Convendium Limited (in liquidation) v Monnery - [2020] NZHC 838

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2019-404-001906

[2020] NZHC 838

UNDER the Insolvency Act 2006

IN THE MATTER OF

the bankruptcy of JULIE ANN MONNERY.

The Official Assignee abiding decision of the Court

BETWEEN

CONVENDIUM LIMITED (IN LIQUIDATION)

Judgment Creditor

AND

JULIE ANN MONNERY

Judgment Debtor

CIV-2019-404-001907

UNDER

The Insolvency Act 2006

IN THE MATTER OF

the bankruptcy of PAUL MARK MONNERY. The Official Assignee abiding decision of the Court

BETWEEN

CONVENDIUM LIMITED (IN LIQUIDATION)

Judgment Creditor

AND

PAUL MARK MONNERY

Judgment Debtor

Hearing: On the papers

Appearances:

D Chisholm QC for Judgment Creditor

C R Carruthers QC for Judgment Debtors

Judgment:

29 April 2020

JUDGMENT OF ASSOCIATE JUDGE P J ANDREW

CONVENDIUM LTD (IN LIQ) v MONNERY [2020] NZHC 838 [29 April 2020]

Introduction

[1] On 12 March 2020, I adjudicated both the judgment debtors, Mr and Mrs Monnery, bankrupt. At that time there was no appearance by or on behalf of either of them.

[2] Mr and Mrs Monnery now apply to set aside the orders adjudicating them bankrupt in reliance on ss 42 and 309 (Annulment) of the Insolvency Act 2006. They say the orders for adjudication were improperly made because the Court was not advised at the time of those orders that Mr and Mrs Monnery had applied for a stay of execution of the judgment debt, for which a hearing date had been granted, or that a hearing date had also been allocated for their appeal against the judgment debt.1

[3] The judgment creditor, Convendium Ltd (in liquidation) (Convendium), opposes the applications for annulment. It says Mr and Mrs Monnery failed to comply with the directions of the Court in respect of the stay application; failed to file and serve an appearance on the adjudication applications in accordance with r 24.18 of the High Court Rules 2016; and failed to appear at the call of the adjudication applications.

[4] The Official Assignee has been served with the applications and abides the Court’s decision.

[5] The critical issue is whether I should now determine on the papers received whether orders for annulment should be made on the grounds that not all the relevant facts were before me at the time I made the adjudication orders or, as Convendium submits, make further timetabling directions for the filing of evidence before determining the applications.

Factual background

[6]Mr and Mrs Monnery (the Monnerys) were directors of Convendium.

1 The stay application had been scheduled for a hearing in this Court on 1 April 2020 and the appeal to the Court of Appeal is scheduled to be heard in June 2020.

[7] On 27 August 2019, Convendium obtained summary judgment against the Monnerys in the sum of $515,654.64 (inclusive of interest), with costs to be agreed between the parties.

[8] On 20 September 2019, the Monnerys lodged an appeal against that summary judgment debt to the Court of Appeal.

[9] On 25 September 2019, the Monnerys were served…

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 838
Decision Date: 29 April 2020

CaseChat Overview and Summary

The applicants, Mr and Mrs Monnery, sought an annulment of the bankruptcy orders made against them by the Court. Convendium Limited, the judgment creditor, opposed the annulment. The applicants argued that the bankruptcy orders were improperly made as the Court was not advised that they had applied for a stay of execution of the judgment debt and that their appeal against the judgment debt had been scheduled for hearing. The Court had to decide whether to annul the bankruptcy orders on the grounds that not all relevant facts were before it at the time the orders were made, or whether further evidence should be called. The Court found that it was appropriate to determine the annulment application on the papers before it, as the narrow issue of whether an annulment order should be made was before it. The Court accepted that the applicants had failed to comply with the Court’s directions in relation to the stay application, but found that there was a proper basis to grant an annulment of both bankruptcy adjudications on the grounds set out in s 309(1)(a) of the Insolvency Act 2006. The Court found that the applicants should not have been adjudicated bankrupt on 12 March 2020, and made orders for the annulment of the bankruptcy adjudications and for the re-hearing of the adjudication proceedings. The Court found that there should be no orders for costs.

The Court annulled the adjudication of the applicants bankrupt and ordered the adjudication proceedings to be reheard. The Court found that there should be no orders for costs.

Orders