FM Custodians Limited v Kooiman - [2019] NZHC 2955

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE

CIV-2017-485-671

[2019] NZHC 2955

UNDER the Insolvency Act 2006

IN THE MATTER

of the bankruptcy of Michael Edwin Kooiman

BETWEEN

FM CUSTODIANS LIMITED

Judgment Creditor

AND

MICHAEL EDWIN KOOIMAN

Judgment Debtor

AND

KEVIN JOHN WHITLEY in his capacity as the receiver of Ribble Limited (in rec) Supporting Creditor

Hearing: 21 October 2019

Appearances:

S D Munro and A L Davidson for judgment creditor Judgment debtor in person

R B Tucker for supporting creditor

Judgment:

13 November 2019

JUDGMENT OF ASSOCIATE JUDGE JOHNSTON

This judgment was delivered by me on 13 November 2019 at 4.00 pm, pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar Date: 13 November 2019

FM CUSTODIANS LIMITED v KOOIMAN [2019] NZHC 2955 [14 November 2019]

[1] This is an application by the judgment creditor, FM Custodians Ltd, for an order pursuant to s 11 of the Insolvency Act 2006 adjudicating the judgment debtor, Mr Michael Kooiman, bankrupt. FM Custodians’ application is supported by Mr Kevin Whitley, the receiver of a company by the name of Ribble Ltd, formerly Ground Support (Wgtn No. 1) Ltd. It is opposed by Mr Kooiman.

[2] On 19 March 2013, FM Custodians and Ribble entered into an agreement whereby FM Custodians agreed to lend and Ribble agreed to borrow certain monies to enable the latter to acquire two sections in Ribble Street, Island Bay, Wellington. Ribble was a developer and was proposing to develop the sections. The same day, various security arrangements were put in place; a mortgage over the two sections, a general security agreement and a guarantee of Ribble’s obligations by Mr Kooiman.

[3] Ribble defaulted on its obligations under the loan and Mr Kooiman defaulted on his obligations under the guarantee.

[4] Pursuant to the general security agreement, by deed of appointment dated 5 December 2016, FM Custodians appointed Mr Whitley as receiver over Ribble’s property secured under the same.

[5] Pursuant to the guarantee, on 13 April 2017 FM Custodians commenced proceedings against Mr Kooiman and applied for summary judgment. Mr Kooiman opposed this. The application was heard on 24 July 2017. Associate Judge Smith issued a judgment granting FM Custodians summary judgment against Mr Kooiman in the sum of $930,103.90 on 31 July 2017.1 It is this judgment upon which FM Custodians relies in this bankruptcy proceeding.

[6] FM Custodians served a bankruptcy notice dated 17 August 2017 on Mr Kooiman on 24 August 2017.

[7] By originating application dated 7 September 2017, Mr Kooiman applied to set aside the bankruptcy notice. This application was opposed by FM Custodians. It

1 FM Custodians Ltd v Kooiman [2017] NZHC 1783.

was heard on 5 February 2018. Associate Judge Smith issued a judgment dated 16 February 2018 dismissing the application.2

[8] On 19 March 2018, FM Custodians commenced this proceeding by filing and serving an application for the order described above.

[9] Mr Kooiman appealed from Associate…

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.

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Details

Case: [2019] NZHC 2955
Decision Date: 13 November 2019

CaseChat Overview and Summary

FM Custodians Limited, a judgment creditor, sought an order adjudicating Michael Edwin Kooiman, the judgment debtor, bankrupt. The application was supported by Kevin John Whitley, the receiver of Ribble Limited, formerly Ground Support (Wgtn No. 1) Ltd. The primary legal issue was whether it would be just and equitable to make an order adjudicating Mr Kooiman bankrupt. Mr Kooiman opposed the application, arguing that it would not be just and equitable due to various alleged improper actions by FM Custodians and Mr Whitley. The court had to decide whether Mr Kooiman could raise these arguments in the current proceeding, or if they were precluded by principles of res judicata and abuse of process.

The court found that Mr Kooiman was precluded from raising his arguments in this proceeding. It was an established principle that a party could not re-litigate the same matter in the hope of a better outcome. Mr Kooiman had raised and abandoned similar arguments in earlier proceedings. The court also found that Mr Kooiman had no arguable case that his proposed claims would allow him to set off any amounts against the judgment debt. Finally, the court considered the public interest in ensuring that parties who default on their financial obligations face appropriate consequences. Mr Kooiman had delayed the proceedings at every turn and now sought to raise further arguments that had already been available to him. The court found no merit in Mr Kooiman's position.

Accordingly, the court made an order adjudicating Mr Kooiman bankrupt. The order would come into effect on the date and time noted in the judgment. Costs were reserved pending an agreement between the parties. If the parties could not agree, they could apply to the court to determine the costs.

Orders