Official Assignee v Henshaw - [2015] NZHC 1856

IN THE HIGH COURT OF NEW ZEALAND NAPIER REGISTRY

CIV-2012-441-316 [2015] NZHC 1856

UNDER The Insolvency Act 2006

IN THE MATTER OF

the bankruptcy of Michelle Jane Hodder

BETWEEN

THE OFFICIAL ASSIGNEE Applicant

AND

BERYL MARY HENSHAW Respondent

On the Papers

Counsel:

G E Slevin for the Official Assignee

Judgment:

6 August 2015

JUDGMENT OF ASSOCIATE JUDGE SMITH

[1] Ms Hodder was adjudicated bankrupt by order made in this Court on

5 June 2014. She now resides in Australia.

[2] Ms Hodder’s father died in Queensland in early 2013. She was not named as a beneficiary in his Will, but has a potential claim against her father’s estate under the Succession Act 1981 (Qld). That claim is an item of property which vested in the Official Assignee (the Assignee) on Ms Hodder’s bankruptcy.1

[3] The Assignee has recovered no assets in the bankruptcy, and has been unable to consider (and if appropriate pursue) the claim against Ms Hodder’s estate under
the Queensland legislation.

1 Insolvency Act 2006, s 101, and Gollan v Official Assignee [2012] NZHC 1869, at [8]; Creser v Creser [2006] NZFLR 850 (HC). See also the definition of “property” in s 3 of the Insolvency Act 2006: the definition includes “…rights, interests and claims of every kind in relation to property however they arise”.

THE OFFICIAL ASSIGNEE v BERYL MARY HENSHAW [2015] NZHC 1856 [6 August 2015]

[4] Through her solicitor, Ms Hodder sought the consent of the Assignee to pursue the claim herself, on the basis that she would retain the benefit of any recovery in the proposed litigation. At first, the Assignee refused. Ms Hodder then made a proposal that, on the basis that the cause of action against her father’s estate would be assigned to her, she and the Assignee would share equally in any recovery, after payment of costs.

[5] The solicitor acting for Ms Hodder in Australia has advised on a preliminary basis that the proposed claim has some prospects of success. Like a claim under the Family Protection Act 1955, the prospects of success will apparently depend on a number of factors including Ms Hodder’s needs and the competing needs of other possible claimants. The solicitor acting for Ms Hodder in Australia has advised that it will only be after Ms Hodder has been able to reach an agreement with the Assignee on a basis for sharing any recovery that a detailed investigation and assessment of the amount Ms Hodder might recover will be undertaken. A preliminary estimate puts the value of the deceased’s estate at AUD$364,000.

[6] The debts in Ms Hodder’s bankruptcy total approximately $15,000. Understandably in those circumstances, the Assignee considers that, if an arrangement can be made for the assignment of the cause of action to Ms Hodder on the basis proposed, an asset will or may be recovered for the benefit of Ms Hodder’s creditors that could not otherwise have been recovered.

[7] The Assignee now applies to the Court for approval to assign Ms…

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 Henshaw

Details

AGLC: Official Assignee v Henshaw [2015] NZHC 1856
Case: [2015] NZHC 1856
Decision Date: 6 August 2015

CaseChat Overview and Summary

Michelle Jane Hodder, an Australian resident, was adjudicated bankrupt in New Zealand on 5 June 2014. Hodder's father passed away in Queensland in early 2013, and she has a potential claim against his estate under the Succession Act 1981 (Qld), which vested in the Official Assignee (the Assignee) upon Hodder's bankruptcy. The Assignee applied to the High Court of New Zealand for approval to assign Hodder's claim under the Queensland legislation to her, on the basis of a 50/50 sharing of proceeds. The Assignee argued that the Court had jurisdiction to approve the proposed assignment under s 221 of the Insolvency Act 2006. The respondent, the executor of Hodder's father's estate, indicated that she would abide by the Court's decision on the application.

The court was required to determine whether it had jurisdiction to approve the proposed assignment under s 221 of the Act. The court also had to decide whether the proposed assignment should be approved under s 221 and whether there was inherent jurisdiction to approve the assignment if the court did not have jurisdiction under s 221. The court concluded that s 221 did not provide authority for the Court to approve the proposed assignment, as it only applied to assignments of rights to sue created by the Act for the Assignee. The court found that the assignment of a right to sue which was already owned by the bankrupt at the date of adjudication and had vested in the Assignee under s 101 or s 102 did not fall under s 221. The court also concluded that there was no inherent jurisdiction to approve the assignment, as it would result in a departure from the scheme of the Act.

The court dismissed the application, finding that it did not have jurisdiction to grant consent to the assignment under s 221 of the Act, and declined to exercise any inherent jurisdiction to approve the proposed assignment. The court noted that the available options for the Assignee appeared to be to disclaim under s 117 or to investigate whether third party litigation funding may be an option. The court made no order or direction on these matters, leaving them for the parties to consider further.

Orders