BODY CORPORATE 68792 v MEMELINK [2017] NZHC 905

BODY CORPORATE 68792 v MEMELINK [2017] NZHC 905

Court has jurisdiction to adjudicate even where debts have been paid but must exercise discretion under s37; halt order was lifted because Memelink breached conditions (late/partial payments and failure to pursue Proceeding 141) but court exercised its discretion not to adjudicate because Memelink had paid or could...

Source-derived case information.

Citation
[2017] NZHC 905
Parties
Substituted Creditor: Body Corporate 68792; Substituted Creditor: Body Corporate 378945; Debtor: Harry Memelink
Court
High Court
Jurisdiction
New Zealand
Judgment Date
8 May 2017
Procedural Posture
Bankruptcy Adjudication Under Insolvency Act 2006 / Application to Lift Halt Order; Reserved Judgment on Whether to Adjudicate Bankrupt
Outcome
Halt order lifted; applications for adjudication dismissed; funds paid out to Body Corporate without prejudice; costs awarded to the substituted creditors (quantum reserved)
Legal Topics
Adjudication Order, Jurisdiction to Adjudicate After Payment, Discretion to Refuse Adjudication, Body Corporate Levies, Costs
Insolvency Law Bankruptcy Unit Titles (body Corporate) Law Civil Procedure Adjudication Order Jurisdiction to Adjudicate After Payment Discretion to Refuse Adjudication Body Corporate Levies +1 more

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Parties

Body Corporate 68792

Substituted Creditor

Body Corporate 378945

Substituted Creditor

Harry Memelink

Debtor

Procedural Posture

Bankruptcy Adjudication Under Insolvency Act 2006 / Application to Lift Halt Order; Reserved Judgment on Whether to Adjudicate Bankrupt

Legal Issues

  1. 1 Whether the court has jurisdiction to make an adjudication order where the debt pleaded has been paid before adjudication is ordered
  2. 2 Whether the halt order made on 7 November 2016 should be lifted for breach of its conditions
  3. 3 Whether the court should exercise its discretion to adjudicate the debtor bankrupt despite jurisdiction existing

Ratio Decidendi

Court has jurisdiction to adjudicate even where debts have been paid but must exercise discretion under s37; halt order was lifted because Memelink breached conditions (late/partial payments and failure to pursue Proceeding 141) but court exercised its discretion not to adjudicate because Memelink had paid or could immediately pay the claimed debts, adjudication would be pointless and bankruptcy is not a tool for debt collection; funds in court to be paid out without prejudice and adjudication applications dismissed.

Court Disposition

Halt order lifted; applications for adjudication dismissed; funds paid out to Body Corporate without prejudice; costs awarded to the substituted creditors (quantum reserved)

Orders

  • Halt order made on 7 November 2016 is lifted
  • Balance of funds paid into court by Mr Memelink, together with any interest, to be paid out to Body Corporate 68792 without prejudice to any claim by Mr Memelink to recover those funds in Proceeding 141 or other proceedings