Henderson v Official Assignee - [2017] NZCA 411

IN THE COURT OF APPEAL OF NEW ZEALAND

CA30/2017
[2017] NZCA 411

BETWEEN	DAVID IAN HENDERSON Appellant
AND	OFFICIAL ASSIGNEE Respondent

Hearing:	12 September 2017
Court:	Harrison, Miller and Gilbert JJ
Counsel:	D M Lester for Appellant J N Foster and C R Vinnell for Respondent
Judgment:	18 September 2017 at 3 pm

JUDGMENT OF THE COURT

A The appeal is dismissed.

BThe appellant is ordered to pay costs to the respondent costs for a standard appeal on a band A basis and usual disbursements.

____________________________________________________________________

REASONS OF THE COURT

(Given by Harrison J)

Introduction

David Ian Henderson was adjudicated bankrupt in November 2010. In January 2011 he filed his statement of affairs with the Official Assignee. Under the Insolvency Act 2006 he would be automatically discharged from bankruptcy within three years of the latter date. However, the Assignee objected. The High Court was then required to conduct a public examination of Mr Henderson after taking into account a report filed by the Assignee on a number of issues including Mr Henderson’s post adjudication conduct.
Associate Judge Osborne discharged Mr Henderson from bankruptcy subject to conditions following an extensive public examination.[1] Mr Henderson appeals against his conditional discharge on three interrelated grounds. His primary ground is that the Associate Judge erred in imposing the conditions without first making a finding on his post-adjudication conduct. Mr Henderson also asserts that in making this error the Associate Judge breached his rights to natural justice and displayed apparent bias against him.

Background

[1]Havenleigh Global Services Ltd v Henderson [2016] NZHC 2969 [Public examination] at [446].

Mr Henderson has been adjudicated bankrupt twice. His first bankruptcy was in 1996. He was discharged in 1999. His second bankruptcy in November 2010 arose from his failure to satisfy a judgment debt for $70,318.90 in favour of Havenleigh Global Services Ltd. That company was substituted as the applicant in a bankruptcy proceeding earlier commenced by another creditor Gold Band Finance Ltd with which Mr Henderson compromised a claim for $811,994.05.[2] However, it soon transpired that these debts were minimal when compared to Mr Henderson’s liabilities to others. Claims by third parties against his bankrupt estate exceeded $160 million.[3] His final indebtedness was settled in the range of $100 million to $150 million.[4]
[2]At [19]–[20].
[3]At [28].
[4]At [58].
The Associate Judge conducted Mr Henderson’s public examination. It was a lengthy process lasting 12 days in August and October 2015. The Assignee was represented by counsel who also questioned Mr Henderson. He represented himself. The Associate Judge’s careful analysis of the evidence and relevant principles is reflected in a judgment of 134 pages delivered in December 2016.
The causes of Mr Henderson’s bankruptcy were undisputed. He had assumed substantial liabilities through personal guarantees given to largely second-tier financiers for loans to various companies under his control. Mr Henderson undertook major property developments in Queenstown, Christchurch, Dunedin and Invercargill.[5] He acted principally through Property Ventures Ltd (PVL), in which he was a major shareholder and later managing director.…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Henderson v Official Assignee

Details

AGLC: Henderson v Official Assignee [2017] NZCA 411
Case: [2017] NZCA 411
Decision Date: 18 September 2017 at 3 pm

CaseChat Overview and Summary

In this case, the appellant, David Ian Henderson, sought to appeal against the decision of the Associate Judge who conditionally discharged him from bankruptcy. The primary ground for appeal was that the Associate Judge erred in imposing conditions on his discharge without first making a finding on his post-adjudication conduct. Henderson also argued that the Associate Judge breached his rights to natural justice and displayed apparent bias against him. The Court of Appeal dismissed the appeal and ordered Henderson to pay costs to the Official Assignee.

The Court of Appeal examined the grounds of appeal and concluded that the Associate Judge's decision not to take post-adjudication conduct into account was justified. The court found that the root causes of Henderson's bankruptcy were profound and endemic to his character, and that the Assignee's allegations about his post-adjudication conduct were relatively inconsequential when compared with these factors. The court further held that the Associate Judge's decision not to make findings on the Assignee's report was within his discretion, as the court was not bound to make specific findings on each of the six issues outlined in the report. The court also rejected Henderson's argument that the Associate Judge breached the rules of natural justice and displayed apparent bias against him. The appeal was dismissed, and Henderson was ordered to pay costs to the Official Assignee.

Orders