Moxham Milk Limited v Clark - [2022] NZHC 2729

IN THE HIGH COURT OF NEW ZEALAND ROTORUA REGISTRY

I TE KŌTI MATUA O AOTEAROA

TE ROTORUA-NUI-A-KAHUMATAMOMOE ROHE

CIV-2021-463-86

[2022] NZHC 2729

BETWEEN
MOXHAM MILK LIMITED

Plaintiff

AND

STEPHEN GEORGE GIBSON CLARK

Defendant

Hearing: 24 August 2022

Appearances:

Glenn Mason for the Plaintiff Defendant is self-represented

Judgment:

20 October 2022

Reissued:

21 October 2022

JUDGMENT OF ASSOCIATE JUDGE C B TAYLOR

[Adjudicating defendant bankrupt]

This judgment was delivered by me on 20 October 2022 at 3:00pm
pursuant to Rule 11.5 of the High Court Rules 2016

This judgment is re-issued on 21 October 2022 at 3:00pm
[with amendments to paragraph [39]] pursuant to r 11.10 of the High Court Rules 2016

………………………….
Registrar/Deputy Registrar

Solicitors/Counsel:
Fenella Devlin, Palmerston North, for the Plaintiff
Copy for:
Glenn Mason, Barrister, Palmerston North, for the Plaintiff Stephen George Gibson Clark (the Defendant)
District Court Judge Stephanie B Edwards, District Court, Palmerston North

MOXHAM MILK LIMITED v CLARK [2022] NZHC 2729 [20 October 2022]

Introduction

[1] Moxham Milk Ltd (Moxham) seeks that Mr Stephen Clark be adjudicated bankrupt.

Background

[2] This adjudication application relates to a debt deriving from a judgment of the District Court at Levin of 14 December 2020.1 The debt owed is said to be $34,667.31, comprising the order made in the District Court, subsequent costs of $1,014 relating to a charging order over land and $50 for the cost of the certificate of judgment.

[3] Moxham served a bankruptcy notice dated 16 November 2021 and the certificate of judgment on Mr Clark on 22 December 2021. The last day for compliance with the bankruptcy notice was 12 January 2022. Mr Clark did not comply with the bankruptcy notice or apply to set it aside.

[4] Moxham made the present adjudication application on 16 March 2022, Mr Clark’s act of bankruptcy (the noncompliance with the bankruptcy notice) being within three months of that date.

[5] The background facts to the District Court decision are that Moxham mistakenly paid a sum of $26,509.80 into Mr Clark’s bank account on 18 June 2018. It had intended to pay the sum into the bank account of Zenith Ltd in satisfaction of an invoice for fertiliser. Moxham was unsuccessful in its attempts to reverse the payment and sought judgment on the basis it did not owe Mr Clark any money and he was not lawfully entitled to retain the funds. Judge Edwards was satisfied Mr Clark had no defence to Moxham’s claim. The Judge gave summary judgment to Moxham in the sum of $26,509.80, together with interest, schedule costs and disbursements.2

1 Moxham Milk Ltd v Clark [2020] NZDC 24751.
2 At [16].

Creditor’s application for adjudication order

[6]Moxham seeks orders adjudicating Mr Clark bankrupt and as to costs.3

[7]The grounds on which the orders are sought are:4

(a)the debtor has, for the greater part of the past 6 months, resided at 69 Paparoa Road, RD 2, Opotiki; and

(b)the debtor owes the creditor $34,667.31 following a final judgment or final order made…

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: [2022] NZHC 2729
Decision Date: 20 October 2022

CaseChat Overview and Summary

Moxham Milk Ltd sought adjudication of Mr Stephen Clark as bankrupt based on a District Court judgment in favour of Moxham. The District Court had ruled that Mr Clark was not lawfully entitled to retain a sum of money mistakenly paid into his account by Moxham. The key issue was whether Mr Clark should be held personally liable for the repayment of the mistaken payment. The Court found that Mr Clark could not rely on the defence of being an agent for EcoFarm Aotearoa Ltd because the payment was not made to him as an agent and he had notice of the mistake when the funds were received. Additionally, the Court held that the ultimate control of the account into which the funds were mistakenly paid did not relieve Mr Clark of his personal responsibility for repaying the funds. The Court also found that there was insufficient grounds to look behind the District Court judgment, which had been a trial on the merits and was not appealed. The Court ordered that Mr Clark be adjudicated bankrupt, emphasising the importance of the commercial community being assured of the recoverability of money paid under a fundamental mistake.

Orders