Memelink v Official Assignee

[2020] NZHC 2709

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

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

CIV-2018-485-363

[2020] NZHC 2709

UNDER

the Insolvency Act 2006

IN THE MATTER

of the bankruptcy of Harry Memelink

BETWEEN

HARRY MEMELINK

Applicant

AND

THE OFFICIAL ASSIGNEE

Respondent

Hearing:

16 September 2020

Appearances:

D Livingston for applicant

P Chisnall and C Vinnell for respondent No appearance by or for Bruce Mead

C Tennet in person

A O’Connor for Gambitsis Crombie Ltd G Dewar for Body Corporate 68792

L Hui for Lynx Trustees Ltd (in liquidation)

Judgment:

15 October 2020

JUDGMENT OF ASSOCIATE JUDGE JOHNSTON

Introduction

[1]    The applicant, Mr Harry Memelink, applies for orders setting aside determinations of the respondent, the Official Assignee, accepting certain claims by unsecured  creditors  in  his  bankruptcy.  One  of  the  unsecured  creditors  —   Body Corporate BC 68792 — cross-claims for an order increasing the amount of its claim.

MEMELINK v THE OFFICIAL ASSIGNEE [2020] NZHC 2709 [15 October 2020]

[2]    In his notice of application Mr Memelink challenged ten such determinations. However, by the time his application was heard, this had reduced to four. It will be necessary to return to this in dealing with costs.

[3]    In the order in which they were dealt with at the hearing, the impugned determinations concerned claims by the following:

Mr Bruce Mead

$

9,903.50

Mr Chris Tennet

34,528

Gambitsis Crombie Ltd

25,770.93

BC 68792

144,175.71

[4]    The balance of this judgment will be easier to follow if certain matters are dealt with at the outset.

The statutory framework

[5]    The obligations of the Official Assignee in dealing with claims by unsecured creditors against bankrupt estates are dealt with in s 234 of the Insolvency Act which provides:

234     Assignee must examine creditor’s claim form

(1)The Assignee must examine each creditor’s claim form and the grounds of the debt, unless the Assignee considers it likely that no dividend will be paid to creditors.

(2)After examining the claim form, the Assignee must, as soon as practicable, do 1 or more of the following:

(a)admit the claim, in whole or in part:

(b)reject the claim, in whole or in part:

(c)require further evidence in support of the claim.

[6]    There was general agreement between counsel as to the Official Assignee’s responsibilities under that provision. The Official Assignee is obliged to consider creditors’ claim forms and admit or reject the same, in whole or in part, unless she has concluded that there is unlikely to be any funds available to pay unsecured creditors. the Official Assignee may require additional evidence before making a determination.

[7]    The authorities indicate that the onus is on the claimant, and that, whilst the Official Assignee is not obliged to engage in a minute analysis of each claim, before accepting a claim, or any part of a claim, she must be satisfied that there is sufficient supporting evidence.1

[8]    The Official Assignee’s determinations pursuant to s 234 of the Insolvency Act are challengeable pursuant to s 238 which provides:

(1)Court may cancel creditor’s claim

(a)The court may make an order cancelling an admitted creditor’s claim or reducing the amount claimed, if it considers that the claim was improperly admitted.

(b)The court may make the order on the application of the Assignee, the bankrupt, or any creditor.

(c)The court must not make an order under subsection (1) unless the creditor who submitted the claim has been served with the application.

[9]    Applications pursuant to s 238 of the Insolvency Act raise de novo the issue of whether the claim is properly founded, and the Court must determine whether the Official Assignee’s determination and the process by which she reached that determination was reasonable.2 Again, the burden rests on the claimant to satisfy the Court that the claim is adequately supported.

[10]   Where a creditor’s claim is founded, in part or in whole, on a judgment debt, the Official Assignee or the Court, as the case may be, will start from the position that a final judgment of a Court of competent jurisdiction is prima facie not something which should be looked behind, other than except in exceptional circumstances, such as allegations of fraud, collusion and miscarriages of justice.3

Mr Memelink’s bankruptcy

[11]   Unusually, this Court has made two orders adjudicating Mr Memelink bankrupt. The first was made on 28 August 2018. The second on 9 March 2020.

1      Walker v Official Assignee [2014] NZHC 975 at [37].

2      Holdgate v Bloccassa Ltd HC AK CIV-2005-404-002693, 4 July 2008 at [12].

3      See for example Wilkins v Official Assignee [2016] NZHC 1742 [46]-[56].

[12]   The application before the Court is made in the context of the earlier bankruptcy, so that only debts that had accrued as at 28 August 2018 are relevant.

The Official Assignee’s position

[13]   The Official Assignee’s position is that any challenges to determinations must be made to this Court pursuant to s 238 of the Insolvency Act. As Mr Vinnell said during the  course  of  the  hearing,  any  other  approach  on  the  part  of  the Official Assignee would be impractical because it would mean that requests to reconsider determination would overwhelm the Official Assignee’s office.

[14]   In this case, the Official Assignee opposes Mr Memelink’s application. The Official Assignee’s solicitors took primary responsibility for the preparation of the trial bundle, and Mr Chisnall and Mr Vennell filed and served comprehensive submissions on her behalf.

Late affidavit evidence

[15]   On the eve of the hearing, Mr Memelink’s solicitors filed and served an affidavit sworn by Mr Ben Stockbridge who is an accountant and whose affidavit is said to be expert opinion evidence. The Official Assignee and the other parties objected to this affidavit being read. Their objection was essentially that it was filed too late to enable them to consider it, let alone respond.  They also contended that  Mr Stockbridge was purporting to give evidence as to the law which was outside his area of expertise. Mr Livingston submitted that Mr Stockbridge’s evidence could not have come as a surprise to anyone because all it did was put before the Court in affidavit form a letter of advice that was already in the applicant’s bundle of documents.

[16]   I excluded Mr Stockbridge’s affidavit. Although the respondent and the other parties may have seen his letter of advice, Mr Stockbridge’s views having been reduced to affidavit form, they were obliged to deal with them and they were not given a  fair  opportunity  to   do   so.   Additionally,   although   I   have   not   reviewed Mr Stockbridge’s letter of advice carefully, it is obvious that there are real issues

concerning admissibility having regard to the views he expresses as to the legal position.

The impugned claims

[17]   Having dealt with the above matters I turn to the creditors’ claims that are the subject of challenge.

[18]I do so in the order in which they were summarised earlier.

Mead

[19]Mr Mead’s proof of debt was founded on three judgment debts:

(a)The first was a District  Court  judgment  in  proceedings  between  Mr Memelink as plaintiff and Mr Mead as defendant commenced in 2015.4 In that proceeding, Mr Mead sought summary judgment, essentially on the basis that the proper plaintiff in the proceeding was not Mr Memelink but a company by the name of Link Technology (2000) Ltd. In a judgment dated 15 February 2016 Judge Toohey accepted that submission and entered judgment in favour of Mr Mead. He made a costs award which was subsequently quantified at

$3,757.00;

(b)The second judgment was a judgment of Clark J in this Court dated  10 July 2018.5 It followed an application by Mr Memelink for an order staying enforcement of another District Court judgment pending the disposal of his appeal from that judgment in proceedings between    Mr Mead and Mr Memelink in which the former had been successful.6 His application for a stay was  unsuccessful  and  Clark  J  awarded Mr Mead costs in the sum of $5,350.50;

4      Memelink v Mead [2016] NZDC 2369.

5      Memelink v Mead [2018] NZHC 1698.

6      Memelink v Mead [2016] NZHC 1886.

(c)The third judgment debt for $796 in costs was entered in bankruptcy proceedings initiated by Mr Mead in this Court in an attempt to enforce Clark J’s judgment on or about 25 September 2018.

[20]   The Official Assignee’s determination was to accept all three of those judgment debts which total $9,903.50.

[21]   Mr Livingston submitted that the claim in the first District Court proceeding was properly regarded  as  a  claim  by  Link  Technology  (2000)  as  opposed  to  Mr Memelink, and argued that in those circumstances the Official Assignee’s determination in relation to it was wrong. I do not follow that contention. The proper plaintiff in the proceeding was indeed Link Technology (2000), and that is precisely the basis upon which Judge Toohey awarded Mr Mead summary judgment and made a costs award against Mr  Memelink.  It  hardly  appears  to  follow  that  the  Official Assignee should have rejected Mr Mead’s claim in respect of this debt.

[22]   Insofar as Clark J’s  judgment  in  this  Court  is  concerned,  I  understood  Mr Livingston’s contention to be that Clark J erred in her interlocutory judgment. As I  understood  the  argument,  it  was  that  Clark  J’s  costs  award  in  relation  to   Mr Memelink’s unsuccessful application for a stay should be revisited because, ultimately, Mr Memelink was successful in overturning the District Court’s judgment.7 Clark J’s judgment was not the subject of an appeal, and nor was her award of costs reconsidered when the substantive appeal was dealt with. Mr Livingston’s contention ignores the law relating to costs in interlocutory proceedings, which is evident from  r 14.8 of the High Court Rules. Interlocutory proceedings are dealt with discretely and costs awarded in relation to them are not generally revisited after the substantive proceeding has been disposed of.   I see no merit in the contention that because     Mr Memelink was ultimately successful in his substantive appeal that in any way undermines the enforceability of Clark J’s judgment or the Official Assignee’s determination to allow Mr Mead’s claim.

[23]   The Official Assignee’s determination in relation to the third component of Mr Mead’s claim was clearly wrong, as it included debt incurred post-bankruptcy.

7      Memelink v Mead [2016] NZHC 3008.

[24]   In the course of argument Mr Livingston referred me to a judgment debt owed by Mr Mead to Mr Livingston in the sum of $1,834. This arises from a judgment of Associate Judge Christiansen dated 21 February 2017. I accept that it is appropriate to reduce the amount of Mr Mead’s claim on account of this judgment debt.

[25]   For those reasons, I propose to set aside the Official Assignee’s determination on Mr Mead’s proof of debt.

[26]   His claim will be reduced to $7,273.50 (the sum of the first two judgment debts, less the sum of the third and the amount of the judgment debt owed by Mr Mead to Mr Memelink).

Tennet

[27]   Mr Tennet is a Wellington barrister. His proof of debt was based on fees rendered for professional services.  There is no doubt that Mr Memelink engaged   Mr Tennet to carry out legal work for organisations with which he — Mr Memelink

— was closely associated. Nor is there any doubt that Mr Tennet carried out such work. The Court has before it copies of his fee notes addressed to Mr Memelink.

[28]   On Mr Memelink’s behalf Mr Livingston submitted that because some or all of these services were carried out not for Mr Memelink personally but for entities with which he was connected, Mr Tennet’s claim should have been declined. I do not accept that. As already said, there is no doubt that Mr Memelink was personally responsible for engaging Mr Tennet for and on behalf of the entities in question. Mr Tennet’s invoices were addressed to Mr Memelink. There is no evidence of Mr Memelink having objected to this.

[29]   It is said on Mr Memelink’s behalf that he “raised negligence concerns” that would have justified a challenge to these invoices through the Law Society’s complaints service. Mr Memelink may have “raised negligence concerns”, but in the end he elected not to challenge the fee notes. I infer because there was no real merit in his concerns.

[30]   However, as Mr Livingston submits, a significant proportion of Mr Tennet’s fee notes were rendered more than six years prior to 28 August 2020.

[31]   Mr Tennet very fairly and properly accepted this. On his calculations — which I accept — the total amount of his claims which were not beyond the limitation period as at the date of Mr Memelink’s bankruptcy amount to $11,952.

[32]   In my view, the Official Assignee was entitled to and should have disallowed Mr Tennet’s claim for any amount above that. Accordingly, I propose to reduce the amount of Mr Tennet’s claim in the bankruptcy to $11,952.

Gambitsis Crombie

[33]   Gambitsis Crombie is an accounting firm and its proof of debt was based on its fees for accounting services provided between 7 October 2013 and 6 November 2014. A copy of the firm’s invoice dated 6 November 2014 is included in the evidence.

[34]   Mr Memelink’s contention is that he did not authorise the firm to incur the expenses claimed. There is no evidence of Mr Memelink having taken issue with the invoice. However, Mr Memelink says that he did not receive the invoice in question for some time. He also says that he does not accept that the firm “worked anywhere near the number of hours stated or attended the number of meetings these invoices purport”. Finally — perhaps rather inconsistently — he says that the firm and he entered into arrangements whereby any costs the firm incurred would be set-off against work carried out by him repairing furniture for the firm.

[35]   In my assessment, Mr Memelink’s evidence in relation to this claim has the appearance of a series of ex-post facto allegations, none of which are supported in any contemporaneous documentation.

[36]Mr Memelink’s case is contradicted by the evidence of Mrs Gina Gambitsis.

[37]   Mrs Gambitsis’ husband, Mr Anthony Gambitsis, is the or a principal of Gambitsis Crombie. She is the firm’s practice manager, a position that she has held for several years. Her evidence is that she prepared the firm’s proof of debt and that

it reflects the sum owing to the firm in respect of work undertaken on Mr Memelink’s instructions and covered by the invoice before the Court. To the suggestion that there was some sort of contra arrangement covering the firm’s fees Mrs Gambitsis has this to say:

In paragraph 7(b) of his September affidavit, Mr Memelink claims to have done work for us. In about 2014 he agreed to repair the top of a chest of drawers which had a crack in it and to strengthen four of our dining room chairs which had become “wobbly”. It was never suggested this work was to be done in lieu of fees, and this was not raised by him until his affidavit.

[38]   Moreover, in response to Mr Memelink’s assertion that he had never received the firm’s invoice or heard about its claims, Mrs Gambitsis says that she personally delivered a letter to him dated 29 November 2019 effectively demanding payment of the outstanding costs. A copy of this letter is in evidence.

[39]   I regard Mr Memelink’s assertions in relation to this claim as incredible. I accept what Mrs Gambitsis says.

[40]   I  propose  to  dismiss  the  application  to  overturn  or   modify   the   Official Assignee’s acceptance of the Gambitsis Crombie proof of debt.

Body Corporate 68792

[41]   BC 68792’s claim against Mr Memelink’s estate in bankruptcy is the largest and most complicated. The dispute between the parties has been going on for years. There are aspects which it would be helpful to address at the outset.

[42]   BC 68792 is the body corporate for a block of residential units in Lower Hutt City. There are something like a dozen units in the complex. By 28 August 2018, Mr Memelink was associated with about half of them (unit titles 1, 3, 12, 14, 15 and 16). For years BC 68792 and Mr Memelink have been locked in a no-holds-barred dispute about levies which BC 68792 says are payable to it and Mr Memelink denies are payable.   BC 68792 submitted a proof of debt claiming outstanding levies of

$191,873.60. This figure however included a claim for levies imposed after 28 August 2018. The Official Assignee identified this  and accepted a claim for $144,175.71. Mr Memelink says that BC 68792 is owed nothing.  BC 68792 says that the claim

accepted understated the levies due as at 28 August 2018. As already mentioned, it has cross-claimed seeking an order increasing its claim to $262,451.73.

[43]   Mr Memelink is not and has never been the owner of any of the units in his personal capacity. At all material times the owners have been the trustees of the  Link Trust (No. 1). The trustees have changed from time to time. But, as at 28 August 2018, the trustees were Mr Memelink and Lynx Trustees Ltd, a company that has since had liquidators appointed and is being wound up. The liquidators are Mr Jared Booth and Mr Tony Maginness.

[44]   BC 68792’s claim is therefore against Mr Memelink in his capacity as one of the trustees (it has a corresponding claim against Lynx Trustees as the other trustee owner).

[45]   Mr Livingston accepted that as trustees Mr Memelink and Lynx Trustees were jointly and severally liable for any levies legitimately due in respect of the units owned by them in that capacity.

[46]   It was not suggested by Mr Livingston on behalf of Mr Memelink, or anyone else, that the current status of Mr Memelink as a bankrupt or Lynx Trustees as a company in liquidation should affect the analysis.

[47]   Mr Dewar submitted that, because, as a matter of law, trustees must act unanimously (in the absence of any provision in a trust instrument entitling them to act by majority or on any other basis), the fact that Lynx Trustees, through its liquidator, admits this claim means that it is admitted by both trustees.

[48]   I am not at all convinced that that follows. It seems to me that the correct position as a matter of logic and law must be that precisely because the trustees must act unanimously, absent issues of agency or estoppel, which are not in play here, neither an admission nor a denial of liability by one of them can bind them both. However, I do not perceive that it will be necessary to resolve that issue.

[49]   I propose to address this aspect of the case by determining (subject only to any restraint arising from BC 68792’s cross-claim) what amount if  any was  owed  to BC 68792 by the trustees of the Link Trust (No 1) as at 28 August 2018. That appears to me to be the correct approach because, if there was a debt owed to BC 68792 by the trustees, both Mr Memelink and Lynx Trustees would have been liable for the entire amount, and both would have had rights of indemnity against each other and the assets of the trust (to the extent that any such indemnity would have been of any value).

[50]   Mr Memelink’s application as advanced on his behalf by Mr Livingston proceeds on two bases:

(a)first, that BC 68792 failed to comply with the requirements of the Unit Titles Act 2010 in imposing levies and therefore that many or perhaps all of the levies which make up the claim are unlawful and unenforceable;

(b)second, that a special levy imposed for the purposes of effecting or funding repairs and maintenance to the roof at the complex, and which the trustees paid, was “misappropriated” by BC 68792 and that the trustees have a claim for recovery of the same which can and should be set off against any levies that are payable.

[51]In my judgement, neither of those contentions can succeed.

[52]   The process provided for in s 234 of the Insolvency Act whereby unsecured creditors are obliged to submit claims for assessment by the Official Assignee has already been described. The authorities indicate that this is not a process in which the Official Assignee is charged with carrying out a minute analysis of every aspect of such claims. Rather, he or she must be satisfied on reasonable grounds that the claim is a proper and sustainable one.

[53]   In advancing his submission on Mr Memelink’s behalf in relation to this matter, Mr Livingston began:

The BC 68792 has provided no information to the Official Assignee that it has complied with its UTA obligations. Mr Memelink has identified several material failures by the BC 68792 in respect of its UTA obligations. These include a failure to hold AGMs (a mandatory requirement under s 88 of the UTA) a failure to establish separate bank accounts of the approved UTA funds’ accounts and to pass the relevant special resolutions in respect of these accounts (ss 115–120 of the UTA), a failure to levy only for the expenses set out in s 115(2) of the UTA, a failure to seek court approval to change the administrators’ budget, and a failure to provide records and documents requested under s 206 of the UTA.

[54]   It is clear from this that Mr Memelink — or his advisers — have reviewed the levies struck by BC 68792 down to 28 August 2018 with a view to identifying any basis upon which it might be contended that the legislation or BC 68792’s internal management rules have not been complied with so as to challenge the levies in question.

[55]   In my view, neither the Official Assignee pursuant to s 234 nor the Court in the context of an application pursuant to s 238 are required to examine in minute detail every levy to ensure that it was imposed in compliance with all aspects of the legislation and BC 68792’s internal management rules. It is sufficient for the  Official Assignee or the Court to be satisfied that the Body Corporate had a statutory entitlement and responsibility to levy, has done so and that those levies are prima facie payable.

[56]   Of course any unit title holder is entitled to challenge the lawfulness of levies, but in my view that is something which must be done in a timely way in a separate ordinary proceeding.

[57]   The trustee owners here have had years to do that and have elected not to do so.

[58]   I am satisfied that the material that was before the Official Assignee, and is now before the Court, is adequate to establish that all relevant levies were imposed by BC 68792 and that, subject to timely challenge, the period for which has long since passed, these became payable by the trustees as the owners of the six units in question.

[59]   As to Mr Memelink’s assertion that BC 68792 misappropriated levies paid by the trustees in respect of the repairs to the roof of the complex, any examination of this claim would require the Official Assignee in the context of dealing with a claim pursuant to s 234 of the Insolvency Act to act in an arbitral capacity and determine a series of complex factual and legal issues in order to resolve the claim advanced by Mr Memelink.

[60]   Again, this seems to me to be a matter entirely incapable of being resolved by the Official Assignee in dealing with claims pursuant to s 234 or for that matter the Court dealing with an application under s 238. Mr Memelink’s claim is one that would need to be the subject of a timely claim in separate proceedings.

[61]   It turns out that in fact the trustees — or at least Mr Memelink — did initiate such a proceeding in 2016, a proceeding that, for whatever reason, although still extant, is apparently moribund.8

[62]   I am satisfied that it was appropriate for the Official Assignee to conclude that the special levies rendered pursuant to the legislation and paid by the trustees were properly recovered by the former, and that it would have been inappropriate for the Official Assignee, and would be equally inappropriate for the Court, to entertain a complex claim of the nature Mr Memelink makes in this summary process under the Insolvency Act.

[63]   I propose to dismiss Mr Memelink’s application for an order varying the Official Assignee’s determinations in relation to the claim by BC 68792.

[64]That brings me to BC 68792’s cross-claim.

[65]   I am bound to say that I was not assisted in attempting to deal with BC 68792’s cross-claim by the disparate contentions advanced on behalf of Mr Memelink, the Official Assignee, BC 68792 and Lynx Trustees. In a number of critical respects their analyses were irreconcilable, adopting different starting positions as they did, and focussing on different aspects of the cross-claim.

8      Memelink v Body Corporate 68792 CIV-2016-485-141.

[66]   The first point to deal with is the scope of BC 68792’s cross-claim. In its formal notice of cross-claim BC 68792 contended that the correct amount of its claim against Mr Memelink’s bankrupt estate was $262,451.73, as opposed to the claim accepted by the Official Assignee of $144,175.71.

[67]   In his submissions on BC 68792’s behalf, Mr Dewar sought to go well beyond that, contending that the correct amount of its claim was in fact $341,254.42.

[68]   In my judgment, it is not open to BC 68792 to go beyond its formal notice of cross-claim, especially as no application was made on its behalf for leave to amend the same. Accordingly, I limit my assessment to the claim set out in the formal notice.

[69]   The most helpful, and, in my assessment, definitive analysis of the position as between BC 68792 and the trustees of the Link Trust (No 1) is the affidavit evidence of BC 68792’s Administrator, Mr Gambitsis. In his affidavit, he traces through dealings between BC 68792 and the trustees including some of those that occurred over the period during which the trustees acquired the various units they came to own, in order to determine what if any levies were due as at 28 August 2018.

[70]   No useful purpose would be served by reiterating his evidence in detail here, but it is important to address the key aspects.

[71]   Shortly after Mr Gambitsis’ appointment, and as it became evident that there was a serious dispute between BC 68792 and the trustees as to what if any levies were due, apparently at Mr  Memelink’s  instigation,  or  at  least  with  his  agreement,  Mr Gambitsis engaged Deloitte to carry out an independent analysis of the levies due in respect of the six units in question. Deloitte produced a report dated 8 October 2018, identifying the amount due (as at 28 August 2018 at least) as $144,175.71.

[72]   It was immediately identified that Deloitte had overlooked that two payments to BC 68792 by or on behalf of the trustees in respect of levies totalling $67,383.24 (the payments in question were for $42.379.42 and $25,003.12) had in fact not been received. It is quite clear what happened. The trustees made these two payments by cheque drawn on their bank as the paying bank. BC 68792’s bank as the collecting

bank credited them to its account. The cheques were subsequently dishonoured by the paying bank and the credits were reversed by BC 68792’s bank. But this was not as obvious as it might have been on the face of BC 68792’s bank statements, and was overlooked. Deloitte issued an amended report dated 19 October 2018 accordingly.

[73]   Subsequently, Mr Gambitsis himself on further analysis identified two additional credits that BC 68792 had allowed to the trustees totalling $50,892.78 thereby further increasing the amount of BC 68792’s claim by that amount. In his affidavit he explains why these credits should be reversed. No attempt was made on behalf of Mr Memelink to contend that his analysis was inaccurate. Moreover, his analysis is accepted as being accurate by  the  liquidators  of  the  other  trustee,  Lynx Trustees.

[74]   I am left in no doubt that Mr Gambitsis’ analysis is accurate and I propose therefore to uphold BC 68792’s cross-claim, overturn the Official Assignee’s determination and approve the sum claimed by BC 68792 in that cross-application being $262,451.73.

Summary of conclusions and orders

[75]   Mr Memelink’s application in respect of the claim by Mr Mead is allowed in part. I set aside the Official Assignee’s determination and allow Mr Mead’s claim in the sum of $7,273.50.

[76]   Mr Memelink’s application in respect of the claim by Mr Tennet is allowed in part. I set aside the Official Assignee’s determination and allow Mr Tennet’s claim in the sum of $11,952.00.

[77]   Mr Memelink’s application in respect of the claim by Gambitsis Crombie Ltd is dismissed.

[78]Mr Memelink’s application in respect of the claim by BC 68792 is dismissed.

[79]   BC 68792’s cross-claim is allowed in full. I set aside the Official Assignee’s determination in relation to this claim and allow BC 68792’s claim in the sum of

$262,451.73.

[80]   Two of Mr Memelink’s creditors whose claims were originally the subject of challenges that were not  pursued  seek  costs.  These  are  Mr  Michael  Bott  and BC 378945. They will have their costs on a 2B basis, together with such disbursements as may be allowed by the Registrar.

[81]   Otherwise, I reserve costs, not having heard from counsel on the subject. If counsel are unable to resolve costs, they may file memoranda in the usual way and I will deal with these on the papers.

Associate Judge Johnston

Solicitors:

Livingston & Livingston Ltd, Wellington for applicant Anthony Harper, Christchurch for respondent