Wanganui District Council v Page HC Wanganui CIV-2010-483-134
[2011] NZHC 1317
•21 July 2011
IN THE HIGH COURT OF NEW ZEALAND WANGANUI REGISTRY
CIV-2010-483-134
IN THE MATTER OF the Insolvency Act 2006
AND IN THE MATTER OF the bankruptcy of ADRIAN NEIL PAGE
BETWEEN WANGANUI DISTRICT COUNCIL Judgment Creditor
ANDADRIAN NEIL PAGE Judgment Debtor
Hearing: 20 July 2011
(Heard at Wanganui High Court by Video Conference)
Counsel: J.M. Woodcock - Counsel for Judgment Creditor (Wanganui District
Council) and for the Official Assignee
Mr A.N. Page the judgment debtor/bankrupt
Judgment: 21 July 2011 at 4:00 PM
JUDGMENT OF ASSOCIATE JUDGE D.I. GENDALL
This judgment was delivered by Associate Judge Gendall on 21 July 2011 at 4.00 pm under r 11.5 of the High Court Rules.
Solicitors: Armstrong Barton, Solicitors, PO Box 441, Wanganui
Official Assignee, Private Bag 5091, Wellington 6145
WANGANUI DISTRICT COUNCIL V AN PAGE HC WANG CIV-2010-483-134 21 July 2011
Introduction
[1] Mr Adrian Neil Page (Mr Page) was adjudicated bankrupt on an application brought by the judgment creditor, Wanganui District Council, at the High Court at Wanganui under matter number CIV-2010-483-134 on 24 February 2011. Nicola Janet Wilson (Ms Wilson), who I understand is his wife or partner, was also adjudicated bankrupt on the application of the judgment creditor, Wanganui District Council, at the High Court at Wanganui under matter number CIV-2010-483-133 on
24 February 2011.
[2] The debt upon which each of the applications by the Wanganui District Council were brought amounted to $12,000.00 and was based upon an order for costs of this amount made against both Mr Page and Ms Wilson in the Environment Court on 11 March 2010.
[3] On 14 March 2011 an Application purporting to be for the Annulment of both bankruptcies under the signatures of both Mr Page and Ms Wilson was filed in this Court. Reference to matter number CIV-2010-483-133 and the name of Ms Wilson, however, had been deleted from the backing sheet on this Application on the Court’s original document.
[4] And, it was only Mr Page who appeared before me on 20 July 2011 at the hearing of the Annulment Application. Notwithstanding this, at para 3 of the section head ―Conclusion‖ in the 14 March 2011 Annulment Application itself, the following is noted:
3. Please note that Mr Page is representing Ms Wilson in relation to this matter.
[5] Mr Page is not a barrister and solicitor of this Court and therefore is not entitled to represent Ms Wilson in this matter without the leave of the Court. But, in any event, the judgment creditor’s opposition to the present application and the Official Assignee’s Reports and all submissions before me relate solely to the application to annul Mr Page’s bankruptcy and not that of Ms Wilson. The Official Assignee in his first report also notes that only one filing fee on the applications was provided to the Court and that he is:
... aware that these annulment proceedings apply only to the bankruptcy of Adrian
Neil Page and not to the bankruptcy of Nicola Jean Wilson.
[6] I must therefore proceed on the basis that the application before me, all material before the Court and the submissions made by Mr Page and Ms Woodcock relate only to Mr Page’s Application to annul his own bankruptcy and not the Annulment Application purported to be made by Ms Wilson.
Annulment Application
[7] From that 14 March 2011 Annulment Application, it appears that the general ground identified in support of the application simply follows s 309(1)(a) Insolvency Act 2006 on the basis that it is contended ―the applicant should not have been adjudicated bankrupt‖.
[8] For the sake of completeness, however, I set out s 309 Insolvency Act 2006 in its entirety. It reads:
309 Court may annul adjudication
(1) The Court may, on the application of the Assignee or any person interested, annul the adjudication if—
(a) the Court considers that the bankrupt should not have been adjudicated bankrupt; or
(b) the Court is satisfied that the bankrupt's debts have been fully paid or satisfied and that the Assignee's fees and costs incurred in the bankruptcy have been paid; or
(c) the Court considers that the liability of the bankrupt to pay his or her debts should be revived because there has been a substantial change in the bankrupt's financial circumstances since the date of adjudication; or
(d) the Court has approved a composition under subpart 1 of
Part 5.
(2) In the case of an application on one of the grounds specified in subsection
(1)(a) to (c) by an applicant who is not the Assignee,—
(a) a copy of the application must be served on the Assignee in the manner and within the time that the Court directs; and
(b) the Assignee may appear on the hearing of the application as if the Assignee were a party to the proceeding.
(3) The adjudication is annulled—
(a) from the date of adjudication, in the case of an application on the ground specified in subsection (1)(a):
(b) from the date of the Court's order of annulment, in the case of an application on one of the grounds specified in subsection (1)(b) to (d).
(4) In the case of an application for annulment on the ground that the adjudication should not have been made because of a defect in form or procedure, the Court may, in addition to annulling the adjudication, exercise its powers under section 418 to correct the defect and order that the application for adjudication be reheard as if no adjudication had been made.
(5) If the Court annuls the adjudication on one of the grounds specified in subsection (1)(a) to (c),—
(a) the Court may, on the Assignee's application, fix an amount as reasonable remuneration for the Assignee's services and order that it be paid, in addition to any costs that may be awarded:
(b) that amount must be paid into a Crown Bank Account:
(c) the Assignee is not entitled to remuneration under section 406 for those services.
[9] There is no doubt that s 309(1)(c) and (d) do not apply here. The Court has not approved a composition in this case nor has there been a substantial change in the bankrupt Mr Page’s financial circumstances since adjudication that justifies the revival of his debts.
[10] As to s 309(1)(b) no suggestion was made before me that Mr Page’s debts have been fully paid or satisfied at this point such that an annulment is appropriate. I will return to make brief mention of this aspect later in this judgment however.
[11] From the submissions advanced to me at the hearing of this matter it is clear that the judgment creditor, the Wanganui District Council, opposes Mr Page’s Annulment Application. As I have noted, the Official Assignee’s position is set out in two reports filed in this Court pursuant to s 309 Insolvency Act 2006. These relate solely to Mr Page’s bankruptcy, the first being dated 15 April 2011 and the second 15
July 2011.
[12] From the Official Assignee’s 15 July 2011 report, the claims received from creditors up to the present are said to be as follows:
Preferential Creditors
Wanganui District Council $1,252.00
Wanganui District Council $3,873.75
Unsecured Creditors
Farmlands Trading Society Limited $25,828.97
Wanganui District Council $ 6,589.28
TOTAL $37,044.00
[13] As to Mr Page’s asset position, the Official Assignee confirms in his earlier report that on 7 March 2011 Mr Page provided a statement of affairs which showed his assets including superannuation, a motor vehicle, a miniature horse and company shares in Earth Design Contracting Limited at a total value of $9,500.00. This statement of affairs also acknowledged a liability to Farmlands Trading Society Limited of $25,000.00 but no other liabilities. The Official Assignee in this 15 April
2011 report also indicates that his investigations since 24 February 2011 showed that Mr Page might have an interest in certain properties, although these were probably owned by Trusts and this was yet to be confirmed. No mention of these additional properties was made in his subsequent 15 July 2011 report however. Nor have any verified details of his financial position been provided at any time to the Court by Mr Page.
[14] As I have noted above, there cannot be any question here that Mr Page’s debts have been fully paid or satisfied and the Official Assignee’s fees and costs cleared in terms of s 309(1)(b) to justify an annulment on that ground. Whether they can be in the future remains an unanswered question at this point.
[15] That leaves the only possible ground for an annulment order here as s 309(1)(a) to the effect that the Court considers that Mr Page should not have been adjudicated bankrupt at the time when this occurred on 24 February 2011.
[16] The jurisdiction available to annul a bankruptcy under s 309(1)(a) is a narrow one – Re Hunter Ex Parte CIR [2000] 9 NZTC15722. As Brookers Insolvency Law
& Practice at para IN309.05 notes, generally sub-section (1)(a) will not provide
grounds for interfering with a discretion exercised on a properly brought adjudication application unless it is established that there was some defect in procedure, abuse of process or where some material fact was not brought before the Court making the adjudication order.
[17] As I understand Mr Page’s submissions here, his first argument is that when this Court made the adjudication order it failed to ask him as the judgment debtor whether he was able to satisfy the debt in question. Further he asserts that this Court failed to provide him with 5 working days in which to satisfy the debt which he claims he could have done.
[18] As I see the position, Mr Page had numerous opportunities and a considerable length of time to settle the judgment creditor’s debt in question here prior to his adjudication. In a judgment I gave on 18 August 2010 dismissing Mr Page’s application to set-aside the Bankruptcy Notice which had been issued against him, I made an order giving him a further 5 working days from that date to pay or satisfy the debt in question, failing which bankruptcy proceedings could be brought. The debt was not paid or satisfied within that time and the bankruptcy proceedings were filed on 8 September 2010. Mr Page then effectively had a further period of over 5 months to clear the judgment creditor’s debt before adjudication, but he failed to do so. It is this failure to satisfy the outstanding judgment debt within the statutory time frame following service of the Bankruptcy Notice upon him that constituted an act of bankruptcy here. This formed the basis for the adjudication order made later. The order was made following a full defended hearing in a reserved and reasoned decision. In each case noted above, evidence was provided by the judgment creditor. Despite Mr Page being given the opportunity to be heard by way of evidence on each occasion, including independently verified evidence, he failed to do so. Instead, he simply provided detailed and lengthy written and oral submissions raising a raft of unsubstantiated assertions, most of which he has again repeated in his submissions on the present Annulment Application.
[19] Essentially, as I understand his submissions, Mr Page wishes to relitigate the grievances he feels he has suffered at the hands of the judgment creditor, Wanganui District Council over recent years. As I see it, however, this is not a proper
opportunity for Mr Page to endeavour to relitigate these complaints. I have listened to and carefully considered all Mr Page’s oral and written submissions on his present application and I am satisfied that the matters he has raised have been both traversed at length by this and other Courts already and dealt with appropriately in numerous affidavits which have responded to his grievances. And, notwithstanding these strongly voiced grievances against the Council expressed again here by Mr Page, even on his own acknowledgement he has an undisputed debt of at least $25,000.00 owing to Farmlands Trading Society limited which has remained unpaid for some time. No funds would appear to be available to clear this acknowledged debt.
[20] Finally, as Brookers Insolvency Law & Practice notes at IN309.04:
If the bankrupt contends that the order should not have been made, they will have to adduce evidence of matters that were not before the Court when the adjudication was made. The bankrupt probably will not be able to apply for annulment unless they adduce evidence that the adjudication amounts to an abuse of process, or evidence of fraud or collusion.
No such evidence of any kind has been adduced by Mr Page here.
[21] I am satisfied in this case that Mr Page has been quite unable to establish that there has been some defect in procedure, abuse of process or failure by this Court to consider a material fact such that annulment under s 309(1)(a) Insolvency Act 2006 is appropriate.
Conclusion
[22] It follows that for all these reasons, Mr Page’s application before this Court for annulment of his bankruptcy is dismissed.
[23] If costs may be in issue then they are reserved.
[24] As a post-script to this judgment, it is noted from the two s 309 Insolvency Act 2006 reports to this Court that the Official Assignee acknowledges in writing that he has no objection to an annulment of Mr Page’s bankruptcy being granted here provided that:
(a) Sufficient funds are available to meet the debts of, or arrangements made with all known creditors; and
(b) The petitioning creditors costs and disbursements of $3,873.75 are paid;
and
(c) The Official Assignee’s costs and disbursements presently outstanding of
$8,325.86 are paid; and
(d) No creditor objects to the annulment.
[25] And, before me, Ms Woodcock for the Wanganui District Council as judgment creditor confirmed that if all outstanding amounts owing to the Council by Mr Page were settled in full then it too would have no objection to an annulment on the basis put forward by the Official Assignee. That annulment would be effectively under s 309(1)(b) Insolvency Act 2006.
[26] Whether or not this may present an opportunity for a fresh annulment application to be made later is a matter for the future.
‘Associate Judge D.I. Gendall’
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