Tizzie's Limited v Wilson - [2017] NZHC 1657

IN THE HIGH COURT OF NEW ZEALAND NAPIER REGISTRY

CIV-2016-441-122 [2017] NZHC 1657

UNDER the Insolvency Act 2006

IN THE MATTER

of the bankruptcy of Gay Louise Wilson

BETWEEN

TIZZIEʼS LIMITED
Judgment creditor

AND

GAY LOUISE WILSON Judgment debtor

Hearing: 14 July 2017

Appearances:

T Manktelow for the judgment creditor
Ms G L Wilson in person

Judgment:

18 July 2017

JUDGMENT OF ASSOCIATE JUDGE SMITH

[1] The judgment creditor (Tizzies) applies for an order adjudicating the judgment debtor (Mrs Wilson) bankrupt.

Background

[2] On 26 July 2016 Tizzies obtained judgment by default against Mrs Wilson for

$24,673.16. The nature of the claim by Tizzies against Mrs Wilson is not relevant to the present decision, as she acknowledges the debt and says she will pay it. With interest at 5% per annum under the District Court Act 2016 calculated up to
31 May 2017, and costs in this court, the total debt is now said to be in excess of

$35,400.

[3] Tizzies issued a bankruptcy notice against Mrs Wilson on 17 October 2016 in this court at Napier. The bankruptcy notice was served on Mrs Wilson on

TIZZIEʼS LIMITED v WILSON [2017] NZHC 1657 [18 July 2017]

26 October 2016, and any application Mrs Wilson might have wished to make had to be filed within 10 working days (by 9 November 2016).

[4] Under the High Court Rules,1 any application by Mrs Wilson to set aside the bankruptcy notice was required to be made by formal interlocutory application with a supporting affidavit, and those documents were required to be served on the judgment creditor within the 10 working day period. No such application was filed by Mrs Wilson.

[5] The court has no jurisdiction to extend the 10 working day period within which a judgment debtor may apply to set aside a bankruptcy notice.2 Mrs Wilson therefore committed an act of bankruptcy on 10 November 2016 when the 10 working days period expired.

[6] Tizzies filed an application for an order adjudicating Mrs Wilson bankrupt on

29 November 2016. A date of hearing for the application was set for

2 February 2017 in the Napier registry. Mrs Wilson was served with the creditor’s

application and summons to debtor on 10 January 2017.

[7] Prior to the hearing scheduled for 2 February 2017, Mrs Wilson made a written application for an order transferring the proceeding to the Palmerston North registry of the court.

[8] When the matter was called on 2 February 2017, Mrs Wilson’s application to transfer the proceeding to the Palmerston North registry was not opposed. I made an order for transfer accordingly, and directed Mrs Wilson to file and serve a formal notice of opposition and affidavit in opposition, by 16 February 2017.

[9] Mrs Wilson duly filed a notice of opposition and affidavit by that date. The notice of opposition described the District Court judgment entered against Mrs Wilson as “totally flawed” and “out of order”. Mrs Wilson denied that she was
a “debtor”, and stated:

1…

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: [2017] NZHC 1657
Decision Date: 18 July 2017

CaseChat Overview and Summary

The judgment creditor, Tizzies Limited, applied for an order adjudging the judgment debtor, Mrs Gay Louise Wilson, bankrupt. The total debt owed to Tizzies was in excess of $35,400. Tizzies issued a bankruptcy notice against Mrs Wilson on 17 October 2016. Mrs Wilson did not file an application to set aside the bankruptcy notice within 10 working days. She subsequently filed an application for an order transferring the proceeding to the Palmerston North registry. The case was adjourned to 1 June 2017 and subsequently to 14 July 2017. Mrs Wilson applied for a final adjournment of the hearing to 15 September 2017. The issues for determination were whether the application should be further adjourned and whether the application should be dismissed.

Tizzies submitted that the application should not be adjourned as Mrs Wilson had had a reasonable time to pay the debt. Mrs Wilson submitted that she had been working very hard to organise the subdivisional works and that the court should grant her one final opportunity to pay. The court exercised its discretion under section 37 of the Insolvency Act 2006 and granted a final adjournment to 15 September 2017. The court made an order that the adjudication application would be dismissed if Tizzies had not been paid by 15 September 2017.

Orders