Dale King Building Supplies Limited t/a Placemakers Pakuranga v Hatley [2013] NZHC 2045 (13 August 2013)

Last Updated: 3 September 2013

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV 2012-404-007586 [2013] NZHC 2045

BETWEEN	DALE KING BUILDING SUPPLIES LIMITED TRADING AS PLACEMAKERS PAKURANGA Judgment Creditor
AND	PAUL ALLISTAIR HATLEY Bankrupt

Hearing:	13 August 2013
Appearances:	W A Endean for applicant bankrupt
Judgment:	13 August 2013

_{ORAL JUDGMENT OF ASSOCIATE JUDGE ABBOTT}

Solicitors:

Dawsons Lawyers and Notaries, Auckland

Solv Law Ltd, Auckland

DALE KING BUILDING SUPPLIES LIMITED v HATLEY [2013] NZHC 2045 [13 August 2013]

[1] Paul Allistair Hatley (the bankrupt) was adjudicated bankrupt by this Court on 9 April 2013. He has applied for annulment of his bankruptcy.

[2] The application has been served on the Official Assignee and on the judgment creditor on whose application the order for adjudication was made (Dale King Building Supplies Ltd). Although there is no proof of service on them, the Official Assignee has filed a report, and the judgment creditor has filed a memorandum, both indicating that they do not object to the orders sought, given the basis of the application, namely that all creditors will be paid and the Official Assignee’s costs will be met.

[3] The Official Assignee has identified the creditors who have proved against the estate, in a letter to the bankrupt’s solicitors. There are three creditors in addition to the judgment creditor. The bankrupt’s solicitors have been in communication with the largest of them, and understand that the Official Assignee has been in communication with the other two (smaller) creditors. Given that they cannot be prejudiced (because their claims will be met in full) I am able to, and do, dispense with service on them.

[4] The application was made on 2 bases: first that the order for adjudication should not have been made (s 309(1)(a) of the Insolvency Act 2006), and secondly on the basis that there has been a substantial change in the financial circumstances of the bankrupt (s 309(1)(c)).

[5] I do not accept that this is a matter that should be determined under s

309(1)(a). It is clear from the file that the order was properly made. Whilst I have no doubt that adjudication could have been avoided if the bankrupt had taken the steps then that he is taking now, that did not occur.

[6] I accept that there is a basis for determining the application in favour of the bankrupt under s 309(1)(c). The change of circumstances is that he has been able to secure an offer of finance (on the security of his family home) which will allow him to meet all of his debts. The offer of finance is conditional on obtaining an order for annulment of his bankruptcy. The solicitor for the lender has confirmed that that

offer remains open, and will not be withdrawn provided the matter is dealt with by the Court no later than the end of this month. The solicitor has undertaken to settle the refinancing immediately after an order has been made on the application (although subject to security being given in support of the loan).

[7] There are two possible sources of the finance. One is by extension to an existing loan, the other is from a new and separate lender. The same solicitor acts for both potential lenders

[8] The Official Assignee has filed a report advising that he will abide the Court’s decision in so far as an annulment under s 309(1)(c) is concerned. He has confirmed the names and debts of the known creditors, with one minor correction to the amount of the claim of one creditor, as identified in the bankrupt’s affidavit in support of the application.

[9] The judgment creditor has filed a memorandum advising that it does not object to the orders sought on the proviso that the order will lie in Court until such time as the bankrupt’s solicitor provides the Registrar with his undertaking that all his creditors (as identified in the affidavit in support) have been paid all sums due to them.

[10] Counsel informs me that it ought to be possible to complete settlement of the refinancing within the next couple of weeks. I will allow a further week to ensure that appropriate notice is given to the Registrar before the sealed order is released.

[11] I make an order annulling the bankruptcy, pursuant to s 309(1)(c), on the following terms:

(a) The order is to lie in Court, and not be sealed, until the solicitor for the bankrupt provides a written undertaking to the Registrar that the bankrupt’s creditors have been paid in full, and that the Official Assignee’s costs and disbursements (calculated at $5,078.86) have been paid.

(b) The order for annulment will lapse if it is not sealed within 15

_{working days from today’s date.}

Associate Judge Abbott