Official Assignee v Singh - [2020] NZHC 180

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2019-404-000980

[2020] NZHC 180

BETWEEN
THE OFFICIAL ASSIGNEE

Applicant

AND

JASWEEN DEEPAK SINGH

Respondent

Hearing: 20 September 2019

Appearances:

K Morrison for the Plaintiff

J Niemand and E N Speakman for the Defendant

Judgment:

13 March 2020

JUDGMENT OF ASSOCIATE JUDGE SARGISSON

This judgment was delivered by me on 13 March 2020 at 4.00 p.m. pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar Date.......................................

Solicitors:

Meredith Connell, Auckland Niemand Peebles Hoult, Auckland

OFFICIAL ASSIGNEE v SINGH [2020] NZHC 180 [13 March 2020]

Introduction

[1] Ashwin Ashneel Narayan was adjudicated bankrupt on 28 June 2018 on the application of the Commissioner of Inland Revenue.

[2] On 22 September 2016, just shy of two years before Mr Narayan’s adjudication, he entered into an agreement for the sale of property registered in his name to the respondent, Jasween Singh. Under the sale and purchase agreement, Mr Singh was to pay a deposit of $118,000 “by way of gift”. Under cl 2 of the agreement, the deposit became payable upon the execution of the agreement. The amount paid at settlement was the amount of the purchase price minus $118,000. On the day of settlement, 29 September 2016, the parties recorded the basis for the gifted deposit in a deed of gift.

[3] The Official Assignee seeks an order under s 206(6) of the Insolvency Act 2006 to cancel the waiver of the $118,000 as an insolvent gift. If the application is granted, the Official Assignee intends to bring a further proceeding to recover the $118,000 as a debt due from Mr Singh to Mr Narayan’s bankrupt estate.

[4] Mr Singh opposes the application for an order to cancel the alleged gift on two grounds. The first is that the “gift of the deposit” was — contrary to the agreement for sale and purchase and the deed of gift — not a gift at all, but partial repayment of loans he had made in fact to Mr Narayan. He says that, on that basis alone, the application for cancellation of an insolvent gift must fail. The second is in the nature of a defence under s 208, namely, that he gave value for the property and had no reason to believe Mr Narayan would be bankrupted.

[5]In broad terms, the issues I must determine are as follows:

(a)Whether Mr Narayan, the bankrupt, made an insolvent gift by waiving the deposit payable of $118,000; and

(b)Whether Mr Singh has put up an available defence to an order for cancellation, in particular, by way of s 208.

Factual background

[6] By agreement for the sale and purchase dated 23 October 2015, Mr Narayan purchased a property — two adjoining residential units at Pollen Crescent in Hamilton
— for $595,000. On 9 November 2015, Mr Narayan settled the purchase and became the registered proprietor. He completed the purchase using $476,000 borrowed from the ANZ Bank. A mortgage…

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 Singh

Details

AGLC: Official Assignee v Singh [2020] NZHC 180
Case: [2020] NZHC 180
Decision Date: 13 March 2020

CaseChat Overview and Summary

In the High Court of New Zealand, the Official Assignee applied to the court to cancel a purported gift of $118,000 from Jasween Singh to Ashwin Ashneel Narayan, who was later adjudicated bankrupt. The Official Assignee sought to cancel the gift as an insolvent transaction under the Insolvency Act 2006. Singh opposed the application, arguing that the purported gift was not a gift but a repayment of loans he had made to Narayan. He also argued that he had a valid defence under section 208 of the Act.

The court examined whether Narayan had made an insolvent gift by waiving the deposit and whether Singh had a valid defence to the application for cancellation. The court found that the waiver of the deposit was an insolvent gift because it had the effect of reducing the assets available to creditors. The court rejected Singh's argument that the waiver was a repayment of loans because Singh failed to provide any credible evidence to support his claim. The court also held that the defence under section 208 was not available because the waiver of the deposit was not a transfer of property or interest in property.

The court cancelled the waiver of the deposit as an insolvent gift and held that the Official Assignee would need to take steps to recover the debt of $118,000 in the usual manner. The court made an order for costs against Singh on a 2B basis, with disbursements as fixed by the Registrar.

Orders