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Official Assignee v Memelink

Official Assignee v Memelink

Case [2023] NZHC 3044 31 October 2023

Automatic Discharge

Public Examination

Breach of Contract

Unconscionable Conduct

Disregard of Court Orders

Management of Business in Bankruptcy

Recordkeeping

Bankruptcy & 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-2018-485-363

[2023] NZHC 3044

UNDER the Insolvency Act 2006

IN THE MATTER

of the bankruptcy of Harry Memelink

BETWEEN

THE OFFICIAL ASSIGNEE

Plaintiff

AND

HARRY MEMELINK

Debtor

Hearing:
24 April 2023, 1 May 2023 and 29 May 2023

Last Memorandum filed 21 September 2023.

Appearances:

C R Vinnell and P R W Chisnall for Plaintiff Debtor in Person

J J Pietras for P H McKinley (an interested party)

A O’Connor for Administrator of Body Corporate 68792 Q S Haines as creditor in person

Judgment:

31 October 2023

JUDGMENT OF GRICE J

(PUBLIC EXAMINATION AND AUTOMATIC DISCHARGE)

TABLE OF CONTENTS

Para Nos

Introduction[1]
Notice of objection to automatic discharge of bankruptcy[7]
Public examination[13]
Automatic discharge — legal position[33]
Factors relevant to the discharge[40]
Relationship between the bankrupt and the Link Trust No. 1[43]

THE OFFICIAL ASSIGNEE v MEMELINK [2023] NZHC 3044 [31 October 2023]

The Official Assignee’s Report [54]

The bankrupt’s affairs[55]

Lack of clarity as to ownership of assets[61]

Recordkeeping[65]

Disputes and litigation[67]
Insight into commercial failing and cause of bankruptcy[85]

Causes of bankruptcy [87]

Post-adjudication conduct[98]

Management or control of business[112]

Other activities by Mr Memelink during his period of bankruptcy — trading on exchange platform[125]

Whether the bankrupt breached the prohibition on entering into, carrying

on or taking part in the management or control of any business[134]
Issues raised by Mr Memelink[140]
Service of the application and the public examination record process[152]
Record of public examination/signing of the transcript[152]
Redactions sought[153]
Service of the report[157]

Automatic discharge from bankruptcy [167] Mr Memelink’s interests in securing a discharge from bankruptcy [175] Summary [190]

Conclusion on discharge[198]
Public examination adjourned[209]
Summary and conclusion[212]

Introduction

[1] Mr Memelink was adjudicated bankrupt on 28 August 2018.1 His bankruptcy followed the filing of a proposal by him to creditors under the Insolvency Act 2006.

[2] After the expiration of three years from that date Mr Memelink was entitled to an automatic discharge from bankruptcy unless the Official Assignee or a creditor objected.2 The Official Assignee did object by notice on 16 August 2022. Under s 295(1)(a) of the Insolvency Act, the Official Assignee also applied to the court for a public examination of the bankrupt, which is required following the objection. Mr Memelink remains in bankruptcy pending determination of the objection.

1 Re Memelink HC Wellington CIV-2018-485-363, 28 August 2018.
2 Insolvency Act 2006, s 292.

[3] The Official Assignee seeks orders that Mr Memelink remains bankrupt until the receivership of Link Trust No. 1 (the trust) is concluded and all funds have been distributed.

[4] Mr Memelink appeared for public examination. He opposes the Official Assignee’s objection to his discharge.3

[5] For the reasons that follow, I allow the Official Assignee’s objection to the automatic discharge, consequently prohibiting Mr Memelink to apply for a discharge of the bankruptcy for a period of three years or until the completion of the receivership, whichever is the…

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 Memelink

Details

AGLC: Official Assignee v Memelink [2023] NZHC 3044
Case: [2023] NZHC 3044
Decision Date: 31 October 2023

CaseChat Overview and Summary

The High Court of New Zealand considered the objection by the Official Assignee to the automatic discharge from bankruptcy of Mr Harry Memelink. Mr Memelink was adjudicated bankrupt in 2018. The Official Assignee objected to the automatic discharge from bankruptcy on the grounds of Mr Memelink's lack of cooperation and interference with the administration of his bankruptcy. The Official Assignee sought an order prohibiting Mr Memelink from applying for a discharge of bankruptcy for a period of three years or until the completion of the receivership of Mr Memelink’s Link Trust No. 1, whichever is the earlier. Mr Memelink opposed the objection. The Court held that the Official Assignee's objection was well founded and that Mr Memelink was not to be discharged from bankruptcy for a period of three years from the date of the judgment, or until the completion of the receivership of the Link Trust No. 1, whichever is the earlier. The public examination was adjourned for a period of two years from the date of the judgment.

Orders