Buxcey v ANZ Bank Limited

[2021] NZHC 1041

IN THE HIGH COURT OF NEW ZEALAND INVERCARGILL REGISTRY

I TE KŌTI MATUA O AOTEAROA WAIHŌPAI ROHE

CIV-2020-425-66

[2021] NZHC 1041

UNDER

the Insolvency Act 2006

BETWEEN

NICOLA BUXCEY

Insolvent

AND

ANZ BANK LIMITED, HARMONEY LIMITED and LATITUDE FINANCIAL SERVICES LIMITED

Creditors

Hearing:	6 May 2021
Counsel:	Mr Amptmann for the Insolvent C Liggins (Trustee for Insolvent)
Judgment:	11 May 2021

JUDGMENT OF ASSOCIATE JUDGE LESTER

This judgment was delivered by me on 11 May 2021 at 3.00 pm pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar 11 May 2021

BUXCEY v ANZ BANK LIMITED [2021] NZHC 1041 [11 May 2021]

[1]                 The insolvent, Nicola Buxcey, seeks approval of a creditor’s proposal under pt 5 of the Insolvency Act 2006 (the Act).

[2]                 On 22 October 2020, the insolvent lodged  her  proposal  with  the  Court.  Ms Liggins has accepted the role of provisional trustee in respect of the proposal.

[3]The insolvent’s proposal disclosed three creditors;

(a)       ANZ BankLimited:	$ 2,500.00
(b)       HarmoneyLimited:	$41,000.00
(c)       Latitude Financial Services Limited:	$13,175.00
Total:	$56,675.00

[4]                 The insolvent updated her statement of affairs to disclose a property and the debt secured against that property. The insolvent has some equity in her property.

[5]                 The proposal, as originally put to creditors, involved payments of $360.00 per fortnight being made by the insolvent for three years to her trustee who would then distribute the funds to the creditors. The proposal therefore offered 78 payments of

$360.00, a total of $28,080.00, which amounted to not quite 50 cents in the dollar for the creditors before costs were taken into account.

[6]                 The proposal as originally tabled was modified. The proposal that was put to the creditors’ meeting saw the proposal extended from three to four years. Accordingly, there would  be  104  payments  of  $360.00  per  fortnight  –  a  total  of $37,440.00 (before costs), which would amount to a return to creditors of approximately 66 cents in the dollar.

[7]                 The creditors meeting was held on 14 January 2021. Each of the creditors voted, with ANZ Bank Limited (ANZ) voting against the proposal.

[8]                 By the time of the vote, the indebtedness had increased slightly to $57,832.67. ANZ was owed $2,541.59 and voted against the proposal.

[9]All votes were by way of postal vote.

[10]              The intent of the proposal is to only deal with unsecured debt. The insolvent intends to meet her secured indebtedness as if the proposal had not been passed. Accordingly, while the insolvent’s property is disclosed in her statement of affairs along with the mortgage secured against the property, this proposal does not impact on the mortgagee’s rights.

[11]              For a proposal by an insolvent under subpart 2 of pt 5 of the Act to be passed, it must be accepted by a majority in number and three quarters in value of the creditors who vote.1 Those requirements are satisfied here.

[12]              Ms Liggins has provided evidence to the Court confirming that notice of the proposal was given to the creditors and, given they all voted on the proposal, I am satisfied they received notice of the proposal in its final form. The evidence also satisfies me that the creditors were notified of this application. The creditor who opposed has not taken any steps in respect of the present application.

[13]              I am also satisfied that the proposal is in the appropriate form so that the technical requirements of subpart 2 of pt 5 of the Act have been complied with.

[14]              Under s 333(3) of the Act, I may refuse to approve the proposal if I consider the terms of the proposal are not reasonable or are not calculated to benefit the general body of creditors or for any reason it is not expedient that the proposal be approved. Accordingly, I should only refuse to give approval if one of these criteria applies.

[15]              Here, two commercially experienced creditors decided to accept the proposal, representing more than 95 per cent of the creditors. The proposal is intended to return to creditors two-thirds of the insolvent’s indebtedness (less costs of administering the proposal).

1      Insolvency Act 2006, s 331(3).

[16]As was held in Farmer v Rowley:2

… the Court should accept the view of the creditors, or the majority of them, and grant approval unless it is apparent that one of the grounds for refusing approval exists.

[17]              Given the level of support for the proposal and the absence of opposition to this application, I am satisfied it is appropriate there be an order as sought in the application dated 26 February 2021 approving the proposal made  to  creditors  at  the meeting held on 14 January 2021, that being the proposal as lodged with the Court on 22 October 2020, save that the term of the proposal is varied from three years to four years. There is an order accordingly.

Associate Judge Lester

Solicitors:
Webster Malcolm Law, Warkworth

2      Farmer v Rowley [1992] 2 NZLR 195 (CA) at 205, citing Re Bennetts Proposal HC Christchurch M306/81, 1 February 1982.