Official Assignee v Bruce John Cameron

• Jurisdiction: New Zealand
• Judge: R M Bell
• Judgment Date: 11 November 2014
• Neutral Citation: [2014] NZHC 2820
• Docket Number: CIV-2009-470-603
• Court: High Court
• Date: 11 November 2014

Under the Insolvency Act 2006

In the Matter of the bankruptcy of Bruce John Cameron

BETWEEN

Official Assignee

Applicant

and

Bruce John Cameron

Respondent

[2014] NZHC 2820

CIV-2009-470-603

IN THE HIGH COURT OF NEW ZEALAND TAURANGA REGISTRY

Application for directions by the Official Assignee (OA) as to whether a bankrupt had been discharged from bankruptcy under s290 Insolvency Act 2006 (IA) (Automatic discharge 3 years after bankrupt files statement of affairs) — issue was whether the bankrupt's statement of affairs which he filed in March 2010 had complied with the IA and reg 6 Insolvency (Personal Insolvency) Regulations 2007 (IA Regs) (Debtor's statement of affairs) — statement did not included an IRD number, had answered a question incorrectly, and was not signed (although the cover letter was signed and the bankrupt had ticked a box confirming he had signed the form) — comments about scope of OA's standard form for a statement of affairs — whether there had been substantial compliance with reg 6 IA Regs.

Appearances:

P V Cornegé for Official Assignee

N King for Respondent

Noel C King, Barrister, Manukau, for Respondent

ORAL JUDGMENT OF ASSOCIATE JUDGE R M Bell

1 Five years ago Mr Cameron was adjudicated bankrupt. The question in this application for directions by the Official Assignee is whether he has been discharged under s 290 of the Insolvency Act 2006, or whether he should be discharged now. The particular issue is when Mr Cameron filed a statement of affairs under s 67 of the Insolvency Act.

2 Under s 290 of the Insolvency Act, the three years until an automatic discharge runs from when a bankrupt files a statement of affairs under s 46 or s 67. As Mr Cameron did not apply for his own adjudication, s 46 does not apply.

3 Mr Cameron filed three statements of affairs with the Official Assignee: on 3 March 2010, 23 August 2012 and 23 October 2012. The Official Assignee says that only the last statement of affairs complies with the Insolvency Act and the Insolvency (Personal Insolvency) Regulations 2007. There is no question as to the delivery of the statements of affairs. The Official Assignee's complaint goes to the quality of the statements supplied by Mr Cameron.

4 The focus is on the first statement of affairs, filed on 3 March 2010. If that statement is accepted, Mr Cameron was discharged with effect from 3 March 2013. On the other hand, if that does not comply and only the later statements of affairs count, it is common ground that he should be discharged today under s 294. Even though the full three years following the statement of affairs will not have run, he will have been bankrupt for five years and that is more than long enough for him to endure that status.

5 Section 67 of the Insolvency Act 2006 says:

67 Bankrupt must file statement of affairs with Assignee

After adjudication, the bankrupt must file with the Assignee a statement of the bankrupt's affairs in the prescribed form, unless the bankrupt has already filed a statement under section 46.

6 Under s 68, following adjudication the Official Assignee is required to notify the bankrupt of the adjudication and to require a statement of affairs. Under s 69, the bankrupt must file a statement of affairs in the prescribed form within 10 working days of receiving the Official Assignee's notice.

7 The Insolvency (Personal Insolvency) Regulations 2007 prescribe the form for a statement of affairs. Regulation 6 applies to a statement of affairs to be provided by a debtor under s 46 of the Insolvency Act. Under reg 8 the same requirements apply to a statement of affairs under s 67. Regulation 6 says:

• 6 Debtor's statement of affairs

• (1) For the purposes of section 46(1), a statement of affairs must be—

  • (a) signed by the debtor; and

  • (b) dated.

• (2) The statement of affairs must contain the following information:

  • (a) the debtor's full name:

  • (b) the debtor's current address, telephone number, and any other contact detail (such as a mobile telephone number or an email address):

  • (c) if the debtor has used any other name, including any alias in the last 7 years, those other names and aliases:

  • (d) the debtor's date of birth:

  • (e) whether the debtor is male or female:

  • (f) the debtor's tax file number (IRD number):

  • (g) if the debtor has a current passport, the nationality and number of the passport:

  • (h) if the debtor is employed—

  • (i) the employer's name and address:

  • (ii) the debtor's occupation:

  • (i) a statement of the debtor's income:

  • (j) an itemised statement of the debtor's expenses:

  • (k) if the debtor has included his or her partner's expenses under paragraph (j), a statement of the partner's income:

  • (l) a statement of the debtor's current assets, including the description, value, and location of those assets:

  • (m) a statement of any assets that the debtor has disposed of in the previous 36 months:

  • (n) a statement of the debtor's liabilities, including any contingent liabilities, with the following details for each liability:

    • (i) the amount:

    • (ii) whether it includes goods and services tax:

    • (iii) how it was incurred:

    • (iv) whether it is secured:

    • (v) if it is secured, a description of the security:

    • (vi) whether it is a preferential debt:

• (o) a statement of all financial transactions by the debtor during the previous 36 months

8 The regulation does not specify any particular format for a statement of affairs. Instead, the requirements are that the statement be dated, signed by the debtor, and contain 15 particular items of information. While a bankrupt may not have much difficulty with some of the items of information, it is clear that other matters may be more difficult. I expect any person, not necessarily a bankrupt, would find it hard to give a statement of all assets they have disposed of in the last three years. Similarly, I would expect any person, not just a bankrupt, would have difficulty giving a complete statement of all their financial transactions for the last three years. For my part I would struggle to address those matters fully. It seems to me that it is inherent in the nature of the task required that there must be some give and take in the information that a debtor might give. Literal compliance with each and every subclause in reg 6(2) may not be practicable.

9 Before I turn to the statements of affairs which Mr Cameron provided, I need to deal with the Official Assignee's forms.

10 In 2010 the Official Assignee's office in Hamilton sent to Mr Cameron a document called a “Statement of Affairs”. That was said to be “For use in relation to Bankruptcy/No Asset Procedure/Summary Instalment Orders.” The document runs to 30 pages. It provides 89 questions. Not all questions need to be answered in every case. Where some subjects are not applicable to the particular debtor or bankrupt, further questions do not always require an answer. But within those 89 questions there are sub-questions. For example, at question 52 on motor vehicles/transport, the sub-questions run from (b) to (u).

11 In many areas the matters on which the Official Assignee seeks information in this statement of affairs go beyond those required under reg 6. For example, the debtor or bankrupt is required to specify his or her ethnicity, although that is irrelevant under the regulations. Similarly, the debtor is required to give details of past employment, even though the regulations only enquire as to current employment. As to accommodation, the debtor is required to give full details of any tenancy arrangements even though the regulations do not require it.

12 In two respects the statement of affairs used by the Official Assignee does not seek information to the same extent as required by the regulations. The Official Assignee's form requires the debtor/bankrupt to state assets that the debtor has disposed of over the last two years rather than the previous three years. And the Official Assignee's statement does not require the bankrupt to give a statement of all financial transactions during the previous three years.

13 The Official Assignee's statement requires the bankrupt to set out the bankrupt's beliefs as to the main cause of insolvency. That is an enquiry into beliefs, whereas the regulation is concerned only with facts.

14 The form used by the Official Assignee makes no attempt to separate out the information required under reg 6 from other information. A bankrupt receiving a statement of affairs from the Official Assignee is likely to believe that to comply with s 67 they would be required to provide all the information set out in the statement of affairs before time can start running. In that respect I regard the statement of affairs used by the Official Assignee as unhelpful and potentially misleading.

15 The Official Assignee changed to a new form in 2012. That is also a lengthy document which requires information that goes beyond what is required under reg 6. That change has not improved matters.

16 It is apparent that the Official Assignee requires bankrupts to use the statement of affairs he has prepared and to give all the information required in his form. There is a consistent course of practice by the Official Assignee in using that form under s 67 of the Insolvency Act. That is obviously a problem, because the Official Assignee does not require all the information under reg 6. On the other hand, he requires surplus information beyond reg 6. It would be helpful if the Official Assignee were to amend his statement of affairs so that debtors and bankrupts need give only the information required under reg 6.

17 Now for Mr Cameron's case.

18 Mr Cameron obviously did not welcome his bankruptcy. He has, if anything, been a resentful bankrupt but his attitude towards the bankruptcy and his conduct later in his bankruptcy are irrelevant. I am required in his case only to consider whether he has filed...