McCready v Green Cabs Limited - [2013] NZHC 2594

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

CIV 2013-485-1370
[2013] NZHC 2594

UNDER the Insolvency Act 2006

IN THE MATTER

of the bankruptcy of

GRAHAM EDWARD MCCREADY
Judgment Debtor

AND

GREEN CABS LIMITED

Judgment Creditor

Hearing:

2 October 2013

Counsel:

Judgment Debtor in Person

G D Pearson for Judgment Creditor

Judgment:

4 October 2013

REASONS FOR JUDGMENT OF RONALD YOUNG J

Introduction

[1] Green Cabs and Callum Brown have a judgment debt against Mr McCready for $10,230.80. Mr McCready has not paid the debt. And so the Judgment Creditor sought to bankrupt Mr McCready.

[2] Mr McCready opposes any bankruptcy order. He says that it is just and equitable that no order of adjudication be made or that there are other reasons why an order of adjudication should not be made.[1] Mr McCready says that he has a realistic plan to pay off both the Judgment Creditor’s debt and his other debts through a Summary Instalment Order that he has applied to The Trustee and Insolvency Service. No such order has currently been made. It is opposed by the
Judgment Creditor.

MCCREADY v GREEN CABS [2013] NZHC 2594 [4 October 2013]

[1] Insolvency Act 2006, s 37(c) and (d).

[3] The Judgment Creditor says that I should make an adjudication order. Mr McCready’s arrangements are inadequate and unreliable and will not result in a significant payment to the Judgment Creditor.

[4] After hearing submissions from Mr McCready and counsel for the Judgment Creditor I made an order for adjudication of Mr McCready on 2 October 2013. I advised Mr McCready that I would in due course give my reasons for rejecting his invitation for me to invoke s 37 of the Insolvency Act.[2] I now do so.

[2] [Give reference].

[5] Significant material was placed before the Court by Mr McCready which was broadly irrelevant. I do not need now identify that material.

[6] With Mr McCready’s agreement the discussion with him focussed primarily on his application for Summary Instalment Order and whether his plans to supplement that order were realistic and could be relied upon.

[7] Before I consider those matters I deal with the claim by the Judgment Creditor that Mr McCready’s debts exceeded $40,000 and were, therefore, outside of the jurisdiction to make a Summary Instalment Order.[3]

[3] [Give reference].

[8] My conclusion is that it is not possible to be certain that Mr McCready’s debts are more than $40,000 although it is possible they are. I proceed, therefore, on the basis that a Summary Instalment Order could be made.

Mr McCready’s case

[9] The essence of Mr McCready’s submission is, therefore, that he has made a realistic offer to pay his debts through the Summary Instalment Order. Although the initial payments under the order might be small he believes that he can increase payments so that his debts are fully paid after a period of five years. This, he says, is a preferable course to bankruptcy where the creditors may…

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: [2013] NZHC 2594
Decision Date: 4 October 2013

CaseChat Overview and Summary

In the High Court of New Zealand, Wellington Registry, the case of McCready v Green Cabs Limited was heard by Ronald Young J, concerning the bankruptcy of Graham Edward McCready, who owed Green Cabs Limited a judgment debt of $10,230.80. McCready opposed the bankruptcy order, arguing that it was just and equitable that no order of adjudication be made, or that there were other reasons why an order should not be made. McCready claimed that he had a realistic plan to pay off both the judgment creditor's debt and his other debts through a Summary Instalment Order, which was opposed by Green Cabs Limited.

The primary legal issue the court needed to decide was whether it was just and equitable to make an order of adjudication of bankruptcy against Mr McCready. The court had to consider the reliability of Mr McCready's repayment plan and whether there were other reasons to not make a bankruptcy order. The court also needed to determine whether Mr McCready's debts exceeded $40,000, as this would be outside the jurisdiction to make a Summary Instalment Order.

Ronald Young J rejected Mr McCready's invitation to invoke section 37 of the Insolvency Act. The court found that Mr McCready's repayment plan was speculative and unreliable, and that he had seriously overestimated his capacity to make further payments. The court was not satisfied that it would be just and equitable for the court not to make an order of adjudication. Furthermore, the court found that there was little hope that Mr McCready would receive a tax refund or that the Legal Services Agency would write off its debt to Mr McCready. The court also noted Mr McCready's previous bankruptcy and convictions involving tax fraud and blackmail, as well as his exposure to other liabilities.

In light of these factors, the court made an order adjudicating Mr McCready bankrupt on 2 October 2013. The court found that Mr McCready's proposal involved a modest payment and that there were reasons to be concerned about his reliability in keeping to any arrangement. The court was not satisfied that Mr McCready's repayment plan was realistic or reliable, and that there were other reasons to not make a bankruptcy order.

Orders