Jamieson v Official Assignee

• Jurisdiction: New Zealand
• Judge: BELL
• Judgment Date: 08 May 2012
• Neutral Citation: [2012] NZHC 949
• Docket Number: CIV-2007-404-2139
• Court: High Court
• Date: 08 May 2012

Under the Insolvency Act 2006

In The Matter Of the bankruptcy of KATHLEEN MARY JAMIESON

BETWEEN

Kathleen Mary Jamieson

Applicant

and

Official Assignee

Respondent

[2012] NZHC 949

Judges:

Associate Judge Bell

CIV-2007-404-2139

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

Application for discharge from bankruptcy under s108 Insolvency Act 1967 (“IA”) (bankrupt may apply for discharge) — bankruptcy governed by 1967 Act — appellant resided in Vanuatu — respondent opposed on basis applicant had refused to supply information; had moved assets out of New Zealand and continued to operate a business in Vanuatu without informing Official Assignee — whether application should be refused under s110 IA (Court may grant or refuse discharge) — whether definition of property under s2 IA included overseas assets — bankrupt's duties under s60 IA (general duties) — whether operating overseas business breached s62 IA (prohibition of bankrupt entering business).

Appearances:

K M Jamieson in person

K M Waltelin for Official Assignee

N J Carter for Creditor, Haines House Removals Company Limited

RESERVED JUDGMENT OF ASSOCIATE JUDGE BELL

This judgment was delivered by me on … 8 May 2012 … at.. 4:00pm pursuant to Rule 11.5 of the High Court Rules.

………………

Registrar/Deputy Registrar

1 The question in this case is whether Ms Jamieson should be discharged from her bankruptcy. She was adjudicated bankrupt on 5 September 2007 on the petition of Haines House Removals Ltd. Her bankruptcy and the question of her discharge are governed by the Insolvency Act 1967: s 444(2) of the Insolvency Act 2006.

2 The Official Assignee lodged an objection to her discharge on 2 September 2010, almost on the eve of the third anniversary of her adjudication, when she would ordinarily have been automatically discharged under s 107(2) of the Insolvency Act. The Official Assignee's objection did not specify any grounds. Ms Jamieson filed an application for discharge under s 108 on 8 April 2011. The Official Assignee filed a notice of opposition on 28 April 2011, which included these grounds:

• (a) Ms Jamieson had not co-operated with the Official Assignee's request for information about her affairs, including information and documents concerning various trusts and companies she is associated with;

• (b) Ms Jamieson had not disclosed all her assets to the Official Assignee; and

• (c) Ms Jamieson had failed to assist the Official Assignee to recover assets for the benefit of her creditors.

3 At the same time the Official Assignee filed for a public examination of Ms Jamieson under s 109(1). Under that provision the Official Assignee is required to arrange the public examination as soon as practicable after the expiration of three years of the adjudication.

4 There has been a de facto extension of Ms Jamieson's bankruptcy because of the time taken for Ms Jamieson's application for discharge to be heard and for this decision to be given.

5 The public examination took place on 6 October 2011. The Official Assignee's report under s 109(2) was not filed until 4 October 2011. The creditor, Haines House Removals Co Ltd, appeared but took a limited part in the hearing on that day. As the hearing developed, it turned out that the Official Assignee's position was limited to requiring Ms Jamieson to provide fuller information. If she did that, the Official Assignee would no longer oppose the discharge. I gave directions for the Official Assignee to request information from Ms Jamieson and for Ms Jamieson to provide it, and adjourned the matter. When the substantive hearing resumed on 18 November 2011, the creditor had filed its own notice of opposition under s 109(4) of the Insolvency Act. That allows a creditor who opposes a discharge on grounds other than those mentioned in the Assignee's report to give notice of his intended opposition and grounds. The creditor's notice gave these grounds:

• (a) Ms Jamieson had deliberately misled the Official Assignee;

• (b) Ms Jamieson had created and provided false fraudulent documents to the Official Assignee;

• (c) Ms Jamieson had operated a business without disclosing this to the Official Assignee;

• (d) Ms Jamieson had failed to disclose details of assets disposed of prior to or during the bankruptcy; and

• (e) Ms Jamieson's failure to co-operate with the Official Assignee that has prevented the Official Assignee from realising the bankrupt's assets and making a distribution to the creditor.

6 I gave rulings allowing the creditor to file its own notice of opposition and for the public examination of Ms Jamieson to be continued. At the end of the hearing, the Official Assignee's position was that the Official Assignee no longer opposed Ms Jamieson's discharge from bankruptcy. The Official Assignee intended to continue the administration of Ms Jamieson's bankruptcy after the discharge. It had received some further information from Ms Jamieson which the Official Assignee could use in the administration. The Official Assignee did not want to obtain further information from Ms Jamieson. Consistent with his limited grounds of opposition, the Official Assignee considered that no useful purpose would be served by prolonging her bankruptcy. On the other hand, the creditor continued to oppose her discharge.

7 There are two ways by which a creditor can oppose the discharge of a bankrupt. Under s 107(3) a creditor may lodge an objection before the expiry of the three years from adjudication, if the court has given leave. If the Official Assignee has objected, and the creditor intends to oppose on grounds other than those in the Official Assignee's report, the creditor may give notice of opposition under s 109(4). In this case, the creditor has given a notice of opposition under the second provision. As the creditor has standing to oppose Ms Jamieson's application and asserts wider grounds of opposition than those in the Assignee's report, the Official Assignee's withdrawal of opposition does not by itself dispose of the matter. Given the creditor's continued opposition, it is necessary to consider the merits of Ms Jamieson's application.

Legal principles

8 Under s 109(2) of the Insolvency Act the report that the Official Assignee is required to file must address the affairs of the bankrupt, the causes of the bankruptcy, the manner in which the bankrupt has performed the duties imposed under the Act or obeyed the orders of the court, the bankrupt's conduct before and after the bankruptcy and any other fact, matter or circumstance that would assist the court in making its decision. These matters clearly go to the exercise of the court's discretion under s 110:

• (1) At the hearing of any application for an order of discharge under section 108 of this Act, or at any examination under section 109 of this Act, the Court, having regard to all the circumstances of the case, may:

  • (a) Grant an immediate order of discharge:

  • (b) Grant an order of discharge subject to such conditions (including consenting to any judgment or order for the payment of any sum of money) as it thinks fit, or suspend an order for discharge for such time as it thinks fit:

  • (c) Grant an order of discharge with or without such conditions as it thinks fit to take effect at a specified future date:

  • (d) Refuse an order of discharge, in which case the Court may specify the earliest date on which the bankrupt may apply again to the Court for an order of discharge.

• (2) Section 107 of this Act shall be read subject to any order of the Court under this section.

• (3) Where the Court has granted an order of discharge subject to the bankrupt consenting to any judgment and the bankrupt consents, the Court may from time to time vary the judgment as it thinks fit.

9 In ASB Bank v Hogg the Court of Appeal said: 1

In conferring a discretion expressed in the broadest terms, the legislation recognises that each case will be different, that the relevant factors may vary from case to case and that the exercise of the discretion must be governed by the circumstances of the particular case having regard to the guidance provided by a consideration of the scheme and purpose of the legislation. In providing for automatic discharge after three years, the legislation recognises that it is not in the public interest that the bankruptcy should endure indefinitely. In providing for earlier discharge, s 108 recognises that continuing the bankruptcy to the end of the three years may not be in the public interest. Whether or not it is will be a matter for decision on the particular facts. In that regard, guidance is provided by s 109(2) which lists matters on which the assignee is to report to the High Court in such a case. The Court is to consider the assignee's report as to the affairs of the bankrupt, the causes of the bankruptcy, the manner in which the bankrupt has performed the duties imposed on him or her under the Act and his or her conduct both before and after the bankruptcy, and also as to any other fact, matter or circumstance that would assist the Court in making its decision. Clearly the Court apprised of the matter will consider the legitimate interests of the bankrupt, the creditors and wider public concerns, but it is neither required nor entitled to impose threshold requirements in the exercise of the discretion so as to derogate from the breadth of the powers conferred under s 110.

10 In that case the bankrupt applied for a discharge before the expiry of three years from his adjudication. In such cases the bankrupt has the onus to show good cause for an early discharge. Where there are objections to an automatic discharge under s 107, the onus is on those objecting. 2 But the court's statements as to the breadth of the discretion, that each case will be different, that relevant factors vary from case to case and the exercise of the discretion must be governed by the

circumstances...