THE OFFICIAL ASSIGNEE IN BANKRUPTCY IN THE ESTATE OF DAVID WAYNE CHURTON (A BANKRUPT) V MIRIA CHRISTINE CHURTON HC WANG CIV-2005-483-256

THE OFFICIAL ASSIGNEE IN BANKRUPTCY IN THE ESTATE OF DAVID WAYNE CHURTON (A BANKRUPT) V MIRIA CHRISTINE CHURTON HC WANG CIV-2005-483-256 19 October 2005IN THE HIGH COURT OF NEW ZEALAND WANGANUI REGISTRY CIV-2005-483-256IN THE MATTER OF the Property Law Act 1952 Section 140 BETWEEN THE OFFICIAL ASSIGNEE IN BANKRUPTCY IN THE ESTATE OF DAVID WAYNE CHURTON (A BANKRUPT) Plaintiff AND MIRIA CHRISTINE CHURTON Defendant Hearing: 19 October 2005 Appearances: J.G. Krebs for Official Assignee R. Goldsbury for Defendant Judgment: 19 October 2005 Reasons: 21 October 2005 In accordance with r540(4) I direct the Registrar to endorse this judgment with a delivery time of ________ on the 21st day of October 2005.REASONS FOR DECISION OF ASSOCIATE JUDGE D.I. GENDALL[1] In an oral decision I gave in this matter on 19 October 2005 on the plaintiff's application, an order was made granting summary judgment to the plaintiff in the following terms:1. The plaintiff's application for summary judgment against the defendant is granted. 2. An order for sale of the property, being all that land described in Certificate of Title WN43D/494 is made. The property is to be sold on the open market by auction.3. The Official Assignee at Napier is to have control of the sale process, and in particular shall: a. Appoint a reputable real estate firm based in Wanganui to market the property and conduct the auction. b. Obtain a market valuation from a registered valuer. c. Set the reserve price for auction based on the market valuation. d. Attend to the conveyancing and other mechanics of sale. e. Apply the proceeds of sale as set out in paragraph [4](d) below. f. Report to the Registrar of the Wanganui High Court at the conclusion. 4. The net proceeds of sale of the property shall be held in trust by the Official Assignee at Napier and applied in the following priorities: a. First to meet the amount outstanding to Asteron Life as secured by mortgage B560377.3. b. Secondly to meet any sum owing to the estate of William Hayward and secured by mortgage B598644.1. c. To meet the costs of sale, including real estate agent's commission and reasonable legal expenses and disbursements. d. The remaining funds shall then be divided into two equal parts. The first part shall be payable to the defendant (subject to paragraph [5] below). The second part shall be payable to the Official Assignee in bankruptcy in the property of David Wayne Churton. 5. Costs Costs are awarded in favour of the plaintiff on a category 2B basis, together with disbursements, as fixed by the Registrar. These costs are to be deducted from the defendant's share of the net proceeds of sale in paragraph [4](d) above prior to distribution to the defendant. 6. The Official Assignee at Napier shall file a report with the Registrar of the High Court at Wanganui outlining steps taken throughout and providing the Registrar with a full accounting of the funds covered in the saleprocess, such report to be filed within two weeks of settlement of the transaction and served upon the defendant.[2] In granting summary judgment to the plaintiff on 19 October 2005 in the terms noted above, I indicated that my reasons for this decision would follow. I now set out those reasons. [3] The plaintiff's application for summary judgment is made pursuant to Rule 136 High Court Rules. This Rule requires that the plaintiff is to satisfy the Court that a defendant has no defence. That was explained by the Court of Appeal inPemberton v Chappell [1987] 1 NZLR 1 at page 3 in the following terms:In this context the words "no defence" have reference to the absence of any real question to be tried. That notion has been expressed in a variety of ways, as for example, no bona fide defence, no reasonable ground of defence, no clearly arguable defence.[4] The Court in Pemberton v Chappell added at page 4:Satisfaction here indicates that the Court is confident, sure, convinced, is persuaded to the point of belief, is left without any real doubt or uncertainty.[5] The position was further considered in Australian Guarantee Corporation (NZ) Limited v McBeth [1992] 3 NZLR 54 at 59 where the Court said:Although the onus is upon the plaintiff, there is upon the defendant a need to provide some evidential foundation for the defences which are raised. If not, the plaintiff's verification stands unchallenged and ought to be accepted unless it is patently wrong.[6] Although these matters often involve elements of discretion, the direction given by the Court of Appeal in Bilbie Dymock Corporation v Patel (1987) 1 PRNZ 84 at page 85 needs to be borne in mind. There the Court said:But the need for judicial caution has to be balanced, when considering a summary judgment application, with the appropriateness of a robust and realistic judicial attitude when that is called for by the particular facts of the case.Background Facts[7] David Wayne Churton ("the bankrupt") was adjudicated bankrupt on 20 September 2000. Creditors have apparently filed proofs of debt totalling $289,083.29 in the bankrupt's estate. [8] The bankrupt and his wife, the defendant, are joint tenants of a property containing 37.9090 hectares, being Certificate of Title WN43D/434 ("the property"). The property had a Government Valuation of $520,000.00 as at 1 September 2003. Apparently, the bankrupt's interest in the property is the only significant asset in the bankruptcy. [9] The property is mortgaged to Asteron Life Limited, under which mortgage approximately $123,000.00 is outstanding, and to William Hayward, under which mortgage approximately $8,000.00 is owing. [10] For the five years since adjudication of the bankrupt, the plaintiff, the bankrupt and another entity have apparently sought to resolve underlying outstanding debt issues without the need to sell this property. This has not proved to be possible. [11] The plaintiff now wishes to have the property sold to apply the bankrupt's one half share in the equity to the bankruptcy. The other one half share is to be paid to the bankrupt's wife, the defendant. The present application by the Official Assignee was brought on 1 September 2005. [12] The application is for a sale order pursuant to s140 Property Law Act 1952. This section permits the Court on a partition application to make a direction for the sale of land, and indeed the section states that the Court "shall, unless it sees good reason to the contrary" direct a sale. Here, Mr Goldsbury appeared for the defendant. He indicated, however, that he had received his instructions only late in the piece, notwithstanding that the defendant was served with these proceedings and the summary judgment application on 13 September 2005.[13] Before me Mr Goldsbury indicated that the defendant recognises the reality of the situation, and that a sale is inevitable. He offered no opposition to the plaintiff's summary judgment application. Mr Goldsbury noted that an order for sale and consequential orders must follow, and he raised no opposition to the form of draft order which counsel for the plaintiff placed before the Court. [14] The plaintiff's summary judgment application is therefore unopposed. [15] The bankrupt's interest in the property in question (one moiety) has passed to the plaintiff pursuant to s42 Insolvency Act 1967. In terms of the Pemberton v Chappell test, I am satisfied that the plaintiff has done sufficient here to show that the defendant has no defence to the present proceeding. [16] Both Mr Krebs for the plaintiff and Mr Goldsbury for the defendant acknowledged that a partition order for the property was not appropriate. Under the circumstances, therefore, an order directing sale under s140 Property Law Act 1952 is inevitable. [17] That said, the plaintiff's summary judgment application succeeds. The orders noted at paragraph [1] of this judgment are made. ________________________________Associate Judge D.I. GendallSolicitors:Elvidge & Partners, Napier for Plaintiff