Young v Official Assignee - [2022] NZHC 1676

IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY

I TE KŌTI MATUA O AOTEAROA KIRIKIRIROA ROHE

CIV-2022-419-000025

[2022] NZHC 1676

UNDER Insolvency Act 2006, s 309

BETWEEN

PHILIP ROGER YOUNG and VIVIEN JANE YOUNG

Applicants

AND

OFFICIAL ASSIGNEE

Respondent

Hearing: 6 July 2022

Appearances:

Applicant in Person (Mr Young)

No appearance by Applicant (Mrs Young) C T Jones for Respondent

Judgment:

14 July 2022

JUDGMENT OF ASSOCIATE JUDGE P J ANDREW

This judgment was delivered by Associate Judge Andrew on 14 July 2022 at 3.00 pm
pursuant to r 11.5 of the High Court Rules Registrar / Deputy Registrar

Date ……………………………….

YOUNG v OFFICIAL ASSIGNEE [2022] NZHC 1676 [14 July 2022]

Introduction

[1] Mr and Mrs Young were adjudicated bankrupt in October 2003, on the application of Mr Dennis Parsons as receiver of Baywater Finance Ltd1 (in receivership).2 Mrs Young was discharged from her bankruptcy in October 2006 and Mr Young in March 2007. They now apply, nearly 19 years later, for their adjudications to be annulled.

[2] The bankruptcies arose from a failure by the Youngs to make payment for summary judgment entered against them in this Court in the sum of $350,000, plus costs and disbursements of $6,750. Mr Parsons brought those proceedings as receiver based on a call on unpaid share capital in Baywater in the sum of $350,000.

[3] The Youngs say that they should never have been adjudicated bankrupt and that all their debts in the bankruptcy have been fully paid and satisfied.

[4]The critical issues I must determine are as follows:

(a)Should the Youngs have been adjudicated bankrupt?

(b)Can I be satisfied that the Youngs’ debts have been fully paid or satisfied?

(c)Should I decline to grant the applications on the grounds of delay?

Factual background

[5] Baywater was incorporated in November 2001 as Bay Finance Ltd.3 In 2001, it purchased the principal value of loans held by Omega Finance Ltd. Omega Finance Ltd was a finance company owned and operated by Mr Young. That company had primarily been lending to persons who were purchasing time-share holidays at various resorts located in New South Wales and Queensland.4

1      Baywater.
2      Young v Parsons HC Hamilton CIV-2003-419-594, 14 October 2003.
3      Name change from Bay Finance Ltd to Baywater Finance Ltd occurred on 2 September 2002.
4 See receiver’s first report dated 24 January 2003 at [1].

[6] Mr Young was the director of Baywater and he and Mrs Young held 350,000 shares in that company.

[7] On 17 December 2002, Mr Parsons was appointed the receiver of Baywater pursuant to a security trust deed dated 7 March 2002 between Baywater and Covenant Trustee Company Limited. Mr Parsons’ duties included the recovery of all known assets of the company, including unpaid capital.

[8]In his receiver’s first report of 24 January 2003, Mr Parsons noted:

23.As stated I believe that some risk does exist to the principal amounts due to stockholders. As a preliminary step I have called upon the
$350,000 in uncalled capital held…

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 Young v Official Assignee

Details

AGLC: Young v Official Assignee [2022] NZHC 1676
Case: [2022] NZHC 1676
Decision Date: 14 July 2022

CaseChat Overview and Summary

In this case, the applicants, Mr and Mrs Young, seek the annulment of their bankruptcies which were declared in 2003. The Youngs argue that they should never have been adjudicated bankrupt and that all their debts have been paid. The Official Assignee opposes the annulment of the bankruptcies, arguing that the Youngs have not satisfied the legal criteria for annulment under the Insolvency Act 1967. The primary issue before the court was whether the Youngs' bankruptcies should be annulled on the grounds that the order of adjudication should not have been made, that the debts have been fully paid or satisfied, or that there has been a substantial change in the Youngs' financial circumstances since the date of adjudication. The court found that the Youngs had not established that their debts had been fully paid or satisfied, as all of their bankruptcy debts remained unpaid. Furthermore, the court found that the significant delay in applying for annulment weighed heavily against granting relief. Consequently, the court dismissed the Youngs' applications for annulment of their bankruptcies.

The court awarded costs to the Official Assignee on a 2B basis, plus disbursements, if the parties could not agree on the costs. The Youngs were required to file submissions within 14 days if they disagreed with the costs decision.

Orders