Hodder v Official Assignee - [2016] NZHC 981

IN THE HIGH COURT OF NEW ZEALAND NAPIER REGISTRY

CIV-2012-441-316 [2016] NZHC 981

UNDER the Insolvency Act 2006

IN THE MATTER OF

the bankruptcy of Michelle Jane Hodder

BETWEEN

MICHELLE JANE HODDER Applicant

AND

THE OFFICIAL ASSIGNEE First Respondent

BERYL MARY HENSHAW Second Respondent

On the Papers

Counsel:

J Krebs for the Applicant

Judgment:

16 May 2016

JUDGMENT OF ASSOCIATE JUDGE SMITH

[1] Ms Hodder was adjudicated bankrupt by this Court on 5 June 2014. She now resides in Australia. The debts in Ms Hodder’s bankruptcy total approximately
$15,000, and the Official Assignee did not recover any assets in the bankruptcy. However Ms Hodder has a potential claim against her father’s estate under the Succession Act 1981 (Queensland).

[2] The Official Assignee did not have available resources to pursue that claim, and Ms Hodder sought the consent of the Official Assignee to pursue the claim herself, on the basis that she would retain the benefit of any recovery in the proposed litigation. That proposal was subsequently amended to a proposal that any recovery would be shared equally between Ms Hodder and the Official Assignee, after
payment of costs.

MICHELLE JANE HODDER v THE OFFICIAL ASSIGNEE [2016] NZHC 981 [16 May 2016]

[3] The Official Assignee applied to this Court for approval to assign Ms Hodder’s claim under the Queensland legislation to her, on the basis that the proceeds of the claim would be shared equally between Ms Hodder and the Official Assignee. In a judgment delivered on 6 August 2015 I refused approval of the proposed assignment.

[4] Since that decision, the Official Assignee has given a notice of disclaimer, disclaiming the property comprising the cause of action against the estate of Ms Hodder’s father. The notice of disclaimer was given on 21 August 2015.

[5] Ms Hodder now applies for an order under s 119 of the Insolvency Act 2006 vesting the disclaimed property in herself. In her application, the property is described as:

The cause of action by way of family provision application against the estate of Edward David Jones pursuant to the provisions of Part 4 of the Succession Act 1981 (Queensland legislation).

[6] For convenience, I will refer to this cause of action as “the disclaimed property”.

[7] Section 118 of the Act sets out the effect of a disclaimer by the

Official Assignee. The section provides:

118 Effect of disclaimer

A disclaimer by the Assignee—

(a) brings to an end, on and from the date of the disclaimer, the rights, interests, and liabilities of the Assignee and the bankrupt in relation to the property disclaimed:

(b) does not affect the rights, interests, or liabilities of any other person, except in so far as is necessary to release the Assignee or the bankrupt from a liability.

[8] The right of a person suffering loss or damage as a result of disclaimer by the Official Assignee to apply for an order vesting property in that person, is contained in s 119 of the Act. That section provides:

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 Hodder v Official Assignee

Details

AGLC: Hodder v Official Assignee [2016] NZHC 981
Case: [2016] NZHC 981
Decision Date: 16 May 2016

CaseChat Overview and Summary

The case of Hodder v Official Assignee involved Michelle Jane Hodder, who was adjudicated bankrupt in New Zealand and subsequently moved to Australia. The Official Assignee had disclaimed a potential claim Hodder had against her father's estate under the Succession Act 1981 (Queensland), which would have likely provided funds sufficient to cover her bankruptcy debts and costs. Hodder sought an order vesting this disclaimed property in herself to allow her to pursue the claim. The key legal issue was whether it was fair for the disclaimed property to be re-vested in Hodder under section 119 of the Insolvency Act 2006.

The court considered the effect of the disclaimer, which brought to an end the rights, interests, and liabilities of the Official Assignee and the bankrupt in relation to the disclaimed property, and the right of a person suffering loss or damage as a result of such a disclaimer to apply for an order vesting the disclaimed property in that person. The court found that Hodder had suffered loss or damage as a result of the disclaimer, and that it was fair to re-vest the disclaimed property in her, given her difficult personal circumstances and the potential value of the claim. The Crown, which had become the owner of the disclaimed property, did not object to the re-vesting order.

In light of the circumstances, the court granted the application and ordered that the disclaimed property, being the cause of action by way of family provision against the estate of Edward David Jones pursuant to the Succession Act 1981 (Queensland), be vested in Hodder. This decision allowed Hodder to pursue the claim against her father's estate and potentially recover funds to cover her debts and costs, providing her with an opportunity to improve her financial situation and that of her ill daughter.

Orders