Howcroft v Skelton - [2016] NZHC 1389

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2015-404-001663 [2016] NZHC 1389

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: 23 June 2016

Appearances:

B M Cunningham for Judgment Creditor
B H Skelton for Judgment Debtor

Judgment:

23 June 2016

JUDGMENT OF VENNING J

ORDER FOR ADJUDICATION MADE AT 1.15 PM

Solicitors: BSA Law, Auckland
Copy to: B Cunningham, Auckland
B H Skelton, Auckland

HOWCROFT v SKELTON [2016] NZHC 1389 [23 June 2016]

[1] The judgment creditor seeks an order adjudicating the judgment debtor bankrupt. The order is opposed. There is a lengthy procedural history to this matter. The judgment debt arose out of a costs order made by the Court when Associate Judge Sargisson struck out a claim and made an order for costs personally against the judgment debtor. That was on 11 June 2015.

[2] On 23 July 2015 the judgment debtor filed an application for an order extending time to file a notice of appeal. Shortly thereafter the judgment creditor served the bankruptcy notice on the judgment debtor. The judgment debtor then filed an affidavit and notice of application to set aside the bankruptcy notice.

[3] The application to set aside the notice was called a number of times in the

Insolvency list in the latter part of 2015 and early 2016.

[4] On 18 February 2016 the judgment debtor discontinued his application to review the order of Associate Judge Sargisson striking out the proceeding which had led to the order for costs.

[5] The matter was then called on further occasions in the Insolvency list before the judgment debtor’s application for an order setting aside the bankruptcy notice was heard on 26 April 2016 before Associate Judge Doogue. On 29 April 2016 the Associate Judge dismissed the application for the order setting aside the bankruptcy notice.

[6] The matter has now come before the Court this morning on an opposed basis. The judgment debtor opposes the application for adjudication on the following grounds:

(a) he does not owe a debt to the judgment creditor;

(b)he seeks an order pursuant to s 43(2) of the Insolvency Act 2006 halting the application so that the question of whether the debt is owed or how much of the debt is owed can be resolved at trial;

(c) he seeks such an order in accordance with s 38(1) and (2) of the

Insolvency Act 2006;

(d)he intends to dispute the judgment creditor’s debt for costs of $1,998 including a fee of $500 and a service fee of $150 in the summons to debtor;

(e) he says he has a cross-claim against the judgment creditor that has not previously been litigated and has an application for pre- commencement discovery to enable him to particularise that;

(f) he says the application for pre-commencement discovery is set down for hearing at 10.00 am on 24 August 2016;

(g)he…

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 Howcroft v Skelton

Details

AGLC: Howcroft v Skelton [2016] NZHC 1389
Case: [2016] NZHC 1389
Decision Date: 23 June 2016

CaseChat Overview and Summary

In the case of Howcroft v Skelton, Charles Michael Howcroft, the judgment creditor, sought an order to adjudicate Bevin Hall Skelton, the judgment debtor, bankrupt. The application was opposed by Skelton, who argued that he did not owe the debt to Howcroft and sought to halt the adjudication under the Insolvency Act 2006. The court had to decide whether to exercise its discretion under section 36 of the Insolvency Act in Skelton's favour and dismiss the petition or halt the adjudication under section 38 of the Insolvency Act.

The court considered Skelton's arguments that the proposed proceedings, which would benefit the BH Skelton Children's Trust, might allow him to benefit as a discretionary beneficiary. However, the court found that the claims were speculative, with no proceedings issued, and that the other two proceedings were currently subject to appeal with no particular merit. The court also noted that Skelton had no assets and could not pay the judgment debt. The court found that Skelton's conduct in pursuing unmeritorious claims had caused Howcroft substantial costs and expenses, and that it was necessary to bring home to Skelton the responsibility that a party has when unreasonably causing other parties to incur costs. Therefore, the court declined to exercise its discretion in Skelton's favour and made an order for adjudication at 1.15 pm.

The final orders of the court were that the judgment debtor, Bevin Hall Skelton, be adjudicated bankrupt. The court emphasised that Skelton's personal bankruptcy would not affect the claims being pursued on behalf of the BH Skelton Children's Trust. The court also noted that Skelton had no assets and could not pay the judgment debt, and that his conduct in pursuing unmeritorious claims had caused the judgment creditor substantial costs and expenses.

Orders