Memelink v Official Assignee - [2019] NZHC 1357

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE

CIV-2018-485-686

[2019] NZHC 1357

UNDER the Insolvency Act 2006

IN THE MATTER OF

an originating application for annulment

BETWEEN

HARRY MEMELINK

Applicant

AND

OFFICIAL ASSIGNEE

Respondent

Hearing: 5 and 6 June 2019

Appearances:

Mr H Memelink (in person) Applicant P Chisnall for Respondent

D G Dewar and A O’Connor for Supporting Creditors (Body Corporate 378945, Body Corporate 81012, Geoffrey Raymond Fawcet and Gambitsis Crombie Ltd)

Judgment:

14 June 2019

JUDGMENT OF ASSOCIATE JUDGE LESTER

Introduction

[1] Mr Memelink was adjudicated bankrupt following a hearing before Associate Judge Johnston on 28 August 2018. At that hearing Mr Memelink represented himself. There were a number of supporting creditors represented.

[2] On 7 September 2018, Mr Memelink, then represented by counsel, filed an application seeking to annul the adjudication. An amended application was filed

MEMELINK v OFFICIAL ASSIGNEE [2019] NZHC 1357 [14 June 2019].

on 14 October 2018 referring to ss 309(1)(a) and (c) of the Insolvency Act 2006 as the basis of the application. An affidavit in support from Mr Memelink was also filed.

[3] Late on 4 June 2019, by way of a memorandum filed with the Court, Mr Memelink made a further application for adjournment of the hearing scheduled to start on 5 June 2019. A prior application for an adjournment on the grounds that Mr Memelink’s counsel had withdrawn was dismissed by me in a Minute dated 13 May 2019. A further application for adjournment made by memorandum dated 24 May 2019 relied (in part) on Mr Memelink not being represented. Churchman J in a Minute dated 27 May 2019 dismissed the further adjournment application.

[4] Given Mr Memelink’s application of 4 June 2019 for an adjournment was based on the same grounds previously raised by him, the application was declined by me. Mr Memelink said he had located another solicitor who was prepared to act but that solicitor was not able to appear on 5 June 2019. I advised Mr Memelink that his steps to obtain representation had come too late. This matter has been set down for a hearing on 6 March 2019. Other than accommodating Mr Memelink’s request to attend a medical appointment on the first day of the scheduled hearing, I directed that the matter was to proceed on 5 June 2019.

[5] Mr Memelink’s application was opposed by a number of creditors and by the Official Assignee (“the OA”) who has filed two reports.

Section 309(1)(a)

[6]This section provides:

309 Court may annul adjudication

(1)The court may, on the application of the Assignee or any person interested, annul the adjudication if—

(a)the court considers that the bankrupt should not have been adjudicated bankrupt; or …

[7]The power to annul under s 309(1)(a) is exercised sparingly:1

Generally, three categories of annulment applications have succeeded under s 309(1)(a). These are where there was some defect in procedure, abuse of process or where subsequent evidence shows that not all…

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 Memelink v Official Assignee

Details

AGLC: Memelink v Official Assignee [2019] NZHC 1357
Case: [2019] NZHC 1357
Decision Date: 14 June 2019

CaseChat Overview and Summary

Mr Harry Memelink was adjudicated bankrupt by Associate Judge Johnston on 28 August 2018. On 7 September 2018, Mr Memelink filed an application seeking to have the adjudication annulled under ss 309(1)(a) and (c) of the Insolvency Act 2006. The primary issue before the court was whether there were grounds to annul the adjudication of bankruptcy. Mr Memelink contended that the adjudication should be annulled on the basis that there was a conflict of interest on the part of the Associate Judge who presided over the adjudication hearing, that he had been given flawed legal advice against paying the judgment debts on which the adjudication proceedings were based, and that the supporting creditors were using the bankruptcy process for collateral purposes to achieve his bankruptcy. The Official Assignee and supporting creditors opposed the application.

The court found that Mr Memelink did not establish the grounds for annulment relied upon in his application. The court found that the Associate Judge had disclosed his prior involvement with Mr Memelink and that Mr Memelink did not object at the time. The court also found that even if the advice Mr Memelink received was flawed, he had adopted the insolvent debtor's proposal in submissions to the Judge and sought an adjournment for the purposes of allowing the proposal to be advanced. The court found that even if some of the supporting creditors were motivated in the manner suggested by Mr Memelink, this was not enough to say that the adjudication order should not have been made given the number of uncontested creditors standing behind the creditor seeking adjudication. The court further found that Mr Memelink had not established the pre-conditions for the court to exercise its discretion under either subsection of s 309 relied upon in his application.

The court dismissed Mr Memelink's application for annulment.

Orders