Body Corporate 68792 v Memelink - [2018] NZCA 509

IN THE COURT OF APPEAL OF NEW ZEALAND

I TE KŌTI PĪRA O AOTEAROA

CA298/2017
[2018] NZCA 509

BETWEEN	BODY CORPORATE 68792 First Appellant BODY CORPORATE 378945 Second Appellant
AND	HARRY MEMELINK Respondent

Hearing:	30 July 2018 (further material received 30 October 2018)
Court:	French, Collins and Moore JJ
Counsel:	A O’Connor for First Appellant P S J Withnall and D G Dewar for Second Appellant Q S Haines for Respondent
Judgment:	19 November 2018 at 11 am

JUDGMENT OF THE COURT

A The appeal is dismissed.

BThe appellants are jointly and severally liable to pay the respondent costs for a standard appeal on a band A basis and usual disbursements.

____________________________________________________________________

REASONS OF THE COURT

(Given by Moore J)

Introduction

Mr Memelink is involved in a long running dispute with two bodies corporate over unpaid levies. The bodies corporate seek to have him adjudicated bankrupt. In a reserved judgment of 8 May 2017, Associate Judge Smith declined to do so.[1] Body Corporate 68792 (the first appellant) and Body Corporate 378945 (the second appellant) appeal that decision. They claim the Associate Judge erred in exercising his discretion not to adjudicate Mr Memelink bankrupt when he concluded:
(a)Mr Memelink was able to pay his debts;
(b)the circumstances in which the debt was incurred did not justify adjudication; and
(c)adjudication would be pointless.
[1]Body Corporate 68792 v Memelink [2017] NZHC 905 [decision under appeal].
Following the hearing before us, Associate Judge Johnston, having refused Mr Memelink’s application for an adjournment, adjudicated Mr Memelink bankrupt.[2] The creditors were a Lower Hutt law firm and the orders were based on bankruptcy notices relating to costs judgments in the High Court (for $108,200.06), and in this Court (for $13,767.52) following Mr Memelink’s unsuccessful claim against the firm.
[2]Collins & May Law v Memelink HC Wellington CIV-2018-485-363, 29 August 2018.
As a consequence, we issued a minute on 30 August 2018 inviting the parties to file memoranda as to whether the adjudication rendered the appeal moot. Counsel for the first and second appellants responded by way of joint memorandum. The appellants indicated it was premature to say whether the consequences of Mr Memelink’s adjudication had such an effect. They noted that on 11 September 2018 Mr Memelink filed an originating application in the High Court seeking an order annulling his bankruptcy.[3] At the time of filing, the application had yet to be called, although the appellants indicated it would be opposed. They observed that whether the appeal was moot turned heavily on the outcome of Mr Memelink’s application. They also noted that in the event he was successful, the appellants would seek leave to advance further matters which have arisen subsequent to the hearing before us.
[3]Pursuant to the Insolvency Act 2006, s 309.
Notwithstanding the above, we can see no good reason to further delay the delivery of this judgment pending the determination of Mr Memelink’s application to annul Associate Judge Johnston’s bankruptcy order.

Background

The appellants operate properties situated in Lower Hutt.…

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: [2018] NZCA 509
Decision Date: 19 November 2018 at 11 am

CaseChat Overview and Summary

Body Corporate 68792 and Body Corporate 378945 appealed against the Associate Judge's decision not to adjudicate Mr Harry Memelink bankrupt. The Associate Judge had found that Mr Memelink was able to pay his debts, that the circumstances in which the debt was incurred did not justify adjudication, and that adjudication would be pointless. The appellants sought to argue that the Associate Judge had erred in his exercise of discretion by taking into account irrelevant considerations and disregarding relevant considerations. The Court of Appeal found that the Associate Judge was correct in declining to adjudicate Mr Memelink bankrupt. The Court found that Mr Memelink was a debtor unwilling to pay his debts rather than one who was unable to do so. The Court also found that the Associate Judge was correct in considering the circumstances in which the debt was incurred and that adjudication would be pointless. The Court of Appeal dismissed the appeal and ordered the appellants to pay the respondent's costs for a standard appeal on a band A basis and usual disbursements.

Orders