Official Assignee v Williamson - [2013] NZHC 2579

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV 2013-404-002713 [2013] NZHC 2579

IN THE MATTER OF the Insolvency Act 2006

IN THE MATTER OF

The Bankruptcy of ANGELA JEAN MACDOUGALL

BETWEEN

THE OFFICIAL ASSIGNEE Applicant

AND

RONALD JOHN WILLIAMSON Respondent

Hearing: 2 October 2013

Appearances:

C R Vinnell/C Baldock for the Applicant
R V Sami for the Respondent

Judgment:

3 October 2013

JUDGMENT OF ASSOCIATE JUDGE CHRISTIANSEN

This judgment was delivered by me on
03.10.13 at 4:30pm, pursuant to
Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar
Date……………

THE OFFICIAL ASSIGNEE v R J WILLIAMSON [2013] NZHC 2579 [3 October 2013]

Background

[1] Mrs MacDougall was adjudicated bankrupt on 5 June 2012. On 12 March

2012 Mrs MacDougall authorised a payment of $253,131.76 from her solicitors to

another solicitor’s trust account.

[2] The expressed purpose of the payment was to enable Mr Williamson to complete the purchase of two sections in Kerikeri, he having been nominated as purchaser of those in place of Mrs MacDougall.

[3] The payment was purportedly made in satisfaction of a debt due to Mr

Williamson.

[4] The Official Assignee has issued a notice to set aside the payment as an insolvent gift under s 206(2) of the Insolvency Act 2006. Notice of that purpose was formally served on Mr Williamson. It advised that the payment was considered to be an insolvent gift.

[5] The Official Assignee’s application to this Court to set aside the payment asserts:

(a) Mrs MacDougall was not personally liable for any debt due to Mr

Williamson.

(b) In any event the debt was likely to be statute barred.

[6] Accordingly it was claimed the payment was a gift and having been made within two years of Mrs MacDougall’s adjudication, was repayable by Mr Williamson.

[7] Mrs MacDougall and her husband Gary were shareholders and directors of Pauanui Lake Resort Limited (Pauanui). In 1998 Mr Williamson paid $200,000 to an earthworks contractor (Downers) to assist the finish of work on a golf course being developed by Pauanui.

[8] Mr Williamson has filed an objection to the application to set aside the payment to him. He says that when he lent the money the MacDougalls executed an acknowledgement of debt that was guaranteed by the MacDougalls personally. He said the debt was required to be repaid on demand.

[9] Mr Williamson paid the money directly to the works contractor because at that time the final resource consent had not been given for the development project which meant Pauanui was unable to uplift any of its funding. By the time funding came through in the following year Mr Williamson had expressed a desire to have sections in stage 3 of the Pauanui development. He said the parties agreed that two sections in Pauanui would be security for the loan. Agreements for the sale and purchase of those were partially completed but not finalised. Nor was any security registered in his favour at that time.

[10] The development failed and Pauanui was…

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.

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Details

Case: [2013] NZHC 2579
Decision Date: 3 October 2013

CaseChat Overview and Summary

The case before the New Zealand High Court involved a dispute between the Official Assignee and Ronald Williamson. The Official Assignee sought to set aside a payment made by Angela MacDougall to Williamson, claiming it was an insolvent gift under the Insolvency Act 2006. The court had to determine whether the payment was indeed an insolvent gift or if it could be justified as a legitimate repayment of a debt. Williamson argued that he was owed a debt by MacDougall, secured by a personal guarantee and an offer of sections in the Pauanui development as collateral. The key issues included whether a guarantee existed, whether the payment was made in good faith, and if Williamson had reason to suspect MacDougall's insolvency.

The court found that the evidence did not support the existence of a written guarantee or any substantial collateral that could secure the debt. The payment made by MacDougall to Williamson was within two years of her bankruptcy, triggering a presumption of insolvency. The court concluded that Williamson knew or should have known that MacDougall was insolvent when she could not afford to pay both the debt and purchase the Kerikeri sections. As such, the payment was deemed a voidable gift and an insolvent transaction. The court ordered the payment to be returned to the Official Assignee and for Williamson to cover the costs of the proceeding.

Orders