Waitakere City Council v Mawhinney HC Auckland CIV 2009-404-6612

[2010] NZHC 907

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2009-404-006612

CIV-2009-404-006659

IN THE MATTER OF     the bankruptcy of PETER WILLIAM MAWHINNEY

AND

IN THE MATTER OF     the Insolvency Act 2006

BETWEEN  WAITAKERE CITY COUNCIL Judgment Creditor

ANDPETER WILLIAM MAWHINNEY Judgment Debtor

Hearing:         10 May 2010

Appearances: M Broad for Judgment Creditor

Peter William Mawhinney (Judgment Debtor  in person) Judgment:  10 May 2010

ORAL JUDGMENT OF ASSOCIATE JUDGE BELL

Solicitors:

Kensington Swan, Private Bag 92101, Auckland

Copy to:

P W Mawhinney, PO Box 157, Swanson (Judgment debtor in person)

WAITAKERE CITY COUNCIL V P W MAWHINNEY HC AK CIV-2009-404-006612  10 May 2010

[1]      This matter was called before me on 10 May 2010.  There are two bankruptcy notices against Mr Mawhinney.   They were served on the same day and Mr Mawhinney applied to have both notices set aside.  He claims that he has a cross- claim which exceeds the amount of the judgments against him which he could not set up in the earlier proceedings.

[2]      I was advised when the matter was called that the parties have negotiated a resolution of the matter and they seek these directions by consent:

a)       Both  applications  to  set  aside  the  bankruptcy  notice  are  to  be dismissed on the following terms:

b)        Mr Mawhinney is to pay the Council legal costs and disbursements of

$14,649.50;

c)       Mr Mawhinney is to pay the Council the settlement sum of $34,000 by 5:00 pm on 9 July 2010, but any payment the Council receives from the Court by way of the security for costs paid into Court by Mr Mawhinney under CIV-2008-484-1119, plus interest, is to be taken into account;  and

d)       The time for compliance with the bankruptcy notices is extended until

5:00 pm on 9 July 2010.  If Mr Mawhinney defaults on the payment of the settlement sum then he will commit an act of bankruptcy under s 17 of the Insolvency Act and that will enable the Council to apply for adjudication.

[3]      When these terms were presented to me, they seemed to me in order save for one doubt.    In his applications to set aside, Mr Mawhinney said that he had been served on 23 November 2009.   His applications were received by the Court on

8 December 2009.  On my calculations it seemed that he had filed his applications on the eleventh working day after he had been served and that would put him out of time to apply to set aside under s 17 of the Insolvency Act 2006.

[4]      An added twist to the matter is that because more than three months have expired since the act of bankruptcy, the Council would also be out of time for applying for Mr Mawhinney to be adjudicated bankrupt.

[5]      However, Mr Broad was able to assist.  He tendered an affidavit of service by Bernard George Burton-Brown which showed that Mr Mawhinney had in fact been served on 25 November 2009.  When shown this affidavit, Mr Mawhinney accepted that it was correct.  Accordingly, my concern has now been addressed.  It turns out that Mr Mawhinney filed his application to set aside the bankruptcy notices within time and under r 24.11 of the High Court Rules, the bankruptcy notices have been suspended pending the hearing of these applications.

[6]      The appropriate way of dealing with this matter with this from now on is to adjourn both applications to be called before me on 13 July 2010 at 10:00 am.  I will dismiss the applications then.   The effect of the dismissal will be to set time running again under the bankruptcy notices.  If Mr Mawhinney then commits an act of bankruptcy, the Council will be entitled to apply for him to be adjudicated bankrupt.

[7]      I record that Mr Mawhinney no longer contends that the bankruptcy notices should be set aside.  I also record that the parties have agreed that Mr Mawhinney is to pay the gross sum of $34,000 to avoid committing an act of bankruptcy.   That includes the sum of $14,649.50 for costs.  Any amount the Council receives by way of payment of security for costs from the Court will be taken into account against

what Mr Mawhinney has to pay.

R M Bell

Associate Judge