Biomex Trustees Limited v Wilson - [2020] NZHC 1038

IN THE HIGH COURT OF NEW ZEALAND NELSON REGISTRY

I TE KŌTI MATUA O AOTEAROA WHAKATŪ ROHE

CIV-2019-442-65

[2020] NZHC 1038

UNDER the Insolvency Act 2006

IN THE MATTER

of the bankruptcy of PHILLIP JOHN WILSON

BETWEEN

BIOMEX TRUSTEES LIMITED

Judgment Creditor

AND

PHILLIP JOHN WILSON

Judgment Debtor

Hearing: 11 May 2020 (By AVL)

Appearances:

S Galbreath for Judgment Creditor P J Bellamy for Judgment Debtor

Judgment:

19 May 2020

JUDGMENT OF ASSOCIATE JUDGE LESTER

This judgment was delivered by me on 19 May 2020 at 2.30pm pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar 19 May 2020

BIOMEX TRUSTEES LIMITED v WILSON [2020] NZHC 1038 [19 May 2020]

[1] The judgment debtor, Mr Wilson, is indebted to the judgment creditor, Biomex Trustees Limited (Biomex), in the sum of approximately $478,000. The indebtedness has its origins in a settlement agreement reached in March 2017 where, in the course of a hearing in the High Court, the present parties along with others, reached a settlement.

[2] That settlement agreement required Mr Wilson and his related parties to take certain steps. It is common ground they did not do so. The settlement agreement provided that in the event those steps were not taken, Mr Wilson and related parties would be liable for a specified amount.

[3] With Biomex being entitled to pursue payment of the amount payable as a result of non-compliance with the settlement agreement, it issued summary judgment proceedings in early 2019 which were served on Mr Wilson and parties related to him in April 2019. The first call of those proceedings occurred on 27 June 2019. Mr Wilson was the first defendant in those proceedings. No notice of opposition was filed by Mr Wilson or the other defendants. An application for an adjournment to allow oppositions to be filed was sought but declined by Associate Judge Matthews in relation to all defendants, except for Mr Wilson, and judgment was entered against the other defendants.1

[4] The adjourned proceeding against Mr Wilson was called on 8 August 2019. There was no appearance by or on behalf of Mr Wilson. No notice of opposition had been filed and judgment was entered against him.

[5] On 11 September 2019, a bankruptcy notice was issued in the Nelson High Court and served on Mr Wilson on 3 October 2019. No steps were taken by Mr Wilson to apply to set the bankruptcy notice aside.

1 Biomex Trustees Ltd v Wilson [2019] NZHC 1488.

[6] The present application to adjudicate Mr Wilson bankrupt was filed on 21 October 2019. Liquidation proceedings had been filed against the corporate defendants, against whom summary judgment had been entered by Associate Judge Matthews in June 2019. Bankruptcy proceedings were also issued against Ms Pamela Thomson, Mr Wilson’s wife, who was also a signatory to the settlement agreement. Ms Pamela Thomson was bankrupted and the corporate defendants were liquidated on 31 October 2019. Because the proceedings against Mr Wilson had become out of step with…

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: [2020] NZHC 1038
Decision Date: 19 May 2020

CaseChat Overview and Summary

Biomex Trustees Limited applied to the High Court for an order to adjudicate Phillip John Wilson bankrupt. The application followed judgment being entered against Wilson in summary judgment proceedings brought by Biomex. The basis for the judgment was a settlement agreement, which Wilson and others entered into in 2017. The settlement agreement provided that Wilson would be liable for a sum if certain steps were not taken. The steps were not taken and Biomex brought the summary judgment proceedings, which resulted in judgment being entered against Wilson. Wilson opposed the application to adjudicate him bankrupt on several grounds, including that there was a set-off against the debt owed by him to Biomex, which had not been heard previously or compromised by the settlement agreement. The court rejected Wilson's arguments. The court held that the opportunity to raise the set-off had been lost, as it could have been raised at the time judgment was obtained. The court also held that the set-off was covered by the terms of the full and final settlement set out in the settlement agreement. The court made an order adjudicating Wilson bankrupt.

Orders