Insolvency Service attempts to block a bankrupt’s day in court challenging grounds for his bankruptcy in order to force payment from him of an inheritance from his mother amounted to a fundamental injustice, the High Court ruled.
Administrative coercion does not sit easily with one of the fundamental purposes of the judicial system: to provide access to justice for individuals, Justice van Bohemen said. This particularly when the litigation in question concerns bankruptcy and the limits it imposes on individual freedoms.
Marcus Meder was bankrupted in 2010 on a $87,100 debt claimed by liquidators of his Northland building company: Marie Harper 2007 Ltd. It was disputed whether Mr Meder was aware of this claimed debt before he left for Chile in October 2010. He returned in 2015. He wants his day in court to challenge the claim. The intervening bankruptcy means his legal affairs are now controlled by Insolvency Service. It wants a minimum of $55,000 for prospective legal costs. Mr Meder is in the High Court challenging these conditions. Insolvency Service asked the High Court to block his challenge. Mr Meder was being unco-operative, it said. In particular, Insolvency Service complains Mr Meder refused to attend an earlier court-ordered examination as to his financial affairs and has refused to comply with a further court order that he hand over $65,000 received from his late mother’s estate. She died one month before Mr Meder was adjudicated bankrupt.
Insolvency Services’ argument was inherently circular, Justice van Bohemen said. It wanted to prevent Mr Meder from having his day in court to challenge his bankruptcy as a means for it to enforce the effect of his bankruptcy. Such leverage was inconsistent with the fundamental purpose of the courts, he said.
This court ruling allowing Mr Meder to continue with his challenge was made in his absence. Mr Meder did not attend court to argue his case. Insolvency Service has an arrest warrant out against him for his failure to attend the earlier court-ordered examination.
Meder v. Official Assignee – High Court (27.04.18)
18.090