Waimauri Limited v Mahon - [2021] NZHC 1538

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2020-404-1218

[2021] NZHC 1538

IN THE MATTER of the Insolvency Act 2006

IN THE MATTER

of the proposed bankruptcy of NEVILLE CHRISTOPHER MAHON

BETWEEN

WAIMAURI LIMITED

Judgment Creditor

AND

NEVILLE CHRISTOPHER MAHON

Judgment Debtor

Hearing: 8 March 2020

Appearances:

M Lenihan for the Judgment Creditor

RB Hucker and RS Selby for the Judgment Debtor

Judgment:

25 June 2021

JUDGMENT OF ASSOCIATE JUDGE SUSSOCK

This judgment was delivered by me on 25 June 2021 at 4pm pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar

Solicitors / Counsel M Lenihan, Auckland
Hucker & Associates, Auckland

WAIMAURI LIMITED v MAHON [2021] NZHC 1538 [25 June 2021]

Introduction

[1] Mr Mahon, the judgment debtor, applies for a halt of bankruptcy proceedings brought against him by Waimauri Ltd.

[2]The bankruptcy proceedings follow the failure by Mr Mahon to pay Waimauri

$394,245.74 plus interest of $437,639.42, as ordered by Muir J on 29 May 2020.1

[3] Mr Mahon has appealed the High Court decision, with the appeal due to be heard by the Court of Appeal in September 2021.

[4] No stay has been sought preventing enforcement of the High Court decision until the appeal is determined.

[5] Waimauri issued a bankruptcy notice on 2 September 2020 seeking payment of the total amount ordered of $831,885.16 (“Judgment Debt”). The bankruptcy notice was not complied with leading to these bankruptcy proceedings being commenced.

[6] Waimauri opposes Mr Mahon’s application for a halt on the basis that Waimauri has obtained judgment, no stay has been sought from the Court of Appeal, and so Waimauri is entitled to its money. In Waimauri’s submission, Mr Mahon has failed to disclose any meaningful information about his financial position, despite a number of requests, and so should not be entitled to a halt. Waimauri submits further that if a halt is granted it should only be on the basis that security is provided.

Issues

[7]The issues for this Court are:

(a) Should the bankruptcy proceedings be halted pending determination of the appeal?

(b) If so, should the halt be subject to security being provided for the Judgment Debt?

1 Waimauri v Mahon [2020] NZHC 1170 [High Court Decision].

[8] I set out a brief summary of the background facts to provide context before first determining the security question, which is of relevance to the proposed halt and can be answered relatively easily. I then move to consider whether a halt should be ordered.

Relevant background

[9] The Judgment Debt arises following the bringing of a claim by Waimauri and Mr Edney against Beach Arena Ltd and Mr Mahon for breaches of lease and loan agreements relating to the development of the Station Hotel in Auckland and adjacent properties. Before the claim was brought, Mr Mahon, Mr Edney and their respective interests had been engaged in business ventures together for several decades.

[10] Mr Mahon and Beach Arena disputed that any monies…

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 Waimauri Limited v Mahon

Details

AGLC: Waimauri Limited v Mahon [2021] NZHC 1538
Case: [2021] NZHC 1538
Decision Date: 25 June 2021

CaseChat Overview and Summary

In Waimauri Limited v Mahon, Neville Christopher Mahon applied for a halt of bankruptcy proceedings brought against him by Waimauri Limited, the judgment creditor. The bankruptcy proceedings followed Mr Mahon’s failure to pay Waimauri $394,245.74 plus interest of $437,639.42, as ordered by Muir J on 29 May 2020. Waimauri opposed the application for a halt on the basis that Waimauri had obtained judgment, no stay had been sought from the Court of Appeal, and so Waimauri was entitled to its money. The issues for the court were whether the bankruptcy proceedings should be halted pending determination of the appeal and, if so, whether the halt should be subject to security being provided for the Judgment Debt. The court held that a halt should be ordered, but only until final determination of the appeal. The court did not consider it necessary to consider whether a halt should be ordered under s 38 because of the view reached on the basis of s 42. The court also granted the application for a halt of the application for adjudication until the appeal of the claim relating to the underlying debt was finally heard and determined. Finally, the court held that Mr Mahon was entitled to costs in the usual way on a 2B basis.

Orders