Avon Parnell Limited v Chevin - [2021] NZHC 2301

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2020-404-001778

[2021] NZHC 2301

UNDER The Insolvency Act 2006

IN THE MATTER OF

The bankruptcy of PETER LOUIS CHEVIN

BETWEEN

AVON PARNELL LIMITED

First Judgment Creditor

WAIMAURI LIMITED
Second Judgment Creditor

AND

PETER LOUIS CHEVIN

Judgment Debtor

Hearing: 13 August 2021

Appearances:

M J W Lenihan for Judgment Creditors R B Hucker for Judgment Debtor

Judgment:

2 September 2021

JUDGMENT OF ASSOCIATE JUDGE P J ANDREW

This judgment was delivered by Associate Judge Andrew on 2 September 2021 at 4.00 pm
pursuant to r 11.5 of the High Court Rules Registrar / Deputy Registrar

Date……………………………

AVON PARNELL LTD v CHEVIN [2021] NZHC 2301 [2 September 2021]

Introduction

[1] These are bankruptcy proceedings. In April 2021, the two judgment creditors were substituted for the original judgment creditor, pursuant to s 44 of the Insolvency Act 2006.

[2] Mr Chevin, the judgment debtor, contends that the Court had no jurisdiction to substitute two creditors; the jurisdiction under s 44 is confined to the substitution of one creditor only for the original creditor. Mr Chevin also contends the second judgment creditor, Waimauri Limited,1 is not a creditor for the purposes of s 44.

[3] Those are the two issues I must address, namely jurisdiction and the status of Waimauri.

[4] The parties are agreed as to the disposal of the proceedings following my determination of these issues. I address that matter below.

Factual background

[5] The bankruptcy notice issued by the original judgment creditor, Rainey Law, was based on a judgment of the District Court in the sum of $128,780.49.

[6] Timothy Edney is the sole director and majority shareholder of Waimauri. His son-in-law, Ryan Leggatt, is the sole shareholder and director of Avon Parnell Limited.2

[7] Avon Parnell is a creditor of Mr Chevin under the judgment of van Bohemen J dated 29 March 2021 in related proceedings.3 Mr Chevin was ordered to pay Avon Parnell and Mr Leggatt, jointly, damages of $256,432.32 plus interest and costs and disbursements of $83,971.30.4

1      Waimauri.
2      Avon Parnell.
3      Avon Parnell Ltd v Chevin [2021] NZHC 650.
4      Avon Parnell Ltd v Chevin, above n 3, at [138](c) and (d).

[8] The second creditor, Waimauri, contends it is a creditor of Mr Chevin under nine separate loan agreements entered into between 13 February 2017 and 27 September 2018. Waimauri says all of the loans are overdue and the total amount owing (including interest) as at 31 January 2021 is $196,142.17.5

[9] On 28 January 2021, Waimauri and Mr Edney filed notices of appearance advising that in the event the judgment creditor, Rainey Law, were to withdraw, they would seek orders under s 44 of the Insolvency Act to be substituted as creditors.6

[10] On 16 April 2021, Avon Parnell filed a notice of appearance seeking an order that in the event that Rainey Law, the judgment creditor, was to withdraw its application for adjudication, Avon…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2021] NZHC 2301
Decision Date: 2 September 2021

CaseChat Overview and Summary

In the High Court of New Zealand, Associate Judge PJ Andrew determined the case of Avon Parnell Limited v Chevin, involving the bankruptcy of Peter Louis Chevin. The key issues were whether the Court had jurisdiction to substitute two creditors in place of the original creditor and whether Waimauri Limited was a creditor for the purposes of the Insolvency Act 2006. The judgment creditor, Rainey Law, had been substituted by Avon Parnell Limited and Waimauri Limited. Chevin argued that the Court lacked jurisdiction to substitute more than one creditor and that Waimauri Limited was not a creditor.

Associate Judge PJ Andrew held that the Court had jurisdiction to substitute two creditors, rejecting the argument that the Insolvency Act 2006 prohibited such substitution. The Judge referred to the statutory scheme of the 2006 Act and the Acts Interpretation Act 1999, which provided that words in the singular include the plural. The Judge also found that Waimauri Limited was a creditor under loan agreements with Chevin, as the latter had accepted liability for the loans in related proceedings. Consequently, Waimauri Limited was properly substituted under section 44 of the Insolvency Act 2006.

The Court ordered that Waimauri Limited should receive $196,142.17 within two working days of the judgment, and the parties were to file a joint memorandum confirming the payment. The proceedings were to be further discussed in a telephone conference to determine whether they should be dismissed on the papers or adjourned for a call of the matter in the Bankruptcy List.

Orders