Notorious Wellington debtor Harry Memelink has been bankrupted whilst currently bankrupt. Concurrent bankruptcies are seldom seen.
Mr Memelink’s initial bankruptcy kicked off in August 2018 following non-payment of a court costs order totalling $122,000. Other debts surfaced after this date, primarily subsequent court orders against Mr Memelink. Later creditors suggested to Insolvency Service that these debts be lumped into the existing bankruptcy, despite arising after the August 2018 adjudication. Insolvency Service said this is not possible. Mr Memelink’s assets as at August 2018 provide a pool for payment of pre-August 2018 debts; subsequent creditors cannot dip into this pool. Their claim is against post-August 2018 assets, if any.
Owed some $5500 on a post-2018 court costs judgment, Quentin Haines served a bankruptcy notice on Mr Memelink demanding payment. The effect of bankruptcy notices is that debtors are deemed insolvent if payment is not made within ten working days.
The High Court was told a trust associated with Mr Memelink paid Mr Haines $5500 by electronic bank transfer just before midnight on the last day of the ten working days. This after a cheque earlier offered in payment bounced. But an extra $828 claimed as part of the bankruptcy notice was not paid, being court costs on issue of the bankruptcy notice. Associate judge Johnstone put Mr Memelink into bankruptcy a second time for non-payment of this $828.
Insolvency law requires a debtor to owe at least one thousand dollars before being forced into bankruptcy. The $828 still owed Mr Haines was under this threshold. In this case, other post-2018 creditors collectively claiming several hundred thousand dollars from Mr Memelink lined up in court supporting Mr Haines application for a further bankruptcy.
Haines v. Memelink – High Court (9.03.20)
20.050