Pack v Ultra Projects Limited (in liquidation)

[2015] NZHC 1659

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

CIV-2014-485-11276 [2015] NZHC 1659

UNDER

Part 5 of the Insolvency Act 2009

IN THE MATTER OF

a proposal made by STEPHEN JOHN EDWARD PACK

BETWEEN

STEPHEN JOHN EDWARD PACK Insolvent

AND

ULTRA PROJECTS LIMITED (IN LIQUIDATION)

Objector

Teleconference:	16 July 2015
Counsel:	M Freeman for the Insolvent J C D Corry for the Objector
Judgment:	16 July 2015

JUDGMENT (No. 2) OF ASSOCIATE JUDGE SMITH

[1]      On 30 June 2015 Mr Pack’s counsel filed a memorandum inviting me to revisit the order for costs made in the judgment which I gave on 6 May 2015, in which I declined a proposal which Mr Pack had put to his creditors.

[2]      In the memorandum, counsel drew to my attention additional evidence (in the form of a letter dated 23 June 2015 from a firm of solicitors who have acted for Mr Pack and/or the SS Pack Family Trust) showing that a debt which I had taken to be owing by Mr Pack’s Family Trust to Mr Pack, which was not disclosed by him in the proposal put to his creditors, had in fact been forgiven by the Trust.

[3]      Having considered the solicitors’ letter of 23 June 2015, I accept that what appeared  to  have  been  an  undisclosed  asset  of  Mr  Pack  was  not  in  fact  an

STEPHEN JOHN EDWARD PACK v ULTRA PROJECTS LIMITED (IN LIQUIDATION) [2015] NZHC 1659 [16 July 2015]

undisclosed asset.  The judgment was accordingly in error to the extent that it found that Mr Pack had wrongly failed to disclose to his creditors a substantial asset.

[4]      However  the  circumstances  do  not  justify  recalling  the  judgment,  and Mr Pack and his counsel have not asked me to do so.  Any error in the judgment lay in my drawing an inference from the evidence which, as circumstances have now shown, was not justified.  That would have been a matter for appeal, not recall of the judgment.

[5]      I add that if I had been informed that the advances from Mr Pack to the Trust had been forgiven, the result of the application for approval of the proposal would have been the same.  The issue relating to the net value of the debts (discussed at paras [82]-[87] of the judgment), and the reasons for my finding that it would have been inexpedient to approve the proposal (set out at paras [88]-[93] of the judgment), each provided a sufficient basis for the decision.

[6]      In his memorandum, counsel for Mr Pack invited the Court to confirm its order declining to approve the proposal, but submitted that the Court might (in light of the matters disclosed in the memorandum) consider that costs should not be awarded, or should be ordered in a reduced sum.

[7]      I do not see any basis for reducing the costs award.  There was no increase in the amount of costs awarded against Mr Pack because of his apparent failure to disclose a significant asset – the costs were awarded on the normal 2B basis, and remain justified on the basis that the objector was successful with his objection.

[8]      In the result, the judgment issued on 6 May 2015 stands.  There is no basis for recall, whether on the substantive merits or on the question of costs.

Associate Judge Smith