JDN Limited v Abdul-Jabbar

[2021] NZHC 2835

IN THE HIGH COURT OF NEW ZEALAND INVERCARGILL REGISTRY

I TE KŌTI MATUA O AOTEAROA WAIHŌPAI ROHE

CIV-2021-425-31

[2021] NZHC 2835

IN THE MATTER

of the Insolvency Act 2006

AND

IN THE MATTER

of the bankruptcy of SILVIA ABDUL-JABBAR

BETWEEN

JDN LIMITED

Creditor

AND

SILVIA ABDUL-JABBAR

Debtor (Bankrupt Applicant)

Hearing:	21 October 2021
Appearances:	W D Hofer for Bankrupt Applicant (appearance excused) J C D Guest for Creditor (appearance excused)
Judgment:	21 October 2021

INTERIM JUDGMENT OF ASSOCIATE JUDGE LESTER

(Application for annulment)

JDN LIMITED v ABDUL-JABBAR [2021] NZHC 2835 [21 October 2021]

[1]                 This is an application for annulment of a bankruptcy. The applicant, Silvia Abdul-Jabbar was adjudicated bankrupt on 29 July 2021 by order of this Court on the application of the creditor, JDN Limited.

[2]                 I note that in the bankruptcy proceedings the creditor was incorrectly named as “JDM Ltd”. The correct name of the creditor is JDN Ltd. There is an order correcting the name of the creditor to JDN Ltd. There was no suggestion that the typographical error caused any confusion or led to the bankruptcy order being made.

[3]                 Similarly, the debtor’s name was also subject to a typographical error in that her surname Abdul-Jabbar was spelt “Abdul-Jabber”. There is an order correcting the debtor’s surname. Again, it is not suggested the typographical error was of any consequence.

[4]                 The application for annulment is made under s 309(1)(b) of the Insolvency Act 2006 (the Act), that is, on the basis the bankrupt’s debts have been fully paid or settled, and the costs of the Official Assignee incurred in the bankruptcy have been paid.

[5]                 The judgment creditor’s counsel filed a memorandum confirming that the creditor’s debt had been paid in full along with costs and in Mr Guest’s words, from the point of view of his client: “The matter is at an end”. Hence Mr Guest was excused from appearing  when  this matter was called in  the Invercargill List on Thursday  21 October 2021.

[6]                 The Official Assignee has filed a report. The adjudication was advertised and no other creditors have come forward.   The report indicates that the bankrupt has     a number of assets. Indeed, the Official Assignee collected the bankrupt’s share of funds which were held in a joint account and which were far in excess of the debt leading to adjudication.

[7]                 If there is an annulment application, the Official Assignee seeks that there be an order for the Assignee’s remuneration pursuant to s 309(5) of the Act.

[8]                 Mr Hofer, in a memorandum filed on behalf of the applicant, confirms that there may be an order that the Official Assignee’s costs, as set out in the Assignee’s report, paid and, given issues of costs with the creditor have been resolved, costs on this application should otherwise lie where they fall.

[9]                 The matter was called in the List on 21 October 2021 against the possibility that there may be other appearances, but there were none. However, on the morning of the call of the application, Mr Hofer properly brought to the Court’s attention that he had received an email from the Assignee advising that the Assignee had received and accepted two claims by the Commissioner of Inland Revenue  (IRD) against   Ms Abdul-Jabbar. Mr Hofer submitted in his memorandum that the annulment order should nonetheless be made and the IRD can take up its claim with Ms Abdul-Jabbar.

[10]              I am not able to adopt that course. If Ms Abdul-Jabbar does not accept the Assignee’s decision to accept the IRD’s claims, then she must challenge that decision. With the IRD’s claims having been accepted, I cannot ignore them and grant an annulment on the basis all creditors have been paid. But for this issue, an order would have been appropriate.

[11]              With this issue arising at the eleventh hour, Mr Hofer had not had a chance to consider it in detail. If the IRD debt is valid then it will need to be paid. Given the IRD claims are modest, the likelihood that a challenge to the Assignee’s decision will cause an increase in the Assignee’s costs will have to be weighed in the balance.

[12]              The application to annul is adjourned until Thursday 18 November 2021. However, if upon reflection the IRD debt is paid and no other claims are received by the Assignee, Mr Hofer may, by memorandum confirming the above, ask that the file be  referred  to  me  for  an  order  to  be  made   without  the  need  to  wait  until   18 November 2021.

Associate Judge Lester

Solicitors:

Downie Stewart, Dunedin Tompkins Wake, Hamilton The Official Assignee