Official Assignee v MWA Consultants Limited

[2017] NZHC 10

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

CIV-2016-409-001137 [2017] NZHC 10

BETWEEN

THE OFFICIAL ASSIGNEE

Applicant

AND

MWA CONSULTANTS LIMITED First Respondent

AND

MWA TRUSTEES LIMITED Second Respondent

AND

LATIMER TRUSTEES LIMITED Third Respondent

Hearing:	On the papers
Counsel:	G E Slevin for the Applicant
Judgment:	16 January 2017

JUDGMENT OF NATION J

[1]      On  21  November  2016  and  with  an  amendment  of  24  November  2016, Dunningham J made freezing and ancillary orders as set out below:

1.    The applicant has a good arguable case on an accrued or prospective cause of action that is justiciable in the Court.

2.    The Court has considered the applicant’s application for a freezing order and the memorandum of counsel for the Official Assignee provided in support of the application.

3.    The Court is satisfied, having regard to all the circumstances disclosed by affidavit evidence filed in support of the application, that there is a

danger that judgment in favour of the applicant will be wholly or partly

OFFICIAL ASSIGNEE v MWA CONSULTANTS LTD [2017] NZHC 10 [16 January 2017]

unsatisfied because the assets of the prospective judgment debtor might be disposed of, dealt with or diminished in value.

4.    This freezing order is made in respect of the following assets:

(1)  A maximum amount of $20,000 in the Westpac bank account 1702-

0385747-17 of MWA Consultants Limited;

(2) All funds that are held in or may be deposited into the Westpac bank account of the KD Trust to a maximum value of $81,046.81;

(3)Any funds held in any bank account of MWA Trustees Limited, Latimer Trustees Limited, MWA Consultants Limited or any third party for the benefit of Latimer Trustees Limited as trustee of the KD Trust, to a maximum value of $81,046.81;

(4) Any chose in action or other property of Latimer Trustees Limited as trustee of the KD Trust to a maximum value of $81,046.81.

5.    Subject to paragraph 6, this order restrains you from removing any of the assets listed in paragraph 4 from New Zealand or from disposing of, dealing with or diminishing the value of those assets, whether they are in or outside New Zealand.

6.    This freezing order does not prohibit you from dealing with the assets covered by the order for the purpose of –

(a)  paying legal expenses related to the freezing order, if you are able to satisfy the Court you have no other means of paying them.

7.    As the freezing order has been made without notice to you, it will have no effect after 30 working days from the date of this order unless on that date it is continued or renewed.   On that date you or your counsel are entitled to be heard by the Court in opposition to the continuation or renewal of the order.

8.    You may apply to the Court by interlocutory application to discharge or vary the order.  If you apply, you must give the applicant notice of not less than 72 hours.

9.    The Court has ruled that an undertaking by the applicant is not required in the circumstances of this case.

10.  The Court has also made the following ancillary orders for the purpose of eliciting information relating to the freezing order:

(a)  Murray Ian Withers must within five working days file in the Court and serve on the applicant a statement setting out in detail:

(i)   all funds and property subject to these orders;

(ii) the  identity  of  each  person  or  entity  holding  such  funds  or property; and

(iii) the location of such funds or property.

11.  This  order  does  not  affect  anyone  outside  New  Zealand  until  it  is declared enforceable by a Court in the relevant country (in which case it affects a person only to the extent that it has been declared enforceable) unless the person is:

(a)  a person to whom this order is addressed or an officer of that person or an agent appointed by power of attorney of that person; or

(b)  a person who –

(i)   has  been  given  written  notice  of  this  order  at  that  person’s

residence or place of business within New Zealand; and

(ii) is able to prevent acts or omissions outside the jurisdiction of this Court that constitute or assist a breach of this order.

12.  This order does not prevent, in respect of assets located outside New

Zealand, any third party from complying with –

(a) what it reasonably believes to be the third party’s obligations, contractual or otherwise, under the laws of the country in which those assets are situated or under the proper law of any contract between the third party and the respondent; and

(b)any orders of the courts of that country, provided that reasonable notice of any application for such an order is given to the applicant’s solicitors.

13.  For the avoidance of doubt, this order does not require Westpac New Zealand Limited or any other financial institution that may hold bank accounts for any person to restrain any funds that are not, to the best of its knowledge, held by that person for the benefit of Latimer Trustees Limited as trustee of the KD Trust.

[2]      The above orders stated that the freezing orders would remain in effect for 30 days but on a date 30 days from the making of the orders (which would have been 9

January 2017).   The respondents would be entitled to be heard by the Court in opposition to the continuation or renewal of the orders.   The orders also gave the respondents the right to apply to discharge or vary the orders made on notice of not less than 72 hours.

[3]      Mr Withers has filed a statement relating to the application.  The applicant says that Mr Withers has not complied with order 10 requiring him to provide a statement setting out certain information for the Court and the applicant.

[4]      No hearing was scheduled in relation to the continuation of the freezing and ancillary order.  The respondents did not file any application to discharge or vary the orders made.

[5]      On 4 January 2017, the solicitors for the applicant  filed a memorandum seeking a continuation of the freezing orders.  Because the relevant case officer was on leave, the memorandum was not dealt with by the registry until 16 January 2017.

[6]      The official assignee has filed a substantive application to cancel various transactions undertaken by the respondents on behalf of the bankrupt and/or the KD Trust.   He advised that application was served on the respondents by email on 20

December 2016 and has a first call date of 9 February 2017.

[7]      Counsel  for  the  official  assignee  submits  there  is  an  ongoing  risk  of dissipation of funds by the respondents, and the existing orders should be continued pending determination of the substantive application by the Court.

[8]      In the circumstances, I consider it appropriate to continue the existing orders and I should do so on an ex parte basis.  The existing orders, as set out above, are thus to continue until 9 February 2017 but with leave to the respondents to seek a discharge of variation of the order as set out in order 8 above.

[9]      The parties can present submissions as to the continuation or renewal of these orders on 9 February 2017 when the substantive proceedings are first called before this Court.

Solicitors: G Slevin

Copy to: Mr Withers