ELIZABETH ANN HUSHEER Judgment Creditor AND KEVIN MURRAY CAMPBELL Judgment Debtor
[2024] NZHC 3643
•3 December 2024
IN THE HIGH COURT OF NEW ZEALAND NAPIER REGISTRY
I TE KŌTI MATUA O AOTEAROA AHURIRI ROHE
CIV-2024-441-028
[2024] NZHC 3643
BETWEEN ELIZABETH ANN HUSHEER
Judgment Creditor
AND
KEVIN MURRAY CAMPBELL
Judgment Debtor
Hearing: 30 October 2024 Appearances:
D O’Connor for Judgment Creditor P Ross for Judgment Debtor
Judgment:
3 December 2024
JUDGMENT OF ASSOCIATE JUDGE SKELTON
[1] This is an application by the judgment creditor (Elizabeth Husheer) for an order adjudicating the judgment debtor (Kevin Campbell) bankrupt. The application is opposed by Mr Campbell.
[2] This issue is whether there are grounds to exercise the discretion under s 37 of the Insolvency Act 2006 to refuse to adjudicate Mr Campbell bankrupt or grounds to exercise the discretion under s 38 of the Insolvency Act to halt the bankruptcy.
Procedural history
[3] The parties have been engaged in litigation for some years. This appears to revolve around a contractual dispute between Mr Campbell and Ms Husheer’s former husband over work done on an aeroplane; and a defamation claim by Mr Campbell against Ms Husheer.
HUSHEER v CAMPBELL [2024] NZHC 3643 [3 December 2024]
[4] On 30 September 2022, the District Court struck out Mr Campbell’s defamation claim against Ms Husheer.1 Subsequently, on 8 December 2022, Ms Husheer was awarded indemnity costs against Mr Campbell of $50,470.63 plus disbursements of $150.2
[5] On 22 December 2022, Mr Campbell filed a notice of appeal against both judgments in this Court. However, it was noted in a covering letter that an application for leave to appeal was required in respect of the strike out judgment and that an application to stay execution of the judgments would also be filed. It is contended that the notice of appeal was not served on Ms Husheer.
[6] Six months later, on 30 June 2023, after no application for leave or application for stay was filed, the Wellington High Court registry emailed Mr Campbell’s solicitor noting that the notice of appeal had not been registered, and asking whether Mr Campbell intended to continue with the appeal. The email stated:
If there is no response to this email by Friday 7 July, I will assume that this notice of appeal is not to be actioned further.
[7] No response was provided. Since then, Mr Campbell has not progressed any appeal and has not applied for leave to appeal3 or for stay of execution of the judgments.
[8] The judgments were sealed on 13 May 2024. On the same day Mr O’Connor, counsel for Ms Husheer, sent an email to Mr Ross, counsel for Mr Campbell, making demand for payment of the costs. No reply was received.
[9] On 20 March 2024, a certificate of judgment was issued. On 15 April 2024, a bankruptcy notice was issued and copies of the certificate of judgment and the sealed judgment were attached. The bankruptcy notice was served on 16 May 2024.
1 Kevin Murray Campbell v Elizabeth Anne Husheer [2022] NZDC 18651 [Defamation decision].
2 Kevin Murray Campbell v Elizabeth Anne Husheer [2022] NZDC 24107 [Defamation costs order].
3 High Court Rules 2016, r 20.4.
[10] There was an exchange of emails between the solicitors for Mr Campbell and Mr O’Connor on 23 May 2024 indicating that the judgment debt was to be paid, but payment was not made.
[11] On 28 May 2024, Mr Campbell filed an application to set aside the bankruptcy notice. However, this was not served within the required period and therefore it was not a valid application. The application was not pursued by Mr Campbell.4
[12] On 5 July 2024, Ms Husheer filed an application to adjudicate Mr Campbell bankrupt on the basis of failure to comply with the bankruptcy notice. On 17 September 2024, Mr Campbell filed a notice of intention to oppose the application.
Legal principles
[13] Section 36 of the Insolvency Act 2006 provides that the Court may, at its discretion, adjudicate the debtor bankrupt if the creditor has established the requirements set out in s 13 of the Act.
[14] Under s 37 of the Insolvency Act, the court may, at its discretion, refuse to adjudicate the debtor bankrupt if—
(a)the applicant creditor has not established the requirements set out in section 13; or
(b)the debtor is able to pay his or her debts; or
(c)it is just and equitable that the court does not make an order of adjudication; or
(d)for any other reason an order of adjudication should not be made.
[15]In Baker v Westpac Banking Corp, the Court of Appeal held:5
It is proper for the Court to consider not only the interests of those directly concerned — the petitioner, other creditors, the debtor — but also the wider public interest. A creditor who establishes the jurisdictional facts as set out in s 23 is not automatically entitled to an order. On the other hand, it is for an opposing debtor to show why an order should not be made. The Court will give proper weight to the commercial judgment of the petitioner but the oppressive use of the bankruptcy process may be a ground for refusing an
4 Rule 24.10.
5 Baker v Westpac Banking Corp CA 212/92, 13 July 1993 at 4.
order. Another ground may be the undoubted absence of assets but that will not necessarily preclude an order given the range of interests involved including the public interest in the continuing oversight of a bankrupt’s affairs and the disqualifications that go with bankruptcy. In the end the Court must balance the various considerations relevant to the case and determine whether the debtor has succeeded in showing that an order ought not be made.
[16] The Court in New Zealand Bloodstock Finance & Leasing Limited v Jones has recently set out the general principles, as developed through case law, that are relevant to the Court’s discretion to refuse adjudication:6
(a)The onus is on the debtor to show why an adjudication order should not be made.
(b)In exercising its discretion, the Court may consider, inter alia, the following factors:
(i)The views of all affected parties, including the petitioner, other creditors and the debtor;
(ii)The wider public interest, including whether adjudication is “conducive or detrimental to commercial morality and the interests of the general public”;
(iii)The circumstances in which the debt was incurred and whether those circumstances suggest that the creditor is acting unreasonably in pursuing adjudication;
(iv)Whether adjudication would be pointless in the sense that the creditors are unlikely to receive payment; and
(v)Whether adjudication would render the debtor unable to support themselves.
(c)In exercising its discretion, the Court should also remain cognisant of the broader purposes of bankruptcy which include:
(i)allowing for administration of the debtor’s estate in the interests of creditors;
(ii)holding the debtor accountable for their debts;
(iii)punishing or stigmatising the debtor for misconduct;
(iv)protecting the community from a debtor who runs up credit without being able to honour it; and
(v)allowing the debtor to eventually take up commercial activity once freed from their liabilities after the discharge of their bankruptcy.
6 New Zealand Bloodstock Finance & Leasing Ltd v Jones [2023] NZHC 3542 at [35] (footnotes omitted).
(d)Ultimately, the Court must balance the various considerations relevant to an application when concluding whether the debtor has succeeded in showing that the order sought should not be made.
[17] Section 38 of the Insolvency Act provides that the court may at any time halt the creditor’s application for adjudication, on the terms and conditions (if any), and for the period, that the court thinks is appropriate.7 Section 38 does not set out the particular matters the court must consider; the rule is intended to provide a flexible discretion which enables the courts to take into account varying circumstances.8 The considerations that are invariably brought into account include:9
(a)the history of the litigation and the conduct of the parties in the same;
(b)the impression that the court can gain of the merits of the appeal;
(c)the stage reached in the appeal and any information to hand as to when it may be disposed of;
(d)the relative consequences for both parties of making or refusing the order sought;
(e)any known consequences for third parties.
Issues
[18] It is not disputed that Ms Husheer has established the jurisdictional requirements in s 13 of the Insolvency Act 2006.
[19] Mr Ross raises two arguments as to why I should exercise my discretion to refuse adjudication:
(a)the underlying judgments are seriously flawed; and
7 Insolvency Act 2006, s 38.
8 Re Koroniadis ex parte Bank of New Zealand [2013] NZHC 2865 at [11].
9 Waimauri Ltd v Mahon [2022] NZHC 1622 at [40] citing Michael Wilson & Partners Ltd v Sinclair [2020] NZHC 2546 at [9].
(b)that the application is an abuse of process and oppressive.
[20] As submitted by Mr O’Connor, it is also relevant to consider whether Mr Campbell is able to pay his debts within a reasonable time.
[21] Finally, I consider the factors identified above as to whether there is any basis to halt the application for adjudication under s 38 of the Insolvency Act.
Underlying judgments
[22] It is apparent that jurisdiction exists for the Court to look behind the underlying judgment on which the bankruptcy application is based. However, the Court must be satisfied that there is a proper basis for doing so.10
[23] Mr Ross submits that the substantive judgment is seriously flawed as it has not engaged with aspects of established and settled defamation law. Mr Ross submits that this has occurred to such an extent that it cannot be relied upon in any sense. Mr Ross submits that “although ostensibly the decision was made on the strength of Dow Jones Inc v Jameel,11 the decision misapplied that authority and was incorrect as [to] defamation law generally”.
[24] I have reviewed the substantive judgment. I do not make any findings on the judgment as it may yet be the subject of an application for leave to appeal. However, I do not consider that the judgment is so obviously and seriously flawed that I can properly look behind it and find Mr Campbell is not indebted to Ms Husheer.
[25] As it was a strike out application, the Judge was careful to proceed on the basis that the facts pleaded in Mr Campbell’s statement of claim were assumed to be true except for one allegation which was negated by evidence put forward by Mr Campbell. The Judge records that Mr Ross accepted this position.12 The Judge appears to have
10 Re White, ex parte Silich [2020] NZHC 2107 at [90]–[92]; Keung v Official Assignee [2020] NZHC 32; Nightingale v James [2018] NZHC 965.
11 Jameel v Dow Jones & Co Inc [2005] EWCA Civ 75, [2005] QB 946 at [40]
12 Defamation decision, above n 1 at [18].
referred to relevant New Zealand authorities in relation to the Jameel principle, including the decision of Palmer J in Sellman v Slater.13 In particular, Palmer J held:
[69] So I consider the common law of defamation in New Zealand is that damage to reputation as presumed to occur on publication of a defamatory statement. That presumption is rebuttable. If a defendant can show their statement has caused less than minor harm to the plaintiff’s reputation, that will defeat a defamation claim. It may therefore be a basis for showing a cause of action is clearly not tenable in a strike-out application. …
[26] The Judge found that the relevant statement was “capable, but only marginally so of tending to harm the reputation of Mr Campbell”.14 The Judge found “by the finest of margins that the words spoken, in the absence of context, in themselves can be defamatory”.15 Applying the test set out by Palmer J in Sellman v Slater, the Judge then went on to find that the presumption of damage to reputation in this case had been rebutted because Ms Husheer had shown that the statement had caused less than minor harm to Mr Campbell’s reputation.16 This finding was made on evidence that was not in dispute and had been put forward by Mr Campbell. On that basis, Mr Campbell’s claim was struck out.
[27] Mr Ross submits that the costs judgment suffers from the same error in approach as the substantive judgment, and that the costs award should have been awarded on a 2B basis, rather than indemnity costs. I have reviewed the costs judgment. Again, without making any findings on the judgment, it does not seem to me that the costs judgment is so obviously and seriously flawed that I can properly look behind it and find that there is no debt owing.
[28] Costs are ultimately at the discretion of the Court. In this case, the District Court struck out Mr Campbell’s claim for defamation. The Judge referred to and applied r 14.6(4)(a) of the District Court Rules 2014 which provides that indemnity costs may be awarded if a party has acted vexatiously, frivolously,
13 Sellman v Slater [2018] 2 NZLR 218, [2017] NZHC 2392. See also Craig v Slater [2020] NZCA 305 at [45].
14 Defamation decision, above n 1, at [39].
15 At [41].
16 At [55].
improperly or unnecessarily in commencing and continuing a proceeding. The Judge found that:17
[9] …The claim was poorly thought out, should never have been commenced and was brought because the plaintiff did not pursue his real grievance, a claim in contract against the defendant’s husband.
[10] The plaintiff also dragged the proceedings out to the point that an Unless Order was made. That incurred the defendant in the cost of continually having to review the proceedings and return to Court for ongoing case management conferences.
[11] I cannot find a reason to disagree with Mr O’Connor when he submits that this is one of those rare cases where indemnity costs are justified.
[29] Further, although Mr Ross submits that the underlying judgments are “seriously flawed”, apart from filing a notice of appeal in late December 2022, Mr Campbell has not taken any further steps towards progressing the appeal of either judgment or applying to stay execution. This is despite being followed up by the Wellington High Court Registry in mid-2023. The email from the Court seems to have been ignored.
[30] Mr Campbell deposed in an affidavit sworn on 28 May 2024 that: “I do wish to proceed with the appeal and will shortly be filing an application to stay the underlying judgment so the appeal can progress expeditiously”. In a further affidavit sworn on 17 September 2024, Mr Campbell deposed that: “It is my intention to bring the appeal (at least) on so that it is in progress by the date this application is heard. It may take slightly longer to get the cross claim underway”. Despite these sworn statements in this proceeding, Mr Campbell has not taken any further steps to progress the appeal of either judgment.
[31] Mr Campbell is asking me to exercise my discretion to refuse adjudication in respect of a judgment debt that has remained unpaid for two years. His primary argument is that the underlying judgments are “seriously flawed”. In the circumstances, I would have expected Mr Campbell to have done more since December 2022 to pursue appeal of the judgments, and I would have expected him to comply with his own sworn statements in the evidence before me.
17 Defamation costs decision, above n 2.
Abuse of process and oppression
[32] The first point raised by Mr Campbell is that no steps were taken to seal the judgments until 13 March 2024. Mr Ross submits that it is “quite extraordinary” that Ms Husheer waited so long before taking action to seal the judgments. However, I do not consider that this delay gives rise to abuse of process or oppression. It is apparent that the judgments could be sealed at any time after they were given.18
[33] The second point raised by Mr Campbell is that the 13 March 2024 demand for payment of the judgment debt did not mention the judgment being sealed, nor did it attach a copy of the sealed order. The payment was also sent long after the decision and with no enquiry as to whether instructions were still held by Mr Ross. Mr Ross submits it “seems odd” that it was not sent by the instructing solicitors rather than counsel.
[34] However, I do not consider that any of these matters constitute oppression or abuse of process such that I should refuse adjudication. The demand appears to have been sent for the purpose of reminding Mr Campbell that the costs award had not been paid for some 14 months and requesting payment to avoid the need to take steps to enforce the judgment. The demand was sent some time after the judgment, but it was a matter for Ms Husheer as to when she chased up payment of costs. The fact that the demand was sent by Mr O’Connor rather than Ms Husheer’s instructing solicitors, and that no enquiry was made as to whether Mr Ross continued to act for Mr Campbell before the demand was sent, does not constitute an abuse of process or oppression such that I should refuse adjudication. If Mr Ross did not continue to act for Mr Campbell when the demand was received, he could have advised Mr O’Connor and the demand could have been sent to Mr Campbell’s lawyers at that time.
[35] Mr Ross submits that there was breach of r 11.11(5) of District Court Rules in that the sealed judgment was not served immediately on Mr Campbell and he was only served with the bankruptcy notice on 16 May 2024. However, any failure to strictly comply with the service requirements for sealed judgments under r 11.11(5) of the District Court Rules has no effect on the validity of the bankruptcy notice and does
18 District Court Rules 2014, r 11.11(2)(b).
not constitute abuse of process or oppression which would justify refusing adjudication. In Chang-Hooker v Rooke, the Court held:19
Court file records do not record the date on which an order is sealed. Routinely orders are sealed as an immediate precursor to taking recovery action – in this case for the issue of a bankruptcy notice. The evidence here is the bankruptcy notice was issued soon after Mr Rooke requested it and for which purpose he provided a copy of the judgment earlier sealed by the High Court. The Court does not require knowing whether a sealed copy of a judgment has been served when it issues a bankruptcy notice. Rule 11.11.5 has no effect on the issue of a bankruptcy notice.
[36] Mr Ross also submits that there was a breach of r 11.13 of the District Court Rules which provides that a step may be taken on a judgment before it is sealed only with leave. However, even if the demand on 13 March 2024 was a formal “step” taken on the judgment, the demand was sent on the same day the judgment was sealed. It is clear that the bankruptcy notice was not issued until after the judgment was sealed. There is no oppression or abuse of process such that I should refuse adjudication. Mr Campbell has had the opportunity to apply to set aside the bankruptcy notice and to oppose the application for adjudication.
[37] The third point raised is that the bankruptcy proceeding has been pursued by Ms Husheer for a collateral purpose, that is to prevent Mr Campbell from bringing a contractual claim against Ms Husheer’s former husband. Mr Campbell contends that the claim is worth “at least $96,000”. Mr Ross submits that the claim is also against Ms Husheer because she unlawfully interfered in the alleged oral contract between Mr Campbell and her former husband and Mr Campbell has a claim in tort against her. There are issues between the parties as to whether the alleged claim is time-barred.
[38] The crux of the argument put forward by Mr Ross seems to be that the adjudication application has been brought to prevent Mr Campbell pursuing the alleged claim(s) against Mr Husheer and Ms Husheer because the effect of adjudication would be the immediate vesting of all his property (including choses of action) in the Official Assignee. However, this would not necessarily prevent the claims being pursued. It remains open for any claims that Mr Campbell may have to
19 Chang-Hooker v Rooke [2013] NZHC 1763 at [4].
be conducted under the control of the Official Assignee. In many cases this can be useful as it allows for an independent review of the merits of the claims.20
[39] Further, Mr Campbell’s evidence is that alleged repudiation of the oral contact occurred around March 2022. Mr Campbell has already had well over two years to bring the alleged claims against Ms Husheer’s former husband and Ms Husheer, but he has not done so. Ms Husheer did not seek to enforce the December 2022 costs judgment for a period of approximately 15 months after the judgment was issued. If it was the intention of Ms Husheer to use the bankruptcy process to prevent Mr Campbell from bringing his claims, then one would have expected Ms Husheer would have immediately sought to enforce the costs judgment in early 2023. On the evidence before me, I am not satisfied that the bankruptcy process is being used by Ms Husheer for a collateral purpose, being to prevent Mr Campbell from pursuing his alleged claims.
[40] Further, I am not satisfied on the evidence before me that the alleged claim is a genuinely triable claim against Ms Husheer, that is, that there is a claim of true substance which Mr Campbell genuinely proposes to pursue.21
[41] First, it is apparent the focus of the claim is alleged breach by Ms Husheer’s former husband of an alleged oral contract.22 Mr Campbell states that Ms Husheer is “jointly and severally” liable because she “pressed [Mr Husheer] to repudiate the agreement with [Mr Campbell], interfering in our contractual relationship”. He states that Ms Husheer “interfered in the business relationship between us and prevented the otherwise likely settlement of that matter between Mr Husheer and me”. On the other hand, Ms Husheer states that there was no business relationship between her former husband and Mr Campbell. She states that Mr Campbell had a dispute with Mr Husheer and said he would sue him, but has not done so, and the claim for breach
20 Bank of New Zealand v Koroniadis [2013] NZHC 2865 at [12].
21 Sharma v ANZ Banking Group (1992) 6 PRNZ 386 (CA) at 389.
22 Even if Mr Campbell has a contractual claim against Mr Husheer, the claim has not yet been commenced, and there would be a significant period of time before it would be determined. Therefore it is not a relevant consideration with regard to the issue of Mr Campbell’s ability to pay his debts. See Insolvency Law & Practice (online loose leaf ed, Thomson Reuters) at [IN37.04(4)].
of contract against Mr Husheer was initially raised in 2018 giving rise to limitation issues.
[42] The allegations against Ms Husheer seem to me to lack substance. There is correspondence from Mr Campbell’s solicitors in 2018 and 2019 raising the allegations of breach of contract against Mr Husheer and proposing to settle the matter for $50,000 or otherwise proceedings would be issued. There is reference in the correspondence to a potential defamation claim involving Ms Husheer, but no reference to a claim against Ms Husheer for tortious interference with the contractual relationship. The impression I have is that Mr Campbell is belatedly raising allegations against Ms Husheer for tortious interference in an attempt to provide a defence to the bankruptcy proceedings.
[43] Secondly, Mr Campbell has not taken any steps to pursue the alleged contractual claims. Notwithstanding his solicitors’ correspondence alleging breach of contract in 2018 and 2019, Mr Campbell now says that repudiation of the oral agreement only occurred in March 2022. Mr Campbell states that he “held off” pursuit of the contractual claim against Mr Husheer when he became aware that Mr and Mrs Husheer had separated and he “considered the possibility that it might be possible to restore some measure of relationship with Mr Husheer”. However, it is now over six years since the allegations were first raised and over two and a half years since Mr Campbell alleges the oral contract was repudiated and no proceedings have been issued against either Mr or Ms Husheer. Mr Campbell did not put forward a draft statement of claim in his evidence and has not given any firm indication as to when the claim would be commenced, stating only that his appeal would be in progress by the date of the hearing (it was not) and that “[i]t may take slightly longer to get the cross claim underway”. In the circumstances, I am not satisfied that Mr Campbell genuinely proposes to pursue the alleged claim against Ms Husheer.
Is Mr Campbell able to pay his debts?
[44] One of the grounds on which the Court may exercise its discretion to refuse adjudication is if the debtor is able to pay his or her debts. The debtor is required to
provide sufficient evidence of ability to pay. 23 In Holdgate v Blocassa Ltd, the Court of Appeal held that the debtor must be able to pay his or her debts as they are incurred:24
… either immediately or within a reasonable time. If unable to do this, the debtor may be declared bankrupt even though he or she has more assets by value than liabilities.
[45] In this regard, Mr Campbell has deposed that the property in which he lives and other assets are held in two trusts. Mr Campbell deposes that he is a trustee and a beneficiary of the trusts and one of the purposes of the trusts is to address his needs. He states that the trusts could make available the funds required to settle the debt. There is no evidence put forward by Mr Campbell as to the details of the trusts, the other trustees, the trust assets, the beneficiaries or any other personal assets. There is no evidence as to the value of the assets of the trusts and whether those assets would need to be sold or mortgaged in order to meet the debt. Mr Campbell expects the Court to take at face value his statement that the trusts could make available the funds required to settle his debt immediately or within a reasonable time.
[46] Mr Campbell also deposes that as a trustee of the trusts he is “concerned to be handing money over to the judgment creditor” in circumstances where, if he succeeded on his appeal, she may not be able to repay the money. However, there is evidence from Ms Husheer that when she and her former husband separated, she received half of the relationship property and the total value of her assets is approximately $550,000. In any event, the focus is on whether Mr Campbell is able to pay his debts. Mr Ross submitted at the hearing that Mr Campbell would be able to pay the outstanding debt into Court or into a trust account. However, there is insufficient evidence before me to substantiate the ability of Mr Campbell to do so. It was open to him to pay the money into a trust account prior to the hearing and to put forward evidence as to the funds being held on trust. However, he did not do so.
[47] In the circumstances I am not satisfied that Mr Campbell has put forward sufficient evidence to satisfy me of his ability to pay the debt immediately or within a
23 Insolvency Law & Practice above n 22, at [IN37.04(1) and (2)]
24 Holdgate v Blocassa Ltd [2007] NZCA 132 at [19].
reasonable time. There is no substantiated or independent evidence before the Court as to his financial position.
Conclusion as to exercise of discretion to refuse adjudication
[48] Overall, for the reasons set out above, balancing the various considerations relevant to the application for adjudication, I am not satisfied that Mr Campbell has discharged the onus on him of showing why an adjudication order should not be made. On the basis of the evidence before me, I am not satisfied that Mr Campbell is able to pay his debts, or that it is just and equitable that I do not make an order for adjudication, or that an order of adjudication should not be made for any other reason.
Should the application for adjudication be halted?
[49] The history of the litigation and the conduct of the parties as discussed above does not lead me to consider that I should exercise my discretion under s 38 of the Insolvency Act to halt the application. The position is that a significant award of indemnity costs was made against Mr Campbell in December 2022. That costs award has not been paid for two years. Mr Campbell contends the underlying judgments are “seriously flawed” and he lodged a notice of appeal in December 2022. However, as discussed above, I do not consider that the judgments are so obviously and seriously flawed that I can properly look behind them. And Mr Campbell has not taken any further steps to pursue the appeal of either judgment since filing a notice of appeal in December 2022. He deposed in September 2024 that it was his intention to progress the appeal by the date of the hearing, but he has not done so. On the basis of the evidence before me, I am not satisfied that the appeals would be progressed with the necessary expedition if a halt was granted.
[50] If a halt order was made, Ms Husheer would not be paid while any appeal was prosecuted. Ms Husheer would also incur further cost to bring the adjudication proceedings back to the Court if Mr Campbell failed to comply with the conditions imposed on any halt, including requiring him to take reasonable steps to expedite his appeal. On the other hand, if the halt order is refused, Mr Campbell could avoid bankruptcy by paying the debt as he says he can, although I am not satisfied he is able to do so on the evidence before me. If he is unable to pay and is adjudicated bankrupt
then, as discussed above, it remains open for the Official Assignee to independently review Mr Campbell’s proposed appeal and alleged cross claim and for these to be pursued under the control of the Official Assignee.
[51] There is insufficient evidence of any consequences on third parties to take that into account.
[52] I am not satisfied that I should exercise my discretion to halt Ms Husheer’s application for adjudication under s 38 of the Insolvency Act.
Result
[53] I am not satisfied that I should exercise my discretion under s 37 of the Insolvency Act to refuse adjudication or under s 38 to halt the application for adjudication.
[54] However, I am prepared to grant a temporary halt of the application for adjudication for ten working days from the date of this judgment to give Mr Campbell a final opportunity to pay the outstanding debt.
[55] If the debt is not paid within ten working days, Ms Husheer should file and serve a solicitor’s certificate under r 24.20 of the High Court Rules as evidence that the debt remains unpaid. An order will then be made adjudicating Mr Campbell bankrupt.
[56] If the debt is paid within the ten working day period, then Ms Husheer should file and serve a memorandum advising how she wishes to proceed and whether costs are claimed, and Mr Campbell will have five working days to file and serve a memorandum in response.
[57]At this stage, costs are reserved.
Associate Judge Skelton
Solicitors:
Heaphy & Co, Hastings for Judgment Creditor Cathedral Lane Law, Napier for Judgment Debtor
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