DeMarco v Official Assignee

Case [2023] NZHC 1576


IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE

CIV-2022-485-642

[2023] NZHC 1576

UNDER Section 226 of the Insolvency Act 2006

AND

IN THE MATTER

of an application to review the Official Assignee’s decision

BETWEEN

EUGENE JOHN DEMARCO

Applicant

AND

THE OFFICIAL ASSIGNEE in bankruptcy of the property of Eugene John DeMarco Respondent

Hearing: 19 June 2023

Counsel:

E J DeMarco in person

R M G Hindriksen for Respondent

Judgment:

23 June 2023


JUDGMENT OF RADICH J


[1]                 Eugene John DeMarco (Mr DeMarco),1 an undischarged bankrupt, has brought this appeal under s 226 of the Insolvency Act 2006 (the Act) from a decision of the respondent (the Official Assignee) in which Mr DeMarco’s request for the Official Assignee’s consent for him to travel to the United States of America was declined.

[2]                 Mr DeMarco had purchased his airline ticket to travel to the United States before he sought the permission that was needed for him to travel from the Official


1      Mr DeMarco seeks to draw a distinction between “Mr DeMarco” as a corporate form, on the one hand, and “a people who is called Eugene”, on the other. For reasons I go on to give, the distinction is not tenable and I refer in this decision to all aspects of the applicant as “Mr DeMarco”.

DEMARCO v OFFICIAL ASSIGNEE [2023] NZHC 1576 [23 June 2023]

Assignee. He left New Zealand for the United States before the Official Assignee’s decision was made. The decision was made and communicated just three days after the request was made.

[3]                 Mr DeMarco has not complied with a number of timetable orders made by the Court (and extended on several occasions to accommodate his interests) requiring him to file evidence in support of the appeal. The grounds for the appeal remain unknown. In these circumstances, the Official Assignee seeks security for costs and orders staying the proceeding until Mr DeMarco pays funds into the Court or gives security in accordance with the Court’s orders. It is that application with which this decision is concerned.

[4]                 Mr DeMarco raises a preliminary matter. He says that the Court does not have jurisdiction to consider the application – or the proceeding  as a whole  – because  Mr DeMarco is a legal fiction, a point I address in the next section of this decision.

[5]                 I am in no doubt that the Court has jurisdiction in this proceeding and, in relation to this application, that security for costs should be ordered and that the proceeding should be stayed.

Protest to jurisdiction

[6]                 Mr DeMarco has, in a memorandum of 10 June 2023, protested the Court’s jurisdiction. The challenge is based, it is said, in three documents which Mr DeMarco regards as not having been refuted. Those documents are as follows:

(a)a memorandum in response to a minute of Grice J, dated 25 April 2023;

(b)the affidavit of DeMarco of 25 April 2023; and

(c)the “proclamation of Eugene  John  of…

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DeMarco v Official Assignee [2023] NZHC 1576
Case
[2023] NZHC 1576
Decision Date

CaseChat Overview and Summary

The case of DeMarco v Official Assignee involved Eugene John DeMarco, an undischarged bankrupt, who appealed against a decision by the Official Assignee denying his request for permission to travel to the United States. The Official Assignee sought security for costs and an order staying the proceedings until security was provided. Eugene John DeMarco contested the Court's jurisdiction, claiming he was a legal fiction and exempt from these proceedings. The Court rejected this argument, confirming its jurisdiction over Mr. DeMarco.

The legal issues centered around whether there was reason to believe Mr. DeMarco would be unable to pay the Official Assignee's costs if unsuccessful and whether it was just to exercise the discretion to order security for costs. The Court found that Mr. DeMarco was impecunious and an adjudicated bankrupt, with liabilities exceeding his assets and no income other than government assistance. Furthermore, Mr. DeMarco's appeal appeared unmeritorious as the Official Assignee's decision to deny travel permission was conditional on Mr. DeMarco providing certain information, which he was legally required to furnish. Given Mr. DeMarco's history of vexatious litigation and refusal to comply with Court orders, the Court deemed it just to order security for costs.

The Court ordered Mr. DeMarco to pay $16,849.50 as security for costs, to be paid into court or secured to the satisfaction of the Registrar, and for the proceedings to be stayed until this was done. Additionally, Mr. DeMarco was ordered to pay the Official Assignee's costs of $8,126 and $500 in disbursements.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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