ex parte - [2017] NZHC 902

IN THE HIGH COURT OF NEW ZEALAND NAPIER REGISTRY

CIV-2017-441-7 [2017] NZHC 902

UNDER the Insolvency Act 2006

IN THE MATTER

of the bankruptcies of Jessica Mary
Hanara and Dimitrious Rangi Hanara

AND

in the matter of applications by

THE OFFICIAL ASSIGNEE for vesting orders under s 119 of the Insolvency Act

2006

Hearing: 27 April 2017

Appearances:

G E Slevin for the Official Assignee
No appearance for Mrs Jessica Hanara or Mr Dimitrious Hanara
No appearance for the Crown, ANZ Bank NZ Limited, or
Avanti Finance Limited (parties served with the application)

Judgment:

5 May 2017

JUDGMENT OF ASSOCIATE JUDGE SMITH

[1] This is an application by the Official Assignee (the Assignee) for an order under s 119 of the Insolvency Act 2006 (the Act) vesting in her the one half interest formerly owned by Mrs Jessica Hanara in a residential property in Hastings. The application is unusual, because in January 2014 the Assignee, acting in her capacity as Assignee of the bankrupt estate of Mrs Hanara, disclaimed the same interest in respect of which she now seeks a vesting order.

[2] The reasons for the application are broadly as follows:

(1)The owner of the other half share in the land, Mr Dimitrious Hanara, was himself adjudicated bankrupt in June 2016. The Assignee says

RE HANARA EX PARTE THE OFFICIAL ASSIGNEE [2017] NZHC 902 [5 May 2017]

that it will be difficult if not impossible for her to realise Mr Hanara’s interest, for the benefit of his creditors, if she is not also the proprietor of the half share formerly owned by Mrs Hanara; and

(2)The property has increased in value, and is no longer considered onerous.

Background

[3] In December 2013 Mrs Jessica Hanara and Mr Dimitrious Hanara were the registered proprietors of a property in Avenue Road West, Hastings (being the land comprised and described in Identifier HBC2/159 Hawkes Bay Land Registration District – “the property”). There was a first mortgage registered on the title to ANZ National Bank Ltd (the Bank), and a caveat registered by Avanti Finance Ltd (Avanti) in respect of advances it had made to the Hanaras.

[4] On 10 December 2013 Mrs Hanara was adjudicated bankrupt on the application of the Commissioner of Inland Revenue. She submitted the required statement of affairs1 on 21 January 2014.

[5] The Assignee in Mrs Hanara’s bankruptcy considered that the valuation of the property was then somewhere between $340,000 and $354,000. However the amounts then secured over the property (including the advances protected by the caveat) totalled $345,471.64. The Assignee reckoned that Mr and Mrs Hanara had an equity of $8,528.36 in the property, of which one half ($4,264.18) would be available to Mrs Hanara’s creditors, subject to costs. She concluded that, allowing for costs and commission on sale, there would be no equity available to Mrs Hanara’s creditors.

[6] The Assignee accordingly issued a formal disclaimer of Mrs Hanara’s interest in the property, by notice dated 22 January 2014. The effect of the disclaimer was…

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 ex parte

Details

AGLC: ex parte [2017] NZHC 902
Case: [2017] NZHC 902
Decision Date: 5 May 2017

CaseChat Overview and Summary

This case concerns an application by the Official Assignee for vesting orders under s 119 of the Insolvency Act 2006 in respect of a half share in a residential property in Hastings formerly owned by Jessica Mary Hanara. The Assignee had previously disclaimed that interest, but now seeks to vest it in her capacity as Assignee of the bankrupt estates of either Jessica Mary Hanara or her husband, Dimitrious Rangi Hanara. The Assignee argues that it is difficult if not impossible for her to realise Mr Hanara’s interest, for the benefit of his creditors, if she is not also the proprietor of the half share formerly owned by Mrs Hanara. The property has increased in value, and is no longer considered onerous. The Assignee seeks to vest Mrs Hanara’s disclaimed interest in either her own estate or Mr Hanara’s estate. The court held that the Assignee had standing to apply for a vesting order in either capacity. However, it found that Mrs Hanara’s creditors had not suffered loss or damage as a result of the disclaimer. On the other hand, it found that Mr Hanara’s creditors were likely to suffer loss or damage if the disclaimer were not corrected. The court concluded that it would be unfair to Mr Hanara’s creditors not to allow the Assignee to obtain the best sale price which is reasonably obtainable for the property. The court found that there would be no unfairness to Mrs Hanara’s creditors if an order were made vesting her interest in the property in the Assignee for the sole benefit of Mr Hanara’s creditors. The court made an order vesting Mrs Hanara’s interest in the property in the Assignee, in her capacity as Assignee of the bankrupt estate of Mr Hanara.

Orders