Gill v KB Contracting and Quarries Limited

[2020] NZHC 1493

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2019-409-548

[2020] NZHC 1493

UNDER

the Insolvency Act 2006

BETWEEN

DAVID GILL

Insolvent

AND

KB CONTRACTING AND QUARRIES LIMITED

Creditors

continued ……

Hearing:	14 May 2020
Appearances:	S C G P Seger for Insolvent’s Trustee
Judgment:	30 June 2020

JUDGMENT OF ASSOCIATE JUDGE LESTER

This judgment was delivered by me on 30 June 2020 at 3.30pm pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar

30 June 2020

GILL v K B CONTRACTING & QUARRIES LIMITED [2020] NZHC 1493

AND

STELLAR COLLECTIONS LIMITED

TRADING AS MFL SERVICES / CREDIT

WORK RECOVERIES (collecting on behalf of Porter Hire Limited and Hynds Pipe systems)

LATITUDE FINANCIAL SERVICES LIMITED TRADING AS GEM

MILTON GRAHAM LIMITED

FLEXICARDS LIMITED TRADING AS Q CARD

ASB BANK LIMITED BAYCORP NZ LIMITED HARMONEY LIMITED

Creditors

[1]    The insolvent  seeks  approval  of  a  proposal  under  pt  5  of  the  Insolvency Act 2006 (“the Act”).

[2]    The proposal was lodged with the Court on 4 October 2019 and was sent by Ms Christine Liggins, the provisional trustee, to the creditors on 2 October 2019 in anticipation of the proposal being filed. The creditors meeting to consider the proposal was held on 20 November 2019. Ms Liggins emailed the proposal to each creditor.

[3]    When I first considered the proposal, I was not able to confirm from the papers filed that there was proof of service of the proposal on all creditors. Ms Liggins has filed a further affidavit which confirms she received, but did not retain, confirmation from two creditors that they received the proposal. I have no reason to not accept that evidence.

[4]    In respect of a third creditor, about whom there was no evidence as to whether they received the proposal, an email confirmation receipt is now produced. In fact,

this creditor in confirming receipt of the proposal, signalled their agreement to the proposal but did not lodge a formal postal vote for the creditors meeting.

[5]I am satisfied that each creditor was given notice of the proposal.

[6]    Of the insolvent’s four creditors who returned votes, all voted in favour of the proposal, together with the informal fifth statement of acceptance.

[7]    Accordingly, over 75 per cent in value of creditors who voted, voted in favour of the proposal.

[8]    Under the proposal, the insolvent will make 78 fortnightly payments of $1,212 to his trustee to be paid onto his creditors with the aim that creditors will receive approximately 100 cents in the dollar.

[9]    I now turn to the form and substance of the application. Under s 327 of the Insolvency Act 2006 (the Act), the proposal must be in the prescribed form and accompanied by a statement of assets in the prescribed form. I am satisfied that was done in this case. As I have said, notice of the proposal and of this application was in fact received by the creditors, as they replied to Ms Liggins’ emails, which have been produced, or if no longer available Ms Liggins has sworn such were received.

[10]   The approach adopted by the court is that unless it is apparent that one of the grounds for refusing approval under s 333(3) of the Act applies, the court should accept the view of the creditors or the majority of them.1 The insolvent wants to make arrangements to pay his creditors in full (or near enough to it). The creditors accept that proposal. Nothing about the proposal warrants the court declining approval and in the circumstances I am satisfied it is appropriate to approve the proposal.

[11]   Accordingly, there is an order approving the proposal by David Gill under pt 5, subpt 2 of the Insolvency Act 2006 lodged with the Court on 4 October 2019.

1      Farmer v Rowley [1992] 2 NZLR 195 (CA).

[12]   The court would be assisted in considering further applications if creditors were referred to consistently from the time they are identified in the proposal, to voting, and to being given notice of the application. Where in the course of a proposal a creditor refers their  debt  to  a  credit  agency,  who  then  votes  for,  or represents a creditor or creditors, the application for approval should explain when the credit agency took over and who they represented when they voted. If the credit agency presents a block vote on behalf of a number of creditors, the identity of the creditors represented by that vote must be identified.

Associate Judge Lester

Solicitors:
Webster Malcolm Law, Warkworth