Greig v Official Assignee

[2025] NZHC 1990

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2010-404-008250

[2025] NZHC 1990

UNDER

Section 294 of the Insolvency Act 2006

IN THE MATTER

of the bankruptcy of D R Greig

BETWEEN

DAVID ROBERT GREIG

Applicant

AND

OFFICIAL ASSIGNEE

Respondent

Hearing:	On the papers
Counsel:	J M Skinner / E W Davies for the Applicant C Jones for the Respondent
Judgment:	18 July 2025

JUDGMENT OF ASSOCIATE JUDGE COGSWELL

This judgment was delivered by me on 18 July 2025 at 3.00 p.m. pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar Date.......................................

Solicitors:

Skinners Law, Auckland

Ministry of Business, Innovation & Employment, Auckland

GREIG v OFFICIAL ASSIGNEE [2025] NZHC 1990 [18 July 2025]

Introduction

[1]                 David Robert Greig applies for early discharge from bankruptcy under s 294 of the Insolvency Act 2006 (Act).

[2]                 The applicant was adjudicated bankrupt in 2011. The Commissioner of Inland Revenue was the petitioning creditor.

[3]                 Section 290(1) of the Insolvency Act 2006 provides that a bankrupt is automatically discharged from bankruptcy three years after he files a completed statement of affairs acceptable to the Official Assignee.

[4]                 The applicant did not file his statement of affairs until 13 December 2023, and is, therefore, only eligible to be automatically discharged on 13 December 2026.

[5]The application has been served on the Official Assignee and all creditors.

[6]The application has been advertised in the New Zealand Gazette.

[7]                 The Official  Assignee  filed  a  report  dated  9  May  2025  as  required  by  s 296 of the Act.

Background

[8]The creditors’ claims at the date of bankruptcy amounted to $222,517.19:1

(a)Inland Revenue - $152,298.67 (plus preferential costs of $6,580.90);

(b)American Express - $27,502.06;

(c)BMW Financial Services New Zealand Limited - $25,539.95 (plus preferential supporting creditor costs of $752);

(d)Collection House (NZ) Limited, for Vodafone NZ Limited - $1,061.21;

1 Official Assignee’s report dated 9 May 2025 at [10].

(e)GE Finance & Insurance (now Latitude Financial Services Limited, trading as GEM Finance) - $1,877.40;

(f)Lion Finance Limited - $6,905.00.

[9]                 The Official Assignee received tax refunds totalling $8,936.38 from Inland Revenue, and these were allocated towards the Assignee’s costs, and in part payment of the preferential claims for costs.

[10]             The Commissioner of Inland Revenue has advised that the amount claimed in the bankruptcy was written off some years ago on the understanding that it was unlikely that a distribution would be made to any creditor.

[11]             The Commissioner advises that he does not have an interest in the applicant’s current bankruptcy and will abide the Court’s decision in relation to the application for discharge.2

[12]No other creditor has taken any steps in relation to the application.

Discussion

[13]             Although the reasons for the delay are disputed, the bankrupt did not provide his statement of affairs to the Assignee until December 2023. This only followed numerous reminders.

[14]             The applicant disputes that he received any notice of the requirement to provide a statement of affairs until January 2023. He filed an affidavit in support of his application that states that he had assumed he was automatically discharged from bankruptcy on 9 June 2014, being three years from the date of his adjudication.

[15]             The applicant also travelled to Australia six times between 2019 and May 2024 without obtaining the Assignee’s consent. This may be explained in part by the applicant’s misunderstanding that he had been discharged from bankruptcy in 2014.

2      Memorandum of counsel for Inland Revenue dated 15 April 2025 at [6]-[7].

Nonetheless, he remained a bankrupt, not permitted to travel without the Assignee’s consent, which was not obtained.

[16]             The Assignee’s report outlines the matters referred to above and goes on to confirm that as no realisable assets had been identified, nor there been any contact from the applicant with the Assignee following his adjudication, the Assignee closed administration of the bankrupt’s file at the end of September 2011.

[17]             An enquiry was received by the Assignee from Inland Revenue in September 2015 asking whether the applicant had obtained the Assignee’s permission to be self- employed. The Assignee’s estate officer replied to say that he had not, but no further information was received in that regard, nor it seems, any action taken.

[18]             Matters appear to have then lay in abeyance, the applicant remaining a bankrupt for failure to file his statement of affairs until 2022. In November 2022 the Assignee received information from Inland Revenue that the applicant was trading as a real estate agent at Precision Real Estate and had incurred a significant PAYE and GST debt whilst being an undischarged bankrupt. The Inland Revenue advised that the applicant was very difficult to contact and did not reply to messages or emails.

[19]             Whilst the failure to file a statement of affairs is perhaps understandable due to a misunderstanding on the applicant’s behalf, and due to, he says, the lack of any follow-up from the Assignee, the incurring of further substantial tax debts whilst an undischarged bankrupt is not.

[20]             The applicant shows a clear disregard for his obligations as a taxpayer, reflected in the fact that he was adjudicated bankrupt on the petition of the Commissioner of Inland Revenue in 2011 and since that time has incurred further tax debts of close to $1 million.

[21]             Taking into account the applicant’s failure to file his statement of affairs, his failure to obtain permission to be self-employed, his failure to obtain consent to travel overseas and his incurring of further substantial tax debt, I would ordinarily have refused to grant the application for early discharge from bankruptcy.

[22]             However, perhaps in an attempt to promote his application for early discharge and in an attempt to resolve the matter of the current outstanding tax indebtedness by permitting him to earn income to meet those arrears, the applicant and Assignee have agreed on a set of conditions under which his early discharge could be subject to.

[23]             The Assignee takes the position that even if it is accepted that the applicant only became aware of his duty to file a statement of affairs on 20 January 2023, it still took him almost a year until 13 December 2023 to comply with that most basic of statutory requirements. The Assignee’s concern is not so much with that delay, but with the fact that the applicant has continued to carry on business without consent whilst also incurring substantial further tax arrears.

[24]             The Assignee says that it is not appropriate that he be discharged unconditionally. With all of the background matters and the applicant’s current conduct, I would not have been prepared to discharge him unconditionally.

[25]             The Assignee submits that if an early discharge was to be granted, it should be subject to a number of conditions, to include that he is not permitted to carry on business without being under the supervision of an accountant who ensures that he complies with his financial duties moving forward.

Decision

[26]By consent, the Assignee and the applicant seek the following orders:

(a)the applicant’s application for an order of discharge under s 294 of the Act is granted, with immediate effect;

(b)the applicant is prohibited  from  doing  any  of the things  set  out  in s 299(1)(a) – (e) of the Act without the Court’s permission, until      13 December 2026;

(c)the applicant is granted specific permission to carry on business as a real estate salesperson with Precision Real Estate, subject to the following conditions:

(i)all withholding tax is to be deducted at source;

(ii)all GST and income tax obligations are to be met in full, and no such obligations are to be in arrears at any time;

(iii)he may not employ any staff;

(iv)the business is, so far as possible, to be operated on a cash basis;

(v)all money is to be banked into a business bank account and funds are to be set aside in a separate account for taxes due to Inland Revenue;

(vi)he must continue to use the services of Romeen Fernando of Hnry Limited to supervise his financial affairs, and must

(1)allow Mr Fernando to have electronic access to all business bank accounts;

(2)ensure that Mr Fernando is aware of all income earned;

(3)cooperate with Mr Fernando and his staff and follow all reasonable instructions;

(4)allow Mr Fernando’s charges to be paid from the business account;

(vii)Mr Fernando’s services are to include:

(1)maintaining records to ensure that he can account for all cash or payments received from the applicant and meet all tax and other financial or regulatory requirements;

(2)preparing financial statements and all Inland Revenue returns,  such  as   PAYE,   GST  and  income  tax,   and

ensuring that any amounts due are paid from the business bank accounts;

(viii)the above conditions will apply until 13 December 2026, and leave is reserved for any interested party to apply to the Court before such date for the conditions to be varied or cancelled;

(ix)costs are to lie where they fall.

[27]I grant the orders sought on a consent basis as set out above.

[28]             In doing so I specifically note and rely on the terms of the Assignee’s consent attached to the joint memorandum of counsel for the applicant and respondent dated 14 July 2025, and in particular, note the conditions that affect the financial supervisor.

[29]To the conditions above I add the following condition:

(a)that the financial supervisor, Mr Fernando, is to provide a report on a six-monthly basis to the Court, copying the Assignee, confirming the applicant’s compliance with the conditions set out above, and on which the order for his early discharge is granted.

[30]             Leave is granted to any interested party to apply to the Court to vary these orders.

[31]There is no order as to costs.

Associate Judge Cogswell