Ensom v Morrison Kent - [2022] NZHC 3391

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2022-404-472

[2022] NZHC 3391

UNDER the Insolvency Act 2006, section 119

IN THE MATTER

AND

of Part 18 of the High Court Rules 2016

IN THE MATTER

of an application for vesting orders

BETWEEN

MARK ROBERT ENSOM (BANKRUPT)

Applicant

AND

MORRISON KENT

Interested Party

Hearing: 8 December 2022

Appearances:

D Grove for the Applicant S Beattie for Morrison Kent

Judgment:

14 December 2022

JUDGMENT OF GORDON J

This judgment was delivered by me
on 14 December 2022 at 11 am, pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar Date:

Solicitors/Counsel:
Vodanovich Law Ltd, Auckland
D Grove, O’Connell Chambers, Auckland Wotton + Kearney, Auckland

ENSOM (BANKRUPT) v MORRISON KENT [2022] NZHC 3391 [14 December 2022]

[1] The applicant, Mark Ensom, is a bankrupt. The Official Assignee (OA) has disclaimed their litigation rights in respect of Mr Ensom’s estate, pursuant to s 117 of the Insolvency Act 2006 (the Act).

[2] Mr Ensom now applies to have those litigation rights vested in him1 so that he may pursue a claim in negligence against the law firm Morrison Kent. Mr Ensom says it is only fair that the property (litigation rights) be vested in him because the OA has no interest in pursuing the claim.

[3] Morrison Kent opposes the application. It says it is not fair for Mr Ensom to be able to pursue a claim given the circumstances in which the rights became vested in the OA and the potential consequences of the vesting.

[4] The Crown does not oppose the application and abides the decision of the Court.

Background facts

[5] The background facts that have led to this application are somewhat convoluted. The following summary of the background is drawn from the summary provided by Ms Beattie, counsel for Morrison Kent, in an appendix to her submissions. Mr Grove, for Mr Ensom, did not take issue with the summary.

[6] On 22 February 2016 Mr Ensom signed a sale and purchase agreement (SPA) for a property at 606–612 and 620 Great North Road, Grey Lynn, Auckland (the Property) between the trustees of the Stanley Trust as vendor and MR8 Construction Ltd and/or nominee as purchaser. The sale and purchase agreement recorded the date of settlement as 15 December 2016.

[7] On 23 February 2016 Mr Ensom emailed the SPA to Morrison Kent, asking them to hold it on file as he was planning to on sell the Property.

1 Insolvency Act 2006, s 119(3).

[8] Mr Ensom was then the sole director and shareholder of MR8 Construction, now in liquidation.

[9] On 17 March 2016 Morrison Kent obtained Mr Ensom’s approval to send an email to the vendor’s solicitors, Martelli McKegg, confirming that it acted for MR8 Construction in relation to the purchase of the Property. The email indicated that the due diligence condition would be satisfied on 6 April 2016.

[10] On 31 March 2016 Morrison Kent…

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 Ensom v Morrison Kent

Details

AGLC: Ensom v Morrison Kent [2022] NZHC 3391
Case: [2022] NZHC 3391
Decision Date: 14 December 2022

CaseChat Overview and Summary

In the High Court of New Zealand, Mark Robert Ensom, a bankrupt, sought to have litigation rights disclaimed by the Official Assignee (OA) vested in him. Ensom wished to pursue a claim in negligence against the law firm Morrison Kent. Morrison Kent opposed the application on the grounds that it was not fair for Ensom to pursue the claim given the circumstances in which the rights became vested in the OA and the potential consequences of the vesting. The court was required to determine whether vesting the litigation rights in Ensom would be fair. The court assessed the application against the relevant legal principles and background facts, including the nature of the property, the circumstances in which the disclaimed property became vested in the OA, and the rights and interests of third parties. The court also considered the consequences of any vesting for the applicant and other persons, the nature of the interests at stake, and the strength of the proposed claim. After careful consideration, the court found that it was not fair to vest the litigation rights in Ensom. The litigation rights had no value, and Ensom had not suffered any loss due to any act or omission of Morrison Kent. Furthermore, any alleged negligence on the part of Morrison Kent had been addressed by a previous judgment of the court, and Ensom's claim lacked merit. Therefore, the application for vesting the litigation rights in Ensom was refused. The court did not hear submissions on costs, but Morrison Kent, as the successful party, was prima facie entitled to costs. The parties were required to agree on costs or file and serve memoranda within specified timeframes. Costs submissions were limited to four pages, and the court would determine costs on the papers.

Orders