DeMarco v Anderson - [2021] NZCA 476

IN THE COURT OF APPEAL OF NEW ZEALAND

I TE KŌTI PĪRA O AOTEAROA

CA438/2021
[2021] NZCA 476

BETWEEN	EUGENE JOHN DEMARCO Applicant
AND	NORMAN HUGH ANDERSON AND REBECCA ALICE CARRASCO First Respondents OFFICIAL ASSIGNEE Second Respondent

Court:	Brown and Collins JJ
Counsel:	Applicant in person E S K Dalzell for First Respondents G A D Neil and S P Farnell for Official Assignee
Judgment: (On the papers)	21 September 2021 at 10.00 am

JUDGMENT OF THE COURT

AThe application to suspend adjudication of Mr DeMarco’s bankruptcy is declined.
BThe applicant must pay the first respondents costs for a standard application on a band A basis and usual disbursements.

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REASONS OF THE COURT

(Given by Collins J)

Introduction

Mr DeMarco was adjudged bankrupt on 14 July 2021.[1] That adjudication occurred in the context of:
(a)Mr DeMarco having been ordered to pay damages totalling $170,436 and costs totalling $153,005.07 to Mr Anderson and Ms Carrasco.[2] We explain the litigation giving rise to those damages and costs orders at [7].
(b)The High Court having declined Mr DeMarco’s application to stay the judgment giving rise to the damages and costs orders.[3]
(c)The High Court having declined Mr DeMarco’s application to stay the application to bankrupt him.[4]
(d)Mr DeMarco having filed a notice of appeal against the first damages award. That appeal was deemed abandoned as at 10 June 2021 because of Mr DeMarco’s failure to file his case on appeal and apply for a fixture.
[1]Anderson v DeMarco [2021] NZHC 1757 (Bankruptcy judgment).
[2]Anderson v DeMarco [2020] NZHC 1349 (First costs judgment); Anderson v DeMarco [2020] NZHC 2979, (2020) 21 NZCPR 758 (First damages judgment); and Anderson v DeMarco [2020] NZHC 3490 (Second damages and costs judgment).
[3]DeMarco v Anderson [2021] NZHC 544.
[4]Bankruptcy judgment, above n 1, at [32].
Mr DeMarco has been involved in other litigation and prosecutions, including the following proceedings:
(a)On 13 September 2019, he was convicted on four charges of theft by a person in a special relationship and two charges of obtaining by deception.[5] Those convictions were not related to the proceedings brought by Mr Anderson and Ms Carrasco.
(b)The placing into liquidation of two of Mr DeMarco’s companies, namely the Old Stick and Rubber Co Ltd and Dairy Air Ltd.
(c)In another proceeding, it is alleged Mr DeMarco misappropriated $2.1 million from The Vintage Aviatior Ltd and misapplied $720,000 to repay a debt to The Film Property Trust.
[5]R v DeMarco [2019] NZHC 3209.
Mr DeMarco has applied to this Court under s 414(2) of the Insolvency Act 2006 (the Act) to set aside the adjudication of bankruptcy. He has also applied under s 416(1) of the Act to have the adjudication suspended pending the hearing of the appeal. That latter application is the subject of this judgment.
Mr Anderson, Ms Carrasco and the Official Assignee oppose the application to suspend the adjudication of Mr DeMarco’s bankruptcy.
The application to suspend bankruptcy was initially scheduled to be determined…

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.

Continue reading DeMarco v Anderson

Details

AGLC: DeMarco v Anderson [2021] NZCA 476
Case: [2021] NZCA 476
Decision Date: 21 September 2021 at 10.00 am

CaseChat Overview and Summary

The Court of Appeal of New Zealand was presented with an application from Eugene John DeMarco, who sought to suspend the adjudication of his bankruptcy. The respondents were Norman Hugh Anderson, Rebecca Alice Carrasco, and the Official Assignee. DeMarco had been adjudged bankrupt following a High Court order that he pay damages and costs to Anderson and Carrasco due to misrepresentations in a property sale contract. The Court of Appeal had to determine whether to suspend the adjudication of DeMarco's bankruptcy pending the hearing of his appeal.

The central legal issue was whether the adjudication of DeMarco's bankruptcy should be suspended pending the outcome of his appeal. This required the Court to weigh several factors, including the likelihood of DeMarco succeeding in his appeal, the effect on the respondents and unsecured creditors, the public interest, and the overall balance of convenience.

The Court of Appeal found that DeMarco's appeal was unlikely to succeed due to his history of abandoned appeals and lack of apparent strength. The Court noted the significant work already undertaken by the Official Assignee in investigating and administering DeMarco's estate, which would be hindered by a suspension. Furthermore, the public interest in ensuring the Official Assignee could effectively manage DeMarco's assets was deemed paramount. The balance of convenience heavily favoured declining the application to suspend the adjudication. Consequently, the Court declined DeMarco's application and ordered him to pay the respondents' costs.

Orders