Apatu v Maugher

[2012] NZHC 1488

IN THE HIGH COURT OF NEW ZEALAND NAPIER REGISTRY

CIV-2011-441-832 [2012] NZHC 1488

IN THE MATTER OF     the Insolvency Act 2006

AND IN THE MATTER OF the bankruptcy of WINIPERE EVA MAUGER

Judgment Debtor

BETWEEN  KENNETH TAMA TE KAPUA APATU AS EXECUTOR OF THE ESTATE OF WIRIHANA TIPENE APATU

First Judgment Creditor

ANDNATHAN WIRIHANA APATU, RENATA ROBIN APATU AND KATHERINE LOUISE BATES AS EXECUTORS OF THE ESTATE OF WIRIHANA TERRENCE APATU

Second Judgment Creditors

Hearing:         28 June 2012 (Heard at Napier)

Counsel:         N. Gray - Counsel for Judgment Creditors

D. O'Connor - Counsel for Judgment Debtor

Judgment:      28 June 2012

ORAL JUDGMENT OF ASSOCIATE JUDGE D.I. GENDALL

Solicitors:           Sainsbury Logan & Williams, Solicitors, PO Box 41, Napier

Luna & Associates, Solicitors, PO Box 846, Napier

KTTK APATU AS EXECUTOR OF THE ESTATE OF WIRIHANA TIPENE APATU & ORS v WE MAUGHER HC NAP CIV-2011-441-832 [28 June 2012]

[1]      Before the Court today is what is effectively an application by the judgment debtor Ms Mauger for leave to file late an opposition to the bankruptcy application brought in this Court against her by the judgment creditors.

[2]      The judgment debt in question on which the bankruptcy application is based is the sum of $85,000.00.  This represents costs awards made against the judgment debtor and her brother Mr Ashley Apatu on unsuccessful proceedings previously brought by them in this Court against the judgment creditors.

[3]      The first judgment creditor Mr Kenneth Apatu is the brother of the judgment debtor.  The second judgment creditors Mr Nathan Apatu and Mr Renata Apatu are nephews of the judgment debtor.   The third-named second judgment creditor Ms Katherine Bates is the judgment debtor’s niece.

[4]      The judgment debtor is aged 79 years.   She presently lives in the Princess

Alexander Retirement Village in Napier.

[5]      In September 2007 the judgment debtor was involved in a motor vehicle accident which resulted in her suffering a head injury and a broken back. As a result of this it is suggested on her behalf today, that her capabilities and reasoning have been severely impaired since the motor vehicle accident, she is unable to live by herself and has difficulty making reasoned decisions.

[6] The history of the litigation which spawned the costs award in question noted at [2] above is long and somewhat troubled. That litigation brought by Mr Ashley Apatu and the judgment debtor was unsuccessful. Those parties were advised by Holmden Horrocks, Solicitors in Auckland and the evidence before the Court today is that the judgment debtor has herself paid some $200,000.00 in legal fees for the proceeding to that firm. Holmden Horrocks say they are still owed approximately a further $96,000.00 for which they obtained an Agreement to Mortgage over a property owned by the judgment debtor and have since caveated that property. It does seem that Mr Ashley Apatu has made no contribution to those costs and indeed he is now bankrupted. It is also suggested (but there is no evidence of this before me) that part of the $200,000.00 amount paid by the judgment debtor to Holmden

Horrocks by way of costs may have found its way to Mr Ashley Apatu personally for

“work he undertook on the earlier claim”.

[7]      The  present  situation  in  which  the  judgment  debtor  finds  herself  is unenviable.   Faced with the present bankruptcy proceedings, which I understand were served on her in about mid-March 2012, attempts were made on her behalf by lawyers she had then instructed to negotiate a settlement of this matter.   Those attempts were unsuccessful.   In the meantime she was out of time to file any opposition to the present bankruptcy application.  Hence the current application for leave.

[8]      This application is strenuously opposed by the judgment creditors.  Mr Gray appeared as counsel for the judgment creditors today and provided a detailed nine page written submission to me opposing the application for leave to file the opposition out of time.

[9]      The thrust of his submissions as I understand them are that the judgment debtor is simply too late now.  He contended that the judgment debtor has had ample opportunity to file her opposition and defence to the present application but has chosen to leave that until well past the eleventh hour.

[10]     In addition, Mr Gray argued that the judgment debtor has effectively been the author of her own misfortune in the sense that she chose to take a part in the earlier proceedings brought by Mr Ashley Apatu and herself.

[11]     Mr  Gray  also  suggested  that  the  judgment  debtor  in  any  event  may  be insolvent here in that she is unable to pay her debts as they fall due.  He noted that her assets, principally being fixed assets, could not in any sense be considered to be liquid.

[12]     Finally, Mr Gray contended that the judgment debtor should be adjudicated bankrupt today and the Official Assignee encouraged to investigate her affairs, in particular relating to the relatively recent transfer by her of her former family home to a family trust.

[13]     I  remind  myself,  however,  that  the  matter  before  me  is  effectively  an application simply seeking leave to file an opposition to the present adjudication application out of time.   On this, the broad interests of justice must be paramount here.

[14]     There can be no doubt from earlier directions given in this matter, including a Minute  issued  by  His  Honour Associate  Judge  Osborne  on  31  May  2012  that indulgences in the past have been granted to the judgment debtor but these, as I see it, were principally to enable settlement negotiations to take place.

[15]     As I have noted, those negotiations have come to nothing however.

[16]     Nevertheless, the question before me is whether leave should be granted to the judgment debtor to oppose the adjudication application against her at this time.

[17]     On 20 June 2012, Mr O’Connor for the judgment debtor filed a memorandum in this Court setting out significant additional information for the judgment debtor. That included a draft affidavit by Duncan John Miller an Auckland, Accountant which included a statement he had prepared of the judgment debtor’s assets and liabilities.

[18]     That statement showed total assets held by the judgment debtor of just under

$350,000.00 with debts totalling $253,000.00 approximately.  Those debts included the present joint Court judgment against the judgment debtor together with approximately $148,000.00  of  jointly owed  legal  costs  outstanding  to  Holmden Horrocks and a Mr Glyn Jones on the earlier unsuccessful litigation advanced by Mr Ashley Apatu and the judgment debtor.

[19]     On the strength of that statement of assets and liabilities, however, it would appear that the judgment debtor’s assets actually exceed her liabilities by approximately $100,000.00.

[20]     I have set all of these matters out at some length because they were matters placed before me at some length by counsel today.

[21]     Taking a broad overview of this whole matter and considering all the family and other circumstances in this case, it is my view that, given the seriousness of the bankruptcy application which is before this Court, the judgment debtor should be given an opportunity to place before the Court a full and comprehensive defence to the adjudication application against her to assist this Court when that application is finally to be considered.

[22]     That said, the leave sought is to be granted here.   An order is now made granting  leave  to  the  judgment  debtor  to  file  her  opposition  to  the  present adjudication application out of time.  In this regard, the following directions are now made:

(a)      Within 5 working days of today the judgment debtor is to file and serve a formal opposition to the present adjudication application together with any affidavit evidence in support she may wish to put before the Court.

(b)The judgment creditors are then to have a further period of 5 working days from that date to file and serve any reply affidavit or affidavits.

(c)       That opposed application is now set down for hearing, to take place at

10.00 am on 15 November 2012 (½ day is allowed).

(d)A direction is made in terms of r 7.39 High Court Rules for filing of synopses of submissions in advance for that hearing.

[23]     Leave is reserved for either party to approach the Court further on 48 hours notice if an earlier alternative hearing date is sought either in Napier or possibly some other registry such as Wellington.

[24]     In the meantime costs are reserved.

‘Associate Judge D.I. Gendall’