IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2010-409-835
[2020] NZHC 32
BETWEEN
SENG BOU (PAUL) KEUNG
Applicant
AND
OFFICIAL ASSIGNEE
First Respondent
WESTPAC NEW ZEALAND LIMITED
Second Respondent
Hearing:
4, 5 and 6 November 2019
Appearances:
M J Tingey for the Applicant
G Caro for the First Respondent
M D Pascariu and H O Meikle-Downing for the Second Respondent
Judgment:
29 January 2020
JUDGMENT OF ASSOCIATE JUDGE R M BELL
This judgment was delivered by me on 29 January 2020 at 11:00am
pursuant to Rule 11.5 of the High Court Rules
………………………………………………….
Registrar/Deputy Registrar
Solicitors:
Ronald W Angland & Son for the Applicant
Official Assignee, Auckland, for the First Respondent
MinterEllisonRuddWatts, Auckland, for the Second Respondent Counsel:
Murray J Tingey, Auckland, for the Applicant
SENG BOU (PAUL) KEUNG v OFFICIAL ASSIGNEE [2020] NZHC 32 [29 January 2020]
Introduction
[1] Mr Keung applies under s 309(1)(a) of the Insolvency Act 2006 to have his bankruptcy annulled claiming he should not have been adjudicated bankrupt. Such an annulment is retrospective – it operates from the date of adjudication.1 He is not interested in annulment on any other ground, as they operate only from the date of the order of annulment. He was made bankrupt in the Christchurch High Court on 20 September 2010. He filed his statement of affairs with the Official Assignee on 9 November 2010 and was automatically discharged on 9 November 2013. He seeks the annulment to remove the stain of bankruptcy from his record.
[2] If the court annuls the bankruptcy, the Official Assignee seeks a remuneration order for $30,000.2 That aside, an annulment will not have any practical effect. Mr Keung has resolved matters with most of his creditors, except for Westpac New Zealand Ltd. The Official Assignee opposes the application.
[3] The bankruptcy application on which Mr Keung was adjudicated relied on non- compliance with a bankruptcy notice, based on an order for costs of $66,155 made on 21 April 2010. Mr Keung says that the order was made in breach of natural justice. There are three main questions:
(a)Was the costs order made in breach of natural justice?
(b)Should Mr Keung have been adjudged bankrupt?
(c)Should Mr Keung’s adjudication be annulled now?
[4] I find that the order for costs was made in breach of natural justice. It was made without notice to him and without giving him the opportunity to adduce evidence in opposition. Because of the breach of natural justice, the court in its bankruptcy jurisdiction should not have accepted that Mr Keung was in debt for the costs order and therefore should not have adjudicated him bankrupt. That does not however mean that his adjudication should be annulled now. Once he was adjudicated bankrupt, he
1 Insolvency Act 2006, s 309(3)(a).
2 Insolvency Act, s 309(5).
lost standing to challenge the costs order. There are also discretionary factors that count against annulment: his insolvency when he was adjudicated, his delay and…
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.
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AGLC
Keung v Official Assignee [2020] NZHC 32
Case
[2020] NZHC 32
Decision Date
CaseChat Overview and Summary
In this case, the applicant, Seng Bou Keung, seeks to have his bankruptcy annulled on the basis that he should not have been adjudicated bankrupt. The key issue for the court to decide is whether there was a breach of natural justice in the non-party costs order against Mr Keung. The court found that the order for costs was indeed made in breach of natural justice, as Mr Keung was not given the opportunity to present evidence in opposition. However, the court determined that Mr Keung's adjudication should not be annulled now, as he lost standing to challenge the costs order once he was adjudicated bankrupt. Additionally, discretionary factors such as Mr Keung's insolvency when he was adjudicated, his delay in applying for annulment, and his previous bankruptcy count against annulment. The court also found that Mr Keung had not settled with Westpac New Zealand Ltd, and therefore, the issue does not affect the resolution of the main questions. The annulment application is dismissed, and the court invites counsel to confer on costs. If they cannot agree, memoranda may be filed, and the court will decide costs on the papers.