Jacomb v Wikeley - [2013] NZHC 3034

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

CIV-2013-485-3414 [2013] NZHC 3034

UNDER the Insolvency Act 2006

IN THE MATTER OF the bankruptcy of KENNETH DAVID WIKELEY (aka KENNETH DAVID WIKLEY)

BETWEEN MICHAEL JOHN JACOMB TRENA KATHLEEN JACOMB and PETER REGINALD RICHARDSON as trustees of the GENSET TRUST Judgment Creditors

AND KENNETH DAVID WIKELEY
(aka KENNETH DAVID WIKLEY) Judgment Debtor

Hearing: 13 November 2013

Appearances: M Lenihan for Judgment Debtor in support
J G Toebes for Judgment Creditors to oppose

Judgment: 13 November 2013

ORAL JUDGMENT OF ASSOCIATE JUDGE BELL

Solicitors:
JT Law, Wellington, for Judgment Creditors
Jones Young, Auckland, for Judgment Debtor

Counsel:
M Lenihan, Auckland, for Judgment Debtor

Copy for:
Judgment Creditors
Judgment Debtor

JACOMB v WIKELEY (aka WIKLEY) [2013] NZHC 3034 [13 November 2013]

[1] Mr Wikeley has applied to set aside a bankruptcy notice served on him. At the outset of the hearing I discussed with counsel whether this hearing was to be heard in court or in chambers. Applications to set aside bankruptcy notices may be heard either in court or in chambers. Counsel agreed that the matter was to be heard in court. A consequence of that is if there is to be any challenge to this decision it is to be by appeal to the Court of Appeal, not be by way of review.

[2] The creditors obtained judgment against Mr Wikeley on 10 April 2013 under a judgment of Kós J on a guarantee he had given.1 Judgment was given in US dollars for the liability under the guarantee. There was also an award of costs in New Zealand currency. The sums demanded in the bankruptcy notice were US$875,768.42 comprising the judgment for liability under the guarantee, plus interest on the judgment sum, and costs of NZ$48,130.18.

[3] Mr Wikeley relies on three broad grounds to set aside the bankruptcy notice:

1 He invokes the court’s inherent jurisdiction to prevent an abuse of

process. He says that the bankruptcy notice is an abuse of process.

2He says that he has a cross claim under s 17(1)(d)(ii) and s 17(7) of the Insolvency Act 2006.

3He asks the court to order a stay on any bankruptcy proceedings. His documents referred to s 37 of the Insolvency Act 2006, but it emerged during the hearing that he was in fact relying on s 38.

[4] Some preliminary clarification is appropriate. For the first ground, normally, when a judgment debtor invokes the court’s inherent jurisdiction to prevent an abuse of its processes, the application is made in reliance on the principles stated by Master Kennedy-Grant in Re Wise.2 The jurisdiction is usually exercised when there has been some procedural defect in obtaining the judgment on which the bankruptcy notice is based, or there is an arguable ground of defence to the claim for which
judgment was given. These matters do not arise here. Instead, Mr Wikeley is

1 Jacomb v Wikeley [2013] NZHC 707.
2 Re Wise HC Auckland B227/95,…

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 Jacomb v Wikeley

Details

AGLC: Jacomb v Wikeley [2013] NZHC 3034
Case: [2013] NZHC 3034
Decision Date: 13 November 2013

CaseChat Overview and Summary

In the High Court of New Zealand, the case of Jacomb v Wikeley involved Mr. Kenneth David Wikeley applying to set aside a bankruptcy notice served on him by the judgment creditors. The creditors, Michael John Jacomb, Trena Kathleen Jacomb, and Peter Reginald Richardson, as trustees of the Genset Trust, had obtained a judgment against Mr. Wikeley on a guarantee he had given. The bankruptcy notice demanded US$875,768.42, which included the judgment for liability under the guarantee, interest on the judgment sum, and costs of NZ$48,130.18.

The legal issues before the court were whether Mr. Wikeley's application to set aside the bankruptcy notice could be upheld under the court's inherent jurisdiction, whether he had a cross claim under the Insolvency Act 2006, and whether the court should order a stay on any bankruptcy proceedings. Mr. Wikeley's arguments were based on events that had occurred after the judgment was given, including the restoration of Edel Metals Group Ltd to the register of companies and the subsequent call on shares, which he claimed extinguished his liability under the judgment.

The court found that while it may be open to the court to exercise its inherent jurisdiction to set aside a bankruptcy notice if the debt has been discharged, Mr. Wikeley's set-off arguments were not genuinely triable due to the artificiality and contrivance of the steps he had taken. The court held that Mr. Wikeley's actions were calculated to defeat the trustees' rights under their loan and were not reasonable under the policy behind decisions such as Whyte v O'Brien. The court also found that Mr. Wikeley remained solely liable for the costs part of the bankruptcy notice.

The court dismissed Mr. Wikeley's application to set aside the bankruptcy notice, and the time for compliance with the notice had now stopped running. The court ordered costs in favour of the trustees against Mr. Wikeley on a category 2 band B basis.

Orders