Kipping v UDC Finance Ltd - [2012] NZHC 1707

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

CIV-2010-409-2273 [2012] NZHC 1707

BETWEEN JOHN BRIAN KIPPING Applicant

ANDUDC FINANCE LIMITED Respondent

Hearing: 16 July 2012
(Heard at Christchurch)

Appearances: J B Kipping, as Applicant in Person with Mr P King (McKenzie friend)
M D Pascariu for Respondent
G Slevin for Official Assignee (appearing initially but then excused) C Ruane for Circle K Limited (with a watching brief only in this proceeding, not attending throughout)

Judgment: 16 July 2012

JUDGMENT OF ASSOCIATE JUDGE OSBORNE
as to application for annulment

[1] On 12 April 2011 the Court adjudicated John Brian Kipping bankrupt. Mr Kipping applies for the annulment of his adjudication. He says that he should not have been adjudicated bankrupt.

The bankruptcy proceeding

[2] UDC Finance Limited (“UDC”) is a money lender. In October 2010, it had a bankruptcy notice issued against Mr Kipping. It relied on a judgment entered in the
District Court against Mr Kipping for $77,351.48 in August 2010.

KIPPING V UDC FINANCE LIMITED HC CHCH CIV-2010-409-2273 [16 July 2012]

[3] Mr Kipping was then promptly served with the bankruptcy notice. He did not meet the requirements of that notice and in particular did not pay to UDC the judgment sum.

[4] In November 2010 UDC applied for an adjudication order. Mr Kipping was served with that application in December 2010.

[5] Following service of the UDC application upon him, Mr Kipping, through a barrister, applied to the District Court for an order setting aside the District Court judgment. His ground of application was that he had no recollection of being served personally with the notice of claim. He also disputed the debt.

[6] Judge Somerville heard the setting aside application on 8 February 2011 and by judgment dated 15 March 2011 dismissed Mr Kipping’s application. He was satisfied that the proceedings were properly served on Mr Kipping and that Mr Kipping had no substantial defence to the claim being made against him.1

[7] The original District Court judgment is based on a debt of Circle K Limited to UDC which had been guaranteed by Mr Kipping. At the setting aside hearing, Mr Kipping did not deny having entered into the guarantee but instead asserted that he had a defence because:

(a) It was an illegal contract;

(b)If it was not illegal then it was not capable of being enforced as there had been no proper disclosure made as required by ss 17 and 22 of the Credit Contracts and Consumer Finance Act 2003;

(c) It was an oppressive contract under the same Act and Mr Kipping was entitled to relief;

(d) The doctrine of laches applies.

[8] Judge Somerville considered all four defences and found that each failed. By way of background his Honour’s judgment refers to the fact that the loan contract was entered into in March 2008 but quickly fell into default, with a repossession order being issued on 27 January 2009. Further demand for payment was then made in June 2009 when UDC…

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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Details

Case: [2012] NZHC 1707
Decision Date: 16 July 2012

CaseChat Overview and Summary

John Brian Kipping applied for the annulment of his bankruptcy adjudication, claiming that he should not have been declared bankrupt. UDC Finance Limited had issued a bankruptcy notice against Kipping, relying on a District Court judgment for $77,351.48. Kipping failed to meet the requirements of the notice and was adjudicated bankrupt. He applied for annulment, arguing that he was unaware of the hearing date, but the Court found that he was not asking the Court to accept that he had not received notice. The Court considered Kipping's application for annulment under s 309(1)(a) of the Insolvency Act 2006, which allows annulment if the Court considers that the bankrupt should not have been adjudicated bankrupt. The Court found that Kipping had not satisfied the threshold of s 309(1)(a) and dismissed his application for annulment. The Court also considered the costs of the proceeding, and awarded UDC scale 2B costs with a 25 per cent uplift, together with disbursements to be fixed by the Registrar. There was no order as to costs as between Kipping and the Official Assignee.

Orders