Commissioner of Inland Revenue v Bruce

[2012] NZHC 1913

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV 2012-404-000512 [2012] NZHC 1913

IN THE MATTER OF     The Insolvency Act 2006

AND IN THE MATTER OF the bankruptcy of Robert Ian Bruce

BETWEEN  THE COMMISSIONER OF INLAND REVENUE

Judgment Creditor

ANDROBERT IAN BRUCE Judgment Debtor

Hearing:         1 August 2012

Appearances: M F Nelson for judgment creditor

No appearance by applicant/judgment debtor

Judgment:      1 August 2012

ORAL JUDGMENT OF ASSOCIATE JUDGE ABBOTT

Solicitors:

M F Nelson, Inland Revenue, PO Box 76-198

Also to: R I Bruce, 18 Saleyard Road, Whitford, Auckland

THE COMMISSIONER OF INLAND REVENUE V ROBERT IAN BRUCE HC AK CIV 2012-404-000512 [1

August 2012]

[1]      Robert Ian Bruce has applied to set aside a bankruptcy notice served on him on 26 June 2012. The application was listed for call at 11.45am today.  Mr Bruce has not appeared in support of his application.

[2]      The bankruptcy notice that Mr Bruce seeks to set aside was served on him (pursuant to an order for substituted service) on 26 June 2012.   Mr Bruce was required to comply with the notice or file any application to set aside within 10 working days.   He filed and served his application within time, but did not file a supporting affidavit.  He has not filed an affidavit since.

[3]      A debtor seeking to set aside a bankruptcy notice is required to serve not only the application but also a supporting affidavit.  If he does not do so within the 10 day working period (stipulated in s 17 of the Insolvency Act 2006) the application is a nullity and the Court has no jurisdiction to extend time.[1]

[1] Re Memelink ex parte SANCO (NZ) Ltd HC Wellington CIV-2008-485-2691, 10 March 2009 at [11]- [13].

[4]      The failure to serve an affidavit in support negates the present application.  It means that the debtor has committed an act of bankruptcy by failing to take one of the steps required pursuant to s 17 of the Insolvency Act 2006.  On that basis, the present application is dismissed.

[5]      Counsel  for  the  debtor  has  also  referred  to  the  grounds  on  which  the application has been brought.  They are that the underlying judgment (on which the bankruptcy notice is based) is defective as the debtor has a set-off and/or cross claim, and the judgment was entered in circumstances “beyond the control of the judgment debtor”.

[6]      The first ground cannot possibly succeed.  There is no set-off or counterclaim available against a tax debt.[2]

[2] High Court Rules, r 5.61.

[7]      The second ground equally has no apparent basis.  There is no affidavit in support, setting out the circumstances.   There is no explanation in the application

itself as to what the debtor contends were the circumstances in question, and to explain why that might cause the judgment to be questioned.  The District Court at Manukau has issued a certificate of judgment.  There is no reason for this Court to question that certificate.

[8]      Accordingly, both on procedural and substantive grounds, the application to set aside is dismissed.

[9]      The Commissioner is entitled to costs on a 2B basis in respect of the hearing today.

Associate Judge Abbott