Norris Ward McKinnon v Kaye - [2016] NZHC 3089

IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY

CIV-2016-419-193 [2016] NZHC 3089

IN THE MATTER of the Insolvency Act 2006

AND IN THE MATTER

of the bankruptcy of Anthony Pratt Kaye

BETWEEN

NORRIS WARD MCKINNON Judgment Creditor

AND

ANTHONY PRATT KAYE Judgment Debtor

CIV-2016-419-194

IN THE MATTER of the bankruptcy of Morva Kaye

BETWEEN NORRIS WARD MCKINNON Judgment Creditor

ANDMORVA KAYE Judgment Debtor

Hearing: 1 December 2016

Appearances:

Mr Beresford for Judgment Creditor
Mr and Mrs Kaye in person

Judgment:

16 December 2016

JUDGMENT OF ASSOCIATE JUDGE J P DOOGUE

This judgment was delivered by me on
16.12.16 at 3.30 pm, pursuant to

Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date……………

NORRIS WARD MCKINNON v KAYE & ANOR [2016] NZHC 3089 [16 December 2016]

[1] Mr and Mrs Kaye were adjudicated bankrupt 3 October 2016. They now seek an order annulling their adjudication.

[2] The following statement of the background is taken from the submissions which Mr Beresford filed on behalf of the judgment creditor and which accurately summarise matters.

2.1. …. Mr & Mrs Kaye were unsuccessful in litigation against NWM.
As a result the High Court awarded NWM costs of $104,232.93, and the Court of Appeal awarded NWM costs of $14,814, against Mr & Mrs Kaye. These Court ordered costs remain unpaid.

2.2 NWM served bankruptcy notices on Mr & Mrs Kaye on 6 and 9 July
2016 respectively. Mr & Mrs Kaye failed to comply with the bankruptcy notices. NWM then (on 27 July 2016) filed applications
to have Mr & Mrs Kaye adjudicated bankrupt. The applications
record Monday 3 October 2016 as the date for the hearing of the bankruptcy applications.

2.3On around 2 August 2016, Mr & Mrs Kaye filed interlocutory applications on notice which sought a stay of the costs ordered by the High Court pending the Kayes’ application for leave to appeal to the Supreme Court. Mr & Mrs Kayes’ own notices state that they will each apply to the Court for a stay of proceedings on “3 October
2016 at 10:00 am”.

2.4NWM then served the bankruptcy applications and summonses on Mr & Mrs Kaye. The applications, summonses and affidavits of service are exhibited to the affidavit of Hannah Jones (exhibits C to J). The evidence is clear that the hearing date was properly brought to the notice of Mr & Mrs Kaye.

2.5However, Mr & Mrs Kaye failed to appear on 3 October 2016 and were duly adjudicated bankrupt.

2.6 On 18 October 2016, Mr & Mrs Kaye filed the current applications.
Mr Kaye says in his affidavit in support that “he misread the date for
hearing of the judgment creditor’s application as 30 October instead of 3 October 2016”. Mr Kaye also claims that the “interposition of alpha-numeric symbols is a recognised phenomenon.” Mrs Kaye says in her affidavit in support that she was working long hours and she asked Mr Kaye to respond. It is submitted that nothing in the evidence of Mr & Mrs…

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: [2016] NZHC 3089
Decision Date: 16 December 2016

CaseChat Overview and Summary

The case involves Mr and Mrs Kaye, who were adjudicated bankrupt on 3 October 2016, and their subsequent application to annul the adjudication. The Kayes were unsuccessful in litigation against Norris Ward McKinnon, resulting in unpaid costs of $119,000. The Kayes claim they misread the hearing date as 30 October instead of 3 October and seek annulment of their adjudication on this basis. The Kayes also argue that the court should not have adjudicated them bankrupt due to personal considerations, including Mrs Kaye's employment status and health issues. The court examines whether the Kayes took reasonable steps to ascertain the true hearing date and whether the court should exercise its discretion to annul the adjudication. The court finds that the Kayes did not establish that they believed the hearing would take place on 30 October or that they took reasonable steps to protect their interests. The court concludes that the Kayes cannot contend that the bankruptcy orders should be annulled on the basis of their mistake regarding the hearing date. The court also considers whether the court should exercise its discretion to annul the adjudication under s 309 of the Insolvency Act 2006. The court finds that the Kayes' arguments are without merit and that the usual outcome in such circumstances is an order of adjudication. The court concludes that the Kayes' application for annulment should be dismissed, except in the case of Mrs Kaye, whose adjudication is annulled due to her personal circumstances. The court orders that the Kayes' stay application should be dismissed and that costs are to lie where they fall.

Orders