Fava v Official Assignee HC Auckland CIV-2011-404-001039

[2011] NZHC 465

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2011-404-001039

UNDER  The Insolvency Act 2006

IN THE MATTER OF     the bankruptcy of PHILIP JOSEPH FAVA BETWEEN  PHILIP JOSEPH FAVA

Appellant

ANDTHE OFFICIAL ASSIGNEE Respondent

Hearing:         10 May 2011

Appearances: P J Fava (Appellant in person)

G Caro for The Official Assignee

Judgment:      10 May 2011

ORAL JUDGMENT OF ASSOCIATE JUDGE BELL

Solicitors:

Ministry of Economic Development, Auckland – Email  [email protected]

Copy to:

P J Fava, P O Box 37606, Parnell, Auckland – Email  [email protected]

Case Officer:      [email protected]

PHILIP JOSEPH FAVA V THE OFFICIAL ASSIGNEE HC AK CIV-2011-404-001039 10 May 2011

[1]      The matter before the Court is the notice of appeal that Mr Fava has lodged under  s 226  of  the  Insolvency Act  2006  challenging  a  decision  of  the  Official Assignee.

[2]      There is one creditor of Mr Fava and that is the judgment creditor in the Aral proceedings.  The debt for which Mr Fava was adjudicated bankrupt was the costs order which was the subject of the decision of Hugh Williams J.   The Official Assignee says that there are no assets under the bankruptcy available for distribution to creditors. There are also no assets which could fund litigation.

[3]      The Official Assignee made a decision in August 2010 not to continue an appeal to the Court of Appeal against the costs decision of Williams J.  Mr Fava says that he was advised of that decision in 2010.  He took no steps then to challenge it. It is apparent also, from an email of 19 January 2011 that Mr Fava was aware of the Official Assignee’s decision.

[4]      The documents that Mr Fava lodged in Court were filed on 23 February 2011. The question arises whether the present application is being brought within time or not. The rule for time to appeal is under s 226(3) of the Insolvency Act which says:

The application is to be made,

(a)      within 15 working days of the act or omission; or

(b)      within the additional time that the Court allows.

If the relevant decision is the decision of the Official Assignee in August 2010 then time has already run.   Mr Fava says the decision he was appealing against is a decision made on either or 4 or 7 February 2011.

[5]      Mr  Fava  says  that  he  invited  the  Official Assignee  to  revisit  his  earlier decision.   He says that it is the refusal to revisit the earlier decision which is the subject of his appeal under s 226.  He says that on that basis his application is within the 15 working days and he does not need to ask the Court to exercise a discretion under s 226(3)(b).

[6]      In  my judgment  the  relevant  decision  in  question  is  the  decision  of  the Official Assignee made in August 2010 to discontinue the appeal.   If a bankrupt wants that decision to be reconsidered there may be a case for the bankrupt to ask the Court for an extension of time under s 226(3)(b) to ask the Court to allow the matter to be revisited.   But simply going back to the Official Assignee and saying to the Official Assignee, “I want you to reconsider this” and then saying that that refusal to reconsider is itself a decision on which an appeal can be founded is, in my judgment, incorrect.  If every time a bankrupt was upset by a decision, went back to the Official Assignee and then said, “Revisit this matter” and used that refusal to revisit as a fresh ground for appeal under s 226, there could be no finality in the administration of  bankruptcies  because  every decision  that  an Assignee  might  make  might  be forever subject to endless appeals and challenges because of alleged refusals to reconsider.

[7]      The refusal to reconsider, in my judgment, is not a decision which can be

subject to appeal. Therefore Mr Fava’s appeal is out of time.

[8]      I  consider  the  matter  on  the  basis  that  it  is  an  out  of  time  application. Mr Fava has persuaded me that as costs were ordered against him as a non-party then if he were to run with the appeal successfully he may be able to reduce his liability to costs to a zero sum.  That is that there might be something in the matter, even though Williams  J  gave  a  very  lengthy  considered  decision,  even  though  Venning  J dismissed an application for a stay of execution and an appeal against that decision to the Court of Appeal was unsuccessful, and even though the Court of Appeal made comments about the lack of merit in the appeal.   But, even setting aside all those matters, Mr Caro has raised a fundamental objection from the point of view of the Official Assignee.   That is that there are simply no funds in the estate and in the absence of funds in the estate to fund a litigation the Official Assignee can see no benefit in pursuing the matter further.  That is simply a fundamental objection which stands in the way of Mr Fava being able to appeal against the Official Assignee’s decision.   In the face of what seems to me a fundamental difficulty I can see no useful purpose by extending time to allow the appeal to be considered on its merits.

[9]      Therefore I am dismissing this matter as an application for extension of time under s 226(3)(b).

[10]    For fullness I mention some additional matters.   There were procedural challenges  in  that  Mr  Fava  filed  his  application  by  way  of  an  interlocutory application in his bankruptcy file, whereas the Official Assignee wanted to take the point that it should have been filed as an original appeal under a different provision in the High Court Rules.  I am not minded to rule against Mr Fava on those technical issues.  If time had properly run from 4 February or 7 February 2011 I would not have ruled against him simply because of the mode of application.  Technically it should  be  brought  as  an  appeal  under  the  High  Court  Rules  but  filing  an interlocutory application in his bankruptcy adjudication proceeding was not a fatal error which would have condemned his appeal.  It could have been repaired by way of amendment.  But as it is there is a fundamental difficulty in his position and he fails on that fundamental point.

[11]     I also record that the Official Assignee does not seek costs.   Accordingly there is no order for costs.

R M Bell

Associate Judge