Cribb v Evia Rural Finance Ltd - [2014] NZCA 543

IN THE COURT OF APPEAL OF NEW ZEALAND

CA179/2012
[2014] NZCA 543

BETWEEN	ROBERT CLIFFORD HOANI CRIBB Appellant
AND	EVIA RURAL FINANCE LIMITED First Respondent
THE OFFICIAL ASSIGNEE Second Respondent

Hearing:	10 September 2014
Court:	French, Winkelmann and Asher JJ
Counsel:	Appellant in person No appearance for Respondents
Judgment:	11 November 2014 at 3.00 pm

JUDGMENT OF THE COURT

AThe application for leave to adduce further evidence is dismissed.
BThe appeal is dismissed.
CThere is no order as to costs.

____________________________________________________________________

REASONS OF THE COURT

(Given by Winkelmann J)

Introduction

On 6 March 2012, Associate Judge Bell adjudicated Mr Cribb bankrupt on the application of a creditor, Evia Rural Finance Ltd (Evia).[1] Mr Cribb appeals against the making of the order of adjudication.[2]
[1]Evia Rural Finance Ltd v Cribb HC Hamilton CIV-2011-419-631, 6 March 2012.
[2]The appeal was filed on 26 March 2012 but was deemed abandoned on 27 September 2012. On 26 November 2012, Mr Cribb filed an application for extension of time under r 43 of the Court of Appeal (Civil) Rules 2005. Consent orders were made extending time for the filing of the case on appeal.
Prior to his bankruptcy, Mr Cribb was a property developer. In 2001 his company, Kaimai Palms Golf Resort Ltd (Kaimai), took over a failed residential development with plans to revitalise the project. Evia was one of the companies providing finance to Kaimai for this purpose. It advanced approximately NZD 800,000 together with capitalised interest. It took security by way of a mortgage over five sites in the development and Mr Cribb’s personal guarantee of Kaimai’s obligations. Receivers were appointed to Kaimai in 2010 by another creditor. Mr Cribb made strenuous attempts to see Evia repaid, obtaining refinancing commitments from an overseas financier, Zender Minol d.o.o.[3] Ultimately, however, Zender Minol did not provide the refinancing and Evia was not repaid. Evia obtained a summary judgment against Mr Cribb and then proceeded with its application to bankrupt him.[4]
[3]As the Judge noted at [15], the letters “d.o.o” are an acronym in Serbo-Croatian. They stand for društvo s ograničenom odgovornošću, indicating a limited liability company.
[4]The application disclosed that Evia had security for part of that debt which it valued at NZD 485,000.
In granting Evia’s application, the Judge considered and rejected an argument by Mr Cribb that Evia had agreed to compromise the debt he owed it, found that Mr Cribb was insolvent, and exercised his discretion to bankrupt him.
Mr Cribb appeals on the following grounds:
(a)The Judge’s assessment that Mr Cribb did not have adequate assets to repay his creditors was wrong. The Judge underestimated the value of rights of action Mr Cribb had while overestimating the likely level of claims. Mr Cribb submits that subsequent events have borne this out. His prospects of repaying his creditors were therefore considerably rosier than the Judge assessed.
(b)The Judge erred in finding that Evia was not precluded from proceeding with its application to bankrupt Mr Cribb by reason of its dealings…

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: [2014] NZCA 543
Decision Date: 11 November 2014 at 3.00 pm

CaseChat Overview and Summary

In Cribb v Evia Rural Finance Ltd, the appellant, Mr. Cribb, appealed against the decision of the Associate Judge Bell to adjudicate him bankrupt on the application of the creditor, Evia Rural Finance Ltd. The appeal was dismissed by the Court of Appeal of New Zealand. The central legal issues in the case were whether the Judge erred in his assessment of Mr. Cribb's insolvency, whether Evia was precluded from proceeding with its application to bankrupt Mr. Cribb, and whether the Judge erred in exercising his discretion to bankrupt Mr. Cribb.

The Court of Appeal held that the Judge was correct in assessing Mr. Cribb as insolvent at the time of adjudication, as Mr. Cribb did not have the assets to pay his creditors, and his claims against third parties were unlikely to be realised. The Court declined to accept further evidence presented by Mr. Cribb, as it was not fresh, relevant, or reliable.

On the second ground of appeal, the Court found that Evia was not precluded from proceeding with its application to bankrupt Mr. Cribb, as there was no evidence of an agreement to assign the debt to Zender Minol. The Judge's analysis of the correspondence between the parties was convincing.

Lastly, the Court of Appeal held that the Judge was correct in exercising his discretion to bankrupt Mr. Cribb, considering the benefits of the Official Assignee's administration of the debtor's estate and the public interest in the discharge aspect of bankruptcy. The Court also noted that Mr. Cribb's real objective was to seek a discharge or annulment of his bankruptcy, which should be pursued in the High Court with proper evidence.

In conclusion, the Court dismissed the appeal and made no order as to costs, as the respondents elected not to involve themselves in the appeal.

Orders