Walker and Others v Official Assignee

JurisdictionNew Zealand
CourtHigh Court
JudgeWhata J
Judgment Date12 May 2014
Neutral Citation[2014] NZHC 975
Docket NumberCIV-2013-409-001056

[2014] NZHC 975



Robert Bruce Walker
First Applicant
Property Ventures Limited
Second Applicant


Five Mile Holdings Limited
Third Applicant


The Official Assignee in bankruptcy of the property of David Ian Henderson

T G H Smith for Applicants

G Slevin for Respondent

D I Henderson appearing in Person

Opposition to application for admission of proof of debts in respect of bankrupt's estate — bankrupt opposed the admission on the basis that the documents filed with the Official Assignee were not “evidence” for the purposes of s233 Insolvency Act 2006 (IA) (Creditor must submit creditor's claim form) and r12(1)(c) Insolvency (Personal Insolvency) Regulations 2007 (IPIR) (Creditor's claim form: have attached to it evidence of the debt and any other evidence supporting the claim) — applicant had filed a copy of a statement of claim from proceedings involving the applicant as receiver for a company of which bankrupt was a director and which alleged breach of duties by bankrupt — whether the statement of claim was evidence as required by r16(1) IPIR — whether Subpart 9 IA (creditors claims) required that the claim lodged must be certain.

Held: The legislative scheme contemplated a relatively streamlined claims process before the Official Assignee and then the Court. Given the very straightforward scheme of subpart 9, and the bankruptcy context generally, the reference to “evidence” simply contemplated that the creditor would provide cogent information, or proof, to enable the Official Assignee to examine the claim for the purpose of commencing the claims process. Any higher threshold would create an unnecessary administrative burden, both on the creditor and the Official Assignee, in circumstances where costs had to be kept to a minimum. An unduly complex administrative process involving rejections of claims for lodgement purposes until sufficient “evidence” was provided was discordant with the underlying premise of the IA and Subpart 9 scheme to achieve efficient assessment of claims within defined timeframes.

The express duty of the Official Assignee to examine claims was tied to the power to require further evidence. This contemplated that the evaluative process included the capacity to correct evidential inadequacies. Furthermore there was no express intermediate power to reject the claim in advance of examining it. The 10 day notice period in s237 (Notice to Assignee to admit or reject creditor's claim) could be undermined by the exercise of any intermediate power to return an incomplete claim.

Subpart 9 did not contemplate that the claim lodged had to be certain. The reverse was literally contemplated by the broad definition of proof of debt, the powers to require further evidence, the referral to the adversarial processes of the District or High Court and the express reference to “uncertain creditors' claims”.

Ordinarily bare allegations of debt would not qualify as evidence. But this was no ordinary claim. The information in the statement of claim cogently presented the basis for the claim and the presentation of detailed evidence was, fairly, to be anticipated in light of previous judgments. For present purposes, it therefore qualified as sufficient evidence to trigger an assessment process under the Act.

If this were wrong, under s234 IA (Assignee must examine creditor's claim form) the Official Assignee could require further information in the context of a claim based on an assertion and if that was not forthcoming, then reject the claim. There was no need, therefore, to treat the claim as presumptively invalid or to develop an intermediate power to reject a claim on its face (though the Official Assignee could expressly do so for that reason if necessary under s234, but only following an examination of the claim).

It was important to recall that the process adopted by the applicant arose as a consequence of H's objection to being joined to the substantive proceedings. It was considered that the lodging of a formal proof of debt with the Official Assignee pursuant to s233 IA together with notice under s237 would provide a sufficient mechanism enabling H to be properly joined to the proceedings. As anticipated, the Official Assignee took no steps and therefore the applicants now sought to have the issue of proof of debt determined by the Court, as s237 and s240 (Parties to application to court in relation to creditor's claim) expressly contemplated. Notably, s237 conferred the power on the Court to make any order it thought appropriate. That had to include the corrective power to seek further evidence.

In the circumstances of this case, sufficient information was supplied to satisfy the basic requirements set out in r12 IPIR for the purpose of the lodgement of the claim.



The applicants have filed an originating application for admission of proof of debts in respect of Mr Henderson's estate. Mr Henderson was formerly a director of a company, PVL, now in liquidation. He is said to be liable to that company for a significant sum of money for, among other things, breach of his duties as a director.


The application for admission of proof of debt under s 237 accords with the process identified in a judgment of this Court of 19 April 2013 1 and an earlier judgment of 6 March 2013. 2


But Mr Henderson opposes the application on the basis that no creditor's claim form, as defined under the Insolvency Act 2006 has been filed.


The essential issue is whether or not the proof of debt claim sent to the Official Assignee attaching a cover letter and a copy of the statement of claim filed in proceedings -2486 was “evidence” for the purposes of s 233 of the Act and regulation 12(1)(c) of the Insolvency (Personal Insolvency) Regulations 2007. If not, I must then decide whether a valid claim was filed at all.

The wider context

The wider context to this application is recorded at [4] — [9] of my March 2013 judgment dealing with related proceedings, which I repeat here for ease of reference:

    The first plaintiff, Mr Walker, is the liquidator of Property Ventures Limited (PVL) and many of its subsidiaries. These companies were placed into liquidation with estimated losses of at least $150 million. Mr Henderson was a managing director of PVL, (though he says not at all material times). He was adjudged bankrupt on 29 November 2010. The claim against Mr Henderson was commenced on 12 November 2012 and comprises seven causes of action against the directors of PVL for allegedly serious breaches of their duties. [5] The relief sought by the plaintiffs includes the following: (a) Declarations that the PVL directors have breached their duties under ss 131, 135, 136, 137 of the Companies Act 1993; (b) Orders pursuant to s 130(1) of the Companies Act 1993 that the PVL directors pay to the first plaintiffs the sum of $100 million by way of compensation or such other sum as the Court thinks fit; (c) An order banning the PVL directors from acting as directors of companies under s 383 of the Companies Act. [6] There are also related claims, including against PricewaterhouseCoopers for breach of an alleged duty of care to PVL and to the PVL Group. I am also advised that one of the directors will seek to join Vero Insurance Limited. [7] Mr Walker says that the PVL directors, including Mr Henderson, held liability insurance with Vero. This is not accepted by Mr Henderson in his notice of opposition. However, disclosure by Vero unveiled a document which purports on its face to be a “Directors and Officers Liability and Company Reimbursement Insurance Policy”. There is also correspondence from the then chairman of PVL putting their brokers on notice of potential claims in respect of the PVL companies. That correspondence and related correspondence assumes the existence of Vero liability insurance. [8] Mr Walker also avers that: 12. In … order to obtain access to the proceeds of Mr Henderson's insurance cover it is necessary that these proceedings continue and that a judgment be obtained against him and on the plaintiffs' behalf I ask that the Court allow this proceeding against him to continue in terms of section 76 of the Insolvency Act 2006. [9] Mr Walker also produces a letter from Grant Slevin, Senior Investigating Solicitor, Insolvency & Trustee Service, Ministry of Economic Development. That letter records the acceptance of the Official Assignee that the companies for which Mr Walker is a liquidator are secured creditors in respect of any liability Mr Henderson may have to them for breach of director's duties to the extent they hold a statutory charge over the proceeds of any insurance policies that might respond to such breaches. The letter states: Accordingly the Official Assignee accepts that your client's rights of recovery, including his right to establish in court that Mr Henderson is liable to Property Ventures Limited and its subsidiaries for any breaches of duty, are not affected by Mr Henderson's bankruptcy. The Official Assignee's consent to the issue of proceedings against him is accordingly not required. The letter also records that a determination by the Court would be instructive in the event that the Official Assignee was required to either admit and quantify, or reject, any proof of debt Mr Walker might elect to lodge in Mr Henderson's bankruptcy.

In that judgment and the sister judgment of April 2013 I also indicated that I was disinclined to grant leave to continue proceedings against Mr Henderson for compensation, but rather granted leave to the applicant to make applications to the Official Assignee pursuant to s 237 within 10 working days.


For completeness, I also confirmed however that Mr Henderson could continue as a party to the substantive proceedings to the extent that the relief...

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