Southern Cross Enterprises Limited (in receivership and in liquidation) v Hettig - [2015] NZHC 1432

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2015-404-301 [2015] NZHC 1432

UNDER the Insolvency Act 2006

IN THE MATTER OF

the bankruptcy of JOHN THERON HETTIG

BETWEEN

SOUTHERN CROSS ENTERPRISES LIMITED (IN RECEIVERSHIP AND IN LIQUIDATION)

Judgment Creditor

AND

JOHN THERON HETTIG Judgment Debtor

Hearing: 18 June 2015

Appearances:

C T Hames for Creditor
C Jones for Official Assignee

Judgment:

18 June 2015

ORAL JUDGMENT OF ASSOCIATE JUDGE R M BELL

Solicitors:
MinterEllisonRuddWatt (Haines) Auckland, for Judgment Creditor
Official Assignee’s office (C T Jones) Auckland.

SOUTHERN CROSS ENTERPRISES LIMITED (IN RECEIVERSHIP AND IN LIQUIDATION) v HETTIG [2015] NZHC 1432 [18 June 2015]

[1] Mr Hettig was adjudicated bankrupt on the application of Southern Cross

Enterprises Ltd (in rec and in liq) on 30 April 2015.

[2] Mr Hettig applied on 19 May 2015 to have his adjudication annulled. His application is made under s 309(1)(a) of the Insolvency Act 2006. That provides that any adjudication made may be annulled if the court considers that the bankrupt should not have been adjudicated bankrupt. I am advised that since being adjudged bankrupt, Mr Hettig has been co-operative with the Official Assignee. He has provided a statement of affairs so as to start time running under s 290. I do not regard the facts that he has co-operated with the Official Assignee and that he has provided a statement of his affairs as barring his ability to apply for annulment.

[3] The enquiry is whether Mr Hettig has any grounds to have his adjudication annulled.

[4] The act of bankruptcy on which the creditor relied to have Mr Hettig adjudged bankrupt was non-compliance with a bankruptcy notice. The bankruptcy notice was served on Mr Hettig on 24 February 2015. The adjudication application was lodged after Mr Hettig failed to comply with the notice. Mr Hettig was served with the bankruptcy application on 23 March 2015. He did not take any steps to oppose the application for his adjudication.

[5] The bankruptcy notice is based on a judgment of the District Court at Waitakere of 21 November 2012. The amount of the Waitakere District Court judgment was $19,922.99.

[6] The background to the matter is that Southern Cross Enterprises Ltd was in receivership, the receivers having been appointed by Westpac New Zealand Ltd. The company was one of the Yarrows group of companies. Mr Hettig became involved in a dispute inside the Yarrow group of companies. He helped Mr Paul Yarrow. Southern Cross Enterprises Ltd was the registered proprietor of a property at 71A Princes Street, Northcote Point, Auckland. The receivers wished to sell that

property. Westpac had priority as a secured creditor over that property. Mr Hettig lodged caveats against the title on 2 November 2011 and 23 April 2012. He claimed to have a caveatable interest in the property by virtue of an unregistered mortgage granted by the company through its director, Mr Paul Yarrow.

[7] The case for Southern Cross Enterprises Ltd was that there was no basis…

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

AGLC: Southern Cross Enterprises Limited (in receivership and in liquidation) v Hettig [2015] NZHC 1432
Case: [2015] NZHC 1432
Decision Date: 18 June 2015

CaseChat Overview and Summary

The High Court of New Zealand heard an application by Mr. John Theron Hettig to have his adjudication as a bankrupt annulled. Southern Cross Enterprises Limited (in receivership and liquidation) had applied for Mr. Hettig's adjudication on the basis of non-compliance with a bankruptcy notice. The bankruptcy notice was served on Mr. Hettig on 24 February 2015, and the adjudication application was lodged after Mr. Hettig failed to comply with the notice. Mr. Hettig was served with the bankruptcy application on 23 March 2015 but did not take any steps to oppose the application for his adjudication. The court had to decide whether Mr. Hettig had any grounds to have his adjudication annulled. The court found that Mr. Hettig's application was unmeritorious as he had not provided any new evidence to challenge the validity of the judgment that formed the basis of the bankruptcy notice. The court dismissed Mr. Hettig's application for annulment and ordered standard category 2 costs on the application.

The court considered the background of the case and found that Mr. Hettig had lodged caveats against a property owned by Southern Cross Enterprises Limited without reasonable cause. The receivers of the company wished to sell the property, but Mr. Hettig lodged caveats claiming to have an unregistered mortgage granted by the company. The District Court had dismissed Mr. Hettig's application to set aside the default judgment, and the Court of Appeal had upheld the decision. The court found that Mr. Hettig had not provided any new evidence to challenge the validity of the judgment that formed the basis of the bankruptcy notice. The court also noted that Mr. Hettig had not provided any documents to show any arguable basis for him caveating the title in the first place. The court found that Mr. Hettig was a vexatious caveator and had correctly been held liable in damages for having lodged a caveat without reasonable cause.

In conclusion, the High Court of New Zealand dismissed Mr. John Theron Hettig's application to have his adjudication as a bankrupt annulled. The court found that there was no ground for believing that Mr. Hettig should not have been adjudicated bankrupt. The court also ordered standard category 2 costs on the application. The court found that Mr. Hettig's application was unmeritorious, and he had not provided any new evidence to challenge the validity of the judgment that formed the basis of the bankruptcy notice. The court noted that Mr. Hettig had not provided any documents to show any arguable basis for him caveating the title in the first place. The court found that Mr. Hettig was a vexatious caveator and had correctly been held liable in damages for having lodged a caveat without reasonable cause.

Orders