Haines v Memelink - [2020] NZHC 434

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE

CIV-2019-485-773

[2020] NZHC 434

UNDER the Insolvency Act 2006

IN THE MATTER

of bankruptcy proceedings

BETWEEN

QUENTIN STOBART HAINES

Judgment Creditor

AND

HARRY MEMELINK

Judgment Debtor

Hearing: 25 February 2020

Appearances:

G Dewar for judgment creditor and BC 378945 (a supporting creditor)

D Livingstone for judgment debtor

A O’Connor for BC 68792 (a supporting creditor) C Matsis for BC 81012 (a supporting creditor)

Judgment:

9 March 2020

JUDGMENT OF ASSOCIATE JUDGE JOHNSTON

This judgment was delivered by me on 9 March 2020 at 4.00 pm, pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar Date:

[1] The judgment debtor, Mr Harry Memelink, was adjudicated bankrupt by this Court on 28 August 2018.

HAINES v MEMELINK [2020] NZHC 434 [9 March 2020]

[2] The judgment creditor, Mr Quentin Haines, served a bankruptcy notice dated 19 December 2019 on Mr Memelink on 21 January 2020 demanding payment of
$5,508.00, that being the amount of a costs judgment of this Court dated 7 February 2020.1

[3] I am informed that Mr Haines (in relation to that costs judgment) and the supporting creditors, BC 68792, BC 81012 and BC 378945 (in relation to other debts), had sought to lodge proofs of debt with the Official Assignee with a view to having those debts (and possibly others) dealt with as part of his current bankruptcy, but that the Official Assignee declined to accept and deal with claims incurred after 28 August 2018.

[4] Accordingly, Mr Haines served his bankruptcy notice and has commenced this proceeding for a further order pursuant to s 11 of the Insolvency Act 2006 adjudicating Mr Memelink bankrupt.

[5] The idea of a bankrupt being bankrupted for a second time is a curious one — even counter intuitive — but is supported by logic and precedent — essentially, at least on the debit side of the ledger, the Official Assignee is charged with dealing with Mr Memelink’s bankrupt estate as at the date of his adjudication on 28 August 2018.

[6] There remains a question as to the utility of a second bankruptcy, but my views on that score are neither here nor there.

[7] Mr Haines’ application proceeds on the orthodox basis that Mr Memelink failed to comply with the bankruptcy notice served on him on 21 January 2020, thereby committing an act of bankruptcy.

[8] Mr Memelink opposes the making of the order sought, essentially on the basis that he has paid the amount of the demand, whilst at the same time acknowledging that he has not paid, or otherwise dealt with, Mr Haines’ claim in respect of costs.

1 Memelink v The Official Assignee [2020] NZHC 97.

[9] The obvious starting point is to determine whether Mr Memelink has committed an act of bankruptcy entitling Mr Haines to commence this proceeding.

[10] In a bankruptcy proceeding the burden is on the judgment creditor to establish that the…

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: [2020] NZHC 434
Decision Date: 9 March 2020

CaseChat Overview and Summary

In the High Court of New Zealand, Associate Judge Johnston delivered a judgment adjudicating Mr Harry Memelink bankrupt. Mr Quentin Haines, the judgment creditor, had issued a bankruptcy notice demanding $5,508.00, the amount of a costs judgment. The Official Assignee had declined to accept claims incurred after Mr Memelink's initial bankruptcy adjudication on 28 August 2018. This led to Mr Haines' application for a further bankruptcy order. The central legal issue was whether Mr Memelink's failure to pay the amount demanded within the 10 working days constituted an act of bankruptcy. The court examined the nature of the payment, considering cheques and electronic transfers. The court determined that while the cheque was irrelevant, the electronic transfer was valid payment. The timing of this transfer, made shortly after the deadline, was contentious, with the court concluding that the transfer occurred within the permitted timeframe. Despite Mr Memelink's partial payment of the principal debt, his failure to address the costs claim constituted an act of bankruptcy. The court weighed various factors, including Mr Memelink's ability to pay and the need to protect creditors, ultimately deciding in favour of the application. The court made an order adjudicating Mr Memelink bankrupt, effective from the date of the judgment.

Orders