Coleman v Knapp

[2020] NZHC 3055

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2020-404-2222

[2020] NZHC 3055

UNDER

The Insolvency (Cross Border) Act 2006

IN THE MATTER OF

An Originating Application Without Notice for Recognition of a Foreign Main Proceeding and other orders

BETWEEN

LUCINDA CLARE COLEMAN and STEPHEN JAMES HOBSON in their

capacities as TRUSTEE IN BANKRUPTCY OF FIONA ROSE KNAPP and as

TRUSTEE IN BANKRUPTCY OF MICHAEL GARRICK PEARCE

Applicants

AND

FIONA ROSE KNAPP

First Respondent

MICHAEL GARRICK PEARCE

Second Respondent

Date of Hearing:

13 November 2020 (by teleconference)

Appearances:

J R F Cochrane for the Applicants

No appearance by or on behalf of the Respondent

Date of Judgment:

19 November 2020

JUDGMENT OF POWELL J

This judgment was delivered by me on 19 November 2020 at 3.30 pm pursuant to R 11.5 of the High Court Rules

Registrar/Deputy Registrar Date:

COLEMAN v KNAPP [2020] NZHC 3055 [19 November 2020]

[1]                  The applicants, Lucinda Coleman and Stephen Hobson, have applied in their capacities as trustees in bankruptcy of the respondents, Fiona Rose Knapp and Michael Garrick Pearce for recognition of a foreign main proceeding pursuant to the Insolvency (Cross-Border) Act 2006 (“the Act”), to enable any New Zealand assets of the respondents to be dealt with by the applicants.

[2]                  The respondents, who have been in a long-term relationship were both declared bankrupt in England:

(a)Ms Knapp on 26 November 2019 following bankruptcy proceedings in the County Court at Swindon (“The Knapp bankruptcy proceedings”); and

(b)Mr Pearce on 7 February 2020 following bankruptcy proceedings in the County Court at London Central (“the Pearce bankruptcy proceedings”).

[3]                  Both Ms Knapp and Mr Pearce remain in the United Kingdom, but Ms Knapp is originally from New Zealand and enquiries have revealed she has maintained a bank account here.

[4]                  Following the filing of the application I made provisional orders pursuant to Art 19(1) of Schedule 1 to the Act so as to preserve the position of the applicants pending consideration of the application.

The application

[5]The application is brought pursuant to Article 15 of Schedule 1 to the Act,

which provides rules applying to cross-border insolvency proceedings. Article 15 provides:

Article 15 Application for recognition of a foreign proceeding

(1)A foreign representative may apply to the High Court for recognition of the foreign proceeding in which the foreign representative has been appointed.

(2)An application for recognition shall be accompanied by:

(a)a certified copy of the decision commencing the foreign proceeding and appointing the foreign representative; or

(b)a certificate from the foreign court affirming the existence of the foreign proceeding and of the appointment of the foreign representative; or

(c)in the absence of evidence referred to in subparagraphs (a) and (b), any other evidence acceptable to the Court of the existence of the foreign proceeding and of the appointment of the foreign representative.

(3)An application for recognition shall also be accompanied by a statement identifying all foreign proceedings in respect of the debtor that are known to the foreign representative.

(4)The Court may require a translation of documents supplied in support of the application for recognition  into  an  official  language  of  New Zealand.

[6]In turn Article 17 provides:

Article 17 Decision to recognise a foreign proceeding

(1)Subject to article 6, a foreign proceeding shall be recognised if:

(a)the foreign proceeding is a proceeding within the meaning of subparagraph (a) of article 2;

(b)the foreign representative applying for recognition is a person or body within the meaning of subparagraph (d) of article 2;

(c)the application meets the requirements of paragraph (2) of article 15; and

(d)the application has been submitted to the High Court.

(2)The foreign proceeding shall be recognised:

(a)as a foreign main proceeding if it is taking place in the State where the debtor has the centre of its main interests; or

(b)as a foreign non-main proceeding if the debtor has an establishment within the meaning of subparagraph (f) of article 2 in the foreign State.

(3)An application for recognition of a foreign proceeding shall be decided upon at the earliest possible time.

(4)As soon as practicable, after the Court recognises the foreign proceeding under paragraph (1) of this article, the foreign representative shall notify the debtor, in the prescribed form, that the application has been recognised.

(5)The provisions of articles 15, 16, 17, and 18 do not prevent modification or termination of recognition if it is shown that the grounds for granting it were fully or partially lacking or have ceased to exist.

[7]                  Given this position, and having considered the affidavits filed in support of the application, it is clear that the applicants have complied with the requirements of Articles 15 and 17. In particular, I am satisfied that both the Knapp and Pearce bankruptcy proceedings brought against the respondents are not manifestly contrary to the public policy of New Zealand for the purposes of Article 6, and should be recognised as a foreign main proceeding pursuant to Article 17 on the basis that:

(a)The proceedings brought against the respondents are “judicial proceedings … in a foreign State … pursuant to a law relating to insolvency in which proceeding the assets and affairs of [the respondents are respectively] subject to control or supervision by a foreign court, for the purpose of reorganisation or liquidation” in terms of Article 2(a).

(b)The applicants are persons “authorised in a foreign proceeding to administer the reorganisation or the liquidation of the [respondents’ respective] assets or affairs” for the purposes of Article 2(d).

(c)The applicant, Ms Coleman, has sworn an affidavit in which are annexed copies of documents which she confirms are the certified copies of the court orders placing the two respondents in bankruptcy in each case, together with documents  appointing  Ms  Coleman  and  Mr Hobson as trustees in bankruptcy for the respondents. Pursuant to Article 16 this Court is specifically “entitled to presume that documents submitted in support of the application for recognition are authentic, whether or not they have been legalised”.

[8]                  Having recognised the Knapp and the Pearce bankruptcy proceedings against the respondents as foreign main proceedings, I am satisfied that relief pursuant to Article 21(2) as well as the provisional relief made pursuant to Article 19(1) made on 13 November 2020, and that the orders should be made in the terms set out in the draft

orders  filed  by  Mr  Cochrane  on  behalf  of  the  applicants.     I make the orders accordingly.

Decision

[8]        The application is granted and orders made as per the draft orders filed with the application.

[9]        Leave is reserved for the applicants to apply to the Court in the event that further orders pursuant to Article 21(1) of Schedule 1 to the Insolvency (Cross-border) Act 2006 are required to discharge their duties.

Powell J