Official Assignee v Carrim - [2017] NZHC 367

IN THE HIGH COURT OF NEW ZEALAND INVERCARGILL REGISTRY

CIV-2016-425-000117 [2017] NZHC 367

IN THE MATTER the Insolvency Act 2006

AND

IN THE MATTER

of the bankruptcy of ABRAHAM NICOLAAS VAN DER WALT

BETWEEN

OFFICIAL ASSIGNEE Applicant

AND

PENNY LOUISE CARRIM Respondent

Hearing: 1 March 2017

Appearances:

G E Slevin for Applicant
R T Chapman for Respondent

Judgment:

8 March 2017

JUDGMENT OF ASSOCIATE JUDGE OSBORNE
on regular transaction

Introduction

[1] Abraham Van der Walt (the bankrupt) was adjudicated bankrupt on 19

November 2015.

[2] This application is brought by the Official Assignee in the bankruptcy of the bankrupt.

[3] The respondent (“Ms Carrim”) is the bankrupt’s partner.

[4] In the two-year period before the bankruptcy, the bankrupt and Ms Carrim settled a family trust upon themselves and then funded it to complete a purchase of

OFFICIAL ASSIGNEE v CARRIM [2017] NZHC 367 [8 March 2017]

an Invercargill property as their home (the property). To avoid confusion, where in this judgment the couple are involved in their capacity as trustees, I refer to them as “the trustees”.

[5] The total purchase price including associated costs was $283,243.66.

[6] The Assignee asserts that part of the funds received by the trustees represented a gift made by the bankrupt and that another aspect of payment represented a gift made to Ms Carrim personally.

[7] As a result, the Assignee regarded the gift elements as “insolvent gifts” under s 204 Insolvency Act 2006 (the Act) and took steps to cancel the irregular transactions under s 206(2) of the Act.

[8] The procedure adopted by the Assignee is not in issue. Nor is there an issue that a gift effected by the bankrupt by deed is properly characterised as a “gift” under the Act. There is an issue as to whether one other transaction involved a gift.

The general nature of the issues

[9] The Court is required to determine first what sums the bankrupt gifted to the trustees and, secondly, what sum (if any) Ms Carrim should appropriately be ordered to pay to the Assignee under s 207 of the Act.

The statutory framework

[10] The Act deals with the concept of insolvent gifts in ss 204 – 205:

204 Insolvent gift within 2 years may be cancelled

A gift by a bankrupt to another person may be cancelled on the Assignee’s initiative if the bankrupt made the gift within 2 years immediately before adjudication.

205 Insolvent gift within 2 to 5 years may be cancelled if bankrupt unable to pay debts

(1) A gift by a bankrupt to another person may be cancelled on the
Assignee’s initiative if—

(a) the bankrupt made the gift within the period beginning 2 years immediately before adjudication and ending 5 years immediately before adjudication; and

(b) the bankrupt was unable to pay his or her debts.

(2) A bankrupt is presumed to have been unable to pay his or her debts for the purpose of subsection (1)(b) unless the party claiming under the gift proves that…

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 Official Assignee v Carrim

Details

AGLC: Official Assignee v Carrim [2017] NZHC 367
Case: [2017] NZHC 367
Decision Date: 8 March 2017

CaseChat Overview and Summary

In this case, the Official Assignee, acting in the bankruptcy of Abraham Van der Walt, sought to cancel certain transactions as insolvent gifts under the Insolvency Act 2006. The primary dispute involved the validity of gifts made by the bankrupt and his partner, Penny Louise Carrim, to trustees prior to the adjudication of bankruptcy. The court was required to determine the sums gifted and whether Carrim should repay any amounts to the Assignee. The court first assessed the $141,621.84 gift executed by deed, which both parties acknowledged as an insolvent gift. The court found that Carrim was estopped from denying her contribution and ordered her to repay $37,170.53. The court also examined a $49,219.98 payment made to the trustees, which the Assignee claimed was partly a gift from the bankrupt to Carrim. However, the court could not find sufficient evidence to support this claim, and thus, no repayment was ordered for this amount. The court ordered Carrim to pay $37,170.53 to the Assignee and reserved costs for later determination.

Orders