HUNT V OFFICIAL ASSIGNEE HC WN CIV-2003-485-2585 [2007] NZHC 639 (12 July 2007)

IN THE HIGH COURT OF NEW ZEALAND
WELLINGTON REGISTRY
                                                                CIV-2003-485-2585


               IN THE MATTER OF            the Insolvency Act 1967

               AND

               IN THE MATTER OF       
    the bankruptcy of PETER MICHAEL
                                           HUNT (BANKRUPT)

               BETWEEN          
          PETER MICHAEL HUNT (BANKRUPT)
                                           Applicant

               AND                
        OFFICIAL ASSIGNEE
                                           Respondent


Hearing:       12 July 2007

Appearances: P Churchman
for intended interveners
             E J Horner for Peter Hunt (Bankrupt)
             M Reddy for Official Assignee
          
  R C Laurenson for creditors R and J Muollo

Judgment:      12 July 2007 at 4.40 p.m.

In accordance with r 540(4) I direct the
Registrar to endorse this judgment with the
delivery time of 4.40 p.m. on 12 July 2007.


                         JUDGMENT OF MACKENZIE
J



[1]    This is a most unusual application. A public examination of the bankrupt, in
accordance with ss 69 and 109 of the Insolvency
Act 1967, is fixed for hearing on
25 July 2007. The trustees of the P M Hunt Family Trust, the P M Hunt (No. 2)
Family Trust and
the P M Hunt (Wellington) Family Trust have applied for an order
grant ing the trusts leave to intervene in these proceedings. The
application is made
under Rule 97 of the High Court Rules and the inherent jurisdiction of the Court.




HUNT V OFFICIAL ASSIGNEE
HC WN CIV-2003-485-2585 12 July 2007

The bankrupt consents to such an order. The making of such an order is opposed by
the Official
Assignee, and by R and J Muollo, creditors of the bankrupt.


[2]    The first issue is that of jurisdiction. The applicants rely
upon Rule 97 of the
High Court Rules, and the inherent jurisdiction of the Court.         Counsel for the
Official Assignee submits
that Rule 97 does not have a place in the inquisitorial
process brought under the Insolvency Act 1967. Counsel refers to Hallam v
Ryan
 (1989) 3 PRNZ 132, Re Baird (a Bankrupt)  [1994] 2 NZLR 463 and Gray v Legal
Services Board  (1998) 11 PRNZ 687. No case where leave was granted to intervene
in an examination under s 69 or s 109 of the Insolvency Act was cited by any
counsel,
but Mr Churchman referred to the previous litigation between these parties
in Hunt v Muollo  [2003] 2 NZLR 322, where leave was granted to the trustees to
intervene in an examination of Mr Hunt under Rule 621 of the High Court Rules.


[3]
   I do not consider it necessary to discuss the question of jurisdiction in detail.
I incline to the view that the Court would have
power, in an appropriate case, to
permit a non party to intervene in an examination under s 69 or s 109. However, for
the reasons
which follow, I am satisfied that this is not an appropriate case and so the
issue of jurisdiction does not arise for decision by
me.


[4]    Mr Churchman submits that the intervention is necessary on two grounds:


       (a)     That it is required in the
interests of justice; and


       (b)     That it may assist the Court to more effectively and completely
               adjudicate
upon and settle all questions involved in these proceedings.


He submits that the purpose of the application is to address a concern
which the
trustees hold that the Official Assignee or the judgment creditor, when examining the
bankrupt, will advance propositions
or make requests adverse to the interests of the
trust. The application does not seek to obtain for the trusts any right of questioning
of the bankrupt. Mr Churchman submits that their sole role will be to protect their
interests by objecting should their rights or
privacy considerations be adversely
affected by any question or request of the bankrupt.

[5]    On an examination under s 69, it
is the duty of the bankrupt to answer all
such questions as the Court puts or allows to be put to him. The purpose of the
applicat
ion is to enable counsel for the trustees to object to the putting of questions
where it is suggested that those may impact improperly
on the affairs of the trust. I
am satisfied that that is not a proper basis on which to allow the trustees to intervene.
The interests
of justice, so far as the trustees are concerned, do not require that they
be permitted to have a say on whether questions are proper
or not. No decision
adversely affecting their position can be given as a result of the examination. They
can have no legitimate interest
in participating in it. The other ground is that the
Court may be assisted. The Court should be slow to admit a person on that ground,
against the opposition of a party. I am not persuaded that that is appropriate here.
Whether a question is proper or not is not a
matter on which I consider that the Court
is likely to be materially assisted by counsel for the trustees.


[6]    Another consideration
is that the leave to intervene which is sought falls short
of full party status. Rule 97 contemplates that a person whose presence
before the
Court may be necessary to enable the Court effectually and completely to adjudicate
upon and settle all questions involved
in the proceedings will be added as a plaintiff
or defendant. In that capacity, that person would be subject to all of the interlocutory
and other processes available to or against a party. That is not what is proposed here.
It is not, for example, suggested that the
trustees would become liable to discovery in
these proceedings.     Accordingly, if counsel for the trustees were permitted to
participate
so as to be able to object to questions on the basis that the interests of the
trustees might be adversely affected, then the factual
underpinning for such an
object ion would not be able to be tested before the Court so as to enable the Court or
the Official Assignee
to assess the merits of the objection. If full party status were
accorded to the trustees, that would inevitably involve an unacceptable
delay.


[7]    For the foregoing reasons, leave to intervene is refused.


[8]    I consider that the Official Assignee is entitled
to costs. The unsuccessful
applicat ion should not unnecessarily deplete the bankrupt's estate. In the light of the
nature and novelty
of the application, and the extensive affidavit which the Official
Assignee has thought it necessary to file to apprise the Court of the background, I

consider that Category 2 and band C are appropriate. There will be costs in favour
of the Official Assignee,
payable by the applicants, on a category 2C basis, together
with disbursements to be fixed by the Registrar.




               
                                    "A D MacKenzie J"




Solicitors
Morrison Kent, Wellington, for applicant
Gibson Sheat, Lower
Hutt, for respondent
Stephen Brown, Wellington, for intended interveners