Re Fawcett - [2014] NZHC 924

IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY

CIV-2010-419-587 [2014] NZHC 924

IN THE MATTER of the Insolvency Act 2006

AND IN THE MATTER

of the bankruptcy of CHRISTOPHER LOUIS FAWCETT

Hearing: 11 December 2013

Appearances:

P V Cornege for Official Assignee
C L Fawcett in person

Judgment:

7 May 2014

JUDGMENT OF PETERS J

This judgment was delivered by Justice Peters on 7 May 2014 at 2 pm pursuant to r 11.5 of the High Court Rules

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

Counsel: P V Cornege, Hamilton

Copy to: C L Fawcett, Hamilton

RE FAWCETT [2014] NZHC 924 [7 May 2014]

Introduction

[1] Mr Fawcett seeks an order that he be discharged from bankruptcy.1 The Official Assignee (“OA”) submits that no such order should be made, given the manner in which Mr Fawcett has conducted himself since adjudication. That conduct is presently the subject of two criminal charges that the Ministry of Business, Innovation and Employment has brought against Mr Fawcett (“criminal charges”). Mr Fawcett denies the charges. An associate to whom I refer below, Mr Steven Spackman, has been charged as a party to the alleged offences.

[2] For the reasons given below, I dismiss Mr Fawcett’s application for discharge. He may make another application for discharge in accordance with [34] below.

Background

[3] Mr Fawcett was adjudicated bankrupt on 15 September 2010 on the application of Southland Building Society (“SBS”). SBS obtained judgment against Mr Fawcett on a guarantee to SBS in respect of repayment of an advance to the C L Fawcett Family Trust.

[4] By s 290(1) Insolvency Act 2006 (“Act”), Mr Fawcett would have been discharged from bankruptcy on 4 October 2013, that being three years after Mr Fawcett filed a statement of affairs.2

[5] On 4 September 2013 however, the Official Assignee (“OA”) notified Mr Fawcett that it would oppose his discharge.3 The effect of this notice was to preclude the otherwise automatic discharge.

[6] On 23 September 2013 Mr Fawcett applied for an order for discharge. The effect of his doing so was to require his public examination prior to the hearing of
the application.4

1 Insolvency Act 2006, s 294.
2 s 290.
3 s 292.
4 s 295.

[7] On 28 November 2013 the OA filed a report (“report”) as to Mr Fawcett’s

affairs and other matters as required by s 296 of the Act.

[8] Mr Fawcett seeks an immediate and unconditional discharge. He submits that he has complied with all the obligations imposed upon him and that he is entitled to be discharged accordingly.

[9] As I have said, the OA opposes a discharge on the basis that Mr Fawcett’s conduct during the bankruptcy has been such that he should not be discharged, at least pending determination of the criminal charges. Alternatively, if an order for discharge is to be made, the OA seeks an order prohibiting Mr Fawcett from entering
into business for a period following discharge.5 Given the view I take of this matter,

it is…

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 Re Fawcett

Details

AGLC: Re Fawcett [2014] NZHC 924
Case: [2014] NZHC 924
Decision Date: 7 May 2014

CaseChat Overview and Summary

Mr Fawcett, an adjudicated bankrupt, sought an order for his discharge from bankruptcy, which the Official Assignee opposed. The Official Assignee contended that Mr Fawcett should not be discharged due to his conduct during his bankruptcy, which was the subject of pending criminal charges. Mr Fawcett argued that he had complied with all obligations imposed upon him and was entitled to be discharged. The court held that the Official Assignee had satisfied the onus of showing that it was in the public interest for the bankruptcy to continue, and that Mr Fawcett should not be discharged at least pending determination of the criminal charges. The court dismissed the application for discharge but noted that Mr Fawcett may make a fresh application upon the earlier of the determination of the criminal charges or 1 December 2014.

The court exercised its discretion under section 298 of the Insolvency Act 2006 to grant or refuse a discharge. The court considered the Official Assignee's report, which included details of Mr Fawcett's conduct after adjudication, and found that he had been closely involved in the management of two companies, JEC No 3 Limited and Kingsland Station Limited. The Official Assignee submitted that Mr Fawcett's conduct constituted an offence under section 149 of the Act, which prohibits an undischarged bankrupt from entering into, carrying on, or taking part in the management or control of any business. The court accepted that the evidence put forward by the Official Assignee raised serious issues as to whether Mr Fawcett had complied with this obligation. The court was satisfied that it was in the public interest for the bankruptcy to continue and dismissed the application for discharge.

Orders