McLeish v Terminus Restaurant and Bar Limited
[2016] NZHC 32
•28 January 2016
IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY
CIV-2013-409-001468 [2016] NZHC 32
BETWEEN GORDON JAMES MCLEISH
Debtor
AND
TERMINUS RESTAURANT AND BAR LIMITED
Creditor
CIV-2013-409-001469
BETWEEN JEANNE HELEN MCLEISH Debtor
ANDTERMINUS RESTAURANT AND BAR LIMITED
Creditor
Hearing: 28 January 2016 Appearances:
J H McLeish (Bankrupt) in person
(G J McLeish excused from attendance)Judgment:
28 January 2016
ORAL JUDGMENT OF ASSOCIATE JUDGE OSBORNE
[1] Jeanne Helen McLeish and Gordon James McLeish were adjudicated bankrupt on 13 February 2014.
[2] They now apply for orders that their adjudications be annulled. The grounds on which they seek such orders are that their debts have been fully paid or satisfied and that the Official Assignee’s costs incurred in the bankruptcies are covered by
funds now held by the Assignee.
MCLEISH v TERMINUS RESTAURANT AND BAR LIMITED [2016] NZHC 32 [28 January 2016]
[3] Section 309(1)(b) of the Insolvency Act 2006 empowers the Court on the application of the Assignee or any person interested to annul an adjudication if the Court is satisfied that the bankrupt’s debts have been fully paid or satisfied and that the Assignee’s fees and costs incurred in the bankruptcy have been paid.
[4] The evidence filed by the bankrupts establishes the factual requirements for an order of annulment. The evidence indicates that the bankrupts had at the time of their adjudications only two creditors, namely Terminus Restaurant and Bar Limited and ASB Bank Limited.
[5] Although the Assignee was unable to identify any realisable assets in the estates of the bankrupts, a relation of theirs was prepared to fund a substantial payment for the benefit of creditors and to cover the Assignee’s costs. The funding was sufficient to fully discharge the debt to ASB, to fully meet the Assignee’s costs and fees, and to pay the costs and disbursements awarded to Terminus as petitioning creditor.
[6] The balance enabled a proposal to be put to Terminus. The proposal involved Terminus accepting a payment equivalent to approximately 50 cents in the dollar of the bankrupts’ debt. Terminus accepted the proposal and has since amended its proof of debts so that the dividends to be paid represent 100 per cent of the proved claims.
[7] The bankrupts’ relation has arranged for the required sum, which is
$48,067.47, to be paid to the Assignee who has dealt with the money in anticipation of annulment.
[8] The Assignee has filed her reports in relation to the annulment application. She confirms the factual basis of the application. She has no objection to an annulment being granted. The Assignee’s reports indicate that the agreed payments have been made. She holds funds sufficient to cover her fees and disbursements of
$4,753.82.
[9] I will briefly discuss satisfaction of the debt. In the case of ASB the debtors’
debts have been “fully paid” as that term appears in s 309 of the Act. In the case of
Terminus the implicit argument of Mr and Mrs McLeish is that the debt has been “satisfied”. In Re Frost, I considered the difference between the concepts appearing in s 309 of full payment and of satisfaction.1 I recognised that the legislation clearly contemplates that a debt may be satisfied other than by being paid in full.2 I adopt that conclusion. I therefore find that the payments to be made by the Assignee on
behalf of Mr and Mrs McLeish’s estate will have fully paid or satisfied their debts.
Orders
[10] I order:
(a) There are orders annulling the adjudication in bankruptcy of Jeanne Helen McLeish and Gordon James McLeish made by this Court on 13 February 2014.
(b) The time of these orders is 10:58 a.m.
(c) The Assignee’s fees and disbursements of $4,753.82 are to be
recovered from the funds received by the Assignee.
Associate Judge Osborne
Solicitors:
Gallaway Cook Allan, Dunedin
Copy to:
J H McLeish, Christchurch
G J McLeish, Christchurch
1 Re Frost HC Nelson CIV-2009-442-160, 6 October 2010
2 At [8].
0
0
0