Keung v Official Assignee

Case [2020] NZHC 32


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…

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Keung v Official Assignee [2020] NZHC 32
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[2020] NZHC 32
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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.

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