Rabson v Croad - [2013] NZHC 472

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

CIV-2011-485-2437 [2013] NZHC 472

IN THE MATTER OF the Insolvency Act 2006

AND

IN THE MATTER OF the bankruptcy of MALCOLM EDWARD RABSON
Judgment Debtor

BETWEEN ANDREW CROAD AND CHRISTINE MARGARET DUNPHY (AS LIQUIDATORS OF DOUBLE ZERO HOLDINGS LIMITED AND AS LIQUIDATORS OF VISION LIMITED) Judgment Creditors

Hearing: 12 March 2013
(Heard at Wellington)

Counsel: D.A. Bleier - Counsel for Judgment Creditors
M.E. Rabson - Judgment Debtor in Person

Judgment: 18 March 2013

JUDGMENT OF ASSOCIATE JUDGE D.I. GENDALL

This judgment was delivered by me on 18 March 2013 at 3.30 pm pursuant to r 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date: ....................................................................

Solicitors: McMahon, Butterworth, Thompson, Lawyers, PO Box 106073, Auckland

A CROAD AND CM DUNPHY (AS LIQUIDATORS OF DOUBLE ZERO HOLDINGS LIMITED AND AS LIQUIDATORS OF VISION LIMITED) HC WN CIV-2011-485-2437 [18 March 2013]

Introduction

[1] Before the Court is an application by the judgment creditor seeking an order to adjudicate the judgment debtor bankrupt in terms of s 13 Insolvency Act 2006.

[2] This application is based upon the judgment creditors’ contention that the judgment debtor committed an act of bankruptcy by failing to comply with a Bankruptcy Notice served upon him on 28 November 2011 claiming the sum of
$68,699.21. I will address calculation of this sum later in this judgment.

[3] On 5 December 2011 the judgment debtor applied unsuccessfully to set-aside this Bankruptcy Notice. That application was heard on 23 February 2012 and was dismissed, although the time for compliance with the Bankruptcy Notice was enlarged to 14 March 2012.

[4] Since that time a range of procedural matters have occurred regarding the principal debt, the subject of the Bankruptcy Notice. I will refer to these below.

[5] The present application is opposed by the judgment debtor. He seeks first, that this application be adjourned or halted pursuant to s 42 Insolvency Act 2006 pending the hearing in the Court of Appeal of an appeal he has lodged against a recent decision in this Court of Her Honour Justice Goddard. This decision lifted an earlier stay order in this proceeding. Secondly and alternatively, if this adjournment application was unsuccessful, then the judgment debtor advanced a range of arguments in opposition to the substantive bankruptcy application. As I understand the judgment debtor’s contentions, these essentially were to the effect that the original judgment debt claimed is in fact not due and secondly, that in any event the Court should exercise its discretion not to adjudicate him bankrupt here.

Parties’ Arguments and My Decision

[6] The present application is brought pursuant to s 13 Insolvency Act 2006 which provides as follows:

13 When creditor may apply for debtor’s adjudication

A creditor may apply for a debtor to be adjudicated bankrupt if

(a) The debtor owes the creditor $1,000 or more or, if 2 or more creditors join in the application, the debtor owes a total of $1,000 or more to those creditors between them; and

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 Rabson v Croad

Details

AGLC: Rabson v Croad [2013] NZHC 472
Case: [2013] NZHC 472
Decision Date: 18 March 2013

CaseChat Overview and Summary

In the matter of the Insolvency Act 2006, the judgment creditor, Andrew Croad and Christine Margaret Dunphy, as liquidators of Double Zero Holdings Limited and Vision Limited, have applied for the adjudication of bankruptcy against the judgment debtor, Malcolm Edward Rabson. The application is based on the debtor's failure to comply with a Bankruptcy Notice served on 28 November 2011, claiming the sum of $68,699.21. The debtor has opposed the application, arguing that the original debt is not due and that it is just and equitable for the court to not make an order of adjudication.

The court considered the debtor's arguments and found that the requirements of the Insolvency Act 2006 had been satisfied. The debtor's failure to comply with the Bankruptcy Notice constituted an act of bankruptcy. The court also dismissed the debtor's argument that the original debt was not due, as there was no substantiated evidence of any kind before the court to show that the debtor was solvent and able to pay his debts within a reasonable time. Furthermore, the court found that the debtor had not satisfied the onus of showing that it was just and equitable not to make an order of adjudication.

The court granted the judgment creditor's application and made an order adjudicating the debtor bankrupt. Costs were awarded to the judgment creditor on a category 2B basis, together with disbursements as fixed by the Registrar. This order was made on 18 March 2013 at 3.30 pm.

Orders