OFFICIAL ASSIGNEE v FAWCETT [2014] NZHC 25

OFFICIAL ASSIGNEE v FAWCETT [2014] NZHC 25

The Court allowed a limited variation of the freezing order because without a capped release for legal fees JEC could not meaningfully defend the summary judgment application; the Court authorised payment of an architect invoice and capped legal fees at $17,500 (excluding GST) paid monthly in arrears on invoice, but...

Source-derived case information.

Citation
[2014] NZHC 25
Parties
Plaintiff: Official Assignee at Hamilton; First Defendant: Christopher Louis Fawcett; Second Defendant: JEC No 1 Limited; Third Defendant: JEC No 3 Limited; Fourth Defendant: Peter Matthew Granville; Fifth Defendant: ANZ National Bank Limited; Sixth Defendant: Mortgage Holding Trust Company Limited
Court
High Court
Jurisdiction
New Zealand
Judgment Date
29 January 2014
Procedural Posture
Bankruptcy Proceeding; Freezing Order (mareva) / Application to Vary Freezing Order; Summary Judgment Application Pending
Outcome
Freezing order varied in part
Legal Topics
Variation of Freezing Order, Payment of Legal Costs From Frozen Assets, Summary Judgment, Disclosure Obligations, Payments to Bankrupt or Associated Parties
Bankruptcy Injunctions and Freezing Orders Civil Procedure Costs Variation of Freezing Order Payment of Legal Costs From Frozen Assets Summary Judgment Disclosure Obligations +1 more

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Parties

Official Assignee at Hamilton

Plaintiff

Christopher Louis Fawcett

First Defendant

JEC No 1 Limited

Second Defendant

JEC No 3 Limited

Third Defendant

Peter Matthew Granville

Fourth Defendant

ANZ National Bank Limited

Fifth Defendant

Mortgage Holding Trust Company Limited

Sixth Defendant

Procedural Posture

Bankruptcy Proceeding; Freezing Order (mareva) / Application to Vary Freezing Order; Summary Judgment Application Pending

Legal Issues

  1. 1 Whether the freezing order should be varied to permit payment of legal fees to defend summary judgment
  2. 2 Whether funds may be released to third parties (architect) caught by the freezing order
  3. 3 Whether payment should be made to the bankrupt First Defendant as wages

Ratio Decidendi

The Court allowed a limited variation of the freezing order because without a capped release for legal fees JEC could not meaningfully defend the summary judgment application; the Court authorised payment of an architect invoice and capped legal fees at $17,500 (excluding GST) paid monthly in arrears on invoice, but refused payments of wages to the bankrupt First Defendant and a director's allowance, on the basis that JEC was largely responsible for its impecuniosity and assets subject to the order must be conserved and properly accounted for.

Court Disposition

Freezing order varied in part

Orders

  • Freezing order varied to permit payment of $990 to Noel Jessop Architecture (balance of invoice 26686 dated 30 April 2013)
  • Freezing order varied to permit JEC to incur legal fees and disbursements to defend the summary judgment application dated 16 August 2013, with payments to be made monthly in arrears on receipt of invoices from JEC's legal representatives, such sum not to exceed NZD 17500 (excluding GST) unless the Court otherwise...