Young v Wadman

IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY

I TE KŌTI MATUA O AOTEAROA KIRIKIRIROA ROHE

CIV-2021-419-000259

[2024] NZHC 3973

UNDER

AND
the Insolvency Act 2006

IN THE MATTER

of the bankruptcy of BRIAN DAVID WADMAN

BETWEEN

GRANT YOUNG

Judgment Creditor

AND

BRIAN DAVID WADMAN

Judgment Debtor

Hearing: On the papers

Appearances:

AM Swan for the Judgment Creditor TJP Bowler for the Judgment Debtor

Judgment:

20 December 2024

JUDGMENT OF ASSOCIATE JUDGE SUSSOCK

This judgment was delivered by me on 20 December 2024 at 12 pm pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar

Solicitors:
Auckland Property Legal Service, Auckland Neilsons Lawyers, Auckland

YOUNG v WADMAN [2024] NZHC 3973 [20 December 2024]

[1] I issued a judgment on 10 December 2024 granting Mr Young’s application for the adjudication of Brian David Wadman in bankruptcy but on the basis that the order was to lie in Court until 18 December 2024 at 11 am to allow Mr Wadman one final opportunity to pay the debt.1

[2] A memorandum has been filed on behalf of the judgment creditor dated 18 December 2024 confirming that the judgment debt has been paid. I issue this judgment, rather than a minute, to confirm publicly that the bankruptcy order is not, therefore, to take effect.

[3] Counsel for the judgment creditor advises that the parties have not agreed on costs and that it seems likely given the history of the matter that the debtor will avoid paying costs. The creditor, therefore, requests that the bankruptcy proceedings remain on foot until costs have been determined and paid.

[4] The judgment creditor attaches a schedule of costs calculated on a 2B basis together with disbursements amounting to $8,178.50. The costs claimed appear appropriately sought. However, as the debt on which the bankruptcy application was based has now been paid, there may no longer be a basis for the bankruptcy proceedings to continue.

[5] In the judgment issued on 10 December 2024, I made directions for the filing of any costs memoranda by 24 January 2025 on behalf of Mr Young and by 7 February 2025 on behalf of Mr Wadman. In the circumstances, I amend the directions to require the memoranda filed to address whether it is appropriate for the bankruptcy proceedings to continue when only costs remain in issue. The bankruptcy proceedings are to remain on foot in the meantime.

[6] I encourage the parties in the interim to reach an agreement on costs as it is likely to be in both parties’ interests to do so to avoid further delay and expense.

1 Young v Wadman [2024] NZHC 3571.

Orders and directions

[7]I order and direct:

(a)the bankruptcy order made in my judgment of 10 December 2024 is not to take effect;

(b)the bankruptcy proceedings brought by Mr Young are to continue until further order of the Court;

(c)the costs memorandum filed on behalf of Mr Young by 24 January 2025 is to include submissions on the basis for which the bankruptcy proceedings can continue where the judgment debt has been paid and costs are now claimed;

(d)the costs memorandum filed by Mr Wadman on 7 February 2025 is to respond in respect of both costs and whether the bankruptcy proceedings can continue when only costs remain to be resolved; and

(e)the matter will then be determined on the papers or further directions will be made.

Associate Judge Sussock

In Young v Wadman, the court was tasked with considering the continuation of bankruptcy proceedings initiated by the judgment creditor, Grant Young, against the judgment debtor, Brian David Wadman. The dispute arose from an unpaid judgment debt, which led to the initial adjudication of Mr Wadman in bankruptcy. The case was heard on the papers, with appearances by AM Swan for the creditor and TJP Bowler for the debtor. The judgment was delivered by Associate Judge Sussock on 20 December 2024.

The primary legal issue before the court was whether the bankruptcy proceedings should proceed, given that the judgment debt had been satisfied. This raised questions about the appropriateness of continuing the bankruptcy order when the main debt was no longer outstanding. Additionally, the court had to consider the costs incurred during the proceedings and the implications of these costs on the continuation of the bankruptcy application.

Associate Judge Sussock confirmed that the bankruptcy order, initially granted on 10 December 2024, would not take effect as the judgment debt had been paid. However, the creditor sought to keep the bankruptcy proceedings active to address the costs issue. The court acknowledged that the costs claimed appeared reasonable but also recognised that the primary reason for the bankruptcy application had been resolved. The court directed that the costs memoranda filed by both parties should address the basis for continuing the bankruptcy proceedings when only costs remained unresolved. The proceedings were to remain on foot until further order of the court, pending the resolution of these issues.

In conclusion, the court ordered that the bankruptcy order would not take effect and that the proceedings would continue until further order, with specific directions for the parties to address the basis for continuing the bankruptcy application in light of the paid judgment debt. The matter was to be determined on the papers or further directions would be made.

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established

UNDER AND	the Insolvency Act 2006
IN THE MATTER	of the bankruptcy of BRIAN DAVID WADMAN
BETWEEN	GRANT YOUNG Judgment Creditor
AND	BRIAN DAVID WADMAN Judgment Debtor

Hearing:	On the papers
Appearances:	AM Swan for the Judgment Creditor TJP Bowler for the Judgment Debtor
Judgment:	20 December 2024