Eight years after her employment with Tauranga-based Highmark Homes ended acrimoniously, Nicola Watkins was bankrupted by her former employer on an unpaid court costs order enforcing recovery of a disputed loan. Ongoing litigation between the two meant the amount she owed doubled; Highmark’s recoverable court costs eventually amounted to more than the original loan.
When bankrupting Watkins, the High Court reviewed a conveyer belt of litigation rolling through the court system, starting with a disputed company loan of a little under $22,000 provided by Highmark to Ms Watkins at a time she was short of cash building a home.
This loan was still outstanding when she was dismissed from Highmark.
Circumstances of her departure were fraught, evidenced by Highmarks’ later claim for $3500 damages to recreate work information Ms Watkins had deleted from a work laptop.
When Highmark sued in the Disputes Tribunal to recover its $22,000 loan, Ms Watkins unsuccessfully claimed the loan was in fact part of her remuneration.
She repaid the loan only after threatened with bankruptcy for non-payment.
The High Court ordered Ms Watkins pay Highmark’s legal costs of some $14,000 on this bankruptcy application.
She did not pay these legal costs. Years later, this triggered her bankruptcy.
Her employment dispute was appealed to the Employment Court with her allegation that Highmark’s management and its solicitor had committed perjury at a prior Employment Relations Authority hearing where her claims for wage arrears and sick pay due were unsuccessful.
Later abandoning this appeal, the Employment Court ordered she pay Highmark’s costs, totalling some $10,000.
Separately, she sued Highmark alleging defamation.
Highmark again applied to have Ms Watkins bankrupted, this time on the unpaid $14,000 costs order following its first bankruptcy application.
Associate judge Brittain adjudged her bankrupt.
Ms Watkins was in court. She refused to answer questions about her financial position.
The High Court was told that in addition to the nearly $24,000 in total owed Highmark on two unpaid court costs orders, Samson Corporation also claims $28,100.
Ms Watkins said bankruptcy should be refused; it would prejudice her ability to sue Highmark for defamation, she said.
Judge Brittain pointed out that claims in defamation are a personal right, not a property right.
Defamation claims do not pass to Insolvency Service on bankruptcy; a bankrupt can continue legal action for defamation in their own right, whilst bankrupt.
Highmark Homes Ltd v. Watkins – High Court (1.03.23 & 12.02.25)
25.064