Commissioner of Inland Revenue v Yorke

[2018] NZHC 2668

IN THE HIGH COURT OF NEW ZEALAND WHANGAREI REGISTRY

I TE KŌTI MATUA O AOTEAROA WHANGĀREI-TERENGA-PARĀOA ROHE

CIV-2017-488-124 [2018] NZHC 2668

UNDER

the Insolvency Act 2006

IN THE MATTER OF

The bankruptcy of MICHAEL PHILIP GRAEME YORKE

BETWEEN

COMMISSIONER OF INLAND REVENUE

Plaintiff

AND

MICHAEL PHILIP GRAEME YORKE Defendant

Hearing:	15 October 2018
Appearances:	P J Smith for the Judgment Creditor Judgment Debtor in person (with his partner)
Judgment:	15 October 2018

ORAL JUDGMENT OF ASSOCIATE JUDGE R M BELL

Solicitors:

Crown Solicitor, Whangarei, for the Judgment Creditor
Copy for:

M P G Yorke, Whangarei

COMMISSIONER OF INLAND REVENUE v YORKE [2018] NZHC 2668 [15 October 2018]

[1]      The Commissioner applies for an order adjudicating Mr Yorke bankrupt.  The Commissioner relies on a bankruptcy notice dated 10 November 2017. That notice is based on a judgment of the Whangarei District Court dated 6 October 2017 for

$46,396.84.  The Commissioner obtained judgment against Michael Philip Graeme

Yorke of 18 Hawke Drive, Haruru, by default.

[2]      The Commissioner had difficulty serving the bankruptcy notice.  I made an order for substituted service on 13 April 2018.  Mr Yorke was served by substituted service on 8 May 2018.  I refer here to the affidavit of service of Helen Brasier of

29 May 2018.  The Commissioner began this application on 16 July 2018, relying on non-compliance with the bankruptcy notice. Substituted service of the application was ordered.

[3]      The case was called before Associate Judge Sargisson.  Mr Yorke appeared. He submitted to Associate Judge Sargisson that he was not the debtor.  He said that there was another person also called Michael Yorke.  He noted that the person named as the debtor is the operator of an internet website design service.   He advised Associate Judge Sargisson that he had never operated such a design service and that he was currently on accident compensation.  He says he has a nephew with the same name  who  did  operate  an  internet  service.   Associate  Judge  Sargisson  directed

Mr Yorke to file documents in opposition.  He was required to file an affidavit by

17 September 2018. She adjourned the matter until today. Mr Yorke filed an affidavit. The Registrar referred it to me.  I did not regard the affidavit as advancing matters very far for Mr Yorke. I issued a minute in which I said:

[4]       At the risk of being seen to help Mr Yorke, I make some observations. His case will be more persuasive if he is able to offer independent evidence as to the existence of another Michael Yorke.  That might be done by providing affidavits from people (other than friends and relatives) who may be able to identify both Michael Yorkes, copies of birth certificates, or other independent evidence showing the existence of two men with the same or similar names. It would be very helpful to arrange for the other Michael Yorke to appear with him when this case is called on 15 October 2018 at 10:00am.

[4]      I indicated that both parties should be prepared for me to deal with the matter on the merits on that date.

[5]      An Inland Revenue officer swore an affidavit in response on 8 October 2018. In the hearing today, Mr Yorke submitted copies of birth certificates.  The first birth certificate is for a Michael Philip Graeme Yorke born 18 November 1958.  Mr Yorke identifies that as his own birth certificate.  There is a second birth certificate for a Michael Phillip Graeme Yorke born 6 January 1980.  Mr Yorke identifies that person as his son. He says that his son is in Australia. There is also a Michael George Yorke, born 11 July 1958, a Michael Alan Yorke born 4 September 1972, and a Michael Lesley Yorke born 5 June 1963. That birth certificate shows that Michael Yorke was born in Kawakawa. The Michael Yorke in this proceeding says that that is his nephew who he says was involved in the IT business but has now left the Haruru Falls area. Mr Yorke, the debtor in this case, explains that he is currently on ACC.   He has provided documents from ACC showing payments he is receiving. He says that he is presently living in a van at his sister’s place in Auckland so that he can receive treatment. He is not in current employment. He effectively has no assets to his name. He is uncertain when he will be off ACC.  It seems likely that when he does go off ACC he may be able to obtain paid employment. His main background is in truck driving and training truck drivers.

[6]      The affidavit in response from an officer of Inland Revenue explains the indebtedness for which the Commissioner obtained judgment.   The proceeding in which judgment was obtained is described.  The statement of claim is attached as an exhibit. The plaintiff is the Commissioner, the defendant is described in the same way as the debtor in this case.  The Commissioner sued for outstanding income tax.  The statement of claim does not give details of the assessments but his income from working was assessed and the amount alleged outstanding to the Commissioner is

$28,783.00.  The statement of claim also claims further indebtedness by way of a student loan agreement between the defendant and the Crown dated 28 February 2004. The statement of claim acknowledges payments by the defendant of $16,674.02. There have been transfers to reduce his indebtedness.  The amounts now outstanding under the Student Loan Scheme Act 1992 is $17,150.35. The Commissioner obtained judgment by default.  The affidavit attaches as an exhibit a copy of the student loan

contract between the Department of Work and Income as lender and Michael Philip Graeme Yorke as borrower. The student loan contract shows the date of birth and the name of the borrower.  The name of the borrower is given as Michael Philip Yorke, and the date of birth is 18 November 1958. The signature on the loan contract matches the signature of Mr Yorke in his affidavit of 14 September 2018.  I am satisfied that there is identity of the borrower under the student loan contract and the debtor in this case.

[7]      There was discussion.  Mr Yorke accepted that he was the person liable under the student loan contract.  He maintains that he had made payments, noting that there had been a reduction of something like $16,000 odd.  I understand his point that he was referred to in the proceeding as operating an internet website design service. I accept his assurance that he has not been involved, in any substantial sense, in operating an internet website design service. He ought more properly to be considered as a truck driver or as an instructor for truck drivers.   But I am satisfied that the Commissioner has correctly sued Michael Philip Graeme Yorke, the debtor in this case, as the person under the student loan contract and as the person liable for the unpaid income taxes.

[8]      Once that question of identity was cleared up, I discussed with Mr Yorke how he intended to deal with his insolvency. It seems clear that in his present circumstances he is no position to clear the debt. The ACC payments he receives are only enough to support himself without leaving any funds available to go towards his creditors. I explained  to  Mr Yorke  that  one of  the  consequences  of bankruptcy  is  that  on discharge the liabilities are written off – subject to certain exceptions.   I am satisfied that the exceptions under s 304 of the Insolvency Act 2006 do not appear to relate to Mr Yorke’s indebtedness to the Commissioner of Inland Revenue.  He understands that in bankruptcy the Official Assignee has the power to require contributions towards creditors but I said to Mr Yorke that in his circumstances, unless he takes highly paid employment, it is unlikely that he will be required to make any contributions to his creditors.  His indebtedness is greater than the limits for the no-asset procedure.  He does not qualify for a summary instalment order.

[9]      I am satisfied there are no reasonable alternatives to bankruptcy.  In the end,

Mr Yorke did not resist an order for adjudication being made, given that on discharge these debts will be lifted off his shoulders.  I am reasonably confident that he will be able to comply with the conditions of bankruptcy. He is not to become self-employed without the consent of the Official Assignee, is not to leave the country without the consent of the Official Assignee and should not run up credit.

[10]     Accordingly, I make an order adjudicating Michael Philip Graeme Yorke bankrupt.  I am sure that he is the correct person identified as Michael Philp Graeme Yorke born on 18 November 1958 at Kaikohe.   I make an order for costs to the Commissioner in the sums claimed, plus disbursements as claimed.  The time of the order is 11:30am.

……………………………….

Associate Judge R M Bell