Malley & Co v Burgess - [2017] NZHC 950

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

CIV-2016-409-000439 [2017] NZHC 950

IN THE MATTER of the Insolvency Act 2006

AND

IN THE MATTER

the bankruptcy of GARY OWEN BURGESS

BETWEEN

MALLEY & CO Judgment Creditor

AND

GARY OWEN BURGESS Judgment Debtor

Hearing:
2 May 2017

Additional submissions (in writing) 11 May 2017

Appearances:

A J Gaborieau for Judgment Creditor
G O Burgess (Judgment Debtor) in person

Judgment:

12 May 2017

JUDGMENT OF ASSOCIATE JUDGE OSBORNE [on adjudication application]

[1] Malley & Co apply for Mr Burgess’s adjudication in bankruptcy stemming from Mr Burgess’s failure to comply with a bankruptcy notice for payment of a judgment debt.

[2] Mr Burgess’s opposition to the application raises issues as to whether –

(a) the application was filed before an act of bankruptcy occurred and is therefore a nullity;

(b)Mr Burgess has a triable counterclaim which equals or exceeds the judgment debt;

MALLEY & CO v BURGESS [2017] NZHC 950 [12 May 2017]

(c) Malley & Co’s use of the application is vexatious, an abuse of process

or oppressive;

(d) The Court ought, in its discretion, to refuse adjudication having regard

to Mr Burgess’s pending appeal concerning his counterclaim.

Factual background

[3] Relevant to the application is the following chronology:

2 October 2014 High Court dismisses Mr Burgess’s judicial review

application1

27 November 2014 Judicial review costs judgment – High Court orders Mr Burgess to pay Malley & Co costs and disbursements of $43,844.292

5 May 2016 Legal costs/counterclaim judgment – High Court enters judgment for Malley & Co on its legal costs claim and on Mr Burgess’s counterclaim3

30 May 2016 Mr Burgess’s notice of appeal from legal

costs/counterclaim judgment

20 June 2016 Effective date of service of Malley & Co’s bankruptcy

notice upon Mr Burgess

30 June 2016 Mr Burgess files application to set aside bankruptcy notice

5 December 2016 High Court dismisses Mr Burgess’s setting aside application4

1      Burgess v Tait [2014] NZHC 2408.
2      Malley & Co v Burgess [2014] NZHC 2981.
3      Malley & Co v Burgess [2016] NZHC 907.
4      Malley & Co v Burgess [2016] NZHC 2920.

16 December 2016 Malley & Co files application for adjudication order

25 July 2017 Scheduled Court of Appeal hearing of Mr Burgess’s

appeal from legal costs/counterclaim judgment.

The pleaded date of the act of bankruptcy

[4] Malley & Co, in its application, asserted that Mr Burgess committed an available act of bankruptcy on 4 July 2016, being 10 working days from 20 June
2016 (the agreed effective date of service of the bankruptcy notice).

[5] Mr Burgess’s note of opposition identified the fact that 4 July 2016 was more than three months before the date of the filing of the adjudication application, a circumstance which would under s 13(b) Insolvency Act 2006 invalidate the application.

[6] The date identified by Malley & Co was clearly incorrect. In her synopsis, Ms Gaborieau invoked the provisions of s 418 Insolvency Act to have the Court correct…

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 Malley & Co v Burgess

Details

AGLC: Malley & Co v Burgess [2017] NZHC 950
Case: [2017] NZHC 950
Decision Date: 12 May 2017

CaseChat Overview and Summary

Malley & Co is seeking to have Gary Burgess, who owes a judgment debt of $43,844.29, adjudicated bankrupt. Burgess opposes the application on a number of grounds. The court was required to decide firstly whether the application was filed before an act of bankruptcy occurred and was therefore a nullity. Secondly, it had to consider whether Burgess had a triable counterclaim which equals or exceeds the judgment debt. Thirdly, the court had to determine whether Malley & Co’s use of the application was vexatious, an abuse of process or oppressive. Fourthly, the court had to decide whether, in its discretion, it ought to refuse adjudication having regard to Burgess’s pending appeal concerning his counterclaim. The court found that the application was valid and that Burgess’s counterclaim was not triable. It decided that the application was not vexatious, an abuse of process or oppressive. It found, however, that in the exercise of its discretion, it was appropriate to halt the application until the outcome of Burgess’s appeal, with conditions attached to ensure that Malley & Co could obtain an adjudication order if Burgess was unsuccessful on appeal. The court ordered that the application for adjudication was halted until the outcome of Burgess’s appeal. The halt would last until the delivery of the Court of Appeal’s judgment in CA 251/2016. In the event Burgess’s appeal in CA 251/2016 was wholly unsuccessful, the Deputy Registrar was to set this proceeding down before the court for the making of an order of adjudication. In the event Burgess’s appeal in CA 251/2016 was successful, the Deputy Registrar was to allocate a case management conference by telephone on the first available date after notification of the appeal outcome.

Orders