Official Assignee in the Bankruptcy of O'Neill v O'Neill

[2012] NZHC 2439

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2012-404-4198 [2012] NZHC 2439

IN THE MATTER OF     the bankruptcy of Julian O'Neill

BETWEEN  THE OFFICIAL ASSIGNEE IN THE BANKRUPTCY OF THE PROPERTY OF J F O'NEILL

Plaintiff

ANDJ F O'NEILL, L M O'NEILL AND ED JOHNSTON & CO TRUSTEES LIMITED AS TRUSTEES OF THE JULIAN O'NEILL FAMILY TRUST

First Defendants

ANDJ F O'NEILL, L M O'NEILL AND ED JOHNSTON & CO TRUSTEES LIMITED AS TRUSTEES OF THE LISA O'NEILL FAMILY TRUST

Second Defendants

ANDL M O'NEILL, PERSONALLY OF PT CHEVALIER

Third Defendant

Hearing:         5 September 2012

Appearances: K Wakelin for Plaintiff

E Krishnan for Defendants

Judgment:      5 September 2012

ORAL JUDGMENT OF ASSOCIATE JUDGE DOOGUE

Solicitors:

Meredith Connell & Connell, P O Box 5275, Auckland – [email protected]

Mr Krishnan, Auckland – [email protected]

THE OFFICIAL ASSIGNEE V O'NEILL & ORS HC AK CIV-2012-404-4198 [5 September 2012]

[1]    The plaintiff sues as the trustee in bankruptcy of Mr O’Neill.   Mr O’Neill’s participation in the property arrangements is relevant in two ways.   First on the transfer of a residential property to two trusts, he became the registered proprietor because he is a trustee of the two trusts.  So the Official Assignee first of all sues to get back the debt that arises from the acknowledgement of debt that the two trusts signed in favour of Mr O’Neill (and his wife).   So far as his status of trustee is concerned, the Official Assignee again in right of Mr O’Neill takes the position that having incurred a liability as a trustee of the trust he seeks to be indemnified against that liability out of the assets in the estate of the trust which he is a trustee of.

[2]    Dealing with a debt that is owed I enter judgment in the sum of $233,000 against the first and second defendants jointly and severally.  Secondly I order that those defendants are to pay interest in the sum of $10,710.98 calculated at the contractual rate from the date of demand down to the present date.  The actual dates are 8 February 2012 to 5 September 2012.

[3]    The plaintiff seeks a declaration in sub paragraph “(c)” of the prayer for relief that the assets of both the trusts and charged in favour of the plaintiff to the extent of the debt together with  interest and costs and  a further declaration the plaintiffs entitled to discharge the indebtedness out of the assets of both trusts.   I make the order sought in paragraph (c) of the statement of claim.   It is apparent that the Official Assignee now representing the bankrupt as trustee of the trusts has the right to seek such an indemnity and the order in subparagraph (c) of the prayer for relief simply refutes that entitlement.  I also make an order in terms of sub-paragraph (d) of the prayer for relief, on the same grounds as those which I have set out thus far.

[4]    There will be an order that the first and second defendants are to pay costs of the  proceeding  on  a  2B  basis  together  with  disbursements  to  be  fixed  by  the

Registrar.

J P Doogue

Associate Judge