Parkin v Marr - [2016] NZHC 2891

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV 2016-404-001023 [2016] NZHC 2891

IN THE MATTER OF
of the bankruptcy of CHARLOTTE

RUBY MARR

BETWEEN

BARRY IAN PARKIN Judgment Creditor

AND

CHARLOTEE RUBY MARR Judgment Debtor

CIV 2016-404-001025

IN THE MATTER OF of the bankruptcy of BERNADETTE MAKUINI MARR

BETWEEN BARRY IAN PARKIN Judgment Creditor

ANDBERNADETTE MAKUINI MARR Judgment Debtor

Hearing: 30 November 2016

Appearances:

M F Nelson for the Judgment Creditor
J Wain for the Judgment Debtors

Judgment:

1 December 2016

JUDGMENT OF ASSOCIATE JUDGE CHRISTIANSEN

This judgment was delivered by me on
01.12.16 at 3:00pm, pursuant to
Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar
Date……………

BARRY IAN PARKIN v CHARLOTEE RUBY MARR [2016] NZHC 2891 [1 December 2016]

CIV 2016-404-001027

IN THE MATTER OF

BETWEEN

The bankruptcy of KEITH CHARLES BLUETT MARR

BARRY IAN PARKIN Judgment Creditor

ANDKEITH CHARLES BLUETT MARR Judgment Debtor

[1] The applications herein for adjudication and to be considered by reference to the provisions of the Insolvency Act 2006 (the Act).

The adjudication application

[2] The judgment creditor (Mr Parkin) applies to adjudicate the judgment debtors bankrupt. Each of the judgment debtors (Mrs Marr and her children Keith and Charlotte) was jointly and severally ordered to pay Mr Parkin’s costs and disbursements following their unsuccessful High Court proceeding claim against Mr Parkin. Total costs exceeding $99,000 have been ordered to be paid.

[3] The judgment debtors’ claim was heard before Faire J on 3 – 6 November

2014. His Honour’s judgment issued on 17 December 2014. It explained the judgment debtors had defaulted on their mortgage over a residential property. Mrs Marr engaged a third party, her friend Ms Guttenbeil to bid on their behalf at the mortgagee auction with the intention that Mrs Marr would raise finance and settle that purchase. The day before the auction Mrs Marr’s mortgage broker referred her to another broker, a Mr Barton who had spoken to Mr Parkin about providing a purchase deposit of $25,000. Ms Guttenbeil entered into an agreement with the mortgagee. She did not formally settle that purchase.

[4] The purchase did not settle in time and Ms Guttenbeil was in breach of the mortgagee sale and purchase contract. Ms Guttenbeil then nominated Mr Parkin to settle the purchase and this Mr Parkin did. Mr Parkin had provided the deposit on the condition he was named as nominee in the purchase contract.

[5] The judgment debtors sued Mr Parkin. In essence it was alleged he was acting for or on behalf of them or otherwise illegally or in breach of commercial obligations to their detriment. In short they sued him for knowing receipt of a property subject to a constructive trust, in breach of competing interest claim and for breaches of the Credit Contracts and Consumer Finance Act 2003 (CCCFA).

[6] Faire J entered judgment in favour of Mr Parkin. His Honour held Mrs Marr’s friend Ms Guttenbeil was their agent but that the scope of that agency did not extend…

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: [2016] NZHC 2891
Decision Date: 1 December 2016

CaseChat Overview and Summary

The High Court of New Zealand considered an application by Barry Ian Parkin to adjudicate Charlotte Ruby Marr, Bernadette Makuini Marr, and Keith Charles Bluett Marr bankrupt under the Insolvency Act 2006. Parkin was the judgment creditor, having been awarded costs exceeding $99,000 after successfully defending a claim brought by the Marrs. The court had to decide whether it was just and equitable to refuse the adjudication of bankruptcy for the judgment debtors, who opposed the application on various grounds, including claims of fraud, illegality, and misleading conduct by Parkin.

The court noted that the judgment debtors had limited involvement in the initial litigation against Parkin and had no legal representation. Charlotte and Keith were named in the proceedings due to their claimed interest in the property, but they had no knowledge of the proceedings. Mrs Marr claimed she had been coerced into making decisions that led to her indebtedness. The court acknowledged that bankruptcy was not the inevitable outcome, but it required the debtors to demonstrate why it would be unjust and inequitable to order bankruptcy.

The court found that Charlotte and Keith had no personal benefit from their involvement in the litigation and should not be subject to bankruptcy. However, the court concluded that a bankruptcy order for Mrs Marr would be unduly oppressive, as she had lost her employment as a real estate agent and had no means to pay the costs. The court held that ordering bankruptcy for Mrs Marr would serve no useful purpose and would be punitive, given her current financial situation and the fact that she had no assets or income.

Ultimately, the court exercised its discretion under section 37 of the Insolvency Act not to order bankruptcy for all the judgment debtors. The court also ordered that all costs of the applications were to lie where they fell.

Orders