Jones v Dromgool - [2020] NZHC 968

IN THE HIGH COURT OF NEW ZEALAND TAURANGA REGISTRY

I TE KŌTI MATUA O AOTEAROA TAURANGA MOANA ROHE

CIV-2019-470-000066

[2020] NZHC 968

BETWEEN
NORMAN ARTHUR JONES

Judgment Creditor

AND

SIMON VICTOR DROMGOOL

Judgment Debtor

Hearing: 11 May 2020

Appearances:

M J Toner for Judgment Creditor Judgment Debtor in Person

Judgment:

12 May 2020

REASONS JUDGMENT OF ASSOCIATE JUDGE P J ANDREW

This judgment was delivered by Associate Judge Andrew on 12 May 2020 at 4.00 pm
pursuant to r 11.5 of the High Court Rules Registrar/Deputy Registrar Date……………………..

JONES v DROMGOOL [2020] NZHC 968 [12 May 2020]

Introduction

[1] The judgment creditor (Mr Jones) seeks an order adjudicating the judgment debtor (Mr Dromgool) bankrupt pursuant to ss 13 and 36 of the Insolvency Act 2006.

[2] Mr Jones says that the judgment debtor has committed an act of bankruptcy for the purposes of s 13, having failed to comply with the Bankruptcy Notice of 23 July 2019. The Bankruptcy Notice was based on a judgment of the District Court at Tauranga on 10 April 2013 in the amount of $20,925.

[3] At the conclusion of the oral hearing on 11 May 2020 (by telephone), I made orders adjudicating Mr Dromgool bankrupt (timed at 2.20 pm). I also awarded costs in favour of Mr Jones. This judgment contains the reasons for my orders.

Factual background

[4] It is clear that there is a lengthy litigation history between the parties. That litigation seems to have arisen from the deterioration of their business relationship in about 2006.

[5] Both parties were equal shareholders and directors in the engineering business, Team Engineering Ltd.

[6] Mr Dromgool initially brought proceedings against Mr Jones in 2007. The proceedings were struck out on 3 November 2009 because they disclosed no cause of action. Costs of $7,555.12 were awarded against Mr Dromgool. He paid those costs to Mr Jones.

[7] A second set of proceedings was filed by Mr Dromgool and Team Engineering Ltd in 2009. Those proceedings were heard by Judge Maze in the Tauranga District Court during December 2011.

[8] The certificates of judgment record that the counterclaim by Mr Jones was successful, resulting in judgment against Team Engineering Ltd in the sum of
$18,790.66.

[9] In addition, Judge Maze ordered that Mr Dromgool and Team Engineeering Ltd were to pay costs to Mr Jones in the sum of $20,925, plus disbursements of
$283.83. Those costs orders, which remain unpaid, form the basis of the Bankruptcy Notice.

[10] Mr Jones advised that he is not pursuing the counterclaim judgment made against Team Engineering Ltd. In relation to the costs jointly made against both Mr Dromgool and Team Engineering Ltd, Mr Jones has elected to pursue costs against Mr Dromgool only.

[11] A third set of proceedings was subject to a hearing in the Tauranga District Court before Judge Ingram during August 2014. Mr Dromgool and Team Engineering Ltd brought a claim against Mr Jones for the sum of $35,000. Judge Ingram struck out the claims. At…

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 Jones v Dromgool

Details

AGLC: Jones v Dromgool [2020] NZHC 968
Case: [2020] NZHC 968
Decision Date: 12 May 2020

CaseChat Overview and Summary

In the case of Jones v Dromgool, the judgment creditor, Norman Arthur Jones, applied for an order adjudicating the judgment debtor, Simon Victor Dromgool, bankrupt. The basis for the application was Mr Dromgool's failure to comply with a Bankruptcy Notice served on 23 July 2019. The notice was grounded in a judgment from the Tauranga District Court dated 10 April 2013, which awarded Mr Jones costs in the amount of $20,925. The court was required to determine whether Mr Dromgool's failure to pay constituted an act of bankruptcy under the Insolvency Act 2006 and whether any of Mr Dromgool's defences were valid.

The court examined four defences presented by Mr Dromgool. Firstly, Mr Dromgool argued that the six-year limitation period under the Limitation Act 2010 rendered the judgment unenforceable. However, the court dismissed this argument, noting that the limitation period did not apply to bankruptcy adjudication proceedings. Secondly, Mr Dromgool contended that the judgment debt should be apportioned between him and Team Engineering Ltd, but the court ruled that the joint and several liability rule permitted Mr Jones to pursue the full amount from Mr Dromgool alone. Thirdly, Mr Dromgool raised the issue of perjury charges against Mr Jones, which were dismissed and thus irrelevant. Lastly, Mr Dromgool attempted to re-litigate past disputes, which the court found to be an abuse of process.

Having dismissed all defences, the court concluded that Mr Dromgool had not demonstrated any basis for the court to refuse an order for adjudication. The court found that Mr Jones had established a proper basis for an order of adjudication under sections 13 and 36 of the Insolvency Act 2006.

In conclusion, the court made an order adjudicating Mr Dromgool bankrupt, effective from 2:20 pm on 11 May 2020. Additionally, the court ordered Mr Dromgool to pay costs to Mr Jones on a 2B basis, plus disbursements, totalling $4,877 as per Mr Toner's memorandum dated 8 May 2020.

Orders