White v Lynch - [2015] NZHC 3202

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2014-404-2845 [2015] NZHC 3202

BETWEEN
AMANDA ADELE WHITE

First Plaintiff

ANNE LEOLINE EMILY FREEMAN Second Plaintiff

AND

CHRISTOPHER MAURICE LYNCH First Defendant

STUART GORDON SPENCE Second Defendant

CIV-2014-404-2282

IN THE MATTER of the Insolvency Act 2006

IN THE MATTER of the bankruptcy of Amanda Adele White

BETWEEN CHRISTOPHER MAURICE LYNCH Judgment Creditor
ANDAMANDA ADELE WHITE Judgment Debtor

[Continued over]

Hearing: 26 and 27 November 2015

Counsel:
Appearance:

PJ Wright and AJ Sinclair for defendants in CIV-2014-404-2485 and judgment creditor in CIV-2014-404-2282 and

CIV-2014-404-2284

AA White and ALE Freeman, plaintiffs/judgment debtors, in person

Judgment:

15 December 2015

JUDGMENT OF FAIRE J

This judgment was delivered by me on 15 December 2015 at 11 am, pursuant to Rule 11.5 of the High Court
Rules.

Registrar/Deputy Registrar
Date……………

White v Lynch [2015] NZHC 3202 [15 December 2015]

CIV-2014-404-2284

IN THE MATTER of the Insolvency Act 2006
IN THE MATTER of the bankruptcy of Anne Leoline
Emily Freeman

BETWEEN CHRISTOPHER MAURICE LYNCH Judgment Creditor
ANDANNE LEOLINE EMILY FREEMAN Judgment debtor
Contents

The applications .....................................................................................................[1] The bankruptcy proceedings ..................................................................................[2]

The application to rescind ......................................................................................[4] Relevant law .........................................................................................................[16] The bankruptcy proceedings ................................................................................[27] Orders ...................................................................................................................[32]

The applications

[1] There are three applications which require determination, namely:

(a) The plaintiffs’ application in CIV-2014-404-2485 that my judgment of

14 May 2015 be set aside;

(b) The judgment creditor’s application on CIV-2014-404-2282 that

Ms White be adjudicated a bankrupt; and

(c) The judgment creditor’s application on CIV-2014-404-2284 that

Ms Freeman be adjudicated a bankrupt.

The bankruptcy proceedings

[2] I will deal with the bankruptcy proceedings separately at the end of this judgment. They rely on non-compliance with a bankruptcy notice based on a judgment of the Court of Appeal delivered on 2 July 2014 which ordered the plaintiffs to pay the defendant’s costs in the sum of $3,433.1 The Court of Appeal judgment dealt with interlocutory issues which arose on an appeal against the decision of Priestley J, in which judgment had been entered against the plaintiffs in their capacity as third parties in favour of the defendants.2 The substantive appeal has not yet been determined.

[3] The requirements of ss 13 and 36 of the Insolvency Act 2006 have been met. The issue for determination is whether the court’s discretion, pursuant to s 37 of the Insolvency Act 2006 should be exercised by refusing to adjudicate both judgment debtors bankrupt. That discretion is necessarily affected by the outcome of the plaintiff’s application that my judgment of 14 May 2015 be rescinded. If it is not set aside then, apart from the as yet undetermined substantive appeal which is currently not being prosecuted, there appears to be no outstanding matters that the judgment debtors could call in aid relating to the dispute which might impact on the exercise of the discretion.

The application to rescind

[4] Although the application is drafted as an application to set aside my judgment of 14 May 2015, it is in fact (and I shall treat…

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 White v Lynch

Details

AGLC: White v Lynch [2015] NZHC 3202
Case: [2015] NZHC 3202
Decision Date: 15 December 2015

CaseChat Overview and Summary

This case involves two plaintiffs, Amanda Adele White and Anne Leoline Emily Freeman, who are judgment debtors, and two defendants, Christopher Maurice Lynch and Stuart Gordon Spence, who are judgment creditors. The plaintiffs sought to set aside a prior judgment that struck out their statement of claim, while the defendants sought to have the plaintiffs adjudicated bankrupt. The court had to determine whether the prior judgment should be rescinded, and if the judgment debtors should be adjudicated bankrupt.

The court found that the order striking out the statement of claim was interlocutory and not final, and therefore the plaintiffs' application to set it aside was within the court's jurisdiction. However, the court concluded that the order was not fraudulently or improperly obtained, and the application to rescind was refused. The court also found that the judgment debtors had not shown any reason why an order of adjudication should not be made, and therefore they were adjudicated bankrupt.

The court considered the principles of finality in litigation and the importance of protecting the integrity of the court's processes. The court noted that the plaintiffs had failed to appreciate that an attempt to set aside a final judgment required fraud in the strict sense, and that matters of a lesser nature did not override the principle of finality. The court also found that the material alleging fraud was available to be placed before the court at the time of trial, and that previous reviews of the case had concluded that further investigation by trial was not justified.

The court ordered that the application to rescind the prior judgment be refused, and that Amanda Adele White and Anne Leoline Emily Freeman be adjudicated bankrupt. The defendants and judgment creditor were also awarded costs.

Orders