Howcraft v Skelton - [2016] NZHC 838

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2015-404-1663 [2016] NZHC 838

IN THE MATTER of the Insolvency Act 1967

AND IN THE MATTER

of the bankruptcy of BEVIN HALL SKELTON

BETWEEN

CHARLES MICHAEL HOWCROFT Judgment Creditor

AND

BEVIN HALL SKELTON Judgment Debtor

Hearing: 26 April 2016

Appearances:

Mr B Skelton in person
Mr B Cunningham for defendant

Judgment:

29 April 2016

JUDGMENT OF ASSOCIATE JUDGE J P DOOGUE

This judgment was delivered by me on
29.04.16 at 4 pm, pursuant to

Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date……………

HOWCROFT v SKELTON [2016] NZHC 838 [29 April 2016]

[1] In this proceeding the judgment debtor seeks an order of the Court setting aside a bankruptcy notice which was served on him. The bankruptcy notice is based upon an order for costs which Associate Judge Sargisson made as part of the judgment she delivered on 11 June 2015. That judgment was concerned with an application to strike out a statement of claim which the judgment debtor, as plaintiff,
had filed.1 The judgment debtor was ordered to pay costs on the strike out

proceeding on a 2B basis. The judgment creditor served a bankruptcy notice on the judgment debtor on 21 July 2015.

[2] In his application, the judgment stated the grounds upon which the application was brought as being these:

a) The judgment debtor has applied in the High Court at Auckland for an order seeking leave to extend time for filing a notice of appeal and the appeal is still to be decided;

b)There is a cross-claim against the creditor that is greater than the judgment debt;

c) That a grave injustice will ensue if the time to appeal is not extended and the appeal filed;

…

[3] There was no evidence before the court confirming the first ground and I

shall not consider it further.

[4] The argument addressed to the court concerned only ground “b” above.

[5] The judgment creditor opposes the application and the key grounds which he relies upon are these:

a) The judgment debtor does not have a counter-claim, set-off or cross demand that equals or exceeds the amount claimed by the judgment creditor that he could not have put forward in the action or proceeding in which the judgment order was obtained;

b)The cross-claim put forward by the judgment debtor is similar to claims that have been made in his amended statement of claim dated
30 January 2015 in the proceeding under CIV-2014-404-001897;2

[6] Following the entry of the judgment against the judgment debtor, he applied to have a Judge review the decision. However that proceeding was discontinued. At the present time, there is no extant proceeding containing the claims that the judgment debtor now says he has against the judgment creditor and which he claims he ought to be able to raise as a ground for making an order setting aside the costs order.

[7] The claims which the judgment debtor now brings fall into these categories:

a)…

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 Howcraft v Skelton

Details

AGLC: Howcraft v Skelton [2016] NZHC 838
Case: [2016] NZHC 838
Decision Date: 29 April 2016

CaseChat Overview and Summary

The case of Howcraft v Skelton involved an application by the judgment debtor, Bevin Hall Skelton, to set aside a bankruptcy notice served by the judgment creditor, Charles Michael Howcroft. The bankruptcy notice was issued based on an order for costs made as part of a previous judgment delivered on 11 June 2015, which concerned an application to strike out a statement of claim filed by Skelton. The key legal issue in this case was whether Skelton had a cross-claim, set-off, or cross demand that equaled or exceeded the amount claimed by Howcroft, which he could not have put forward in the action or proceeding in which the judgment order was obtained. The judgment debtor argued that he had claims against Howcroft that were greater than the judgment debt, including claims related to a loan transaction, a partnership agreement, and alleged mismanagement of trust funds. However, the court found that none of these claims met the statutory requirements for setting aside the bankruptcy notice under section 17 of the Insolvency Act 2006. The court held that Skelton had previously had the opportunity to bring these claims but had failed to do so, and that the claims were either statute-barred or compromised. Therefore, the application to set aside the bankruptcy notice was dismissed, and Skelton was ordered to pay costs on a 2B basis.

The court's reasoning was based on the statutory requirements for setting aside a bankruptcy notice under section 17 of the Insolvency Act 2006. The court found that Skelton had not demonstrated that he had a genuine triable cross-claim, set-off, or cross demand that he could not have set up in the action or proceeding in which the judgment was obtained. The court also considered the relevant authorities, including Clark v UDC Finance Ltd, Re Brink ex parte Commercial Banking CO of Sydney Ltd, and Sharma v ANZ Banking Group, which established the criteria for setting aside a bankruptcy notice. The court found that Skelton's claims did not meet these criteria, as they were either previously litigated or compromised. Therefore, the application to set aside the bankruptcy notice was dismissed, and Skelton was ordered to pay costs on a 2B basis.

Orders