Greenbaum v Lockwood - [2020] NZHC 18

IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY

I TE KŌTI MATUA O AOTEAROA KIRIKIRIROA ROHE

CIV 2019-419-273

[2020] NZHC 18

IN THE MATTER of the Insolvency Act 2006

IN THE MATTER

of the Bankruptcy of BARBARA KAY LOCKWOOD

BETWEEN

ADAM RAPHAEL GREENBAUM

Judgment Creditor

AND

BARBARA KAY LOCKWOOD

Judgment Debtor

Hearing 16 December 2019

Counsel:

RG Ewen for the Judgment Creditor SRG Hamilton for the Judgment Debtor

Judgment :

17 January 2020

JUDGMENT OF ASSOCIATE JUDGE SMITH

This judgment was delivered by Sunaina Chand on 17 January 2020 at 2pm pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar

Counsel / Solicitors:
SRJ Hamilton, Auckland, simon@simonhamilton.co.nz D Burgess, Auckland, doug@dblaw.co.nz
RG Ewen, Auckland, rod@wynyardwood.co.nz

Greenbaum v Lockwood [2020] NZHC 18 [17 January 2020]

[1] In this case, the judgment debtor was served with a bankruptcy notice on Saturday, 26 October 2019. The amount said to be owing was $414,857.50 plus costs and interest. The judgment debtor filed an application to set aside the bankruptcy notice, with two supporting affidavits, on 12 November 2019.

[2] On 27 November 2019 the judgment creditor filed a memorandum asking for a direction from the court that the application to set aside the bankruptcy notice was filed out of time and the court has no jurisdiction to hear the application. A memorandum in opposition was filed by the judgment debtor on 4 December 2019, and the judgment creditor filed a memorandum in reply on 10 December 2019. The judgment debtor filed a short sur-reply, also on 10 December 2019.

Background

[3] The judgment creditor and the judgment debtor were formerly married. They met in 2000 when the judgment debtor was living and working in the United Kingdom, and they began living together later that year. They married in December 2006. They returned to live in New Zealand in 2009, and their relationship ended when they separated on 25 May 2011.

[4] Following their separation, the parties have been involved in ongoing litigation in New Zealand under the Property (Relationships) Act 1976. There have also been spousal maintenance proceedings, and proceedings under the Care of Children Act 1991 relating to their children.

[5] The property relationship proceeding was the subject of a judgment given by Judge Otene in the Family Court on 17 May 2018. The judge held that a substantial debt owed by the judgment creditor to his mother relating to a property in Ringmore Rise, London, was a relationship debt. On the basis that the judgment creditor would be responsible for discharging that debt, the judge ordered the judgment debtor to pay the judgment creditor $415,540.00, together with $17,500.00 for personal loans and a student loan that the judgment debtor had repaid from relationship funds.

[6] The judgment debtor appealed the judgment of Judge Otene, but in a judgment delivered on 3 September 2019, Katz J largely upheld the judgment of Judge Otene.1 Katz J reduced the sum the judgment debtor was ordered to pay the judgment creditor to $397,357.50,…

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 Greenbaum v Lockwood

Details

AGLC: Greenbaum v Lockwood [2020] NZHC 18
Case: [2020] NZHC 18
Decision Date: 17 January 2020

CaseChat Overview and Summary

In the High Court of New Zealand, the case of Greenbaum v Lockwood concerned a bankruptcy notice served on the judgment debtor, Barbara Kay Lockwood, by the judgment creditor, Adam Raphael Greenbaum. Lockwood was required to either comply with the notice or apply to set it aside within 10 working days. Lockwood filed her application to set aside the bankruptcy notice on 12 November 2019, which the judgment creditor argued was outside the prescribed time limit. The primary legal issue in this case was whether the court could set aside the bankruptcy notice despite the judgment debtor filing her application out of time.

The court found that the judgment debtor's first argument, which sought to extend the time limit for filing the application, was unconvincing. The court held that there is no statutory provision deeming service effected on a Saturday to have been effected on the next working day, and no compelling policy reason has been advanced to support that proposition. The court agreed with the judgment creditor's submission that the first of the 10 working days should count as the following Monday if the service of a bankruptcy notice is effected on the weekend.

The court also found that the judgment debtor's second argument, which sought to set aside the bankruptcy notice in the exercise of the court's inherent jurisdiction, was not applicable in this case. The court held that the inherent jurisdiction could not be exercised in circumstances where the alleged "abuse of process" or unfairness consisted of no more than the judgment debtor's inability to run a cross claim falling within s 17(7) of the Act. The court found that the judgment debtor's proposed claim in the United Kingdom courts relating to the Ringmore Rise property and any other property owned by the judgment creditor in the United Kingdom was a s 17 cross claim argument, which is specifically dealt with by s 17 of the Act.

As a result, the court directed that the application to set aside the bankruptcy notice is a nullity and struck it out accordingly. The court also noted that nothing in its judgment would affect the judgment debtor's ability to raise her proposed English property claims in any bankruptcy adjudication proceeding the judgment creditor may file. The court left counsel to confer on the issue of costs. If the parties were unable to agree, the judgment creditor could file and serve a costs memorandum by 31 January 2020, with any reply memorandum by the judgment debtor to be filed and served within 10 working days after service of the judgment creditor's memorandum.

Orders