Seven Brews Limited v Flavell - [2025] NZHC 1086

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2024-409-649

[2025] NZHC 1086

UNDER the Insolvency Act 2006

IN THE MATTER

of a bankruptcy

BETWEEN

SEVEN BREWS LIMITED

Judgment Creditor

AND

GRAEME PIERRE FLAVELL

Judgment Debtor

Hearing: 1 May 2025

Counsel:

R V Sami and K K Montu for Judgment Creditor Judgment Debtor in person

Judgment:

7 May 2025

JUDGMENT OF ASSOCIATE JUDGE PAULSEN

This judgment was delivered by me on 7 May 2025 at 2.30 pm pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar Date:

SEVEN BREWS LIMITED v GRAEME PIERRE FLAVELL [2025] NZHC 1086 [7 May 2025]

[1] This is a creditor’s application by Seven Brews Ltd (Seven Brews) for an order adjudicating Mr Graeme Flavell bankrupt.

[2] The creditor’s application is founded on a judgment for $51,516.97 obtained by Seven Brews against Mr Flavell in the District Court at Christchurch on 24 September 2024.

[3] Mr Flavell opposes the creditor’s application. He does not dispute Seven Brews’ judgment but says he should be given an opportunity to pay his debt off over time and that if he is adjudicated bankrupt his creditors will receive little.

[4] The creditor’s application first came before the Court on 3 April 2025 when Associate Judge Lester adjourned it to allow Seven Brews to consider Mr Flavell’s proposal for time payment of the debt.

[5] When the application next came before the Court on 1 May 2025, I was advised Seven Brews had not accepted Mr Flavell’s proposal and wished to obtain an order for adjudication. I heard from both Counsel for Seven Brews and Mr Flavell.

Mr Flavell’s circumstances and grounds of opposition

[6] Mr Flavell is currently working for a food manufacturing company, and he expects that his income will increase substantially when developments overseas come to fruition. He does not, however, say what he presently earns or provide any detail of the overseas developments that will increase his income.

[7] Mr Flavell is concerned that if he is adjudicated bankrupt, he will be unable to travel overseas. He says he needs to have the ability to travel overseas for his employment. He also says he has been offered a contract overseas in the sports field which will provide him with work in the weekends and after hours which would potentially bring in further income closer to the end of this year.

[8] Mr Flavell provided information concerning his assets and liabilities. He has disclosed that he has “current major creditors” totalling $85,600 as follows:

Seven Brews Ltd $53,000

Christchurch Orthopaedic $14,000

St George’s Hospital $6,600

Inland Revenue Department $12,000

[9] His assets are said to be: Business account

$1,200

Personal accounts $2,800

Invoices owed – Equinox $86,500

Invoices owed – Current $6,000

[10] It appears Mr Flavell has been making payments

to some of his creditors but

not to Seven Brews. The amounts owing to all creditors other than Seven Brews have been reduced. In the case of…

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: [2025] NZHC 1086
Decision Date: 7 May 2025

CaseChat Overview and Summary

Seven Brews Limited applied for an order adjudicating Graeme Pierre Flavell bankrupt. The application was based on a District Court judgment against Mr Flavell for $51,516.97. Mr Flavell opposed the application, proposing to pay off the debt over time instead of being adjudicated bankrupt. The court needed to decide whether it was just and equitable to grant the application or if there were other sufficient reasons not to make an order of adjudication.

The court considered various factors, including Mr Flavell's ability to pay his debts over time and whether adjudication would be pointless. Mr Flavell had not provided evidence of his employment or earnings to show he could make the proposed payments. He had also not made any payments to Seven Brews, raising concerns about his ability to pay. The court noted that Mr Flavell's only significant asset was an amount owed by a company in liquidation, but there was no evidence he had made a creditor’s claim. The court concluded that Mr Flavell had not shown that it was just and equitable or that some other sufficient reason existed for the court not to make an order of adjudication.

The court granted the creditor’s application, adjudging Mr Flavell bankrupt. The judgment creditor was also entitled to costs on a 2B basis plus disbursements. The order was made at 2.30 pm on 7 May 2025.

Orders