court pursuant to s 61 of the Te Ture Whenua Maori Act. Rather than seeking to have that Court reconsider the lawfulness of the penalty imposed upon him in the District Court, Mr Habib indicated that his purpose was to have the Maori Appellate Court consider what he submitted was the "misbehaviour" of the learned District Court Judge. That submission is as misconceived as it is improper. The Maori Appellate Court has no supervisory jurisdiction over either the District Court or the High Court.[13] Mr Habib referred also to a number of ancient English authorities, to the 1835 Declaration of Independence, and to the absence in New Zealand of a written constitution, but without in any coherent manner fashioning an argument of any relevance. The simple fact is that a challenge to the doctrine of Parliamentary sovereignty is bound to fail: see the useful discussion in Berkett v Tauranga District Court [1992] 3 NZLR 206, where Fisher J said at p 213:in fact it is neither necessary nor permissible for a Court to delve back into history to establish the pedigree of the New Zealand Parliament, or the territorial scope of its authority, for the purpose of assessing the validity of a current statute. Once Parliament passes or adopts a statute, the Courts must apply it. An assumed clash of sovereignties in the mid-19thC cannot provide the basis for challenging a New Zealand Act of Parliament.[14] Arguments of the sort raised by Mr Habib have no possible chance of success. On several occasions the Court of Appeal has emphasised in the clearest of language that our Courts must give effect to the intention of Parliament as enacted from time to time. Arguments that an individual is outside the reach of the Courts are untenable. For example, in R v Mitchell CA68/04 23 August 2004, the Court of Appeal said:The sovereignty ground[12] In the High Court Mr Mitchell argued that he was outside the jurisdiction of the High Court and " Pakeha laws" . He presented extensive submissions (Gendall J recorded that one document ran to 131 pages) on this issue. [13] In considering the leave application the Judge carefully explained, by reference to relevant authorities including the decision of this Court in Knowles v Police (CA146/98 12 October 1998), that Mr Mitchell's proposition was untenable. He explained that our Courts are subservient to Parliament and must apply an Act of Parliament in the terms in which it has been enacted. The issues which Mr Mitchell was seeking to raise could not be " resolved by the Courts [they] being a matter for public and political processes and not a judicial one" . Notwithstanding the care the Judge took over this aspect of the case, Mr Mitchell does not accept that explanation.[14] This Court has made it plain on a number of occasions now that arguments that are based upon an assertion that the Parliament of New Zealand was not authorised to make law affecting some or all of the persons living in New Zealand cannot succeed before it. Our courts are bound to accept the validity of Acts of Parliament, including the Land Transport Act 1998. Although this issue does involve a point of law, Mr Mitchell's proposition has been squarely rejected on many occasions in the High Court and Court of Appeal. No useful purpose would be served in retraversing the authorities. Mr Mitchell was perfectly familiar with them, and indeed was physically in possession of some of those authorities before us, includingKnowles. He just does not accept them. He is not entitled to put himself outside the law of New Zealand.[15] Mr Habib's appeal must accordingly fail insofar as it relies upon the grounds articulated by him at the hearing before me.Further issues[16] That is not however the end of the appeal, because Ms Baltakmens has responsibly raised certain jurisdictional matters which suggest that the order for community work ought not to have been made. The starting point is s 84O of the District Courts Act 1947. That section provides:84O Contempt procedures(1) Where— (a) A judgment debtor has been examined under section 84B of this Act; and (b) The Court is satisfied beyond reasonable doubt that— (i) The judgment debtor has sufficient means to pay the judgment debt but refuses to do so; and (ii) All other methods of enforcing the judgment have been considered or tried and are inappropriate or unsuccessful,— the Court may, on the application of the judgment creditor, order the respondent to do community work for a number of hours, not exceeding 200 hours, as the Court thinks fit. (2) Every application under subsection (1) of this section shall be supported by an affidavit setting out the details of the judgment debtor's alleged disobedience. (3) A copy of the application and affidavit referred to in subsection (2) of this section shall be served on the judgment debtor. (4) If a copy of that application and affidavit cannot be served on the judgment debtor, or if the judgment debtor fails to appear at the hearing of the application, the Judge may issue a warrant to arrest the judgment debtor and bring the judgment debtor before the Court as soon as possible. (5) A warrant under subsection (4) of this section shall cease to have effect if the judgment debtor pays, or causes to be paid, the amount due under the judgment debt.(6) Where a judgment debtor is arrested under a warrant issued under subsection (4) of this section, the following provisions shall apply: (a) the judgment debtor shall be bailable as of right: (b) section 46 of the Summary Proceedings Act 1957 and Parts 1 to 3 of the Bail Act 2000 shall apply, with such modifications as may be necessary, as if the application under subsection (1) of this section was the hearing of a charge: (c) if the judgment debtor cannot practicably be brought immediately before a Judge or a Registrar, any member of the police or any bailiff may take the bail bond of the judgment debtor, and Parts 1 to 3 of the Bail Act 2000 apply with any necessary modifications as if the bail bond were taken by a member of the police under section 21(1) of that Act. (7) An order made under subsection (1) of this section shall have effect as if the judgment debtor, following conviction on an information, had been sentenced to community work, and the relevant provisions of Part 2 of the Sentencing Act 2002, with any necessary modifications, shall apply accordingly. (8) Where a District Court, acting under this section, orders a respondent to do community work, the judgment debtor shall have the same right of appeal to the High Court against the order as the judgment debtor would have had if the judgment debtor had been convicted and sentenced by the District Court on an information. (9) Detention pursuant to this section shall not operate to extinguish or affect the liability of the judgment debtor to pay the judgment debt. (10) Section 30 of the Sentencing Act 2002 applies in relation to this section as if the District Court were imposing a sentence of imprisonment.[17] Ms Baltakmens helpfully summarised the requirements of s 84O in the following way: a) There must have been a prior examination of the debtor under s 84B; b) The Court must be satisfied that the debtor has the means but refuses to pay; c) All other means of enforcing the judgment must have been considered or tried, and found to be inappropriate or unsuccessful; d) The application for an order holding a debtor in contempt must be in writing and supported by an appropriate affidavit;e) The application and affidavit must be served on the debtor; f) Section 30 of the Sentencing Act 2002 must be complied with. [18] Section 30, read with s 84O(10), requires a debtor to be legally represented at the stage of the proceedings at which the debtor is at risk of an order for community work, unless the Court is satisfied that the debtor was informed of his or her rights to legal representation, fully understood those rights and had the opportunity to exercise them but had refused or failed to do so. [19] The provisions of s 84O were considered and analysed in Edmonds v Baycorp Ltd [2002] NZAR 111 where Baragwanath J held that Parliament had "imposed stringent limitations upon the modern successor to imprisonment for debt" ([5]). Later at [20] Baragwanath J commented that the Court's power to order a recalcitrant debtor to undergo periodic detention (as it then was) was analogous to the power to sentence on conviction of a criminal offence. That was why, His Honour said, S 84O contained so many procedural safeguards. [20] Against that background I turn to a consideration of the course of events in this case. It appears that the respondent obtained an order for examination of the appellant in May 2006. The appellant came before the Registrar on 6 June 2006, but refused to fill out the statement of means. The matter was then referred to Judge Weir. The appellant appeared, unrepresented, before the learned Judge on 15 September 2006. It seems that he again refused to give evidence as to his means. The order for community work followed. Earlier in this judgment I have set out certain passages from the oral decision of the Judge. [21] There are problems with the approach adopted in the District Court. Section 84O applies where a debtor has been examined under s 84B and despite having been found to have the means to pay, refuses to do so. The section makes no provision at all for situations where the debtor refuses to be examined. Moreover where, as here, the debtor has refused to be examined by the Court, it is not possible for the Court to be satisfied beyond reasonable doubt pursuant to s 84O(1)(b)(i) that:(i) The judgment debtor has sufficient means to pay the judgment debt but refuses to do so;See Warren v Housing New Zealand (1995) 9 PRNZ 387. [22] Further, the Court record contains no evidence that the respondent had made a written application for an order holding the appellant in contempt, nor that the supporting affidavit required by s84O(2) had been filed and served. In Warren v Housing New Zealand that was held to be a major omission, given the evident legislative intention to give the judgment debtor time to challenge the validity of the application and/or to rectify the default after appreciating the impending sanction. [23] There is an additional difficulty. The procedural requirements of s 30 of the Sentencing Act do not appear to have been complied with. The appellant was not represented by counsel at any stage in the proceedings, including the hearing on 15 September 2006. There is nothing in the record of the oral judgment, nor among the other documents on the District Court file, to indicate that the appellant was advised of his right to be represented by counsel, or that the Court had inquired whether he had been so advised, or whether he had had the opportunity but had refused or failed to exercise his right to legal representation. [24] Any one of the foregoing procedural defects would be sufficient to render the District Court order unlawful. Taken in combination they make an irresistible case. The learned Judge had no jurisdiction to make the order. [25] Of course, s 84O does not represent the limits of the learned Judge's powers. He was also entitled to consider committing the appellant for contempt in the face of the court. Section 112 of the District Courts Act provides:112 Power to commit for contemptIf any person— (a) Wilfully insults a Judge or any witness or any officer of the Court during his sitting or attendance in Court, or in going to or returning from the Court; or (b) Wilfully interrupts the proceedings of a Court or otherwise misbehaves in Court; or(c) Wilfully and without lawful excuse disobeys any order or direction of the Court in the course of the hearing of any proceedings,— any officer of the Court, with or without the assistance of any constable or other person, may, by order of the Judge, take the offender into custody and detain him until the rising of the Court, and the Judge may, if he thinks fit, by warrant under his hand, commit the offender to prison for any period not exceeding 3 months or impose upon the offender a fine not exceeding $1,000 for each offence.[26] Section 112(c) plainly applies to the situation with which the District Court Judge was confronted, namely that of a debtor refusing to submit to an order for examination. I agree with the observations of Fisher J in Warren v Housing New Zealand at p 390, to the effect that the learned Judge could have committed the appellant by reference to the general contempt powers found in s 112(c), read in conjunction with s 84O. However, even then the Court would have needed to provide an appropriate warning to the appellant, and in particular to give him time to consider seeking legal representation. In the discharge of their natural justice obligations, Judges considering taking steps to impose sanctions for contempt should always put a party on formal notice, and then provide an opportunity for the receipt of competent legal advice. Although there is little direct authority in New Zealand, I was referred by Ms Baltakmens to R v K (B) [1995] 4 SCR 186, a Canadian case in which a contempt finding was set aside where the Judge had neither put the appellant on notice, nor adjourned the case so that legal advice could be taken. [27] Further, where the Judge had decided to hold the appellant in contempt under s 112(c) it would have been vital that the appellant be given an opportunity to make submissions on sentence. It is to be noted that there is no power under s 112(c) to impose a sentence of community work. The options are a prison sentence of not more than three months, or a fine of not more than $1000.Result[28] Although there is no substance in Mr Habib's challenge to the jurisdiction of the Court, the procedural deficiencies in the case lead inevitably to the conclusion that the Judge's order was made without jurisdiction.[29] The Judge's finding that the appellant was in contempt is therefore set aside and the sentence of 80 hours community work is quashed. [30] The respondent remains free to take such steps as it sees fit in respect of the unmet judgment debt. That would include the taking of further steps under s 84O, but the respondent must, of course, carefully comply with the provisions of that section if it proposes to take further action. [31] The appellant being unrepresented he is unlikely to have incurred any significant recoverable costs. Moreover, given that the respondent chose to abide the decision of the Court, and that Ms Baltakmens appeared simply as amicus curiae, it is unlikely that the Court would see fit to make any order as to costs in any event. Nevertheless, I formally reserve the question of costs in case there is some relevant matter which I have overlooked.C J Allan J