Green v Accident Compensation Corporation HC Hamilton CIV 2006-419-985

[2007] NZHC 1631

IN BANKRUPTCY

IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY

CIV 2006-419-985

IN THE MATTER OF     the Insolvency Act 1967

AND

IN THE MATTER OF     FJ Green

BETWEEN  FARRELL JAMES GREEN Debtor

ANDACCIDENT COMPENSATION CORPORATION

Creditor

Hearing:         16 February 2007

Counsel:         S Greer for debtor

A Hayes for creditor

Judgment:      16 February 2007 at 10:10

(ORAL) JUDGMENT OF ASSOCIATE JUDGE FAIRE [on application to annul bankruptcy]

Solicitors:           Garth O’Brien & Associates, PO Box 79, Te Awamutu for debtor

Maude & Miller, PO Box 50 555, Porirua City for creditor

GREEN V ACCIDENT COMPENSATION CORPORATION HC HAM CIV 2006-419-985  16 February 2007

[1]      The  debtor  was  adjudicated  bankrupt  on  the  petition  of  the  Accident

Compensation Corporation on 30 January 2007.

[2]      On   5 February   2007   the   debtor   applied   for   an   order   annulling   the adjudication.  The application is made in reliance principally on s 119(1)(b) of the Insolvency Act 1967 and, in the alternative, on s 119(1)(c).

[3]      Section 119(1)(b) provides:

119     When Court may annul adjudication

(1)In  any  of  the  following  cases  the  Court  may  by  order,  on  the application of the Assignee or any person interested, annul the adjudication—

(b)       Where the Court is satisfied that the debts of the bankrupt have been fully paid or satisfied:

[4]      Section 119(1)(c) provides:

119     When Court may annul adjudication

(1)In  any  of  the  following  cases  the  Court  may  by  order,  on  the application of the Assignee or any person interested, annul the adjudication—

(c)       Where the Court is of the opinion that the liability of the bankrupt to pay his or her debts should be revived because since the date of adjudication there has been a substantial change in the financial circumstances of the bankrupt:

[5]      The petitioning creditor confirms receipt of payment and consents to the order sought.

[6]      The Official Assignee, in a report dated 9 February 2007, confirms advice from the petitioning creditor of the payment and consent to annulment.  The Official Assignee confirms that the bankruptcy has not been advertised and that no administration has been undertaken.   For that reason, no costs are sought.   The Official Assignee advised that the bankrupt confirmed to the Official Assignee that he  had  no  other  creditors.    On  that  basis,  the  Official  Assignee  confirmed  no objection to the annulment.

[7]      In a supplementary report dated 14 February 2007, the Official Assignee advised that the Inland Revenue Department lodged a claim.  Its claim is made up as follows:

Income Tax for 2006  $3,686.35 (due for payment 7 April 2007)

Provisional Tax for 2007  $4,979.00 (due for the year ended 2007 –

due for payment 7 April 2008)

[8]      The Official Assignee reports that the Inland Revenue Department advised that the bankrupt has a good history with them and has always made his payments on time and in full.   Because the debt is not yet due no objection to an annulment application is made by the Inland Revenue Department.

[9]      Having regard to the matters analysed in re Hansen [1971] NZLR 927 I conclude that even if there is some doubt as to the applicability of s 119(1)(b) of the Insolvency Act 1967 to this application, the application is nevertheless justified pursuant to s 119(1)(c) of the Insolvency Act 1967. That position is reached because:

a)        All known due debts have been paid;

b)The proof of debt lodged in respect  of  the  liability to  the  Inland Revenue Department is for a debt which has not yet reached its due date for payment; and

c)        There are no other known creditors.

[10]     The above facts disclose, in my view, a substantial change in the financial circumstances of the debtor since the date of his adjudication.  There is no reason why the debtor’s liability to pay his debts should not be revived in the circumstances. All parties before the Court support the order that is sought.

Orders

[11]     I order that the adjudication made on 30 January 2007 of the judgment debtor be annulled.  The order is made pursuant to s 119(1)(c) of the Insolvency Act 1967.

The order is made at 10.10am.

JA Faire

Associate Judge