Michael Wilson & Partners Limited v Sinclair - [2020] NZHC 2546

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

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

CIV-2020-485-157 CIV-2020-485-158 CIV-2020-485-159 CIV-2020-485-160

[2020] NZHC 2546

UNDER the Insolvency Act 2006

IN THE MATTER

of bankruptcy proceeding

BETWEEN

MICHAEL WILSON & PARTNERS LIMITED

Judgment Creditor/Respondent

AND

THOMAS IAN SINCLAIR

Judgment Debtor/Applicant

Hearing: 15 September 2020

Appearances:

K Sullivan for judgment creditor/respondent J Dallas for judgment debtor/applicant

Judgment:

29 September 2020

Reissued:

27 October 2020

JUDGMENT OF ASSOCIATE JUDGE JOHNSTON

[1] The judgment creditor, Michael Wilson & Partners Ltd, secured four (costs) judgments against the judgment debtor, Mr Thomas Sinclair, in foreign jurisdictions. These have now been registered as judgments here. At first instance, the company’s application to this Court for registration was declined.1 It appealed and this Court’s judgment was overturned by the Court of Appeal.2

1 Michael Wilson & Parties Ltd v Sinclair [2016] NZHC 835.
2 Michael Wilson & Parties Ltd v Sinclair [2016] NZCA 376; (2016) 23 PKNZ 692.

MICHAEL WILSON & PARTNERS LIMITED v SINCLAIR [2020] NZHC 2546 [29 September 2020]

[2] Although the judgments were registered and thus became enforceable in this country some time ago, Michael Wilson Partners has only recently served bankruptcy notices pursuant to s 29 of the Insolvency Act 2006. This follows other enforcement processes to which I will refer later in this judgment. In any event, Mr Sinclair applied for an order setting those bankruptcy notices aside. In a judgment dated 24 July 2020 I dismissed that application. Michael Wilson & Partners then commenced these (four) proceedings for orders adjudicating Mr Sinclair bankrupt on the basis of his failure to comply with the terms of the bankruptcy notices.

[3] Mr Sinclair has appealed from my judgment to the Court of Appeal, and now seeks an order staying Michael Wilson & Partners’ applications, essentially on the ground that they should await the outcome of his appeal.

[4] Although Mr Sinclair’s application dated 28 July 2020 refers only to r 20.10 of the High Court Rules 2016, the case was argued on his behalf by Mr Dallas — without objection from Mr Sullivan — on the basis that it was made pursuant to that rule or s 38 of the Insolvency Act, under which the Court has jurisdiction to halt adjudication proceedings.

[5]Rule 20.10 provides:

20.10 Stay of proceedings

(1)An appeal does not operate as a stay—

(a)of the proceedings appealed against; or

(b)of enforcement of any judgment or order appealed against.

(2)Despite subclause (1), the decision-maker or the court may, on application, do any 1 or more of the following pending determination of an appeal:

(a)order a stay of proceedings in relation to the decision appealed against:

(b)order a stay of enforcement of any judgment or order appealed against:

(c)grant any interim relief.

(3)An order made or relief granted under subclause (2) may—

(a)relate to enforcement of the whole of a judgment or order or to a particular form of enforcement:

(b)be subject to any conditions for the giving of…

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 Michael Wilson & Partners Limited v Sinclair

Details

AGLC: Michael Wilson & Partners Limited v Sinclair [2020] NZHC 2546
Case: [2020] NZHC 2546
Decision Date: 29 September 2020

CaseChat Overview and Summary

The case of Michael Wilson & Partners Limited v Sinclair involved the judgment debtor, Mr Thomas Sinclair, appealing against the Associate Judge's refusal to stay the judgment creditor's application for bankruptcy adjudication. Michael Wilson & Partners Limited had obtained four judgments against Mr Sinclair in foreign jurisdictions, which were registered in New Zealand. The company served bankruptcy notices pursuant to s 29 of the Insolvency Act 2006, leading to Mr Sinclair's application for an order setting those notices aside. The court had previously dismissed Mr Sinclair's application, and Michael Wilson & Partners then commenced proceedings to adjudicate Mr Sinclair bankrupt.

The legal issues before the court were whether the court should stay the adjudication proceedings pending the outcome of Mr Sinclair's appeal and, if so, under which legal provision. The court considered the history of the litigation, the merits of the appeal, the progress of the appeal, the consequences for both parties of making or refusing the order, and any known consequences for third parties. The court also took into account the need to bring the litigation to a conclusion.

The court decided to stay the adjudication proceedings under s 38 of the Insolvency Act 2007. The court found that the most important considerations were the principle that Michael Wilson & Partners should not be prevented from pursuing enforcement proceedings except for very good reason, the history of the litigation, and the fact that the appeal's prospects of success were remote. The court made an order halting Michael Wilson & Partners' applications until Mr Sinclair's appeal is disposed of in the Court of Appeal. The order is conditional upon Mr Sinclair taking all available steps to prosecute his appeal with expedition. The court also granted leave to Michael Wilson & Partners to return to the court to review the position if Mr Sinclair does not comply with the condition. The court reserved costs and expected counsel to resolve them without further reference back to the court.

Orders