Andrews v Official Assignee
[2024] NZHC 907
•23 April 2024
IN THE HIGH COURT OF NEW ZEALAND TAURANGA REGISTRY
I TE KŌTI MATUA O AOTEAROA TAURANGA MOANA ROHE
CIV-2007-470-492
[2024] NZHC 907
UNDER the Insolvency Act 1967 BETWEEN
RAYMOND ANTHONY ANDREWS
Applicant
AND
THE OFFICIAL ASSIGNEE
Respondent
Hearing: 9 April 2024 Counsel:
Applicant in person
R Sena for the Respondent
Judgment:
23 April 2024
JUDGMENT OF ASSOCIATE JUDGE BRITTAIN
This judgment was delivered by me on 23 April 2024 at 4 pm.
Pursuant to Rule 11.5 of the High Court Rules.
…………………..
Registrar/Deputy Registrar
Solicitors/Counsel:
Solicitor for Official Assignee, Auckland
ANDREWS v THE OFFICIAL ASSIGNEE [2024] NZHC 907 [23 April 2024]
Introduction
[1] The applicant, Raymond Anthony Andrews (Mr Andrews) applies for an order discharging him from his bankruptcy. The Official Assignee does not oppose discharge but seeks an order prohibiting Mr Andrews from being involved in business after discharge.
[2] Mr Andrews’ application has been served on the Registrar of Companies and all creditors with accepted claims in the bankruptcy. The application was advertised in the Bay of Plenty Times. No party has opposed the application.
Applicable law
[3] Mr Andrews’ bankruptcy is governed by the Insolvency Act 1967 (the Act). Section 110 of the Act relevantly provides:
110 Court may grant or refuse discharge
(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.
[4]Section 111 relevantly provides:
111 Court may order bankrupt not to engage in business after discharge
(1)Without restricting the provisions of section 110 of this Act, the Court, when granting the order of discharge or at any earlier time, may make an order prohibiting the bankrupt after his discharge from doing all or any of the following things without the leave of the Court:
(a)Entering into or carrying on any business or class of business either alone or in partnership with any person:
(b)Being engaged in the management or control of any business carried on by or on behalf of, or being in the employ of, any of the following persons, namely, the bankrupt's wife or husband, a lineal ancestor or descendant of the bankrupt, the wife or husband of such an ancestor or descendant, a brother of the bankrupt, the wife of such a brother, a sister of the bankrupt, and the husband of such a sister:
(c)Acting as a director or taking part directly or indirectly in the management of any company or class of company.
(d)[Repealed]
(2)Any such prohibition may be for a specified period or without any time limit.
(3)The Court may at any time cancel or vary any such order.
[5] The discretion conferred on the Court under s 110 of the Act is broad. The Court should consider the legitimate interests of the bankrupt, the creditors, and wider public concerns. However, there are no threshold requirements in the exercise of the discretion.
[6]It is not in the public interest that a bankruptcy should continue indefinitely.1
Analysis
The history of Mr Andrews’ bankruptcy
[7] Mr Andrews was adjudicated bankrupt under the Act on the application of Finance Portfolio Ltd on 21 April 2008.
1 ASB Bank v Hogg [1993] 3 NZLR 156 (CA) at 157.
[8] Mr Andrews was due to be automatically discharged from bankruptcy on 2 April 2011. However, the Official Assignee objected to Mr Andrews being discharged.
[9] On 13 March 2013, Mr Andrews was convicted of numerous charges for a variety of breaches of the Act and sentenced to 15 months’ imprisonment.
[10] On 7 June 2013, Mr Andrews pleaded guilty to an additional charge, and 6 months was added to his prison sentence. Mr Andrews was released from prison on 25 September 2013.
[11] On 19 December 2013, Associate Judge Doogue ordered that Mr Andrews was not to be discharged from bankruptcy, and that he was not to make a further application for discharge before 1 August 2014, in order to give Mr Andrews “an incentive to comply with the legislation and with the directions of the Official Assignee”.2 The Judge noted that if Mr Andrews complied with his obligations under the Act then the Official Assignee might be persuaded to withdraw opposition to discharge.3
[12] In February 2015, Mr Andrews made a further application for discharge. That application was withdrawn.
[13] In 2017, Mr Andrews was convicted of three charges for further breaches of the Act and sentenced to 22 months’ imprisonment. In March 2019, Mr Andrews was convicted of a further 33 charges under the Act, the Companies Act 1993 and the Crimes Act 1961. The offending had occurred after Mr Andrews was released from prison in 2013. Mr Andrews was sentenced to 6 years and 6 months’ imprisonment.
[14] Mr Andrews was released from prison on probation on 20 April 2022, and his sentence ends on 10 December 2024.
[15] On 17 November 2023, Hinton J made an order under s 383(1) of the Companies Act 1993 prohibiting Mr Andrews, without the leave of the Court, from
2 Official Assignee v Andrews [2013] NZHC 3494 at [37] and [38].
3 At [37].
being a director or promoter of, or in any way, whether directly or indirectly, being concerned or taking part in the management of a company.4
[16] It is unnecessary for me to traverse Hinton J’s reasoning in detail. The factors that influenced Hinton J can be summarised as follows:
(a)The loss suffered by Mr Andrews’ victims is substantial.5
(b)Personal financial failures may be an indicator of recklessness towards obligations.6
(c)There was no indication that Mr Andrews could rehabilitate, and Mr Andrews has persistently offended over a lengthy period of time. The progression of time has not demonstrated that Mr Andrews presents less of a risk to the public.7
(d)Mr Andrews has shown no remorse.8
(e)Mr Andrews’ offending shows a blatant disregard for the restrictions imposed by law, and a clear and continued effort on his part to deliberately disregard the law and any protection it provides for the public.9 There has been a complete lack of personal responsibility or accountability on Mr Andrews’ part.10
(f)The offending involved dishonesty.11
4 Registrar of Companies v Raymond Anthony Andrews [2023] NZHC 3242 at [77].
5 At [46].
6 At [47]; see also Registrar of Companies v Blake [2019] NZHC 680, (2019) 12 NZCLC 98-071 at [60].
7 Registrar of Companies v Raymond Anthony Andrews, above n 5, at [49] and [73]; see also
Registrar of Companies v Bublitz [2022] NZHC 2177 at [191]–[192].
8 Registrar of Companies v Raymond Anthony Andrews, above n 5, at [51] and [52].
9 At [53] and [55].
10 At [60].
11 At [56].
(g)Mr Andrews’ case was one of the most serious, and appropriate for a permanent prohibition order.12
[17] Hinton J was aware that the Official Assignee does not oppose Mr Andrews’ discharge from bankruptcy. Hinton J noted that Mr Andrews has been in bankruptcy for 15 years, and that this is materially longer than normal, and nothing further is served by the continuation of the bankruptcy at this point.13
The position of creditors
[18] The creditors’ claims accepted by the Official Assignee total $684,757.75. The Official Assignee has made the following recoveries:
(a)$100,000, being a bequest to Mr Andrews from his late mother’s estate;
(b)$20,150 from the sale of a motor vehicle seized by the police; and
(c)$7,775.80 in income tax refunds.
[19]There is no prospect of any further recoveries.
[20] Although no creditor has taken steps to oppose Mr Andrews’ discharge, the Official Assignee’s report dated 26 January 2024 includes an undated letter from Kevin and Catharine O’Grady to the Official Assignee. Mr and Mrs O’Grady state that they object to a discharge. They describe themselves as victims of Mr Andrews’ fraud.
[21] I do not place any weight on Mr and Mrs O’Grady’s letter, but treat it as merely an indicia of the general public interest that exists in prohibiting Mr Andrews from engaging in business.
12 At [75].
13 At [61].
Mr Andrews’ personal circumstances
[22] Mr Andrews is now 74 years old. He is a superannuant, and lives on his own in a West Auckland rental property. He is currently a full-time student at Auckland University of Technology. His bankruptcy has persisted for 16 years.
Decision
[23] I agree with Hinton J: there is nothing further to be gained from the bankruptcy continuing, provided that the public is protected by orders prohibiting Mr Andrews from being engaged in business in the future.
[24] It is unnecessary to prohibit Mr Andrews from acting as a director of a company or being involved in the management of a company, as that conduct has already been prohibited by the orders made by Hinton J. It is appropriate that Mr Andrews is also prohibited from being involved in business either alone or in partnership.
Orders
[25]The bankruptcy of Raymond Anthony Andrews is discharged.
[26] Raymond Anthony Andrews is prohibited from doing all or any of the following things without the leave of the Court:
(a)entering into or carrying on any business or class of business either alone or in partnership with any person;
(b)being engaged in the management or control of any business.
[27]The Official Assignee has not sought costs, there is no order as to costs.
Associate Judge Brittain
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