Commissioner of Inland Revenue v Heeni

[2021] NZHC 435

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2019-404-000128

[2021] NZHC 435

BETWEEN

COMMISSIONER OF INLAND REVENUE

Judgment Creditor

AND

AROHA HEENI

Judgment Debtor

Hearing:

1 March 2021

Appearances:

C Van Der Merwe for the Judgment Creditor Judgment Debtor in Person

R Makaera as support person and kaumatua

Judgment:

9 March 2021

JUDGMENT OF ASSOCIATE JUDGE GARDINER

This judgment was delivered by me on 9 March 2021 at 3.30 p.m. pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar Date.......................................

Solicitors:

Inland Revenue, Auckland

COMMISSIONER OF INLAND REVENUE v HEENI [2021] NZHC 435 [9 March 2021]

Introduction

[1]    The Commissioner of Inland Revenue (Commissioner) has applied for an order adjudicating Aroha Heeni bankrupt. Ms Heeni was adjudicated bankrupt by order of Associate Judge Bell on 14 May 2020. However, Associate Judge Smith annulled that order on 21 October 2020 and directed a rehearing because he was satisfied that Ms Heeni had not received proper notice of the adjudication hearing.

[2]    The Commissioner maintains that the requirements of s  13  of  the Insolvency Act 2006 (the Act) are met, and the onus is on Ms Heeni to persuade the Court that an order should not be made. The Commissioner contends that Ms Heeni has not addressed any of the grounds in s 37 of the Act which may justify the Court, in its discretion, declining to adjudicate Ms Heeni bankrupt.

[3]    Ms Heeni’s main basis for opposing the Commissioner’s application is that she does not recognise Parliamentary sovereignty and does not cede to its “legislative jurisdiction”. Ms Heeni maintains that the application should be “settled” on the basis of equity and trust law, rather than the Insolvency Act 2006. A secondary basis of opposition is that Ms Heeni says she does not understand or accept the assessments made by the Commissioner that led to the default judgment against her in the Waitākere District Court and these adjudication proceedings.

[4]    The issue to determine is whether the Court should, in its discretion, decline to adjudicate Ms Heeni bankrupt for any of the reasons set out in s 37 of the Act.

Factual background

[5]    Ms Heeni operated a book-keeping service through her associated company “Bookkeeper Express Limited”.   The company was a LACQ,  which means that   Ms Heeni was able to have income or losses attributed to her from the company.

[6]    The Department of Inland Revenue began an investigation into her affairs in late 2011. Ms Melanie Coelho, Compliance Officer for Inland Revenue, conducted an audit of Ms Heeni’s income tax between 31 March 2009 to 2016. The audit identified

issues with Ms Heeni’s income tax returns for the years 2009 to 2012, including omissions of rental income and discrepancies with deposits into her bank accounts for the periods in question.1 Ms Heeni had not filed tax returns at all for the years 2013 to 2016. On 11 May 2017, Ms Coehlo issued Notices of Assessments to Ms Heeni in respect of the income tax years ended 31 March 2013 to 31 March 2016, and informed Ms Heeni that she had four months to dispute the Assessments.2 On 7 August 2017, Ms Coehlo issued Notices of Proposed Adjustments (NOPAs) to Ms Heeni in respect of the income tax years ended 31 March 2009 to  31  March 2012,  and  informed  Ms Heeni that she had two months to dispute the NOPAs.3 Ms Heeni did not dispute any of the Assessments within the statutory timeframes.4

[7]    When the Commissioner filed proceedings in the District Court, the amount claimed for unpaid income tax for the years of 31 March 2013 to 31 March 2016 was

$211,480.96.5     The  total  amount  claimed,  including  penalties  and  interest,  was

$391,320.63.6   On 5 November 2018 judgment was given by default in the amount of

$330,462.00 after deductions for payments/credit offsets.7 Ms Heeni did not appeal the judgment or apply for a stay of execution.

[8]    On 13 February 2019, the Commissioner issued a bankruptcy notice, which Ms Heeni then applied to have set aside. The application was called before Associate Judge Bell on 12 September and 3 October 2019. He adjourned the hearing to

31 October 2020 to give Ms Heeni the opportunity to request review by the Commissioner:8

[3]        When the matter was called before me … Ms Heeni contended that the Commissioner had made incorrect assessments of her income tax liabilities. On 3 October 2019, I indicated that assessments of income tax are final and conclusive under s 109 of the Tax Administration Act once the period for challenge has expired, and the period for challenge had expired in this case. I noted, however, that the Commissioner has the power to review assessments. That is not something that the Court can compel. That power is under s 113 of the Tax Administration Act.

1      Affidavit of Ms Melanie Coehlo, affirmed 21 October 2019 at [11]–[12].

2      Tax Administration Act 1994, s 89AB(3)(a).

3      Tax Administration Act 1994, s 89AB(2).

4 Affidavit of Ms Melanie Coehlo, affirmed 21 October 2019 at [16].

5      Statement of Claim in Waitākere District Court, 11 October 2017.

6      Statement of Claim in Waitākere District Court, above n 5.

7      CIV-2017-090-001595.

8      Commissioner of Inland Revenue v Heeni [2019] NZHC 2843 at [3].

[4]        I gave Ms Heeni the opportunity to provide further information to the Inland Revenue with a view to persuading the Commissioner to amend the assessments on which the judgment was based. If she could successfully persuade the Commissioner that the assessments are incorrect then I would make adjustments to the bankruptcy notice to allow payment of a reduced sum.

[9]    Section 113 of the Tax Administration Act 1994 provides that the Commissioner may, at any time, amend an assessment as the Commissioner thinks necessary to ensure it is correct.

[10]   Ms Heeni’s s 113 application was considered by an independent Customer Compliance Officer of the Commissioner, Ms Steph Martin.  Ms Martin declined  Ms Heeni’s request for an amendment to her income tax assessments for the years ending 31 March 2014, 31 March 2015 and 31 March 2016.9 Ms Heeni was notified of this decision on 30 October 2019.

[11]On 31 October 2019 Associate Judge Bell concluded:10

[7]        Today Ms Heeni has maintained that the assessments are still wrong. I cannot review that matter myself. It was for Ms Heeni to persuade the Commissioner of the errors, not me. As she has not persuaded the Commissioner to exercise the powers under s 113 of the Tax Administration Act, the assessments stand. That means that the judgment in the District Court stands.

[8]        I am not satisfied there is any other ground for setting aside the bankruptcy notice and, accordingly, I dismiss the application. That means that the Commissioner can begin a bankruptcy application based on non- compliance with the bankruptcy notice. That is because the time for complying with the notice has now expired.

(emphasis added)

[12]   On 22 November 2019 the Commissioner filed an application that Ms Heeni be adjudicated bankrupt. The order was granted by Judge Bell on 14 May 2020.

[13]   Ms Heeni applied for the order to be annulled under s 309(1)(a) of the Act on 17 June 2020.

9      Letter of Steph Martin, Inland Revenue, dated 30 October 2019.

10     Commissioner of Inland Revenue v Heeni [2019] NZHC 2843.

[14]   Associate Judge Smith granted her application for annulment of Judge Bell’s order on procedural grounds and directed that the Commissioner’s application be the subject of rehearing.11 Judge Smith summarised his conclusions at [61]:

[55]      In this case, there is an issue as to whether the Court would still have adjudicated Ms Heeni bankrupt if she had been present at the hearing on     14 May 2020. I do not think it is sufficiently clear that the Court would have done so, that I can apply authorities such as Frederickson v Centurion Finance Ltd and conclude that there would be no point in annulling the adjudication order and allowing the bankruptcy application to continue. Once the Court is satisfied that the judgment debtor has not had sufficient notice of the hearing at which the adjudication order is made, I think there would normally need to be a very clear case that annulment would be pointless for the Court to exercise its discretion against making an annulment order. I am not satisfied that the evidence satisfies that test in this case.

[56]    The primary matter of concern is that Ms Heeni told me at the hearing that she is concerned that her mokopuna should be cared for in an appropriate manner, and she was concerned how that could be achieved while she remained an undischarged bankrupt. She did not say how many children she has to care for, or how they have been looked after since her company was put into liquidation, but those may well be considerations to be taken into account by the Court in the exercise of its discretion under s 37(c) or (d) of the Act. I appreciate that it might be said that Ms Heeni could have produced evidence on those matters in support of her annulment application, but she has been acting without legal assistance, and I think it would have been understandable if she assumed that, whatever arguments she might wish to advance in opposition to the bankruptcy application, the problems that arose with the written notice of 14 May 2020 hearing gave her a trump card on the annulment application.

[57]      Ms Heeni did not delay in making her application to annul the adjudication order, and I think it is important that a litigant in her position should not be prejudiced by any reasonable risk that she might not have had a fair opportunity to present her case. In my view she should be given a further opportunity to present any relevant evidence in respect of her family/whanau situation, and how a bankruptcy might impact on her ability to support herself and any children in her care.

[58]      However any further evidence or argument designed to show that she does not owe the debt claimed by the Commissioner is unlikely to be allowed. That is an issue on which Associate Judge Bell ruled against Ms Heeni on her application to set aside the bankruptcy notice, and she did not appeal that judgment.

[59]      Nor was there any merit in the “further affidavit”, or in the various Notices to Settle. They did nothing to assist Ms Heeni’s position. The constructive trust argument, which neither Ms Heeni nor Ms Ehine (who I allowed to address me at the hearing) was able to satisfactorily explain, was clearly hopeless (there could be no question of the Court somehow acting as

11     Commissioner of Inland Revenue v Heeni [2020] NZHC 2764.

a “trustee” for Ms Heeni, to somehow settle the proceeding on her behalf). Nor was there any merit in the purported claim for $10 million in damages.

[60]      Various references were made in the documents filed by Ms Heeni to provisions in Te Ture Whenua Maori Act 1993, but I do not think any of those references assisted Ms Heeni’s case.   For example, reference was made to   s 242 of that Act, which permits the “Court” to order that any money held in trust for any Maori be paid to the person beneficially entitled to the money. There was no evidence before me that Ms Heeni is beneficially entitled to any money held in trust that might be sufficient to meet her substantial debts, and even if there were, this Court would have no jurisdiction to order that such money be paid to Ms Heeni or her creditors – the word “Court” in s 242 refers to the Maori Land Court (or the Maori Appellate Court as appropriate), not this Court.

[61]      Ms Heeni may have little prospect of successfully resisting the bankruptcy claim, but the issues relating to the written notice of the hearing, and the risk that Ms Heeni might not have had a fair opportunity to put her case before the Court, persuade me that the justice of the case requires that I make the annulment order sought. As that order will not involve a determination of the merits of the Commissioner’s adjudication application, the Commissioner’s existing adjudication application will need to be reheard, on a date to be fixed by the Court.

(emphasis added)

[15]   When the Commissioner applied for an order that Ms Heeni be adjudicated bankrupt on 22 November 2019, the amount in question was $736,644.78, comprised of the judgment debt of $330,506.28 and penalties and interest of $406,138.50. The Commissioner now contends that Ms Heeni owes $835,631.24 (as at 31 August 2020).

Legal framework

Insolvency Act 2006

[16]   The criteria for when a creditor may apply for the debtors’ adjudication are set out in s 13 of the Act:

13 When creditor may apply for debtor’s adjudication

A creditor may apply for a debtor to be adjudicated bankrupt if—

(a)the debtor owes the creditor $1,000 or more or, if 2 or more creditors join in the application, the debtor owes a total of

$1,000 or more to those creditors between them; and

(b)the debtor has committed an act of bankruptcy within the period of 3 months before the filing of the application; and

(c)the debt is a certain amount; and

(d)the debt is payable either immediately or at a date in the future that is certain.

[17]   Under s 17, a debtor commits an act of bankruptcy (as required under s 13(b)) if a creditor has obtained a final judgment/ order against the debtor for any amount, the execution of which has not been halted by a court, and the debtor, having been served with a bankruptcy notice, has not complied with the requirements of the notice or otherwise satisfied the Court that he or she has a cross-claim against the creditor.

[18]   Section 36 provides that the Court may, at its discretion, adjudicate the debtor bankrupt if the creditor has established the requirements set out in s 13. It has been said that once the s 13 requirements are made out, the judgment creditor is prima facie entitled to an adjudication order.12 This Court has said:13

… the petitioning creditor does not have an automatic right to obtain an order of adjudication, nevertheless the onus in those circumstances is on the debtor to persuade the Court that an order should not be made.

[19]   The Court may, in its discretion, refuse adjudication for the reasons set out in s 37 of the Act. Section 37 provides:

37       Court may refuse adjudication

The court may, at its discretion, refuse to adjudicate the debtor bankrupt if—

(a)the applicant creditor has not established the requirements set out in section 13; or

(b)the debtor is able to pay his or her debts; or

(c)it is just and equitable that the court does not make an order of adjudication; or

(d)for any other reason an order of adjudication should not be made.

12     See Baker v Westpac Banking Corp CA212/92, 13 July 1993 at 5 and 7; and Re Epirosa HC Wellington B498/91, 6 March 1992 at 5 and 8.

13     Kiwibank Ltd v Hutchin [2015] NZHC 1518 at [26].

[20]   The Court of Appeal has observed that s 37 confers a “wide discretion” informed by various factors.14

The Commissioner’s case

[21]   The Commissioner submits that the requirements of s 13 of the Act have been met: Ms Heeni owes the Commissioner $835,631.24; she has committed an act of bankruptcy following dismissal of her application to set aside the bankruptcy notice and her failure to comply with the bankruptcy notice; the debt is a certain amount; and the debt is payable immediately. Therefore, Ms Heeni should be adjudicated bankrupt unless there are grounds for the Court to exercise its discretion under s 37 not to grant the order for adjudication.

[22]As to the grounds in s 37 of the Act, the Commissioner submits:

(a)s 37(a) does not apply as the requirements of s 13 are met;

(b)there is no evidence to suggest that Ms Heeni can pay the debt owed to the Commissioner immediately or within a reasonable time (or at all);

(c)Ms Heeni has not established why it would be just and equitable for the Court not to make an order for adjudication in terms of s 37(c) or pointed to any other reason in terms of s 37(d).

[23]   The Commissioner contends that there is a strong public interest in an order for adjudication, to demonstrate that taxpayers cannot simply decide not to comply with their obligations. Ms Heeni has undermined the tax system by continually failing to meet her tax obligations and pay her taxes. Allowing Ms Heeni to remain self- employed with disregard for her tax obligations erodes the public’s expectation of timely and voluntary compliance by all taxpayers.

14     Body Corporate 68792 v Memelink [2018] NZCA 509, [2019] NZAR 127 at [15].

Ms Heeni’s case

[24]   Ms Heeni’s grounds for opposing the application for adjudication are found in her “notice of opposition to bankruptcy notice and for the matter to be settled in accord with equity law” dated 12 January 2021, an unsworn affidavit in support also dated 12 January 2021, a “second notice of opposition to bankruptcy notice and for the matter to be settled in accord with equity law” dated 26 February 2021, and a “supplementary affidavit for the matter to be settled in accord with equity law”, dated 26 February 2021 and unsworn.

[25]   The main argument made by Ms Heeni through these documents, and advanced by Mr Makaera on her behalf at the hearing, is to rely on Maori sovereignty and reject that she is subject to the legislative authority of the New Zealand Parliament. She denies she is a “defendant” or “judgment debtor” and contends that she is a “private, sentient, breathing, living woman of flesh, blood and bone, sojourning on the land, subject only to God, the Supreme Creator of All Things, and His Laws and Laws being contained in my family Bible”. She maintains that this issue may only be “settled appropriately, according to the Higher Laws of God and Trust Law which has lawful force and effect”, and not the “colour of law / pretence law” that covers “admiral / maritime statutory jurisdiction”. She emphasises that “at no time do I cede to admiralty / maritime jurisdiction”. She maintains that she is the “sole beneficiary in terms of constructive trust CIV-2019-404-128 with regard to equity jurisdiction and Trust Law”. She contends that the proceeding may only be settled through constructive trust in accordance with equity law.  She also claims restoration of   NZD $10 million in gold bullion or New Zealand currency.

[26]   Ms Heeni’s secondary grounds for opposing the application, which emerged when I questioned her, was that she still does not understand or accept the Commissioner’s calculations of her tax liability.

Discussion

Maori sovereignty, constructive trust, equity

[27]    It is regrettable that Ms Heeni chose to take this approach to defending the application, especially following Associate Judge Smith’s indication at [59] and [60] of his judgment  that these arguments did nothing to assist her position.   I reject    Ms Heeni’s argument that she is not subject to the laws of the New Zealand Parliament. The Court of Appeal in R v Mitchell said:15

This Court has made it plain on a number of occasions now that arguments that are based upon an assertion that the Parliament of New Zealand was not authorised to make law affecting some or all of the persons living in New Zealand cannot succeed before it. Our courts are bound to accept the validity of Acts of Parliament … Although this issue does involve a point of law, Mr Mitchell’s proposition has been squarely rejected on many occasions in the High Court and Court of Appeal. No useful purpose would be served in retraversing the authorities. Mr Mitchell was perfectly familiar with them … He just does not accept them. He is not entitled to put himself outside the law of New Zealand.

[28]   In the judgment of Jay Maui Wallace v The Queen, the Supreme Court rejected a similar claim:16

The applicant is facing trial in the High Court on a number of criminal charges. He seeks leave to appeal direct from a ruling of Brewer J given on 11 October 2010 rejecting a protest to the jurisdiction of the High Court (advanced essentially on Maori sovereignty grounds) and holding that certain evidence which the Crown wishes to lead is admissible subject to certain deletions.

As far as we can tell from the materials supplied by the applicant, the arguments which he wishes to advance are confined to the jurisdiction of the High Court. These arguments, however, are plainly unsound legally.

[29]   I also reject the constructive trust argument as completely without foundation. Neither Mr Makaera or Ms Heeni could explain why they say a constructive trust exists, with the Court as trustee and Ms Heeni as beneficiary. The claim to $10 million in damages is also completely without merit.

15 R v Mitchell CA68/04, 23 August 2004 at [14].

16 Jay Maui Wallace v The Queen [2011] NZSC 10 at [1]–[2]. See also, more recently, Main v Police [2018] NZHC 1828 at [13]: “The law is well-established that the Parliament of New Zealand makes laws which bind everybody in New Zealand”. Leave to appeal declined by the Supreme Court [2019] NZSC 2.

Does not understand or accept the Commissioner’s assessments

[30]   As has been explained to Ms Heeni on several occasions, by Associate Judges Sargisson, Bell and Smith, the Commissioner’s assessment of her tax liability is final, and this Court has no jurisdiction to review it.

[31]   In terms of Ms Heeni not “understanding” the assessments, I note that she has had ample opportunity to gain that understanding. Over several years, from 2012 to 2016, the Inland Revenue sought to engage with Ms Heeni to obtain relevant financial information from her and to discuss her tax position. Ms Heeni repeatedly failed to provide the information sought and evaded contact with the Inland Revenue.17

[32]   She had further opportunity to engage with the Inland Revenue and/or get tax advice once the assessments were issued and then in the context of the District Court proceedings. Associate  Judge  Bell  urged  her  to  take  specialist  tax  advice  on  31 October 2019 when he rejected her application to set aside the bankruptcy notice.18

[33]   When  the  matter  was  called   before   Associate   Judge   Sargisson   on   19 March 2020, Her Honour explained to Mr Heeni and Mr Makaera (who attended as her support person) that the Court could not revisit the amount of the tax debt on which the bankruptcy proceeding is based; that her only recourse to challenge the assessment was to seek a s113 review under the Tax Administration Act; that there were limited grounds upon which she could oppose the bankruptcy application; and directing her to urgently obtain legal advice.19 Her Honour also encouraged Ms Heeni to meet with the Inland Revenue.

[34]   Given this background, I am forced to conclude that it is not so much that  Ms Heeni does not understand the tax assessments, it is rather that she does not accept them. As she has been informed, that is no basis for defending the bankruptcy application.

17     Affidavit of Ms Hilary Mattyasovszky, affirmed 27 January 2021.

18     Commissioner of Inland Revenue v Heeni [2019] NZHC 2843 at [9].

19     Minute of Associate Judge Sargisson, dated 19 March 2020.

Section 37 of the Act

[35]   Ms Heeni did not address in her notices of opposition or affidavits any of the potential grounds for the Court refusing to make an order for adjudication. This is unfortunate, as the intention of the annulment of her adjudication by Associate Judge Smith was to give her the opportunity to file any evidence to address these grounds and persuade the Court that it would be just and equitable not to proceed with an order for adjudication. I refer to Associate Judge Smith’s order at [62]:

(3)Ms Heeni is to file and serve a formal notice of opposition, and further affidavits directed to any arguments she may have under s 37(c) or (d) of the Act, by 5.00 pm on 5 November 2020.

[36]   Ms Heeni has elected not to address the statutory provisions with which the Court is concerned, and instead has advanced a case based on Maori sovereignty and constructive trust and equity.

[37]Despite that, at the hearing I explored with Ms Heeni whether:

(a)she is in fact able to pay the debt to the Commissioner (and any other debts she has); and/or

(b)there is any other reason, such as having dependent family members, which the Court should consider when determining whether it might be just and equitable for the application to be declined.

[38]   As to Ms Heeni’s ability to pay her debts, Ms Heeni has not provided any information to demonstrate to the Court or the Commissioner what her financial position is. At the hearing Ms Heeni told me that she owns her house, which she estimates to have a value of around $900,000. It has a mortgage of around $260,000. Ms Heeni told me that she has no other significant assets. I note that Associate Judge Smith recorded that the Official Assignee had reported in August 2020 that Ms Heeni owned two further properties. Ms Heeni did not mention these properties to me or provide any information. She said that aside from the mortgage over her home, the Commissioner is her only significant creditor. Since her company was placed in

liquidation, she has been relying on family to support her, and occasional data entry work.

[39]   I conclude from this discussion that even if Ms Heeni was prepared to sell her home to pay the debt to the Commissioner (which she confirmed that she was not), she is not able to be able to pay the debt. The grounds for refusing to adjudicate her bankrupt in s 37(b) are not made out.

[40]   As to the “just and equitable” or “any other reason” grounds, Ms Heeni told me about her family, of whom she is justifiably proud. She has three children and several mokopuna. The eldest, her daughter, is at university and is completing a PhD. She herself has four children, the eldest is university educated and employed in logistics, the second an apprentice builder, the third at university studying economics and Te Reo, and the youngest at school. Her middle child, a son, is employed in engineering and drain-laying work. He has three children: the eldest of which is an apprentice painter, a daughter who is at university studying the Arts, and an 11 year old boy who is at school. Her third child, a son, is employed in logistics and is a stepfather. None of these children,  or  mokopuna,  are  financially  dependent  on Ms Heeni. She has previously provided for her children, but they are now all independent adults and earn their own income.

[41]   Ms Heeni appears to want to avoid bankruptcy so she can continue to run a book-keeping business. She is also concerned that bankruptcy will bring shame and embarrassment to her and her family. I acknowledge this concern.

[42]   However, in exercising my discretion I am mindful of the public interest in having the tax system upheld. I note the remarks of Master Lang in Re Mara ex parte Commissioner of Inland Revenue, endorsed by Randerson J in Raynel v Commissioner of Inland Revenue:20

The cornerstone of [our taxation] system is the concept of voluntary compliance. Taxpayers comply with their obligations voluntarily and in the expectation that others will do likewise. If that expectation is allowed to erode, the very foundation of our present tax regime is at risk … Other

20     In re Marra ex parte Commissioner of Inland Revenue (2004) 21 NZTC 18,494 at [17]; endorsed by Randerson J in Raynel v Commissioner of Inland Revenue (2004) 21 NZTC 18,583 at [53].

taxpayers expect and are entitled to see that the Commissioner takes a firm stand in dealing with those who fail to meet their taxation obligations.

[43]   This proceeding originated in Ms Heeni’s failure to file accurate income tax returns for the years 2009 to 2012, and for failing to file income tax returns at all for the years 2013 to 2016. She did not dispute the assessments within the statutory time to do so and appears to have deliberately avoided engaging with the Inland Revenue in the years leading up to the District Court proceedings, which led to default judgment being entered against her. I observe that at this time, the total amount claimed was much more manageable, at $211,480.96, or $391,320.63 including penalties and interest.

[44]   She first engaged with the process when she applied to have the bankruptcy notice set aside. She sought and had the Commissioner’s assessments reviewed under s 113 of the Tax Administration Act, and the Court permitted time for that review to take place. Ms Heeni has had ample time and opportunity to gain an understanding of the Commissioner’s calculations of her liability, and/or to engage with the Commissioner to try to arrange a payment scheme. She has not put forward any proposal for an instalment arrangement to pay the outstanding debt.21 She has not, despite being directed by the Court to do so, taken specialist tax and/or legal advice. Even now, despite a further opportunity, her argument for resisting adjudication is essentially:

(a)to reject the legislative scheme that has brought her to this point; and

(b)to say that she does not understand or accept the Commissioner’s assessment.

[45]    These are not reasons for declining the Commissioner’s application for adjudication, particularly when bearing in mind the public interest in the maintenance of the integrity of the tax system. Ms Heeni has shown a complete disregard for that tax system; indeed, her defence is based on rejecting that system and the legislation underpinning it entirely. She has not shown that if she was to avoid bankruptcy, so

21 Affidavit of Hilary Mattyasovsky, affirmed 27 January 2021 at [28].

she could continue with her book-keeping business, that she would comply with her tax obligations in the future. This attitude is perplexing and concerning in someone who offers services as a book-keeper.

[46]   Ms Heeni has not persuaded me that it is just and equitable for the Court to decline to adjudicate her bankrupt, or that any other reason exists to justify such a decision.

Result

[47]I order that:

(a)Aroha Heeni is adjudicated bankrupt. The time of order is 3.30 pm.

(b)Aroha Heeni is liable to pay the actual costs and disbursements of the Commissioner, as fixed by the Registrar.

Associate Judge Gardiner