Donald v Goldpine Industries Limited

[2020] NZHC 450

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2019-409-488

[2020] NZHC 450

BETWEEN

ANGELA DONALD

Insolvent

AND

GOLDPINE INDUSTRIES LIMITED, STELLAR COLLECTIONS LIMITED

trading as MFL SERVICES /

CREDITWORK RECOVERIES, WINSTONE AGGREGATES LIMITED, DEBTWORKS (NZ) LIMITED, FLEXI CARDS LIMITED, ISAACS

CONSTRUCTION LIMITED

Creditors

Hearing:	4 February 2020
Counsel:	G Davis for Trustee
Judgment:	10 March 2020

JUDGMENT OF ASSOCIATE JUDGE LESTER

This judgment was delivered by me on 10 March 2020 at 11.30am pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar 10 March 2020

DONALD v GOLDPINE INDUSTRIES LIMITED [2020] NZHC 450 [10 March 2020]

[1]    This is an  application  by  the  insolvent,  Angela  Donald,  for  approval  of a creditors proposal. This is one of a number of proposals managed by the same Trustee where I have had concerns about the method of service of the proposal and of giving notice of this application.1 I do not repeat the comments I have made in those judgments about the use of email, other than it is important that the Court can have confidence that the proposal and the application for approval have been properly brought to the notice of creditors.

[2]    In this case, because notice of the proposal was given by email with apparently no prior contact with the insolvent’s creditors, I called for a further report from the Trustee.

[3]    The Trustee has filed a further affidavit giving evidence that all creditors confirmed receipt of the proposal. Accordingly, there is evidence of receipt in fact of the proposal and I accept the Trustee’s evidence in that regard. Section 330 of the Insolvency Act 2006 refers to notice of the proposal being sent by post but given   the evidence of actual receipt I say no more on that issue.

[4]    The evidence in respect of the service of the application is less complete, but the same email addresses were used. As I will refer to below, the amount of the insolvent’s debt in this case is low, only some $32,000. I do not wish to create unnecessary costs and I am prepared to proceed on the basis that proper notice of the proposal has been given.

[5]    The practical reality in this case is that given the evidence that all creditors received the proposal and none of them voted against it, it is reasonably unlikely that there would have been active opposition to the present application. The fact remains, however, that if a creditor was not notified of this application they will have grounds to apply to challenge the proposal.

[6]    As to the merits of the proposal itself, I am satisfied that the proposal is in the correct form required by the Insolvency Act. As I have said, the amount of debt is

1      Henshaw v ANZ National Bank Ltd [2020] NZHC 201 and Hantom v NZCU Baywide [2020] NZHC 126.

relatively modest. The insolvent says she has been struggling to keep up with the repayment of her debts due to a business failure.

[7]    The proposal contemplates that the insolvent’s debts will be paid in full over a three-year period. In substance the proposal is aimed at securing for the insolvent the ability to make time payments.

[8]    Given those circumstances, I agree with the Trustee that the terms of the proposal are reasonable and are calculated to benefit the general body of creditors.

[9]    Of the insolvent’s six creditors, only two voted and both voted in favour of the proposal. Such means the proposal passed in terms of s 331(3) of the Insolvency Act.

[10]   Given the proposal was passed, the absence of any creditors voting against it and the matters I have already referred to above, there is no basis for the Court not to approve the proposal and there is accordingly an order in terms of paragraph 1 of the application for approval dated 13 November 2019.

Associate Judge Lester

Solicitors:
Webster Malcolm Law, Warkworth