Muollo v Garnham - [2017] NZHC 622

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

CIV-2015-485-834 [2017] NZHC 622

IN THE MATTER OF THE INSOLVENCY ACT 2006

IN THE MATTER OF

BANKRUPTCY PROCEEDINGS

BETWEEN

PAULA MUOLLO Judgment creditor

AND

MICHAEL ROBERT GARNHAM Judgment debtor

Hearing: 2 March 2017

Appearances:

Q S Haines for judgment creditor
J W Upson for judgment debtor

Judgment:

3 April 2017

JUDGMENT OF CULL J

Introduction

[1] This case concerns an application by the judgment debtor, Mr Garnham, to review Associate Judge Smith’s decision on 18 October 2016 to substitute Ms Muollo as the judgment creditor in bankruptcy proceedings, which were commenced by the Commissioner of Inland Revenue (the Commissioner).

[2] Mr Garnham seeks a review of the decision, claiming that the Associate

Judge lacked the jurisdiction to substitute Ms Muollo as a qualifying creditor of

Mr Garnham’s, under s 44 of the Insolvency Act 2006 (the Act).

MUOLLO v GARNHAM [2017] NZHC 622 [3 April 2017]

Factual Background

[3] On 23 December 2015, the Commissioner applied to adjudicate Mr Garnham bankrupt. Following the first call on 5 April 2016, the proceeding was adjourned to
17 May 2016, to enable the parties to negotiate settlement.

[4] On 16 May 2016, Ms Muollo filed a notice of intention to support the Commissioner’s application to adjudicate Mr Garnham bankrupt. Her notice of intention to support is not in a form expressly contemplated by either the Act or the High Court Rules 2016.

[5] The notice of intention, also intituled as “Appearance in support of application for adjudication in bankruptcy of the judgment debtor”,1 consisted of three paragraphs. They were:

(1)PAULA MUOLLO of Wellington, Real Estate Agent, intends to appear at the hearing of this proceeding.

(2)PAULA MUOLLO supports the application for adjudicating the defendant bankrupt.

(3) PAULA MUOLLO is a creditor of the judgment debtor of the sum of
$300,000.00.

[6] The matter was called on 17 May 2006 and directions were made for a timetable to a defended hearing of the Commissioner’s application, which was to be heard on 30 June 2016.

[7] There was a further adjournment of the proceeding to 15 August 2016. On

12 August 2016, the Commissioner and Mr Garnham jointly advised the Court that they had settled his indebtedness to the Commissioner. The 15 August 2016 fixture was vacated and on 21 September 2016, the Commissioner filed a notice of discontinuance, seeking leave to withdraw from the proceeding, pursuant to s 15 of the Act.

[8] On 26 September 2016, counsel for Ms Muollo filed a memorandum seeking substitution of the Commissioner, with Ms Muollo as judgment creditor and

1 This was the heading on the second page of the notice.

requested the matter to be dealt with on the papers. No notice was given to Mr Garnham. The memorandum sought substitution under s 44 of the Act, on the basis that Mr Garnham owed Ms Muollo a sum greater than $1000 or more, being the threshold amount under the Act.

[9] On 3 October 2016,…

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 Muollo v Garnham

Details

AGLC: Muollo v Garnham [2017] NZHC 622
Case: [2017] NZHC 622
Decision Date: 3 April 2017

CaseChat Overview and Summary

Muollo v Garnham was a proceeding in the High Court of New Zealand, which concerned an application by Michael Robert Garnham, the judgment debtor, to review an Associate Judge's decision to substitute Paula Muollo as the judgment creditor in bankruptcy proceedings. The Court was required to decide if it had jurisdiction to review the Associate Judge's decision, whether the decision was made in chambers or open court, and whether Ms Muollo's debt was a qualifying debt under the Insolvency Act 2006. The Court found that it had jurisdiction to review the Associate Judge's decision as it was made in chambers and on an interlocutory application. The Court also found that Ms Muollo had no standing as a creditor to apply for adjudication, as she did not have an enforceable debt against Mr Garnham. Consequently, the Court quashed the Associate Judge's decision to substitute Ms Muollo as a creditor and ordered costs for the judgment debtor on a 2B basis.

Orders