MR & J LYNCH V CD MAIN HC PMN CIV 2008-454-285

MR & J LYNCH V CD MAIN HC PMN CIV 2008-454-285

The charging order registered over the debtor's interest in the jointly owned property constituted a security such that the creditors were secured creditors; the only valuation evidence showed the debtor's half equity (~$39,688) exceeded the admitted balance debt ($31,652.50) so the debt did not exceed the value of the charge by $1,000 as required by s14, and accordingly the court was obliged to refuse adjudication and dismissed the application.

Citation
openlaw-7d434629_1e0b_4fee_9b09_74bc41fd0f3e.pdf
Parties
Judgment Creditor: Mark Raymond Lynch; Judgment Creditor: Joanne Lynch; Judgment Debtor: Craig Duncan Main
Court
High Court
Jurisdiction
New Zealand
Judgment Date
8 May 2009
Procedural Posture
Bankruptcy Adjudication Application Under Insolvency Act 2006 / Hearing and Judgment (application to Adjudicate Bankrupt Dismissed)
Outcome
Application dismissed; adjudication refused under s14 Insolvency Act 2006
Legal Topics
Charging Order, Secured Creditor Status, Section 14 Insolvency Act 2006, Section 37 Discretionary Refusal, Valuation of Security, Burden of Proof, Costs
Insolvency Bankruptcy Civil Procedure Property Law Enforcement Charging Order Secured Creditor Status Section 14 Insolvency Act 2006 +4 more

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Parties

Mark Raymond Lynch

Judgment Creditor

Joanne Lynch

Judgment Creditor

Craig Duncan Main

Judgment Debtor

Procedural Posture

Bankruptcy Adjudication Application Under Insolvency Act 2006 / Hearing and Judgment (application to Adjudicate Bankrupt Dismissed)

Legal Issues

  1. 1 Whether a charging order against the debtor's house makes the judgment creditors secured creditors for the purposes of s14
  2. 2 Whether the debt exceeds the value of the charge by at least $1,000 as required by s14
  3. 3 Burden of proof and valuation evidence required from the petitioning creditor

Ratio Decidendi

The charging order registered over the debtor's interest in the jointly owned property constituted a security such that the creditors were secured creditors; the only valuation evidence showed the debtor's half equity (~$39,688) exceeded the admitted balance debt ($31,652.50) so the debt did not exceed the value of the charge by $1,000 as required by s14, and accordingly the court was obliged to refuse adjudication and dismissed the application.

Court Disposition

Application dismissed; adjudication refused under s14 Insolvency Act 2006

Orders

  • Application to adjudicate the judgment debtor bankrupt is dismissed
  • Costs to lie where they fall