Hunt v Official Assignee at Wellington HC Wellington CIV-2003-485-2585

[2005] NZHC 1645

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

CIV-2003-485-2585

IN THE MATTER OF     The Insolvency Act 1967

AND IN THE MATTER OF The Bankruptcy of PETER MICHAEL

HUNT

BETWEEN

PETER MICHAEL HUNT

Applicant

AND

THE OFFICIAL ASSIGNEE AT WELLINGTON

Respondent

Hearing:         11 April 2005 Appearances: S. Warner for Applicant

M. Reddy for Respondent

R. Laurenson for Creditors R. & J. Muollo Judgment: 12 April 2005 at 3.00pm

JUDGMENT OF ASSOCIATE JUDGE D.I. GENDALL

[1]    The applicant was adjudicated bankrupt by order of this Court on 9 February 2004 at 1.22pm. On 16 December 2004 the applicant filed an application for an  order granting a discharge from his bankruptcy.

[2]    Today Ms Warner for the applicant indicated that the applicant seeks to discontinue this application. She explained that this discontinuance was sought in light of the report just provided by the Official Assignee, and the applicant’s acceptance now that it was premature for him to seek a discharge at this point.

[3]    The discharge application was opposed by the Official Assignee and Mr and Mrs Muollo as the original judgment creditors.

HUNT V THE OFFICIAL ASSIGNEE AT WELLINGTON HC WN CIV-2003-485-2585 12 April 2005

[4]    As to the applicant’s request for a discontinuance, the Official Assignee and Mr and Mr Muollo contend that it is inappropriate for the discharge application to be discontinued. If it is to be brought to an end, then they submit that this must be by way of dismissal of the application, rather than by a discontinuance.

[5]    In addition, however, counsel contended that in the present circumstances, given that the applicant himself proceeded to bring this application, he cannot without some just cause discontinue or have the application dismissed at his own whim now.

[6]    The applicant’s discharge application is brought under s108 Insolvency Act 1967 which states:

108. Bankrupt may apply for discharge – Subject to the provisions of paragraph (d) of subsection (1) of section 110 of this Act, the bankrupt may at any time and from time to time apply to the Court for an order of discharge, and the hearing shall be in accordance with section 109 of this Act.

[7]    Section 109 provides for the public examination of the bankrupt before the Court in a range of circumstances noted in that section.

[8]Section 109(3) provides:

(3)Subsections (2), (4), (5) and (8) of section 69 of this Act shall, so far as they are applicable and with the necessary modifications, apply to any public examination under this section.

[9]Section 69(4) states:

The Assignee, or any creditor who has proved his claim, or the counsel for the Assignee or for any creditor who has proved his claim may, without any notice to the bankrupt, examine him.

[10]   Section 110 Insolvency Act 1967 gives the Court power to grant or refuse a discharge from bankruptcy, and in particular s110(1)(d) states:

… the Court, having regard to all the circumstances of the case, may:

…

(d)Refuse an order of discharge, in which case the Court may specify     the earliest date on which the bankrupt may apply again to the Court for an order of discharge.

[11]   According to Mr Laurenson for Mr and Mrs Muollo, the applicant in filing this application has submitted himself to the jurisdiction of the Court, and he cannot now simply withdraw his application on the basis that things may not be going well for him.

[12]   In this regard, counsel referred me to the Supreme Court decision, In re Gilmour [1888] 6NZLR 421.

[13]   In that case bankrupts applied for a discharge from bankruptcy, and the Court found that they could not withdraw their application so as to oust the jurisdiction of the Court when they found that the decision on that application was likely to be adverse to them. The Court held this was especially the case, given that the Court had jurisdiction to make and enforce an order directing the attendance of the bankrupts for the purposes of examination. The application once made needed to be properly disposed of by the Court.

[14]In Gilmour Ward J at p424 said:

They (the bankrupts) did apply, and this is an adjourned hearing of their application, which they cannot abandon.  This Court has the same power  as the Court of Chancery, and I am of opinion that the Court had jurisdiction to make and enforce the order directing the attendance of the bankrupts. They must remain and submit themselves for examination.

(emphasis added)

[15]   In addition, in Spratt & McKenzie’s “Law of Insolvency” (2^nd Edn) at p267 it is stated:

A bankrupt cannot after applying for his discharge withdraw his application so as to oust the jurisdiction of the Court and the Court may order him to attend at the adjourned hearing of such application and from time to time until the application is disposed of: Re Gilmour.

[16]   And in terms of s69(5) Insolvency Act 1967, the Court has clear power to have a bankrupt examined, and to supervise that examination. Examination of the applicant is sought here by the Official Assignee and by Mr and Mrs Muollo as substantial creditors.

[17]   In my view, it is of some significance that, in his affidavits in support of this application, the applicant on 15 December 2004 initially said he was  currently “Chief Executive Officer of” a substantial enterprise involving a number of companies, and then on 28 February 2005 claimed that he did not “manage the organisation”.  It is the contention of Mr and Mrs Muollo in particular that there are  a range of issues surrounding this, and other aspects of the bankrupt’s affairs upon which he needs to be examined, and that the examination should proceed here.

[18]   And as I see it, in the light of s110(1)(d) which enables a Court  when refusing a discharge to specify the earliest date for a re-application by the bankrupt, it is important that the present application is fully dealt with now to prevent repeated applications by a bankrupt and possible abuses of the Court’s processes as a result.

[19]   The Official Assignee broadly supports the position taken by Mr and Mrs Muollo here.

[20]   Weighing up all these matters, and given the clear statements in the decision In re Gilmour, which I am satisfied are authoritative here, I am of the view that the applicant’s application for discharge should remain on foot and the applicant be required to submit himself for examination in terms of s109 and s69 Insolvency Act 1967. Orders to this effect are now made.

[21]   As a next event, this matter is listed for call in the Associate Judge’s List at 10.00am on 18 April 2005.

Associate Judge D.I. Gendall

Delivered aton 12 April 2005.

Solicitors:

Morrison Kent, Wellington for Applicant Gibson Sheat, Wellington for Respondent Sievwrights, Wellington for Mr & Mrs Muollo