Keung v Official Assignee - [2021] NZSC 81

IN THE SUPREME COURT OF NEW ZEALAND

I TE KŌTI MANA NUI

SC 41/2021
[2021] NZSC 81

BETWEEN	SENG BOU (PAUL) KEUNG Applicant
AND	OFFICIAL ASSIGNEE First Respondent WESTPAC NEW ZEALAND LIMITED Second Respondent

Court:	William Young, Glazebrook and O’Regan JJ
Counsel:	M J Tingey for Applicant M Deligiannis and O L Wilkinson for First Respondent S C D A Gollin for Second Respondent
Judgment:	7 July 2021

JUDGMENT OF THE COURT

A The application for leave to appeal is dismissed.
B There is no order as to costs.

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REASONS

The applicant was adjudicated bankrupt on 20 September 2010 on the basis of his non-payment of a costs order which had been made against him on 21 April 2010. He appealed against the costs order, but his applications for a stay of execution were declined in both the High Court[1] and Court of Appeal.[2] On 13 October 2010—that is, after his adjudication—the Official Assignee discontinued the appeal against the costs order. The applicant was automatically discharged from bankruptcy on 9 November 2013. The applicant has settled with his creditors, albeit on what appears to have been discounted terms.[3]
[1]GBR Investment Ltd v Goose Bay Ranch Holdings Ltd HC Christchurch CIV-2009-409-613, 21 May 2010.
[2]Keung v GBR Investment Ltd [2010] NZCA 396, [2012] NZAR 17.
[3]As we understand the course of events, Mr Keung settled with all creditors except for Westpac before the annulment application. He subsequently settled with Westpac before the Court of Appeal hearing. The Court of Appeal noted (at [30]) that “Most or all of his creditors appear to have settled for significantly less than the full amount of their claims”. This is said in the applicant’s submissions to be “disputed”, but no particulars of the basis of the dispute have been provided.
In September 2018, he applied to the High Court under s 309(1)(a) of the Insolvency Act 2006 for an order annulling his bankruptcy.[4] This section provides:
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…
[4]Keung v Official Assignee [2020] NZHC 32 (Associate Judge Bell) [HC judgment].
In the High Court, Associate Judge Bell concluded that the applicant “should not have been adjudicated bankrupt” for the purposes of s 309(1)(a). This was because the applicant had not been served with the application for an order for costs against him, with the result that the order had been made in breach of natural justice.[5] The Associate Judge was of the view that if the true facts had been before the Court when adjudication was in issue, the applicant would not have been adjudicated bankrupt.[6] He concluded, however, that the applicant lacked standing to challenge his adjudication on the basis of an attack on the judgment debt.[7] He also said that in any event, he would not have exercised the discretion to annul in favour of…

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 Keung v Official Assignee

Details

AGLC: Keung v Official Assignee [2021] NZSC 81
Case: [2021] NZSC 81
Decision Date: 7 July 2021

CaseChat Overview and Summary

The Supreme Court of New Zealand heard an application for leave to appeal from the decision of the Court of Appeal in the case of Keung v Official Assignee. The applicant, Seng Bou (Paul) Keung, sought an annulment of his bankruptcy, arguing that he should not have been adjudicated bankrupt as he had not been served with the application for an order for costs against him, which resulted in the order being made in breach of natural justice. The Official Assignee and Westpac New Zealand Limited were the respondents to the appeal. The primary legal issue before the Supreme Court was whether the applicant had standing to seek an annulment of his bankruptcy under section 309(1)(a) of the Insolvency Act 2006, and if so, whether the High Court and the Court of Appeal had exercised their discretion to annul the adjudication correctly. The Supreme Court found that while there was a genuinely arguable issue as to the applicant's standing, the concurrent conclusions of the High Court and the Court of Appeal as to the exercise of the discretion were not sufficiently doubtful to warrant granting leave to appeal. The Supreme Court held that the courts were entitled to take into account what happened after adjudication, such as settling debts on discounted terms, and that the appeal did not involve any matter of general or public importance or an appearance of a miscarriage of justice. Accordingly, the application for leave to appeal was dismissed, and there was no order as to costs as the first respondent did not formally oppose the application.

Orders