Grey District Council v Banks - [2017] NZHC 190

IN THE HIGH COURT OF NEW ZEALAND GREYMOUTH REGISTRY

CIV-2016-418-000022 [2017] NZHC 190

IN THE MATTER of the Insolvency Act 2006

AND

IN THE MATTER

of the bankruptcy of DOUGLAS BANKS

BETWEEN

GREY DISTRICT COUNCIL Judgment Creditor

AND

DOUGLAS BANKS Judgment Debtor

CIV-2016-418-000023

IN THE MATTER of the Insolvency Act 2006

AND

IN THE MATTER of the bankruptcy of CHRISTINE SANDRA BANKS

BETWEEN GREY DISTRICT COUNCIL Judgment Creditor

ANDCHRISTINE SANDRA BANKS Judgment Debtor

Hearing: 17 February 2017 (Determined on the papers)

Counsel:

J Shackleton for Judgment Creditor
Mr & Mrs Banks, Judgment Debtors, self-represented

Judgment:

17 February 2017

JUDGMENT OF ASSOCIATE JUDGE MATTHEWS

[1] On 3 February 2017 I made orders adjudicating both Mr and Mrs Banks

bankrupt. For reasons given in the judgment I directed that the orders of

GREY DISTRICT COUNCIL v DOUGLAS BANKS [2017] NZHC 190 [17 February 2017]

adjudication would lie in the Court until 1.00 pm today and directed that if Mr and Mrs Banks had, by that time, paid their full indebtedness to the Council, the orders would not take effect. I made further directions that the Council inform Mr and Mrs Banks by a certain deadline of the amount owing.

[2] Mr and Mrs Banks have both filed an appeal to the Court of Appeal against these orders. As the Court had not been given the Court of Appeal filing number for their appeals, I instructed the Case Officer to ask the Court of Appeal Registry to provide it so it could be included in this judgment. I am informed by the Case Officer that although a document has been received by the Court of Appeal it has not yet been allocated a filing number as it has not yet been accepted for filing.

[3] In this circumstance s 416 of the Insolvency Act 2006, referred to below, does not apply. However, as the document may be accepted for filing by the Court of Appeal without this court being immediately informed, I proceed to determine the application on the basis that there is an appeal in place.

[4] Mr and Mrs Banks have filed a joint memorandum in which they inform the Court that they have fully paid the Council’s claim as contained within the bankruptcy notices, the application for adjudication, the summons to debtors attached to the notices and a memorandum filed by the Council in which it referred to the debt owing in the application for adjudication. The sum paid, I am informed, is $44,321.22. As a result, Mr and Mrs Banks seek, by way of their memorandum, an order staying or suspending the orders of adjudication, until the appeal is determined or otherwise disposed of.

[5] Counsel for the judgment creditor filed a memorandum in response, on each proceeding.

[6] All these documents were placed before me at 8.00 am this morning. I am conscious that the orders made on 3 February are to take effect at 1.00 pm today. Accordingly, I will treat the memorandum from Mr and Mrs…

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: [2017] NZHC 190
Decision Date: 17 February 2017

CaseChat Overview and Summary

The case of Grey District Council v Banks, adjudicated in the High Court of New Zealand, Greymouth Registry, revolves around the bankruptcy proceedings against Douglas Banks and Christine Sandra Banks. The Grey District Council, as the judgment creditor, sought adjudication of bankruptcy against the Banks, who were the judgment debtors. The primary dispute was whether the court should grant a stay or suspension of the adjudication orders until the appeals against the adjudication were determined, given that the Banks had paid part of the debt owed to the Council.

The legal issues before the court were whether the adjudication orders could be stayed pending the outcome of the Banks' appeals to the Court of Appeal, and if so, under what conditions. The court needed to determine if the Banks had provided sufficient grounds to justify a stay, considering the Insolvency Act 2006 and the precedents set in cases such as Lindsay v Vaucluse Holdings Ltd and Harrison v Harrison. The Banks argued that the adjudication orders should be suspended because they had paid part of the debt, but the Council opposed the stay, asserting that the Banks were still insolvent and the full debt had not been paid.

The court, in its reasoning, found that the Banks' application for a stay lacked any new or compelling grounds that would warrant a different outcome from what was previously decided on February 3, 2017. The court acknowledged that the Banks could still pursue their appeals even if the adjudication orders took effect, as established in Lindsay v Vaucluse Holdings Ltd. The court considered factors such as the right of appeal not being rendered nugatory, the potential for a novel or important point of law to be raised, and the Banks' insolvency status. Ultimately, the court dismissed the application for a stay, concluding that the Banks' appeals would not be futile and that the right to appeal would not be rendered meaningless.

The court's final orders were that the application for a stay of the adjudication orders was dismissed, and the adjudication orders would take effect as previously directed.

Orders