Glynbrook 2001 Ltd v Official Assignee

Case [2012] NZCA 289
IN THE COURT OF APPEAL OF NEW ZEALAND
CA759/2011
[2012] NZCA 289

BETWEEN  GLYNBROOK 2001 LIMITED, CRAIG WILLIAM LAWRENCE, ALFRED NORMAN WILLIAM LAWRENCE, BEVERLY DIANE LAWRENCE

ALFRED NORMAN WILLIAM LAWRENCE and BEVERLY DIANE LAWRENCE (as trustees of the ANW Lawrence Trust)

CRAIGADEAN DAIRY FARM LIMITED AND MARBLE HILL DAIRY LIMITED
Appellants

AND  THE OFFICIAL ASSIGNEE FOR NEW ZEALAND
First Respondent

AND  DEAN ROBERT LAWRENCE
Second Respondent

Hearing:         17 April 2012

Court:             Stevens, Wild and White JJ

Counsel:         T J Shiels for Appellants
P R W Chisnall and T G H Smith for First Respondent
S M Bisley and O E Jaques for Second Respondent

Judgment:      2 July 2012 at 3.00pm

JUDGMENT OF THE COURT

AThe application by the first respondent to adduce further evidence by way of affidavit from Robyn Anne Cox dated 3 April 2012 is granted.

BThe 28 day period for the Official Assignee to decide whether to summon the first meeting of creditors is retrospectively extended from 13 June 2005 to the date of the decision by the Official Assignee.

C        The appeal is dismissed.

DThe appellants are ordered to pay costs to each of the first and second respondents for a standard appeal on a band B basis together with usual disbursements.

____________________________________________________________________

REASONS OF THE COURT

(Given by White J)

Table of Contents

Para No
Introduction  [1]
Background  [9]
High Court judgment  [31]
Power to sell without creditors’ meeting?  [36]
Impeachable title?  [53]
Any right of appeal?  [63]
Standing to appeal?  [74]
Standard of review  [82]
The merits of the Official Assignee’s decision  [91]
Summary  [100]
Result  [102]

Introduction

  1. The appellants, members of the Lawrence family, their family trust and their farming companies, appeal against a High Court decision dismissing an appeal against two decisions of the Official Assignee to assign to Dean Lawrence (Dean), another member of the family and a former bankrupt, certain causes of action which he claimed to have against them.[1]

    [1]Glynbrook 2001 Ltd v The Official Assignee HC Greymouth CIV-2005-418-4, 10 November 2011.

  2. The causes of action had vested in the Official Assignee when Dean was adjudicated bankrupt on 16 May 2005.[2]  Following Dean’s automatic discharge from bankruptcy on 16 May 2008, he issued a proceeding against the appellants in the High Court at Dunedin in August 2009 (the main proceeding)[3] based on the causes of action which, at that time, were still vested in the Official Assignee.

    [2]      Section 42(1) and (2)(b) of the Insolvency Act 1967.

    [3]      CIV-2009-412-713.

  3. When the appellants challenged Dean’s standing to issue the main proceeding, his lawyers obtained two assignments of the causes of action from the Official Assignee.  The first assignment was given without consideration by letter dated 18 January 2010.  The second assignment was given for consideration by deed dated 22 August 2011.

  4. In September 2011 the appellants appealed to the High Court challenging the two assignment decisions of the Official Assignee (the challenge proceeding).  The appeal was brought principally on the ground that the Official Assignee had no power to…

Continue reading Glynbrook 2001 Ltd v Official Assignee

Sign in free to access the full text

Details
AGLC
Glynbrook 2001 Ltd v Official Assignee [2012] NZCA 289
Case
[2012] NZCA 289
Decision Date

CaseChat Overview and Summary

In Glynbrook 2001 Ltd v Official Assignee, the issue under consideration was whether the appellants, Glynbrook 2001 Ltd and others, had the right to appeal against the decisions of the Official Assignee, and if so, whether the High Court had the discretion to reverse those decisions under section 86 of the relevant statute. The appellants argued that they were aggrieved by the decisions of the Official Assignee, which they claimed were void or voidable. They relied on various cases and statutory provisions to support their position, asserting that the High Court retained discretion to confirm, reverse, or modify the decisions of the Official Assignee. In contrast, the Official Assignee and the other respondent, Dean, contended that once Dean’s title was determined to be unimpeachable under section 72(5), there was no right of appeal under section 86 of the statute. They argued that even if the High Court had discretion, there was no basis for exercising it to reverse the decisions, especially given the delay by the appellants in challenging the Official Assignee’s actions.

The Court examined the statutory provisions and relevant case law to determine the extent of the High Court's discretion under section 86. The appellants' argument hinged on the premise that the decisions of the Official Assignee were void or voidable, and thus subject to review by the Court. They referenced cases such as Willoughby v Official Trustees and Hull v Official Assignee to argue that the High Court had the power to reverse the decisions. However, the Court considered that once Dean’s title was established as unimpeachable under section 72(5), the decisions of the Official Assignee were effectively protected, and no right of appeal existed under section 86. The Court also noted that the Official Assignee’s decisions, even if voidable, were reasonable and could potentially benefit Dean’s creditors. The delay in challenging the decisions further militated against granting relief to the appellants.

Orders

Orders of the court

Full text does not contain this section.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

This question arises because s 86 of the Act provided: Appeal from decision of AssigneeIf the bankrupt or any creditor or any other person is aggrieved by an act or decision of the Assignee, he may, within 21 days from the date of that act or decision or within such further period as the Court allows, apply to the Court, and the Court may confirm, reverse, or modify the act or decision complained of, and make such order as it thinks fit. Mr Shiels submitted that, notwithstanding s 72(5), the appellants were still entitled to pursue their appeals against the two assignment decisions of the Official Assignee because the High Court retained its discretion under s 86 to “confirm, reverse, or modify” the decisions and to make “such order as it thinks fit.” Mr Shiels relied on the decisions in Willoughby v Official Trustees[35] and Hull v Official Assignee[36] Mr Shiels also submitted that Australian decisions to the contrary, including Re Chirnside, Digby v Union Trustee Co of Australia Ltd,[37] should be distinguished on the basis of differences between the relevant statutory provisions.[35] Willoughby v Official Trustees [2000] FCA 757, (2000) 102 FCR 261.[36] Hull v Official Assignee HC Auckland HC13/96 12 December 1997.[37] Re Chirnside, Digby v Union Trustee Co of Australia Ltd [1929] VLR 217 (VSC). On this basis Mr Shiels submitted that the High Court, in exercising its wide discretion under s 86, ought to have accepted that the Official Assignee’s decisions were void rather than voidable and therefore ought to have been reversed on appeal. Again Mr Shiels referred to the 1904 decision of this Court in Hamilton v Bank of New Zealand, as well as to the decisions in Webster v Auckland Harbour Board[38] and Mercury Energy Ltd v Electricity Corporation of New Zealand Ltd,[39] and a paper by Jennie Cassie and Dean Knight.[40][38] Webster vAuckland Harbour Board [1987] 2 NZLR 129 (CA).[39] Mercury EnergyLtd v Electricity Corporation of New Zealand Ltd [1994] 2 NZLR 385 (PC).[40]Jenny Cassie and Dean Knight “The Scope of Judicial Review: Who and what may be reviewed” (paper presented to New Zealand Law Society Administrative Law Conference, August 2008) 63. Mr Shiels also submitted that, if the decisions were found to be voidable, there was no reason for the Court to validate them. He claimed that there was nothing in the submissions for the Official Assignee or Dean to warrant validation of the decisions, especially if a test of reasonableness were applied. In response, Mr Bisley and Mr Chisnall submitted that:(a)Once it was held that Dean’s title was unimpeachable under s 72(5) there was no right of appeal under s 86.(b)There was no basis on which the High Court on appeal might exercise its discretion under s 86 to reverse the Official Assignee’s decisions in respect of sales protected by s 72(5).(c)If, contrary to these submissions, there was a right of appeal under s 86 and the High Court had a discretion to exercise, there was no reason for the Court to exercise its discretion and reverse the Official Assignee’s decisions, even if they were voidable.(d)On the contrary, the 2011 assignment was a reasonable decision, which may result in funds for Dean’s creditors. The Court should not exercise its discretion to set aside a transaction for the benefit of creditors, especially in view of the delay by the appellants in challenging the decisions.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.