Keenan v Smith - [2022] NZHC 970

IN THE HIGH COURT OF NEW ZEALAND GREYMOUTH REGISTRY

I TE KŌTI MATUA O AOTEAROA MĀWHERA ROHE

CIV-2022-418-4

[2022] NZHC 970

IN THE MATTER of the Insolvency Act 2006

IN THE MATTER

of the bankruptcy of ANTHEA ROSE KEENAN

BETWEEN

ANTHEA ROSE KEENAN

Appellant

AND

RAYMOND BRUCE SMITH

Respondent

Hearing: 9 May 2022

Appearances:

A R Keenan self-represented

D W King for Respondent (Leave granted to not appear) Official Assignee (Leave granted to not appear)

Judgment:

9 May 2022

REASONS FOR JUDGMENT OF ASSOCIATE JUDGE LESTER

KEENAN v SMITH [2022] NZHC 970 [9 May 2022]

[1] The bankrupt, Mrs Keenan, applied under ss 309(1)(a) and (b) of the Insolvency Act 2006 (the Act), for an order annulling her bankruptcy. Those sections of the Act provide:

309 Court may annul adjudication

(1)The court may, on the application of the Assignee or any person interested, annul the adjudication if—

(a)the court considers that the bankrupt should not have been adjudicated bankrupt; or

(b)the court is satisfied that the bankrupt’s debts have been fully paid or satisfied and that the Assignee’s fees and costs incurred in the bankruptcy have been paid; or

…

[2] I was satisfied an order under s 309(1)(b) of the Act should be made and such an order was made when Mrs Keenan’s application was called on 9 May 2022. I now set out the reasons for that and why the order under s 309(1)(a) is not appropriate.

Section 309(1)(a) of the Act

[3] Mrs Keenan was bankrupted by a Judgment of Associate Judge Paulsen dated 30 March 2022.1

[4] My discussion on s 309(1)(a) assumes an understanding of that Judgment. In short, Mrs Keenan was bankrupted because she refused to pay a costs award of this Court. While Mrs Keenan had filed an appeal against the Judgment resulting in the costs award, that appeal was not pursued. Prior to the appeal being abandoned, the judgment creditor issued a bankruptcy notice and while Mrs Keenan sent an email to the Court denying she owed the debt, no challenge to the bankruptcy notice was made. The judgment creditor’s application to adjudicate Mrs Keenan bankrupt was filed in March 2022 and was opposed.

[5] Associate Judge Paulsen, in his reserved Judgment released 30 March 2022, considered each of the grounds raised by Mrs Keenan and concluded none of them justified declining the order for adjudication sought.

1 Smith v Keenan [2022] NZHC 618.

[6] Two of the grounds not accepted by Associate Judge Paulsen are relied on by Mrs Keenan in her application under s 309(1)(a). One is that the bankruptcy notice resulting in Mrs Keenan’s adjudication was issued while the appeal against the costs award was alive. As Associate Judge Paulsen noted, no stay of enforcement was sought and an appeal does not operate as a stay.2 While Mrs Keenan may have felt aggrieved that the bankruptcy notice was issued while the appeal was alive, no challenge to the bankruptcy notice was made and the judgment creditor…

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 Keenan v Smith

Details

AGLC: Keenan v Smith [2022] NZHC 970
Case: [2022] NZHC 970
Decision Date: 9 May 2022

CaseChat Overview and Summary

Anthea Rose Keenan applied to the High Court of New Zealand for an order annulling her bankruptcy. The application was heard by Associate Judge Lester on 9 May 2022, with the Official Assignee and the judgment creditor not appearing. Mrs Keenan was adjudged bankrupt on 30 March 2022, following her refusal to pay a costs award of the Court. The judgment creditor had issued a bankruptcy notice, which was not challenged, and subsequently applied to the Court to have Mrs Keenan adjudged bankrupt. Associate Judge Paulsen adjudicated Mrs Keenan bankrupt on 30 March 2022, and she now seeks to have that adjudication annulled.
The primary legal issue before the court was whether Mrs Keenan's bankruptcy should be annulled under section 309(1)(a) or (b) of the Insolvency Act 2006. The court considered the evidence and arguments presented by Mrs Keenan and concluded that her application under section 309(1)(a) should not be granted, as it did not provide a forum for relitigating the merits of the adjudication application. The court found that Mrs Keenan had failed to provide sufficient evidence to establish that she was solvent at the time of the adjudication hearing. The court also concluded that an order under section 309(1)(b) should be made, as Mrs Keenan's debts had been fully paid or satisfied, and the Official Assignee's fees and costs incurred in the bankruptcy had been paid.
Associate Judge Lester granted Mrs Keenan's application for annulment of her bankruptcy under section 309(1)(b) of the Insolvency Act 2006, on the condition that the Official Assignee's costs and disbursements are paid from the funds held by the Official Assignee before the balance is returned to Mrs Keenan. The court noted that Mrs Keenan was free to take up her concerns about the level of fees charged by the Official Assignee with the Official Assignee directly. The adjudication was annulled from 9 May 2022.

Orders