Williams v Simpson
| Jurisdiction | New Zealand |
| Judge | Heath J |
| Judgment Date | 17 September 2010 |
| Neutral Citation | [2010] NZHC 1631 |
| Docket Number | CIV 2010-419-1174 |
| Court | High Court |
| Date | 17 September 2010 |
Under The Insolvency (Cross-Border) Act 2006
[2010] NZHC 1631
Heath J
CIV 2010-419-1174
IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY
An order was made in earlier proceedings granting assistance to the English Court under s8 Insolvency (Cross-border) Act 2006 (the Act) and the bankrupt's ability to deal with any of his assets in New Zealand was suspended, pending further order of the Court — whether there was jurisdiction to appoint an independent party to assist in identifying issues and facilitating cross-border Court communication and the co-ordination of concurrent proceedings.
K J Crossland and P J Morris for Applicant
No appearance by, or on behalf of Respondent
JUDGMENT OF Heath J
On 7 September 2009, Mr Simpson was adjudged bankrupt by the High Court of England and Wales (the English bankruptcy), on the petition of the Society of Lloyd's (Lloyd's). With effect from 12 January 2010, Mr Williams was appointed as trustee of Mr Simpson's bankrupt estate. No bankruptcy proceedings have been commenced in New Zealand.
Mr Williams seeks an order from this Court, recognising the English bankruptcy proceeding as a foreign main proceeding. 1 Before service of the application for recognition on Mr Simpson, Mr Williams seeks interim relief. 2 The interim relief sought is in the form of a warrant to search premises and to seize gold and silver bullion that Mr Simpson is allegedly hiding from his creditors. 3
Mr Simpson is a psychiatrist by profession. He practised, at times, from premises in Harley Street, London. He was also a Lloyd's Name. On 11 March 1998, Lloyd's obtained judgment against him in the sum of £163,078.92 (the English judgment).
There were funds to which Mr Simpson may have been entitled that were held in the Isle of Man. On 24 February 2004, the English judgment was registered in the Isle of Man, on the basis that Mr Simpson had until 5 April 2004 to apply to set aside the registration. No such application appears to have been made.
Subsequently, application was made to the High Court of the Isle of Man (the Manx Court) for the judgment to be executed. Around that time, proceedings brought by a number of Names (in which Mr Simpson was involved) against Lloyd's, based on the tort of misfeasance in public office, were working their way
An order granting execution of the registered judgment was made by the Manx Court on 20 June 2005. 6 There is no evidence to indicate the amount of money, if any, that Lloyd's recovered through the Manx proceedings.
In 2009, Lloyd's brought a petition to the High Court of England and Wales to have Mr Simpson adjudged bankrupt. The petition was brought over 11 years after the original judgment in favour of Lloyds was entered. By the time the petition was filed, the amount owing was £242,920.29, including accrued interest and costs. An order of adjudication was made on 7 September 2009.
After his adjudication, Mr Simpson provided a statutory declaration to the Official Receiver answering questions to assist in the administration of the bankrupt estate. That document is dated 7 October 2009. It included an acknowledgement by Mr Simpson that he had read s 5 of the Perjury Act 1911 (UK) and was aware that providing false information deliberately to the Official Receiver was a criminal offence.
Subsequently, in correspondence with Mr Williams, Mr Simpson confirmed the accuracy of the information he supplied to the Official Receiver. For present purposes, I refer to the following information:
a) Although in the United Kingdom when he signed the declaration, Mr Simpson disclosed his ‘home address’ as 35 Ann Street, Hamilton, New Zealand.
b) Mr Simpson had no personal assets of any significance. While bank accounts were disclosed in three different jurisdictions (New Zealand, Scotland and the Isle of Man), minimal amounts were held to his credit on those accounts.
c) The property at Ann Street, Hamilton was leased to Mr Simpson by the BV Adams Trust. The rental was disclosed as $NZ808 per month; $9696 per annum.
d) Two sources of income were disclosed. The first was from a pension plan in the United Kingdom, payments for which began in 1998. 7 The monthly amount of the pension he received was £103.80; £1245.60 per annum. The second was a net New Zealand Superannuation payment of $NZ1284 per month; NZ$15,408 per annum. The exchange rate quoted in respect of all amounts stated in New Zealand dollars was $NZ2.15 = £1.00.
e) Mr Simpson did not own a car but had the use of one from the BV Adams Trust ‘to drive [his] daughter [aged 12 years] to school’.
f) Seven creditors were disclosed, the most significant of which was Lloyd's. That was described as having been incurred in “2009” and an ‘alleged debt for insurance underwriting’. A debt to the United Names Organisation (a group that defended claims by Lloyd's against Names and attempted to bring misfeasance in public office proceedings against Lloyd's) 8 of £85,000 was also disclosed, covering the period between 1996 and 2009.
g) The only debt outside the United Kingdom was in relation to a ‘potential income tax liability’ in New Zealand, for the period between 1999 and 2009. The amount was stated to be ‘unknown’.
h) Monthly household expenses were said to be $NZ1548; $NZ18,576 per annum.
i) Mr Simpson said that he had lost about £1980 gambling, in the two years prior to his bankruptcy.
j) Mr Simpson said he had been unemployed for 12 years, his last employer being Hong Kong University in 1993. He declared that he had ‘retired’ in 1998, consistent with the time at which pension payments began to be made to him in the United Kingdom.
I have reviewed correspondence between Mr Williams and Mr Simpson that took place following Mr Williams' appointment as trustee in bankruptcy, on 12 January 2010. It is unnecessary to recount the correspondence exhaustively. Letters from Mr Simpson create an air of co-operation, on first reading. More detailed consideration of the contents of the correspondence paints a different picture. As will be seen, questions do arise as to the veracity of particular information supplied in response to questions from Mr Williams.
The correspondence began on 10 February 2010, when Mr Williams sent forms of authority for Mr Simpson to sign to enable him to make inquiries about assets and liabilities. The letter was written to Mr Simpson at his New Zealand address in Hamilton. Responses were received from that address until 1 July 2010, when Mr Simpson wrote to Mr Williams advising a ‘change of address until further notice’ to ‘The Old Surgery, 18 Heath Road, Petersfield’, Hertfordshire. Thereafter, Mr Simpson corresponded from the United Kingdom. The last letter produced from Mr Simpson is dated 26 August 2010.
While signing particular forms to enable Mr Williams to make inquiries (for example directed to Her Majesty's Inspector of Taxes), Mr Simpson declined from the outset to sign a form authorising Mr Williams to obtain information from ‘all third parties worldwide who hold details’ of his affairs. In a letter dated 29 March 2010, Mr Simpson said:
While I am conscious of the need to co-operate with you and of the need for you to make necessary inquiries regarding my affairs in relation to matters relevant to the bankruptcy as a result of your appointment in England, I am uncertain whether co-operation requires me to sign such an open ended and wide authority. I say this not because I do not wish to assist you, but rather as a matter of principle and from the academic viewpoint that I am concerned to protect my own privacy rights and do not know whether you are entitled to obtain such a worldwide authority in respect of unnamed third parties ….
By letter dated 7 May 2010, Mr Williams advised Mr Simpson that ‘upon the making of the Bankruptcy Order against [him] on the 7th September 2009, all assets worldwide [vested] inside the bankruptcy estate which [Mr Williams] now [controlled]”. Mr Williams added that a request in respect of individual entities on each occasion information was required would only delay ‘administration and the conclusion of’ the bankrupt estate.
In response, Mr Simpson advised, by letter dated 7 June 2010, that he had made his own inquiries and had ‘received very clear advice that [he was] under no obligation to sign [the worldwide authority] and that [he] should only sign authorities which [were] directed to specific entities’. Mr Simpson reiterated this was not reflective of an unco-operative stance but one by which valid privacy concerns could be addressed. That viewpoint was reiterated later in a letter of 15 July 2010, after Mr Simpson returned to the United Kingdom.
Some correspondence after Mr Simpson returned to the United Kingdom is relevant to the present application. In a letter dated 28 July 2010,
a) Mr Williams asked Mr Simpson directly to confirm whether he had previously traded in any gold or silver purchases which had subsequently been disposed of by him.
b) Mr Williams stated that he understood the Petersfield address was that of a ‘Citizens Advice Bureau’ and asked Mr Simpson to confirm his true residence in the United Kingdom, ‘by return’.
On 12 August 2010, Mr Simpson responded to both queries, stating:
a) He had not disposed or traded in silver or gold, so he had no details to send to Mr Williams.
b) He had sought help from the Citizen's Advice Bureau because he was...
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