Official Assignee at Hamilton v Scott - [2013] NZHC 2903

IN THE HIGH COURT OF NEW ZEALAND TAURANGA REGISTRY

CIV-2012-470-815

CIV-2012-470-816 [2013] NZHC 2903

BETWEEN THE OFFICIAL ASSIGNEE AT HAMILTON
Applicant

ANDLEWTYN MICHAEL SCOTT First Respondent

WOOD WALTON TRUSTEES (2010) LIMITED
Second Respondent
ALH TRUSTEE CO LIMITED Third Respondent
WOOD WALTON TRUSTEES (2011) LIMITED
Fourth Respondent
ASB BANK LIMITED Fifth Respondent

Hearing: 29 October 2013

Appearances: S N Cameron for Applicant
L M Scott in person
No appearance by second to fifth respondents

Rulings: 30 October 2013

RULINGS OF LANG J [on pre-trial issues]

THE OFFICIAL ASSIGNEE AT HAMILTON v LEWTYN MICHAEL SCOTT [2013] NZHC 2903 [30 October
2013]

[1] On 29 October 2013 I was scheduled to consider applications by the Official Assignee’ for orders under ss 206 and 207 of the Insolvency Act 2006. Instead, I spent the entire hearing dealing with preliminary issues raised by Mr Scott. For that reason it was not possible to deal with the substantive applications.

[2] In no particular order and with one exception, I now record my rulings in relation to the points that Mr Scott raised. The exception relates to Mr Scott’s application for review of Associate Judge Doogue’s decision on 15 March 2013 granting Mr Gowing leave to withdraw as Mr Scott’s counsel. That application will be the subject of a separate judgment issued at a later date.

Material obtained using ancillary orders

[3] The present proceedings were preceded by another proceeding, in which the Official Assignee sought freezing orders in respect of the assets that are now the subject of the present proceeding (“the freezing order proceeding”). Heath J granted that application in a judgment delivered on 5 October 2012.1 Heath J also made ancillary orders permitting the Official Assignee to obtain a wide range of documentary material.2

[4] Mr Scott argues that the Official Assignee is not entitled in the present proceedings to rely upon material obtained from any source as a result of the ancillary orders made by Heath J. He maintains that the Official Assignee obtained those orders unlawfully, because he failed to advise Heath J of possible defences Mr Scott might have to the application.

[5] Mr Scott says he has now obtained evidence that will enable him to mount a further challenge to an earlier proceeding in which he was ordered to pay costs of more than $400,000.3 This led largely to the indebtedness that resulted in his bankruptcy. Mr Scott also believes that he has viable claims based in fraud and
negligence against virtually all of the lawyers who are his creditors. He considers

1      Official Assignee v Scott HC Tauranga CIV 2012 470 778, 5 October 2002.
2      Ibid, at [36] – [37].
3      Scott v Scott HC Tauranga CIV 2004 470 094 and CIV 2004 470 957, 25 March 2010.

the Official Assignee ought to have disclosed this fact to the Judge who issued the freezing and ancillary orders.

[6] I do not uphold Mr Scott’s argument on this point. The Official Assignee obtained the material in question using orders…

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: [2013] NZHC 2903
Decision Date: 30 October 2013

CaseChat Overview and Summary

The Official Assignee at Hamilton brought proceedings against Lewtyn Michael Scott, with additional parties including various trusts and the ASB Bank Limited. The Official Assignee sought orders under the Insolvency Act 2006, aiming to recover assets and address Scott's bankruptcy. The court was required to address several preliminary issues raised by Scott, including the legality of material obtained under earlier ancillary orders, compliance with procedural obligations, and the Official Assignee's status.

The court first considered Scott's argument that the Official Assignee could not rely on material obtained via earlier ancillary orders. Scott claimed that the Official Assignee failed to inform the judge of potential defences, rendering the orders unlawful. However, the court ruled that since Scott had the opportunity to challenge the orders but did not, the Official Assignee was entitled to use the material. Additionally, the court found that Scott was served with the relevant affidavits, dismissing his claim regarding non-compliance with service rules. The court also determined that the Official Assignee's status was valid despite an error in the Associate Judge's oral judgment, and that Scott's applications for annulment and review of the bankruptcy order were inappropriate in this context.

In conclusion, the court denied Scott's arguments regarding the material obtained, service of affidavits, and the Official Assignee's status. The court scheduled the next hearing for the substantive applications on 4 and 5 November 2013, emphasizing the need for expeditious resolution due to the impending mortgagee sale of a property involved in the proceedings.

Orders