Sharrock v Kipping - [2020] NZHC 799

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2018-409-244

[2020] NZHC 799

IN THE MATTER of the Insolvency Act 2006

AND IN THE MATTER

of the bankruptcy of JOHN BRIAN KIPPING

BETWEEN

GERALD ERRINGTON SHARROCK

Judgment Creditor

AND

JOHN BRIAN KIPPING

Judgment Debtor

Hearing: 12 March 2020

Appearances:

R B Hucker and M W Swan for Judgment Creditor J B Kipping (self-represented Judgment Debtor)

D M L Dingwall for Official Assignee

Judgment:

24 April 2020

JUDGMENT OF ASSOCIATE JUDGE LESTER

This judgment was delivered by me on 24 April 2020 at 11am pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar 24 April 2020

SHARROCK v KIPPING [2020] NZHC 799 [24 April 2020]

Introduction

[1] Mr Kipping, who was adjudicated bankrupt on 19 December 2018, applied on 6 November 2019 for annulment of his bankruptcy under s 309(1)(a) of the Insolvency Act 2006 (“the Act”) and in the alternative, early discharge under s 294 of the Act.

Annulment application

[2] Annulment was sought on the following ground: “The petitioning creditor has failed to provide any evidence to the court or anyone else that he has incurred any “actual costs”, as all monetary amounts are court costs.” (This is a reference to the fact the debts upon which Mr Kipping was adjudicated were costs awards of this Court).

[3] Given this concern, when Mr Kipping’s application was called on 17 December 2019 as a pragmatic way of addressing the issue, I suggested that Mr Sharrock may be prepared to disclose to me his actual invoices for costs and I would compare those against scale costs to confirm one way or another whether Mr Sharrock’s actual costs exceed scale as required by r 14.2(1)(f) of the High Court Rules 2016. Mr Kipping agreed to this approach.

[4] Mr Sharrock’s counsel filed the requisite material which I reviewed. I issued a Minute in which I confirmed that having examined the invoices and the costs awards, that costs incurred exceeded actual cost by a significant margin.1

[5] As this was the only factor raised to support the annulment application and given Mr Kipping had said he would accept my assessment on this issue, I queried with Mr Kipping at the outset whether that meant the annulment application would not proceed.

[6] Mr Kipping acknowledged that he would not be pursuing annulment on the pleaded ground but made an oral application to amend his application to rely on a new ground to support the annulment which he called the “natural justice” ground.

1 Sharrock v Kipping HC Christchurch CIV-2018-409-244, 30 January 2019.

[7] Mr Kipping’s arguments in respect of what he calls the “natural justice” ground have been the subject of earlier rulings of this Court.

[8] Mr Kipping raised the natural justice argument in an application to set aside the bankruptcy notice which led to his adjudication. Associate Judge Osborne (as he then was) addressed Mr Kipping’s submissions under this head and dismissed…

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 Sharrock v Kipping

Details

AGLC: Sharrock v Kipping [2020] NZHC 799
Case: [2020] NZHC 799
Decision Date: 24 April 2020

CaseChat Overview and Summary

In the High Court of New Zealand, Associate Judge Lester considered the application of John Brian Kipping, a bankrupt, for annulment of his bankruptcy and in the alternative for early discharge. The application was brought by Gerald Errington Sharrock, the judgment creditor. The primary legal issues were whether the grounds for annulment, specifically the alleged failure of the creditor to provide evidence of actual costs, were valid and if there were cogent grounds for early discharge. The court examined the evidence and submissions regarding the costs awards, the bankrupt's attitude towards fulfilling his obligations, and the need for accountability and deterrence in bankruptcy proceedings.

The court dismissed the annulment application, finding that the creditor's actual costs exceeded the scale costs, and denied the bankrupt leave to amend the grounds of his annulment application to introduce a new "natural justice" ground. The court noted that the bankrupt had no legal avenue to challenge the costs judgments upon which his bankruptcy was based. Regarding the early discharge application, the court held that the bankrupt had not met the onus of adducing evidence to show good cause for an early discharge. The court considered factors such as the bankrupt's accountability, his attitude towards the judgment debts, and the lack of benefit to creditors. The court further found that the bankrupt had deliberately structured his income to avoid making contributions to his debts. Consequently, the court refused the application for early discharge and ordered that the bankrupt could not apply for a discharge prior to 19 December 2021. Additionally, the court imposed restrictions on the bankrupt's access to the court file and his ability to disseminate confidential documents.

Orders