Wetini v Official Assignee - [2022] NZHC 3068

IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY

I TE KŌTI MATUA O AOTEAROA KIRIKIRIROA ROHE

CIV-2021-419-309

[2022] NZHC 3068

IN THE MATTER of an application under s 119 of the Insolvency Act 2006

UNDER

Part 18 of the High Court Rules

BETWEEN

DIANA ELIZABETH WETINI

Plaintiff

AND

THE OFFICIAL ASSIGNEE

Defendant

Hearing: On the papers

Appearances:

P Fisher for Plaintiff

No appearance for Defendant (abides decision of court)

Judgment:

23 November 2022

JUDGMENT OF LANG J

[on application for orders under s 119 of the Insolvency Act 2006]

This judgment was delivered by me on 23 November 2022 at 3.30 pm, pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar Date……………

Solicitors:
Clancy Fisher Oxner & Bryant, Tokoroa

WETINI v THE OFFICIAL ASSIGNEE [2022] NZHC 3068 [23 November 2022]

[1] This proceeding concerns a residential property situated at 35 Weka Place, Tokoroa (the property). The property is currently registered in the names of the plaintiff, Ms Diana Elizabeth Wetini and her former spouse, Mr Steven Paul Morehu Wetini.

[2] Mr Wetini was adjudicated bankrupt on 21 October 2013. His interest in the property vested in the Official Assignee immediately on his adjudication.1 Mr Wetini remains an undischarged bankrupt.

[3] On 8 January 2014 the Official Assignee disclaimed any interest in the property under s 117 of the Insolvency Act 2006 (the Act). This meant the share in the property formerly held by the Official Assignee vested in the Crown.

[4] Mr and Mrs Wetini separated in 2011. Since that date the property has been variously occupied by Mrs Wetini, Mr Wetini and their children. Whilst Mr Wetini was occupying the property during 2020 he carried out renovations to, and refurbishment of, the property. During this period Mr Wetini also met the outgoings payable on the property including all utility payments, rates and mortgage instalments. Mrs Wetini considers the cost of the renovations and the outgoings Mr Wetini has paid is likely to be approximately $20,000.

[5] Mrs Wetini was able to negotiate a sale of the property in February 2021 but this could not be completed because she could not provide the purchaser with clear title to the property. This resulted from the fact that the Official Assignee has disclaimed any interest in it and Mr Wetini was unable to execute a transfer given the fact that he remains bankrupt.

[6] Mrs Wetini is now living in the property but wishes to sell it. This will not be possible whilst Mr Wetini remains a registered proprietor of the property.

[7] The sum of approximately $100,000 remains owing on a mortgage registered against the title to the property. However, the mortgagee has no objection to the property being vested in Mrs Wetini provided its rights as mortgagee are unaffected.

1 Insolvency Act 2006, s 7(1)(a).

[8] To navigate this impasse Mrs Wetini seeks an order under s 119(3) of the Act vesting her former husband’s share of the property in her. The Official Assignee abides the decision…

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 Wetini v Official Assignee

Details

AGLC: Wetini v Official Assignee [2022] NZHC 3068
Case: [2022] NZHC 3068
Decision Date: 23 November 2022

CaseChat Overview and Summary

The matter of Wetini v Official Assignee concerns a dispute over a residential property located at 35 Weka Place, Tokoroa. The property is registered in the names of Diana Elizabeth Wetini and her former spouse, Steven Paul Morehu Wetini. Steven was declared bankrupt in 2013, and his interest in the property vested in the Official Assignee. However, the Official Assignee disclaimed any interest in the property under section 117 of the Insolvency Act 2006, meaning that the share in the property formerly held by the Official Assignee vested in the Crown. Diana seeks an order under section 119(3) of the Act vesting her former husband’s share of the property in her, as she is unable to sell the property due to her former husband's status as a bankrupt and the Official Assignee's disclaimer of interest. The Official Assignee has not opposed the application and the Crown has confirmed it does not object to the order Diana seeks. The court must decide whether it is fair to vest Steven's share of the property in Diana under section 119(3) of the Act.

The court considered the circumstances relevant to determining fairness under section 119(3) of the Act, as identified in Goldstone v Goldstone and Re Body Corporate 201036. These include Diana's former interest in the property, how and when such interest was acquired, whether Diana has maintained or increased the value of the property, the circumstances in which the disclaimed property became vested in the Assignee through bankruptcy, the rights and interests of third parties, and the consequences of any vesting for the applicant and any other persons. The court found that Diana has suffered damage as a result of the Official Assignee disclaiming the property, and that the only way to rectify her unfortunate position is for her to become the sole owner of the property. Diana accepts that, should such an order be made, the Official Assignee should receive the sum of $20,000 from the sale proceeds of the property by way of recompense for the cost of the refurbishments that Steven carried out and the outgoings he paid on the property during 2020.

The court found that it was fair to vest Steven's share of the property in Diana under section 119(3) of the Act. The order vesting Steven's share of the property in Diana is made on the condition that when Diana sells the property she is to pay the sum of $20,000 to the Official Assignee from the sale proceeds by way of reimbursement for the expenditure Steven incurred in carrying out renovations and paying outgoings on the property during 2020.

Orders