Haddock v Haddock

[2019] NZHC 530

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2019-409-47

[2019] NZHC 530

IN THE MATTER

of the bankruptcy of TIMOTHY JOHN HADDOCK
Plaintiff

BETWEEN

ELISABETH HELEN HADDOCK

Applicant

Hearing:	(Determined on the Papers)
Counsel:	A N Riches for Applicant
Judgment:	21 March 2019

JUDGMENT OF ASSOCIATE JUDGE LESTER

[1]    The  applicant  applies  for  a  vesting  order  in  relation  to  a  property  at  89 Grange Street, Hillsborough, Christchurch which is currently registered in the name of the applicant and Timothy John Haddock, the applicant’s former partner.  Mr Haddock is now bankrupt.

[2]    The Official Assignee has disclaimed any interest in 89 Grange Street on the basis that it is onerous property.

[3]    The applicant has entered into a contract to sell the property but needs to have the property vested in her alone in order that she can complete the sale of the property.

HADDOCK v HADDOCK [2019] NZHC 530 [21 March 2019]

[4]    The applicant originally sought to have the application dealt with on a ‘without notice’ basis. In a practical sense, that application was treated as an application for directions as to service. With the Official Assignee having disclaimed any interest in the property, service on the Official Assignee was dispensed with. The Westpac Banking Corporation, which has a mortgage over the property, confirmed in writing that it did not wish to be served and accordingly there was no need for Westpac to be served.

[5]    However, following a telephone conference with counsel for the applicant, it was determined that it was necessary to serve the bankrupt. Service of an ‘on notice’ application was completed by counsel for the applicant. The affidavit of service completed by Mr Riches, counsel for the plaintiff, was accepted with leave, given he also appeared as counsel.

[6]    The application for a vesting order is made under s 119 of the  Insolvency  Act 2006.

[7]Moore J in Robinson v IAG New Zealand Ltd said:1

The effect of this provision [s 119] is that the Court enjoys a broad and largely unfettered discretion. It may make an order under s 119(2) if it considers it is “fair” to do so.   In the  absence  of restrictive  language  in subsection (3),    I consider this assessment should be made in a holistic manner and in light of all the surrounding circumstances that the Court considers relevant.

[8]    The section requires the applicant to show that she is a “person suffering loss or damage as a result of the disclaimer”.

[9]    Brookers Insolvency Law and Practice records that the words “loss or damage” are to be given a wide interpretation and notes: “In relation to relationship property interests between partners where one partner goes bankrupt, loss to the non-bankrupt partner has been recognised by a vesting order under s 119”.2

1      Robinson v IAG New Zealand Ltd [2016] NZHC 3149 at [50].

2      Brookers Insolvency Law and Practice (online ed, Thomson Reuters) at [IN119.06].

[10]   Fish Man Ltd (in liquidation) v Hadfield is the authority for the passage from Brookers referred to in the preceding paragraphs and there is some similarity between the circumstances of that case and the present one.3

[11]   The applicant in her affidavit says she has been supporting her family out of her income. Westpac have agreed to a deferral of mortgage payments until the applicant sells the property. That means that whatever equity the applicant has is being eroded by interest. Without a vesting order the effect of disclaimer is to leave the applicant in limbo while interest accrues. I am satisfied the applicant is suffering loss or damage as a result of the disclaimer.

[12]   The applicant has no contact with the bankrupt and he has taken no steps in relation to this application, nor did he appear when the application was called.

[13]In all the circumstances I consider a vesting order is appropriate.

[14]   Accordingly, I make an order under s 119 of the Insolvency Act 2006 that all the land comprised in Lot 14, Deposited Plan 15461, Identifier CB540/217 is vested in Elisabeth Helen Haddock.

Associate Judge Lester

Solicitors:
Saunders & Co., Christchurch

3      Fish Man Ltd (in liquidation) v Hadfield [2017] NZCA 589.