McCormack v Stills - [2024] NZHC 1395

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2023-409-661

[2024] NZHC 1395

IN THE MATTER of the Insolvency Act 2006

IN THE MATTER

of the bankruptcy of ANDREW EDWARD STILLS

BETWEEN

ROBERT JAMES LOUIS McCORMACK and ELIZABETH ROBYN McCORMACK

Judgment Creditors

AND

ANDREW EDWARD STILLS

Judgment Debtor

Hearing: 24 May 2024

Counsel:

H A Evans and S Jung for Judgment Creditors

Judgment Debtor appears in person with C Stokes (McKenzie Friend)

Judgment:

30 May 2024

JUDGMENT OF ASSOCIATE JUDGE PAULSEN

This judgment was delivered by me on 30 May 2024 at 3.00 pm pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar Date:

McCORMACK v STILLS [2024] NZHC 1395 [30 May 2024]

[1] Mr Stills brought an application to sustain a caveat over a property at Little Akaloa which is owned by the judgment creditors (the McCormacks). I dismissed his application in a judgment of 17 August 2023.1 In a further judgment of 14 November 2023 I awarded the McCormacks costs.2

[2] The McCormacks have served a bankruptcy notice upon Mr Stills to enforce their costs judgment. Mr Stills applies to set aside the bankruptcy notice.

[3] While the McCormacks rely on several grounds to oppose Mr Stills’ application, the only ground I need to consider is whether Mr Stills did not comply with the requirements of the bankruptcy notice because his application was not accompanied by a supporting affidavit and is therefore a nullity.

Background

[4] On 14 November 2023 the McCormacks obtained judgment against Mr Stills for costs in the amount of $19,435.60.3

[5] The McCormacks applied to the High Court for a bankruptcy notice to be issued in respect of the judgment. The bankruptcy notice was served upon Mr Stills on 7 December 2023. Mr Stills had until 21 December 2023 to comply with the bankruptcy notice.4

[6] On 21 December 2023 at 4.55 pm Mr Stills emailed to the Court and counsel for the McCormacks an application to set aside the bankruptcy notice. The application was not accompanied by an affidavit.

[7] Mr Stills sought to set aside the bankruptcy notice on the ground that he has a counterclaim, set-off or cross-demand against the McCormacks which exceeds the amount claimed by them under the judgment and which he was not able to put forward in the proceeding in which the McCormacks’ judgment was obtained. Mr Stills says

1      Stills v McCormack [2023] NZHC 2224.
2      Stills v McCormack [2023] NZHC 3200.
3 At [43].
4      Insolvency Act 2006, and High Court Rules 2016, sch 1, form B 2.

the counterclaim, set-off or cross-demand is presently the subject of District Court proceedings between himself and the McCormacks.

[8] At 9.01 pm on 21 December 2023 Mr Stills emailed to the Court and counsel for the McCormacks a copy of a statement of defence which he had filed in the District Court proceedings between himself and the McCormacks.5

[9] At 2.09 pm on 23 December…

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 McCormack v Stills

Details

AGLC: McCormack v Stills [2024] NZHC 1395
Case: [2024] NZHC 1395
Decision Date: 30 May 2024

CaseChat Overview and Summary

McCormack v Stills [2024] NZHC 1395 was heard by Associate Judge Paulsen and concerned an application by Mr Stills to set aside a bankruptcy notice issued by the McCormacks. Mr Stills sought to set aside the bankruptcy notice on the ground that he had a counterclaim, set-off or cross-demand against the McCormacks which exceeded the amount claimed by them under the judgment. The McCormacks opposed Mr Stills’ application on the ground that it was a nullity because it was not accompanied by a supporting affidavit. The central issue before the Court was whether Mr Stills' application complied with the requirements of the bankruptcy notice. The Court found that it did not, as the application was not accompanied by an affidavit, nor was it served on the McCormacks within the prescribed 10 working day period. The Court noted that this is a mandatory requirement under the Insolvency Act 2006 and High Court Rules. The Court dismissed Mr Stills' application and noted that he may still be able to raise his arguments when the Court considers the McCormacks’ application to adjudicate him bankrupt. The Court reserved the issue of costs and invited the parties to file memoranda if they could not agree on how costs should be dealt with.

Orders