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Keung v Official Assignee

Keung v Official Assignee

Case [2021] NZCA 92 26 March 2021

Bankruptcy Adjudication

Annulment of Bankruptcy

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IN THE COURT OF APPEAL OF NEW ZEALAND

I TE KŌTI PĪRA O AOTEAROA

CA99/2020
[2021] NZCA 92

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

Hearing:	29 September 2020
Court:	Brown, Venning and Katz JJ
Counsel:	M J Tingey for Appellant M Deligiannis and O L Wilkinson for First Respondent No appearance for Second Respondent
Judgment:	26 March 2021 at 10.30 am

JUDGMENT OF THE COURT

A The appeal is dismissed.

B There is no order as to costs.

____________________________________________________________________

REASONS OF THE COURT

(Given by Katz J)

Introduction

Seng Bou (Paul) Keung appeals a decision of Associate Judge Bell, in the High Court at Auckland, declining to annul Mr Keung’s bankruptcy adjudication.
Mr Keung was adjudicated bankrupt on 20 September 2010, on the basis that he had not paid a non-party costs order against him in the sum of $66,155.
Mr Keung filed his statement of affairs with the Official Assignee on 9 November 2010. He was automatically discharged from bankruptcy on 9 November 2013. Almost five years later, in September 2018, Mr Keung applied to have his bankruptcy annulled under s 309 of the Insolvency Act 2006 (the Act). That section provides that the Court may, on the application of the Official Assignee or any person interested, annul a bankruptcy in certain circumstances. Under s 309(1)(a) the Court can do this if it considers that the bankrupt should not have been adjudicated bankrupt. An annulment on that basis operates retrospectively — it is effective from the date of adjudication.[1] Alternatively, if a bankrupt has fully paid or satisfied all of their debts, and agreed to meet the Official Assignee’s fees and costs, they can seek an annulment under s 309(1)(b). Such an annulment operates only from the date of the order of annulment.[2]
[1]Insolvency Act 2006, s 309(3)(a).
[2]Section 309(3)(b).
Although Mr Keung meets the criteria for a s 309(1)(b) annulment, he does not seek an annulment on that basis. Mr Keung wants to completely remove the “stain” of bankruptcy from his record. He believes that the only way to do this is by obtaining a retrospective annulment under s 309(1)(a).
Associate Judge Bell found that the non-party costs order was made in breach of natural justice and that Mr Keung should not therefore have been adjudged bankrupt based on that debt.[3] Those findings are not appealed. The Judge declined to annul Mr Keung’s bankruptcy, however, on the basis that Mr Keung lacked standing to attack the non-party costs order by asking the court to “look behind” the relevant judgment. The Judge further found that, even if Mr Keung had standing, it would not have been appropriate in all the circumstances for the Court to have exercised its discretion to grant an annulment.
[3]Keung v Official Assignee [2020] NZHC 32 [High Court judgment].
The key issues raised by Mr Keung’s appeal are:
(a)whether the Judge made an error of law in finding that Mr Keung lacked standing…

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] NZCA 92
Case: [2021] NZCA 92
Decision Date: 26 March 2021 at 10.30 am

CaseChat Overview and Summary

The Court of Appeal of New Zealand dismissed the appeal of Seng Bou (Paul) Keung against the decision of the High Court declining to annul his bankruptcy adjudication. The key issues on appeal were whether the Judge made an error of law in finding that Mr Keung lacked standing to seek an annulment of the bankruptcy adjudication and whether the Judge erred in concluding that it would not have been appropriate to annul Mr Keung’s bankruptcy. The Court found that the Judge was correct in concluding that it would not have been appropriate to annul Mr Keung’s bankruptcy, regardless of any standing issues. The factors weighing against an annulment included Mr Keung's insolvency at the time of his bankruptcy, his significant delay in seeking an annulment, and the fact that this was his second bankruptcy. Although Mr Keung had settled all of his debts, this factor carried less weight in circumstances where the debts had been compromised rather than fully paid. The Court found that annulment was not the appropriate remedy for the breaches of Mr Keung's rights as there were other remedies available under the Insolvency Act 2006. The appeal was dismissed and there was no order as to costs.

Orders