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Official Assignee v Honey

Official Assignee v Honey

Case [2024] NZHC 2216 8 August 2024

Insolvent Gift

Cancellation of Insolvent Transaction

Reciprocity

Tikanga

Koha

Natural Love and Affection

Insolvency Law

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IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE

CIV-2020-485-317

[2024] NZHC 2216

UNDER the Insolvency Act 2006

IN THE MATTER

of the bankruptcy of Richard Edgar Anderson

BETWEEN

THE OFFICIAL ASSIGNEE

Applicant

AND

MARIA LAUREEN HONEY

Respondent

Hearing:
18 April 2024

Further evidence: 28 May 2024
Further submissions: 13 and 24 June 2024

Appearances:

D M L Dingwall for Applicant

T N Hauraki and J P Ferguson for Respondent

Judgment:

8 August 2024

JUDGMENT OF ASSOCIATE JUDGE SKELTON

[1] Richard Anderson was adjudicated bankrupt on 20 November 2014. Mr Anderson is the great uncle of the respondent, Maria Honey.

[2] Several months prior to the bankruptcy, Mr Anderson and Ms Honey entered into an agreement for sale and purchase of a block of land (and house) at Matatoki, near Thames (the property), under which Mr Anderson sold the property to Ms Honey.

[3]The purchase price was $308,000, based on the rateable value. Ms Honey paid

$175,000 to Mr Anderson, which she borrowed from ANZ bank and which was

THE OFFICIAL ASSIGNEE v HONEY [2024] NZHC 2216 [8 August 2024]

secured by way of a mortgage against the property. The balance of the purchase price,
$133,000, was to be gifted by Mr Anderson.

[4] On the settlement date, being 7 October 2014, Mr Anderson (as Donor) and Ms Honey (as Donee) executed a Deed of Gift (Deed) which stated:

INTRODUCTION

A. The Donee owes the Donor the sum of $133,000 (“Debt”) being part of the purchase price of the property at 9477 State Highway 26, Matatoki, Thames.

B. The Donor is the uncle of the Donee. The Donor wishes to make a gift of
$133,000 to the Donee.

C. The Donor wishes to record the gift in this deed.

COVENANTS

1.In consideration of the natural love and affection the Donor holds for the Donee, the Donor gifts to the Donee the sum of $133,000 in repayment of the Debt.

2.The Donee accepts this forgiveness of the Debt.

[5]Mr Anderson was adjudicated bankrupt 45 days later.

[6] The Assignee asserts that the Deed was a ‘gift’ under s 204 of the Insolvency Act 2006 (the Act) because it was made within two years immediately before adjudication. The Assignee has taken steps to cancel the gift as an insolvent gift under s 206 of the Act.

[7] Ms Honey exercised her statutory right of objection to the Assignee’s cancellation notice with the effect that the gift was not automatically cancelled as against Ms Honey.

[8] The Assignee now applies for an order cancelling the irregular transaction under s 206(6) of the Act. The Assignee contends that if the Court is satisfied on the balance of probabilities that:

(a)the Deed was a gift;

(b)the gift was made by Mr Anderson to Ms Honey; and

(c)the gift was made within two years immediately before Mr Anderson was adjudicated bankrupt;

then the Court may cancel the gift as against Ms Honey.

[9] The Assignee contends 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 Honey

Details

AGLC: Official Assignee v Honey [2024] NZHC 2216
Case: [2024] NZHC 2216
Decision Date: 8 August 2024

CaseChat Overview and Summary

The Official Assignee applied to the New Zealand High Court to cancel a deed of gift as an insolvent transaction under the Insolvency Act 2006. The deed was executed by the bankrupt, Mr Anderson, and his niece, Ms Honey, in relation to a property transaction. Mr Anderson gifted $133,000 to Ms Honey as part of the purchase price of the property. Mr Anderson was adjudicated bankrupt 45 days later. The Assignee argued that the gift should be cancelled as it was made within two years immediately before Mr Anderson was adjudicated bankrupt and would otherwise reduce the assets available to the Assignee and creditors. Ms Honey argued that the gift was a koha under tikanga Māori and should not be treated as a ‘gift’ for the purposes of the Act. The court found that the gift was a koha in terms of tikanga, but nevertheless was a ‘gift’ for the purposes of the Act. The court held that even if the gift was recognised as a koha, it was still a ‘gift’ for the purposes of ss 204 and 206 of the Act and should be cancelled. The deed was cancelled as against Ms Honey.

Orders