Commissioner of Inland Revenue v Smith

[2012] NZHC 756

IN THE HIGH COURT OF NEW ZEALAND PALMERSTON NORTH REGISTRY

CIV-2011-454-530 [2012] NZHC 756

IN THE MATTER OF     the Insolvency Act 2006

AND

IN THE MATTER OF     the bankruptcy of PAUL SMITH

BETWEEN  THE COMMISSIONER OF INLAND REVENUE

Judgment Creditor

ANDPAUL KENNETH SMITH Judgment Debtor

(Heard at Palmerston North)

Counsel:         E.M.Carpenter - Counsel for Judgment Creditor

Judgment:      1 March 2012

ORAL JUDGMENT OF ASSOCIATE JUDGE D.I. GENDALL

Solicitors:           Inland Revenue Department, PO Box 1144, Napier

THE COMMISSIONER OF INLAND REVENUE V PK SMITH HC PMN CIV-2011-454-530 [1 March 2012]

[1]      Before the Court is an application by the judgment creditor seeking an order for adjudication in bankruptcy of the judgment debtor.

[2]      The debt in question according to the judgment creditor now stands at the sum of $65,751.96.

[3]      It  relates  to  a  judgment  obtained  by  the  judgment  creditor  against  the judgment debtor at the District Court at Levin on 28 October 2009 for the total sum of $71,325.99

[4]      A Bankruptcy Notice was then issued against the judgment debtor and served upon him on 22 August 2011.

[5]      No opposition to that Notice nor any application to set-aside the Bankruptcy

Notice was made by the judgment debtor.

[6]      Subsequently on 17 November 2011 the present bankruptcy proceeding was brought in this Court.

[7]      The creditor’s application for an adjudication order and related documents were served upon the judgment debtor on 8 December 2011.

[8]      At this point I simply note that the amount claimed from the judgment debtor at that point had reduced to the sum of $63,998.12 as an amount of some $7,883.87 had been abandoned by the judgment creditor since the date of the earlier judgment.

[9]      No formal statement of defence to the present application has been filed by the judgment debtor. And there was no appearance by him before me today, 1 March

2012.

[10]     Instead, yesterday 29 February 2012 this Court received a letter from the judgment debtor.  This letter outlined a number of extreme accusations made by the judgment  debtor.    These  included  accusations  against  the  Levin  District  Court

alleging conspiracy, accessing a computer to commit a crime, producing a false document to commit a crime, being a party to using a false document and making false statements.

[11]     That 29 February 2012 letter confirmed that the judgment debtor would not be attending Court today, 1 March 2012.   Instead, he threatened at para 5 of that letter that:

If the Court proceeds I will make public the corruption in the New Zealand Government Departments, Courts, Police, Land Transfer and Inland Revenue and produce the evidence to back-up what I say is correct.

[12]     These are serious claims.  There is however no evidence of any kind before this Court to support these wild allegations on the part of the judgment debtor.

[13]     In addition, the relevance of these claims to matters before me today is not at all clear.  I must put them to one side in properly considering the judgment creditor’s present application and I now do so.

[14]     As to this, I record that Ms Carpenter appeared as counsel for the judgment creditor before me at the hearing today.  She confirmed that the judgment debtor in earlier criminal proceedings has been convicted for knowingly filing false income tax and GST returns and was sentenced on these matters I understand on 31 October

2011.

[15]     The judgment debtor in his 29 February 2011 letter to the Court contended

that this case cannot proceed “due to it being in the Court of Appeal”.

[16]     As I understand the position from Ms Carpenter, the appeal before the Court of  Appeal  by  the  judgment  debtor  is  against  his  sentencing  on  the  criminal conviction which occurred on 31 October 2011.  He has not appealed nor made any application to set-aside the original judgment of the District Court against him in favour of the judgment creditor on which the present proceeding relies.

[17]     As I see the position there is simply nothing before the Court by way of a possible defence or opposition to the present application.

[18]     The  judgment  debtor  has  clearly  committed  an  act  of  bankruptcy which remains unremedied. An order for adjudication is appropriate here.

[19]     That said the following orders are now made:

(a)       An order is made adjudicating the judgment debtor, Paul Kenneth

Smith, bankrupt.

(b)Costs are awarded to the judgment creditor on a category 2B basis together with disbursements as fixed by the Registrar.

(c)       This order is timed at 11.58 am today, 1 March 2012.

‘Associate Judge D.I. Gendall’