Fava v Official Assignee - [2013] NZHC 564

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2011-404-4669 [2013] NZHC 564

BETWEEN PHILIP JOSEPH FAVA Applicant

ANDOFFICIAL ASSIGNEE Respondent

Hearing: 20 March 2013

Appearances: Philip Joseph Fava in person
J McBride for Aral Property Holdings Limited, a creditor
No appearance for Official Assignee (abiding decision of the court) Judgment: 20 March 2013

ORAL JUDGMENT OF ASSOCIATE JUDGE R M BELL

Solicitors:
Bell Gully (R G Simpson) P O Box 4199 Auckland 1140, for Aral Property Holdings Ltd, a Creditor
Email: Ralph.Simpson@bellgully.com

Copy for:
J D McBride, P O Box 1008 Auckland 1140, for Aral Property Holdings Ltd
Email: josh@joshmcbride.conz

Guy Caro, Ministry of Economic Development, Priovate Bag 92 513 Auckland 1141 for Respondent
Email: guy.caro@companies.govt.nz

Philip J Fava, PO Box 37 606 Auckland
Email: philipfava@paradise.net.nz

FAVA V OFFICIAL ASSIGNEE HC AK CIV-2011-404-4669 [20 March 2013]

[1] On 7 November 2012 I gave a decision on the application by Aral Property Holdings Ltd that Mr Fava provide security for costs on his proceeding under s 238 of the Insolvency Act 2006. I fixed security for costs in the sum of $20,000. I said that that proceeding would be stayed if Mr Fava failed to pay that sum into court by
26 November 2012. I further provided that if Mr Fava did not pay the security for costs into court by 8 February 2013 Aral Property Holdings Ltd may apply under r 7.48 to strike out the s 238 proceeding.

[2] Mr Fava did not provide any security for costs. The time for him to seek a review of my decision was extended – but that was later abandoned.

[3] On 28 February 2013 Aral Property Holdings Ltd applied for an order that Mr Fava’s statement of claim be struck out and for costs. I now consider the strike- out application. It is common ground that Mr Fava has not provided the security for costs.

[4] Ordinarily, on an application to strike out for non-compliance with an order for security for costs, the court will enquire into whether there has been compliance with the order, and if there has been non-compliance, will establish the extent of non-compliance. Typically those facing strike out applications say that although they are in default they are in a position to remedy the default shortly. The court might consider extending time for compliance. However, Mr Fava has not taken that course.

[5] When I made the original order for security for costs against Mr Fava I was all too conscious that he was an undischarged bankrupt. I was aware that he might have difficulty raising security for costs. I allowed him time to arrange it. Even though his assets are vested in the Official Assignee because of his bankruptcy, I did consider that there may be assets available to assist him from other sources. Similarly, he may be able to find a litigation funder to assist him in the litigation. In other words, I intended the time for him to comply to be a…

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 Fava v Official Assignee

Details

AGLC: Fava v Official Assignee [2013] NZHC 564
Case: [2013] NZHC 564
Decision Date: 20 March 2013

CaseChat Overview and Summary

In the High Court of New Zealand, Philip Joseph Fava brought a proceeding against the Official Assignee under s 238 of the Insolvency Act 2006. The primary issue before the court was whether Mr Fava's statement of claim should be struck out for his failure to provide security for costs as previously ordered. The court had to consider whether Mr Fava had a reasonable opportunity to comply with the order, whether the respondent could rely on the general ground of failure to prosecute, whether Mr Fava's non-compliance was intentional or contumelious, and whether the continuation of the proceeding would involve substantial prejudice to the respondent.

The court found that Mr Fava had a reasonable opportunity to comply with the order for security for costs, but had not done so. It was also determined that the respondent could not rely on the general ground of failure to prosecute as the proceeding had not been left to languish. The court concluded that Mr Fava's non-compliance was intentional and contumelious, as he had a history of ignoring orders for costs. Furthermore, the continuation of the proceeding would involve substantial prejudice to the respondent, as they had been subject to repeated attacks by Mr Fava. As a result, the court exercised its discretion to strike out Mr Fava's statement of claim.

The final orders of the court were that Mr Fava's statement of claim be struck out, and that the respondent be awarded costs on a 2B basis. If the parties were unable to agree on costs, they could file memoranda for further determination.

Orders