Nothling v Clayton

IN THE HIGH COURT OF NEW ZEALAND TAURANGA REGISTRY

I TE KŌTI MATUA O AOTEAROA TAURANGA MOANA ROHE

CIV-2022-470-103

[2023] NZHC 2253

IN THE MATTER

AND
of the Insolvency Act 2006

IN THE MATTER

of the bankruptcy of MARK ARNOLD CLAYTON

BETWEEN

LYNN ALTHEA NOTHLING, ZAK EDWARD NOTHLING and

ETH TRUSTEES (NOTHLING) LIMITED
Judgment Creditors

AND

MARK ARNOLD CLAYTON

Judgment Debtor

Hearing: 14 August 2023

Appearances:

GC Jenkin for the Judgment Creditors DG Hayes for the Judgment Debtor

Judgment:

18 August 2023

JUDGMENT OF ASSOCIATE JUDGE SUSSOCK

This judgment was delivered by me on 18 August 2023 at 4 pm pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar

Solicitors:
NZ Commercial Law Group Ltd, Hamilton. GC Jenkin, Princes Chambers, Auckland.

NOTHLING v CLAYTON [2023] NZHC 2253 [18 August 2023]

[1] The judgment creditors apply for an order adjudicating Mark Arnold Clayton bankrupt. Mr Clayton initially opposed the application and a hearing was held on Monday, 14 August 2023. At the end of the hearing I reserved my decision.

[2] A memorandum has been filed today on behalf of Mr Clayton seeking to withdraw his opposition. The memorandum confirms Mr Clayton understands that this means the application will be granted and he will be adjudicated bankrupt.

[3] Counsel further explains that the reason for this change of instructions is that Mr Clayton has confirmed that he is unable to pay the debt, even if given time, and he has other creditors who are also seeking to bankrupt him. In Mr Clayton’s view there is no point in delaying the inevitable.

[4] On this basis I make the order for adjudication sought together with an order for costs.

Result

[5]I order:

(a)Mark Arnold Clayton is adjudicated bankrupt with effect from 3.30pm today; and

(b)costs are awarded on a 2B basis plus disbursements to be fixed by the Registrar.

Associate Judge Sussock

CaseChat Overview and Summary

In the High Court of New Zealand, Tauranga Registry, a case was brought by Lynn Althea Nothling, Zak Edward Nothling, and ETH Trustees (Nothling) Limited, collectively referred to as the judgment creditors, against Mark Arnold Clayton, the judgment debtor. The creditors sought an order for Clayton's adjudication of bankruptcy in accordance with the Insolvency Act 2006. Clayton initially opposed the application, leading to a hearing on August 14, 2023, where the Associate Judge, Sussock, reserved their decision. Following the hearing, Clayton's legal counsel filed a memorandum indicating Clayton's decision to withdraw his opposition to the creditors' application. This withdrawal was based on Clayton's acknowledgment of his inability to repay the debt, even with additional time, and the presence of other creditors also pursuing bankruptcy proceedings against him.

The primary legal issue before the court was whether to grant the creditors' application to adjudicate Clayton bankrupt. This involved considering Clayton's financial situation, his ability to repay the debt, and the implications of such an adjudication on his financial standing. The court had to determine whether the creditors' application should proceed and, if so, under what terms. The creditors argued that Clayton's inability to pay the debt and his acknowledgment of this fact, along with the presence of other creditors seeking similar relief, justified the adjudication of bankruptcy.

Associate Judge Sussock, in their judgment delivered on August 18, 2023, found that the application should be granted. The court accepted Clayton's withdrawal of opposition and his admission that he could not repay the debt, even if given more time. The judge also considered the fact that other creditors were pursuing similar actions against Clayton. Based on these findings, the court adjudicated Clayton bankrupt and ordered that the effects of this adjudication take place from 3:30 pm on the same day. Additionally, the court awarded costs to the creditors on a 2B basis, with disbursements to be determined by the Registrar.

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established

IN THE MATTER AND	of the Insolvency Act 2006
IN THE MATTER	of the bankruptcy of MARK ARNOLD CLAYTON
BETWEEN	LYNN ALTHEA NOTHLING, ZAK EDWARD NOTHLING and ETH TRUSTEES (NOTHLING) LIMITED Judgment Creditors
AND	MARK ARNOLD CLAYTON Judgment Debtor

Hearing:	14 August 2023
Appearances:	GC Jenkin for the Judgment Creditors DG Hayes for the Judgment Debtor
Judgment:	18 August 2023