DeMarco v The Vintage Aviator Limited (15672720)

IN THE COURT OF APPEAL OF NEW ZEALAND

I TE KŌTI PĪRA O AOTEAROA

CA734/2021
[2022] NZCA 84

BETWEEN	EUGENE JOHN DEMARCO Appellant
AND	THE VINTAGE AVIATOR LIMITED (15672720) First Respondent
AND	PETER ROBERT JACKSON, FRANCES ROSEMARY WALSH AND PHILIPPA JANE BOYENS Second Respondents
AND	PETER ROBERT JACKSON Third Respondent

Court:	Cooper, Brown and Gilbert JJ
Counsel:	Appellant in Person B A Scott and T D Smith for First Respondent M G Colson QC and D W Ballinger for Second and Third Respondents G A D Neil and R Hindriksen for Official Assignee
Judgment: (On the papers)	28 March 2022 at 11.30 am

JUDGMENT OF THE COURT

The appeal is dismissed.

____________________________________________________________________

REASONS OF THE COURT

(Given by Cooper J)

Introduction

On 16 December 2021 Mr DeMarco filed an appeal against a judgment of the High Court delivered on 18 November 2021 by Grice J.[1]
[1]The Vintage Aviator Ltd v DeMarco [2021] NZHC 3096.
On 14 February, a memorandum was filed by counsel for the Official Assignee stating:
4 Mr DeMarco filed the application for leave to appeal, and the appeal, in respect of the judgment of her Honour Justice Grice delivered on 18 November 2021, in CIV-2017-485-1027, reported as The Vintage Aviator Ltd v DeMarco [2021] NZHC 3096. Counsel agree that an application for leave to appeal is not required.
5 Mr DeMarco was, however, adjudicated bankrupt on 14 July 2021 at 4.00pm.
6 On adjudication all property belonging to a bankrupt including all rights that a bankrupt could have exercised in, over, or in respect of any property vests in the Official Assignee. To the extent that the application and appeal filed by Mr DeMarco contain or relate to choses in action, those vested in the Assignee pursuant to s 101 of the Insolvency Act 2006 on Mr DeMarco’s adjudication. In the event they do not constitute 3 13394332_1 vested property, Mr DeMarco nevertheless lost the right to advance them.
7 Accordingly, Mr DeMarco did not have standing (or any other right) to file the application for leave to appeal or the notice of appeal dated 16 December 2021. The Assignee did not consent to, or otherwise sanction, their filing.
8 Mr DeMarco is aware that he does not have standing (or any other rights) in respect of proceedings vested in the Official Assignee as a result of his adjudication bankrupt. Recently, in a judgment delivered on 8 December 2021 the Court of Appeal, confirmed that he lacked standing in respect of a separate application seeking joinder and other orders in proceedings CA254/2021 and CA493/2021 as a consequence of his adjudication bankrupt.
9 Similarly here, Mr DeMarco lacks standing (or any other right) to file the application or appeal in relation to the judgment of Justice Grice.
10 Mr DeMarco’s application and appeal are, in the Assignee’s submission, a nullity that ought properly to be struck out or summarily dismissed.
Orders Sought
11 For the above reasons, the Assignee respectfully requests (to the extent it is required) an order striking out or summarily dismissing Mr DeMarco’s application for leave to appeal and the notice of appeal dated 16 December 2021.
This memorandum was served on Mr DeMarco but he has not responded to it. The Official Assignee’s analysis is plainly correct. In the circumstances the appeal must be dismissed.

Result

The appeal is dismissed.

Solicitors:
Chapman Tripp, Wellington for Respondents
Meredith Connell, Auckland for Official Assignee

In the Court of Appeal of New Zealand, the case of DeMarco v The Vintage Aviator Limited (15672720) involved Eugene John DeMarco, who filed an appeal against a High Court judgment delivered by Grice J on 18 November 2021. The appeal was filed by DeMarco on 16 December 2021, but on 14 July 2021, DeMarco was adjudicated bankrupt. As a result, all of his property and rights vested in the Official Assignee. This meant that DeMarco had no standing to file the appeal without the Assignee’s consent, which was not given. Counsel for the Official Assignee submitted that the appeal should be dismissed as a nullity, as DeMarco had no right to proceed with the appeal after his adjudication as bankrupt.

The primary legal issue in this case was whether Eugene DeMarco had standing to file the appeal after being adjudicated bankrupt. The Court of Appeal examined whether DeMarco's adjudication as bankrupt affected his capacity to initiate and pursue the appeal. Under the Insolvency Act 2006, all property and rights of a bankrupt vest in the Official Assignee upon adjudication. Consequently, DeMarco's ability to file the appeal without the Assignee's consent became a critical point. The Official Assignee argued that DeMarco's appeal was a nullity because he had no standing to proceed with it post-adjudication.

The Court of Appeal upheld the Official Assignee’s argument and held that Eugene DeMarco lacked standing to file the appeal. The Court confirmed that all rights and choses in action belonging to a bankrupt vest in the Official Assignee upon adjudication, and without the Assignee's consent, the bankrupt cannot proceed with legal actions. The Court dismissed the appeal, agreeing that DeMarco’s adjudication as bankrupt stripped him of the right to file the appeal independently. This decision reinforced the principle that a bankrupt has no standing to act in relation to their property or rights without the Official Assignee's consent.

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established