Official Assignee v Carrim
[2019] NZHC 1948
•12 August 2019
IN THE HIGH COURT OF NEW ZEALAND INVERCARGILL REGISTRY
I TE KŌTI MATUA O AOTEAROA WAIHŌPAI ROHE
CIV-2019-425-6
[2019] NZHC 1948
BETWEEN THE OFFICIAL ASSIGNEE in Bankruptcy of the property of Abraham Nicolaas van der Walt
Applicant
AND
PENNY LOUISE CARRIM
Respondent
Hearing: 30 July 2019 Appearances:
G E Slevin for the Applicant
R T Chapman for the Respondent
Judgment:
12 August 2019
JUDGMENT OF ASSOCIATE JUDGE LESTER
This judgment was delivered by me on 12 August 2019 at 12.30pm Pursuant to Rule 11.5 of the High Court Rules
Registrar/Deputy Registrar 12 August 2019
THE OFFICIAL ASSIGNEE v CARRIM [2019] NZHC 1948 [12 August 2019]
[1] The applicant seeks judgment under an admission of claim given by the respondent as part of a settlement documented on 18 December 2017. A settlement agreement and a separate admission of claim were executed on that date by the parties.
[2]The settlement agreement provided at cl 2(g):
In the event any payment due to be made by Ms Carrim under this agreement is not made on the date it falls due to be made Ms Carrim will have committed an act of default under this agreement ...
[3]The agreement went on to record under cl 2:
(h)In the event any such default has not been remedied within 5 working days the Assignee may immediately and in any order:
(i)Issue proceedings to enforce the claims made in the statement of claim (the new proceedings)
(j)Obtain judgment and the orders referred to in the Admission of Claim in reliance on it
(k)Apply for costs [in CIV 2017-425-000081].
(l)Recover interest on the judgment in CIV 2016-425-00137 …
[4] The dispute between the parties is whether Ms Carrim has defaulted in her obligations under the settlement agreement.
[5] The settlement agreement was entered into to record how an amount payable under a judgment obtained by the applicant in CIV-2016-425-00137 (“the 2016 proceeding”) would be paid by Ms Carrim and how a further sum accepted as due by Ms Carrim under the admission of claim was also to be paid.
[6] The settlement agreement set out that the amount due under the 2016 proceeding was to be paid by way of an upfront lump sum, nine monthly payments of
$2,000, with a final payment of $1,812 and it is common ground those payments were made.
[7] The separate amount of $62,329.45 payable under the admission of claim was to be paid as follows:
Upon the execution of this Deed Ms Carrim agrees to:
(a)Consent to the transfer of $46,526.42 from her BNZ account 02-0924-0119458-02 to the Assignee
(b)Within 7 days, procure the assignment to the Assignee of the full amount payable by the Southern District Health Board to Abraham van der Walt by way of reimbursement of travel expenses incurred by her (approximately $15,000)
(c)Pay the difference between the payments to be made under (a) and (b) and the amount of $62,329.45 to the Assignee as a residual payment under this agreement
(d)[omitted]
(e)Thereafter make 9 monthly payments of $2,000.00 towards satisfaction of the judgment debt, commencing one month after the date of execution of this Deed; and
(f)One month after making the last of the payments referred to in (e), make one final payment comprising $1,812 plus the residual payment referred to at (c)
[8] I have omitted (d) which related to payment of the lump sum payable under the 2016 proceeding but included (e) as it relates to the monthly instalments which while part of clearing the debt under the 2016 proceeding is relevant to the timeframe set out in (f).
[9] The issue between the parties concerns cl 2(b) and by extension cl 2(c) which applies if compliance with cl 2(b) produces a shortfall in respect of the $62,329.45.
[10] Mr van der Walt who is referred to in cl 2(b) was a bankrupt. The amounts that may be payable to him by the Southern District Health Board as referred to in cl 2(b) are amounts that would in any event be recoverable by the Official Assignee. Ms Carrim is the partner of Mr van der Walt.
[11] Ms Carrim was required within seven days to procure an assignment in favour of the Official Assignee of the amount described in cl 2(b). It is common ground that no legally enforceable assignment was procured.
[12] Notwithstanding the absence of an assignment it appears that some small payments have been made by the Southern District Health Board in respect of travel expenses and they have been passed on to the Official Assignee. Those amounts, however, do not total more than $3,520.
[13] It is also common ground that notwithstanding that the amount that was expected to be recovered under cl 2(b) was not received in full by the Official Assignee that no “top up” payment under cls 2(c) and 2(f) was made by Ms Carrim.
[14] Mr Chapman met this apparent breach of the contract as follows. His submission was that because the amount described in cl 2(b), approximately $15,000 was recoverable by the Official Assignee in any event, the absence of an assignment in fact made no difference to the Official Assignee.
[15] I do not accept that submission. Ms Carrim committed to procure an assignment in favour of the Official Assignee within seven days. It would appear the Official Assignee wished to obtain Ms Carrim’s co-operation in having Mr van der Walt assist in procuring the assignment from the Southern District Health Board of payment of travel expenses to the Official Assignee. That step was not taken.
[16] Nor do I accept that the potential for that payment to be made can be treated as if it were in fact the receipt of funds by the Official Assignee.
[17] Clauses 2(c) and 2(f) contemplate that there would be a “residual payment” made by Ms Carrim once the value of the travel expenses to be assigned was fixed.
[18] Mr Chapman argued that where cl 2(c) refers to payments “to be made”, it means that the payment contemplated by cl 2(b) may be deferred.
[19] There may have been an argument that if a completed assignment of the travel expenses for a sum certain had been obtained, that may have satisfied cl 2(b) on the basis that the applicant had agreed to accept the assignment in lieu of cash. But for that argument to get traction, there would have to have been an assignment completed for a certain sum as such is required to give certainty to the value of washup payment (if any) required under cl 2(c) (that is the residual payment).
[20] The payments under cl 2(e) were to commence one month after execution of the agreement, that is by 18 January 2018. There were then to be nine monthly
payments, that is until 18 October 2018, with the washup payment under cl 2(c) required to be made one month thereafter (cl 2(f)), that is by 18 November 2018.
[21] No residual payment could be made as the amount to be paid was not quantified because the assignment required by cl 2(b) was not completed.
[22] Accordingly, I do not accept Mr Chapman’s argument that there was not a breach of the agreement. While the Official Assignee may not have taken issue with the absence of an assignment within the seven days referred to in cl 2(b), all that meant was that the residual payment had to compensate for the absence of the assignment. Ms Carrim had to pay the balance due without any credit for the amount that might have been covered by cl 2(b). That did not occur.
[23]The alternative argument advanced by Mr Chapman was that in respect of the
$62,329.45, Ms Carrim had in fact met her obligations because an overpayment by her of just over $4,000, when applied to the $62,329.45, meant she had cleared that debt. However, this submission also depended on treating the $15,000 estimated recovery of travel expenses under cl 2(b) as if it had been paid. If the travel expense had been paid, but the top-up omitted because Ms Carrim believed she was in credit overall because of the earlier repayment, the outcome may have been different but that is not the case.
[24] For the reasons I have already given, I do not accept that Ms Carrim is entitled to approach her obligations under the settlement agreement as if the amount referred to in cl 2(b) had in fact been received by the Official Assignee.
[25] Accordingly, I consider the Official Assignee has established that Ms Carrim was in breach of the settlement agreement.
Consequences of breach
[26] Mr Chapman did not argue that the Official Assignee was not entitled to exercise the rights that arose in the event it was found Ms Carrim was in default.
[27] Under the admission of claim, Ms Carrim admitted liability in terms of a draft statement of claim annexed to the admission of claim. That statement of claim had not been filed at the time the admission of claim was given.
[28] Accordingly, in order to obtain judgment on the admission of claim, that being one of the consequences of a default by Ms Carrim under the settlement agreement, the Official Assignee filed in this Court the statement of claim that had been annexed to the admission of claim. This interlocutory application was brought seeking determination of whether the respondent was in breach of the settlement agreement.
[29] Mr Slevin in the interlocutory application identified the amounts said to be payable by Ms Carrim if she was held to be liable under the admission of claim and the settlement agreement.
[30] The amount for which judgment should be entered for the sum claimed in 1(a) of the statement of claim, that is the residual amount due of the $62,329.45, may have reduced due to further payments received by the Official Assignee. Judgment is entered for liability in respect of the claim with Mr Slevin to update the amount outstanding by memorandum.
[31] Mr Chapman did not take issue with the interest claims in the application. Mr Slevin advised that those interest calculations had been made by using the Ministry of Justice Civil Debt Interest Calculator.
[32] There is judgment in terms of paras 1(a)(ii) to 1(a)(v) of the application, they being the various interest payments payable under the settlement agreement.
[33] That leaves the issue of costs in this proceeding and costs on an earlier proceeding which became payable by Ms Carrim if the settlement agreement was breached. Those costs related to a proceeding CIV-2017-425-81 being a proceeding in which the Official Assignee obtained freezing orders in relation to a bank account operated by Ms Carrim
[34] Costs are sought on a 2B basis. A schedule of costs was attached to the application. Costs have been sought on a 1A basis for various telephone conferences and I consider that realistic. While Mr Chapman said he did not accept the schedule, he did not make detailed submissions in respect of it.
[35] Given the Official Assignee was represented by external counsel, that scale costs are sought with a reduction of costs to a 1A basis for certain steps, and that the Official Assignee was successful in obtaining a freezing order, there is no reason why costs should not follow the event in that proceeding.
[36] Accordingly, with the Official Assignee now being at liberty to apply for costs in CIV-2017-425-81, there is an order of costs in favour of the Official Assignee against Ms Carrim in terms of Schedule A to the interlocutory application, the judgment on admission dated 25 March 2019.
[37]That leaves the issue of costs in this proceeding.
[38] The statement of claim filed in this proceeding was prepared some time ago and was annexed to the admission of claim signed by Ms Carrim on 18 December 2017. None of the causes of action in that statement of claim were matters that had to be brought in the High Court. There was a cause of action for money had and received, a claim for knowing receipt and a claim for knowing assistance of breach of trust. The amount claimed was $62,329.45 being the amount that carried over into the admission of claim.
[39] In my view, the present proceeding seeking judgment in respect of that statement of claim could have been brought in the District Court.
[40] While the fixing of costs in the freezing order proceeding (CIV-2017-425-81) would have to be completed in this Court, the fixing of those costs could have been sought by memorandum once there had been a determination in the District Court as to whether there had been a breach of the settlement agreement.
[41] Accordingly, in respect of the costs claimed in this proceeding, including the interlocutory application dealt with in this judgment, there is an award of costs to the Official Assignee against Ms Carrim in terms of Schedule B to the interlocutory application for judgment on admission dated 25 March 2019, save that the Schedule is to be calculated on the basis of scale costs on a 2B basis in the District Court and adopting the filing fees that would have been paid in the District Court.
Conclusion
[42]Accordingly, there is:
(a)Judgment in the sum of $62,329.45 less any further payments received by the Official Assignee (in terms of [30] above).
(b)Judgment in terms of paras 1(a)(ii) to 1(a)(v) of the interlocutory application dated 25 March 2019;
(c)Costs in terms of [36] above;
(d)Costs in terms of [41] above.
Associate Judge Lester
Solicitors:
Insolvency and Trustee Service, Christchurch
Copy to counsel: G E Slevin, Barrister, Christchurch
Cruickshank Pryde, Invercargill
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