Leeds v Richards - [2016] NZHC 2314

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV 2016-404-140 [2016] NZHC 2314

UNDER the Insolvency (Cross-border) Act 2006

BETWEEN

MICHAEL THOMAS LEEDS AND NICHOLAS STEWART WOOD Applicants

AND

MURRAY RICHARDS First Respondent

STEINDLE WILLIAMS LEGAL LIMITED

Second Respondent

Hearing: 22 September 2016

Counsel:

S Bisley for Applicants
M Richards, in person, First Respondent
Appearance on behalf of Second Respondent excused

Judgment:

23 September 2016

Reasons:

29 September 2016

REASONS FOR JUDGMENT OF HEATH J

Solicitors:
Buddle Findlay, Auckland
Copy to:
M Richards, First Respondent
P Davey, Auckland, Second Respondent

LEEDS v RICHARDS [2016] NZHC 2314 [23 September 2016]

CONTENTS

(a) The Vivendi debt [8]

(b) The English bankruptcy proceeding [16]

(c) The s 8 application [20]

(d) Application to set aside English orders [24]

The application and outcome [1] Background

Analysis
(a) The nature of the application

(i) The scheme of the Cross-border Act [25]

(ii) Section 8 of the Cross-border Act [34]

(b) Should relief be granted? [37]

The application and outcome

[1] On the petition of Vivendi SA, a French company, Mr Murray Richards was adjudged bankrupt in England on 19 December 2014. After a period during which the Official Receiver was responsible for management of the bankrupt estate, Mr Leeds and Mr Wood (the joint trustees) were appointed as trustees, with effect from 5 February 2015.

[2] The debt on which Mr Richards was adjudicated bankrupt resulted from a contested hearing in the Chancery Division of the High Court of England and Wales. On 9 October 2013, Newey J entered judgment in favour of Vivendi in a sum of about £14 million.1

[3] Vivendi filed its bankruptcy petition on 4 March 2014. It alleged that Mr Richards was domiciled in England and Wales, or had a sufficient presence within that jurisdiction, for the Court to exercise jurisdiction in bankruptcy over him.2 Mr Richards claims the adjudication order was made without jurisdiction; and asserts that he has never resided or been domiciled in England or Wales. He was born in New Zealand and currently resides in Sydney, Australia. In the alternative, he asserts that the joint trustees are not impartial and ought not to be allowed to
continue to administer his bankruptcy.3

1      Vivendi SA v Richards [2013] EWHC 3006 (ChD).
2      Based on s 265(1) of the Insolvency Act 1986 (UK). See also, para [17] below.
3      See paras [11] and [14] below.

[4] On 3 November 2015, the County Court at Croydon (the English Court), exercising jurisdiction in bankruptcy, considered the joint trustees’ application to issue a Letter of Request (the Request) to this Court, to assist in the administration of the English bankruptcy. The English Court made an order on 16 November 2015. Relevantly, the Request states:4

3.This Court hereby requests that the High Court of New Zealand assists this Court by ordering that:

(a) the High Court of New Zealand act in aid of and be auxiliary to this request for assistance and, for this purpose, the Bankruptcy Order 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.

Continue reading Leeds v Richards

Details

AGLC: Leeds v Richards [2016] NZHC 2314
Case: [2016] NZHC 2314
Decision Date: 23 September 2016

CaseChat Overview and Summary

On the petition of Vivendi SA, Mr Murray Richards was adjudged bankrupt in England on 19 December 2014. The joint trustees of the bankruptcy, Mr Leeds and Mr Wood, applied to the High Court of New Zealand for orders under s 8 of the Insolvency (Cross-border) Act 2006. The joint trustees sought, inter alia, the assistance of the New Zealand solicitors, Steindle Williams Legal Ltd, in the administration of the bankruptcy. Mr Richards opposed the application. The key issues were whether the New Zealand Court should recognise the English bankruptcy order and, if so, whether it should assist the joint trustees in the administration of the bankruptcy. The Court held that the English bankruptcy order was a valid order of a court of competent jurisdiction. There was no need to resolve whether the English Court had jurisdiction to make the order. Under s 8 of the Cross-border Act, the Court had a discretion to assist the joint trustees in the administration of the English bankruptcy. The Court exercised that discretion in favour of giving relief to the joint trustees. It ordered that an independent solicitor be appointed to review files held by Steindle Williams Legal Ltd and to report to the Court. The purpose of the report is to identify documents or other information in respect of which the joint trustees can waive privilege, those in respect of which they cannot waive privilege, and those in respect of which disputes may arise. For those documents (or other information) in respect of which disputes might arise, the independent solicitor was asked to make recommendations for dispute resolution. The Court’s orders will remain in force until Mr Richards’ application to annul his bankruptcy is resolved. If the bankruptcy is annulled, Mr Richards has leave to apply to rescind the Court’s orders, subject to questions of costs that remain in Court involving either the independent solicitor or Steindle Williams Legal Ltd.

Orders