Gollan v Official Assignee - [2012] NZHC 1869

IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY

CIV-2012-419-646 [2012] NZHC 1869

IN THE MATTER OF the Insolvency Act 2006

AND

IN THE MATTER OF the bankruptcy of JP Gollan

BETWEEN JAMES PATRICK GOLLAN Applicant

ANDOFFICIAL ASSIGNEE Respondent

Hearing: 26 July 2012

Counsel: CT Jones for respondent Appearance: JP Gollan, applicant in person Judgment: 30 July 2012

JUDGMENT OF ASSOCIATE JUDGE FAIRE
[on application to reverse decision of Official Assignee]

Solicitors: Insolvency and Trustee Service, Private Bag 92 513, Auckland

And To: JP Gollan, 30 Brookfield Street, Hamilton 3120

GOLLAN V OFFICIAL ASSIGNEE HC HAM CIV-2012-419-646 [30 July 2012]

The application

[1] Mr Gollan applies for an order to reverse a decision made by the Official Assignee on 26 April 2012. The application is made in reliance on s 226 of the Insolvency Act 2006.

The decision

[2] The Official Assignee’s decision was that he would not seek the leave of the High Court to continue a proceeding commenced by Mr Gollan. The proceeding was commenced by Mr Gollan on 14 August 2009. It seeks relief in the form of an order pursuant to the Law Reform (Testamentary Promises) Act 1949 against the estate of Irene Ivy Maud Luders.

The statutory basis for the application and the decision

[3] Section 226 of the Insolvency Act 2006 provides:

226 Appeal from Assignee's decision

(1) A person (including the bankrupt or a creditor) whose interests, monetary or otherwise, are detrimentally affected by an act or decision to which this section applies may apply to the Court to reverse or modify the act or decision.

(2) This section applies to—

(a) an act or decision of the Assignee; or

…

(4) The Court may confirm, reverse, or modify the act or decision.

[4] Section 217(2) of the Insolvency Act 2006 provides:

217 Assignee's general powers

(1) The Assignee has the powers—

(a) necessary to carry out the functions and duties of the
Assignee under this Act; and

(b) conferred on the Assignee by this Act.

(2) In particular, the Assignee has the powers set out in Schedule 1.

[5] The relevant parts of Schedule 1 of the Insolvency Act 2006 for the purposes of this application provide as follows:

Schedule 1 Assignee's general powers

The Assignee has the power to—

…

(c) with the leave of the Court, continue in the Assignee's name legal proceedings begun by the bankrupt before adjudication:

Mr Gollan’s adjudication in bankruptcy

[6] Mr Gollan was adjudicated a bankrupt on 19 March 2012 in the High Court at Hamilton. His estate is being administered by the Hamilton office of the Official Assignee. As a result of his adjudication as a bankrupt his cause of action vests in the Official Assignee.1

[7] Mr Gollan initially submitted that the cause of action under the Law Reform (Testamentary Promises) Act 1949 was a cause of action akin to a personal tort, which therefore does not pass to the Official Assignee in bankruptcy.

[8] This issue was considered by Barker J in

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 Gollan v Official Assignee

Details

AGLC: Gollan v Official Assignee [2012] NZHC 1869
Case: [2012] NZHC 1869
Decision Date: 30 July 2012

CaseChat Overview and Summary

In the High Court of New Zealand, James Patrick Gollan, a bankrupt, applied to reverse the Official Assignee's decision not to continue a legal proceeding initiated by him. The proceeding sought relief under the Law Reform (Testamentary Promises) Act 1949 against the estate of Irene Ivy Maud Luders. Gollan contended that the Official Assignee erred in deciding not to seek the High Court's leave to continue the proceeding, arguing that his interests were adversely affected by this decision. The legal issues centred on whether Gollan had standing to challenge the Official Assignee's decision and whether the decision itself was legally sound.

The court first addressed whether Gollan's rights were detrimentally affected by the decision, thereby giving him standing to apply. It was established that Gollan's cause of action under the Law Reform (Testamentary Promises) Act 1949 vested in the Official Assignee upon his adjudication in bankruptcy. The court then examined the criteria for reversing the Official Assignee's decision, which included errors of law, taking irrelevant considerations into account, failing to consider relevant factors, and the decision being plainly wrong. The Official Assignee's decision not to proceed with the claim was based on a thorough assessment of the merits and prospects of success, considering the financial history of Gollan and the size of the estate. The court found no legal errors or other grounds to reverse the decision.

The court ultimately confirmed the Official Assignee's decision and refused Gollan's application to reverse it. However, it noted that the possibility of assigning the cause of action had not been fully explored. The application was adjourned to allow further evidence on this matter. The court also reserved its decision on costs.

Orders