Tailored Buildings Solutions Limited v Evans - [2020] NZHC 2208

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2019-404-002532

[2020] NZHC 2208

UNDER The Insolvency Act 2006

IN THE MATTER

of the bankruptcy of O L Evans

BETWEEN

TAILORED BUILDING SOLUTIONS LIMITED

Judgment Creditor

AND

OLIVER LLEWELLYN EVANS

Judgment Debtor

CIV-2019-404-002530

BETWEEN

TAILORED BUILDING SOLUTIONS LIMITED
Judgment Creditor

AND

JADE EVANS

Judgment Debtor

Hearing: 17 August 2020

Appearances:

M R Taylor and E E Hill for the Judgment Creditor A C Eager for the Judgment Debtors

Judgment:

28 August 2020

JUDGMENT OF ASSOCIATE JUDGE GARDINER

This judgment was delivered by me on 28 August 2020 at 11.30 a.m. pursuant to Rule 11.5 of the High Court Rules.

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

TAILORED BUILDING SOLUTIONS LTD v EVANS [2020] NZHC 2208 [28 August 2020]

Introduction

[1] Tailored Building Solutions Ltd (TBS) has applied for orders adjudicating Oliver Llewellyn Evans and Jade Evans bankrupt on the grounds that they have failed to pay the amount specified in a bankruptcy notice served upon them or enter into any arrangement and have therefore committed an available act of bankruptcy.

[2] Mr Evans opposes the making of an order of adjudication on the grounds that he is able to pay his debts and/or it is just and equitable that the Court does not make an order of adjudication. Ms Evans opposes on the basis that her husband (from whom she is now separated) is able to pay his debts, including the judgment debt. The judgment debt was incurred jointly by Mr and Mrs Evans. She can pay her own debts (apart from the judgment debt) and it is just and equitable that the Court does not make an order for adjudication.

[3]The issues are:

(a)Are Mr and Mrs Evans able to pay their debts?

(b)Is it just and equitable that the Court does not make an order of adjudication?

[4] In answering those questions, the Court must consider the relationship between the Construction Contracts Act 2002 (the CCA) and the Insolvency Act 2006.

Factual background

[5] In 2018 the judgment debtors, Mr and Mrs Evans, entered into a construction contract with TBS to complete the construction of their home at 80 Matthias Place, Whitford (the Property).

[6] TBS was engaged to continue and complete the building project after Mr and Mrs Evans terminated their contract with their former builder.

[7] Their building work continued through until 23 December 2018, when a dispute arose.

[8] Mr and Mrs Evans purported to terminate the contract on around 21 February 2019. It was TBS’s position that the purported termination was unlawful and amounted to repudiation. TBS terminated the contract on 25 February 2019.

[9] TBS had outstanding invoices which Mr and Mrs Evans refused to pay. They raised several issues with the invoices, which they said established a set-off of the amounts sought by TBS.

[10] TBS referred the matter to adjudication under the CCA. The parties filed submissions and evidence in relation to the claim by TBS, 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.

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Details

Case: [2020] NZHC 2208
Decision Date: 28 August 2020

CaseChat Overview and Summary

The case of Tailored Building Solutions Limited v Evans involved a dispute over a construction contract for the completion of a home at 80 Matthias Place, Whitford. Tailored Building Solutions Ltd (TBS) applied for orders adjudicating Oliver Llewellyn Evans and Jade Evans bankrupt, as they had failed to pay a bankruptcy notice served upon them. The Evans opposed the making of an order of adjudication, arguing that they are able to pay their debts and/or it is just and equitable that the Court does not make an order of adjudication. The court considered two main issues: (a) whether the Evans are able to pay their debts, and (b) whether it is just and equitable that the Court does not make an order of adjudication. The court found that the Evans had not provided enough evidence to demonstrate their ability to pay the amount owed, and that they had not convinced the Court that they have a sound and credible counterclaim. The court declined to exercise its discretion not to adjudicate them bankrupt, but gave Mr Evans a final opportunity to pay the judgment debt to TBS. If the judgment debt is still outstanding at the next call, the court will consider what final order should be made.

Orders