Griffiths v Maran

[2012] NZHC 2904

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

CIV-2012-485-985 [2012] NZHC 2904

IN THE MATTER OF     the Insolvency Act 2006

AND

IN THE MATTER OF the bankruptcy of BELINDA JOY MARAN

BETWEEN  CLEMENT STEPHEN GRIFFITHS Judgment Creditor

ANDBELINDA JOY MARAN Judgment Debtor

Hearing:         5 November 2012 (Heard at Wellington)

Counsel:         C. Mosley - Counsel for Judgment Creditor

B.J. Maran - Judgment Debtor in person

Judgment:      5 November 2012

ORAL DECISION OF ASSOCIATE JUDGE D.I. GENDALL

Solicitors:           Paul Cheng & Co, Solicitors, PO Box 27088, Wellington

CS GRIFFITHS V BJ MARAN HC WN CIV-2012-485-985 [5 November 2012]

[1]      Before the Court is an application to have the judgment debtor adjudicated bankrupt.

[2]      The application is made in reliance on a Bankruptcy Notice which was issued against the judgment debtor and served on 5 June 2012.   That Bankruptcy Notice sought payment of the sum of $575,000.67 representing an amount due under an order made by this Court on 2 May 2012 by way of summary judgment against several parties including the judgment debtor as second defendant.

[3]      The background to that summary judgment proceeding is of some relevance here.  In that proceeding, the plaintiff had made a claim against Mohammed Yunus Sahib (Mr Sahib) as first defendant, the judgment debtor as second defendant and Yunus Trustee Limited (Yunus Trustee) as third defendant with respect to a loan advance he had made available as I understand it for the purchase of a tug boat restaurant business in Wellington.

[4]      The second defendant informs me that she was asked to guarantee this loan only at the very last minute prior to settlement of the tug boat sale and purchase, and she did so simply to allow that settlement to proceed.

[5]      The judgment debtor’s position as I understand it is that, although she was fully aware of the obligation she was undertaking when she entered into the loan guarantee, she was very much a minor party in this whole transaction.  As such she contended that the plaintiff should exhaust his remedies against the first defendant and the third defendant before pursuing her to bankruptcy.

[6]      When the present bankruptcy application came before me today, this was the third call of this matter, it having been last adjourned on 23 October 2012 as a “final” adjournment.  On 23 October 2012 in granting that adjournment, I made directions for the filing and service of a proper opposition to the application together with an affidavit in support by the judgment debtor who had appeared in person at the time and simply indicated orally that she opposed the application.  The formal Notice of Opposition from the judgment debtor and her affidavit in support were filed on 26

October 2012.

[7]      Today, 5 November 2012 at the commencement of her submissions to me, Ms Mosley, counsel for the plaintiff noted several matters which she indicated were of relevance:

(a)      The principal debtor for the loan in question Mr Sahib was apparently adjudicated bankrupt on 24 September 2012.

(b)The second guarantor under the loan arrangement, Yunus Trustee, was the subject of a liquidation order in this Court made earlier today, 5

November 2012.

(c)      The  Official Assignee  is  currently  investigating  the  position  as  I understand  it  concerning  Mr  Sahib  and  will  shortly undertake  an investigation  into  its  affairs  as  the  appointed  liquidator  of Yunus Trustee.

[8]      On this basis Ms Mosley, counsel for the plaintiff, suggested as an alternative to proceeding today that the judgment creditor was willing to consider a halt on the present application pursuant to s 38 Insolvency Act 2006 but only on the following basis:

(a)      These proceedings would be adjourned for a reasonable period of time to enable the Official Assignee to conclude his investigations and for the judgment creditor to exhaust his remedies against the principal debtors here, Mr Sahib and Yunus Trustee.

(b)If the judgment creditor proves unsuccessful in his claim against Mr Sahib and Yunus Trustee after reasonable efforts are made to recover the debt in question from these parties, then the current proceeding against the judgment debtor would be resumed.

[9]      This proposal from the judgment creditor was put to the judgment debtor today 5 November 2012.  The judgment debtor indicated however Court that she did

not see why she should be made liable in this case and her ideal position today was that the current bankruptcy proceeding against her should be dismissed.

[10]     All this, as I understand it, is despite the contention from the judgment debtor that the original judgment against her stands, and that effectively she has little by way of assets and would be quite unable to meet the debt in question.

[11]     I have now had an opportunity to weigh up all these matters.

[12]     In my view, the appropriate course here is to accept the suggestion advanced (in my view responsibly) by counsel for the judgment creditor that this matter should be adjourned for a period of time to see whether recovery from the other (principal) debtors under the loan arrangement with Mr Griffiths might be achieved.

[13]     That said the following directions are now made:

(a)      The present bankruptcy application before the Court is now adjourned to a call in the List at 10.00 am on 8 April 2003.

(b)This is to enable the judgment creditor to advance as far as he is able to do through the Official Assignee his claims against Mr Sahib and Yunus Trustee.

(c)      If those attempts to advance his claims prove unsuccessful, then this matter is to be recalled and considered further by this Court.

(d)Leave is reserved for any party to request the Registrar to list this matter  for  an  earlier  call  than  8 April  2013  if  that  proves  to  be appropriate.

(e)       In the meantime costs on these matters are reserved.

‘Associate Judge D.I. Gendall’