Hewitson v Official Assignee
[2022] NZHC 57
•31 January 2022
IN THE HIGH COURT OF NEW ZEALAND INVERCARGILL REGISTRY
I TE KŌTI MATUA O AOTEAROA WAIHŌPAI ROHE
CIV-2021-425-000042
[2022] NZHC 57
BETWEEN DARRYL ROBERT HEWITSON
Applicant
AND
THE OFFICIAL ASSIGNEE
Respondent
Hearing: 13 December 2021 Appearances:
R G R Eagles for Applicant
I M G Clarke and A M Piaggi for Respondent
Judgment:
31 January 2022
JUDGMENT OF DUNNINGHAM J
This judgment was delivered by me on 31 January 2021 at 11 am, pursuant to r 11.5 of the High Court Rules
Registrar/Deputy Registrar Date:
Introduction
[1]In 2014 Mr Hewitson was an undischarged bankrupt. His father gifted him
$250,000 from the sale of a business. With it, Mr Hewitson purchased back his former home which his mother had bought following adjudication. He spent the balance of the gift on an overseas trip and other items. When the Official Assignee (the Assignee) discovered the property was owned by Mr Hewitson, it was considered to be
HEWITSON v THE OFFICIAL ASSIGNEE [2022] NZHC 57 [31 January 2022]
after-acquired property which should be sold to meet the amounts outstanding to Mr Hewitson’s creditors.
[2] Mr Hewitson now seeks judicial review of the Assignee’s decision to sell the property. He says had the Assignee had proper regard to the circumstances under which he reacquired the property, and to the changed circumstances of his creditors, it was open to the Assignee to return the property to him under s 163 of the Insolvency Act 2006 (the Act).
[3] At issue is whether the Assignee, in deciding to sell the property for the benefit of creditors, failed to have regard to all relevant circumstances such that the Assignee should be directed to reconsider that decision.
Background
[4] In 1997 Mr Hewitson started his own accountancy business in Invercargill. Unfortunately, during that period he fell ill with pulmonary sarcoidosis, a respiratory complaint which adversely affected Mr Hewitson’s ability to engage in physical work. Mr Hewitson says that although he was not diagnosed with the illness until recently, his deteriorating physical condition caused him to suffer from depression, probably from as early as 2005. This, in turn, affected his ability to work. He says, by 2009, his concentration was failing and he often felt so exhausted he would go straight home to bed after work.
[5] In 2009 Mr Hewitson was served with proceedings by some of his clients, including one of his key clients, Allister Saville, a prominent builder in the Queenstown area. The plaintiffs claimed losses stemming from Mr Hewitson’s failure to file their tax returns. For example, Mr Saville says Mr Hewitson failed to file his tax returns for the tax years ending 31 March 2002 through to 31 March 2007, causing him to incur penalties and use of money interest totalling $110,371.31.
[6] Judgment was entered against Mr Hewitson for a total of $306,657.45 made up as follows:
(a)Allister John Saville $111,368.79;
(b)A J Saville Builder Ltd $45,205.36;
(c)Mill Creek Property Investment Ltd $35,670.88;
(d)Alvenbrooke Ltd $49,387.47;
(e)Christopher Peter Colvin $24,623.95;
(f)Colvin Construction Ltd $32,621; and
(g)costs and disbursements $7,780.
[7] On 12 June 2009, judgment by default was obtained against Mr Hewitson by the trustees of the Walnut Grove Trust in the sum of $102,565.08 along with costs of
$2,816.
[8] On 18 November 2009, Mr Hewitson was adjudicated bankrupt in the High Court at Invercargill. His bankruptcy was advertised in the Gazette and his details entered on the Insolvency Register, which is available online for the public to search.
[9] The day after Mr Hewitson was adjudicated bankrupt, Ms Kelly Serrant, the insolvency officer who had primary responsibility for the administration of Mr Hewitson’s bankruptcy, wrote to him advising him of his obligations as a bankrupt. This included advising him of the requirement to file a Statement of Affairs within 10 working days of receiving the letter. The letter also advised:
Discharge from your bankruptcy will occur three (3) years from the date a completed statement of affairs, acceptable to the Assignee, is received. Failure to complete and return this form will result in your bankruptcy not being discharged, and the restrictions of bankruptcy continuing to apply.
[10] Mr Hewitson did not comply with this requirement. Over the next few months Ms Serrant repeatedly contacted Mr Hewitson seeking provision of a Statement of Affairs but, despite promising to do so on several occasions, Mr Hewitson did not file one during this period.
[11] In a telephone call on 26 November 2009 Mr Hewitson promised to send in his Statement of Affairs. He was also advised that his period of bankruptcy would not start to run until this was received. Specifically, Ms Serrant recorded in her file note: “[I] explained that his period of bankruptcy will start to run once we receive a satisfactory SOA”. On 3 December 2009 Ms Serrant again wrote to Mr Hewitson seeking provision of his Statement of Affairs, saying: “Please note that your three year bankruptcy period does not commence until we receive a satisfactory statement of affairs”.
[12] Ms Serrant called Mr Hewiston on 10 December 2019 to ask why he had not submitted his Statement of Affairs. Mr Hewitson said he was in the process of completing it and would send it to Ms Serrant “tomorrow”. He did not fulfil that promise.
[13] On 17 December 2009 and again on 18 January 2010, Ms Serrant called Mr Hewitson and left a voicemail message asking about the provision of his Statement of Affairs. On 21 January 2010, Mr Hewitson returned Ms Serrant’s call and said he had almost finished the Statement of Affairs. There was a further email exchange between them on 26 January 2010 about the information she required.
[14] On 2 February 2010, Ms Serrant wrote to Mr Hewitson enclosing a valuation of his home at 231 Regent Street, Invercargill (the Regent Street property) and signalling a willingness by the Official Assignee to allow his parents to purchase the property so he could remain in it. She also asked to receive his completed Statement of Affairs as soon as possible.
[15] On 10 February 2010, there was a further email exchange between Ms Serrant and Mr Hewitson in which he said “I have also posted today the statement of affairs as promised.” He now accepts that was not the truth.
[16]On 22 February 2010, Ms Serrant again sent a letter which said:
I am a little concerned to note that I have still not received your Statement of Affairs. As this document is crucial to the proper administration of your estate, I must insist that it is returned to me at the address below within
10 working days or it will be necessary to summons you to appear and be examined.
[17] On 23 March 2010 Ms Serrant again wrote to Mr Hewitson, acknowledging his emailed advice that his parents were not in a position to make an offer on the Regent Street property and saying “[f]inally I have still not received your Statement of Affairs. Please can you get this back to me as soon as possible.”
[18] Despite Mr Hewitson saying his parents were not able to buy the Regent Street property, that situation clearly changed and in April 2010 Mr Hewitson’s mother bought the property for $180,000. Her purchase of the property settled on 7 May 2010 and Mr Hewitson was able to stay in occupation of the property.
[19] By letter dated 14 May 2010 Ms Serrant again wrote to Mr Hewitson, noting settlement of the sale of the Regent Street property and then also saying:
I would like to take a final opportunity to impress upon you the importance of completing and returning the Statement of Affairs. To date I have still not received one from you and once I have closed the file I will not be chasing you for it. As I have explained before unless and until we receive your completed Statement of Affairs, the three year period for automatic discharge from bankruptcy does not start to run. I do not want to see you bankrupt for longer than necessary, so please get your statement in as soon as possible. I have enclosed another copy for convenience.
[20] Mr Hewitson, in his evidence, says he then sent a Statement of Affairs in May 2010. However, there is no evidence that this was received by the Assignee’s office, despite that office having what is described in evidence as “a strong mailroom policy” where two staff supervise the opening of the mail bag sent to the private bag address and where each piece of mail is stamped with the date of receipt and then electronically entered into the relevant file. For the purpose of this proceeding I do not need to make a finding of fact on this issue, but will proceed on the assumption Mr Hewitson did send this document and, for circumstances beyond his control, it was not received by the Assignee’s office.
[21] In April 2014, Mr Hewitson’s father sold his poultry farm business to one of Mr Hewitson’s brothers. Mr Hewitson and his three brothers each received $250,000 from the sale of the farm. Mr Hewitson used $165,000 of that payment to purchase the Regent Street property back from his mother.
[22] Mr Hewitson explains that at the time of repurchasing the Regent Street property he believed he was discharged from bankruptcy. This was because he was aware that “discharge normally occurs three years after date of bankruptcy”. He also says he remembers checking the New Zealand Companies Office website to see if he was listed as a disqualified director, but his name did not appear.
[23] Mr Hewitson continued life on the assumption he was discharged from bankruptcy, including travelling to Australia in 2016 using some of the funds from his father’s gift. He says that, while he had kept a copy of the 2010 Statement of Affairs, that was thrown out when he cleared out his house prior to travelling overseas in 2016.
[24] It was not until 2018 that he learnt he had not been discharged from bankruptcy. In March that year, Land Information New Zealand notified him that a caveat had been lodged against the Regent Street property by the Assignee. When he contacted the office of the Assignee, he was told that they had not received his Statement of Affairs and he remained an undischarged bankrupt. A fresh Statement of Affairs form was sent to him and he completed that in April 2018 and returned it to the Assignee.
[25] He was automatically discharged from bankruptcy in April 2021. However, the Regent Street property remains vested in the Assignee by virtue of s 102 of the Act, and the Assignee proposes to sell it to meet the balance owing to creditors.
[26]Mr Hewitson says he has reviewed the status of his creditors and says:
(a)Mill Creek Property Investments Ltd, Alvenbrooke Ltd and Colvin Construction Ltd all appear to no longer be trading. They are either removed from the Companies Office register, or are in the process of being removed for failure to file an annual return.
(b)Christopher Peter Colvin is now deceased. He died on 5 June 2015.
(c)While Mr Saville and his company are still in business, Mr Hewitson spoke to Mr Saville by phone in September 2021. He says “[a]s a result of that discussion I do not believe that Allister John Saville or
A J Saville Builder Limited has any interest in recovering monies from my estate”.
[27] In late November 2020, after Mr Hewitson asked the Assignee not to sell the property but allow him to retain it, Ms Serrant recorded the following decision in a formal six monthly administration review:
I have considered the bankrupt’s interest in remaining in his home due to his ill health and the misunderstanding that has brought about this state of affairs,
i.e. he believed he was already discharged because he did not appear on the list of banned directors. Notwithstanding this he is in possession of a substantial after-acquired asset while his creditors have only received 25c in the dollar in payment of their claims. In all fairness I believe we should be proceeding to sell the property again.
[28] That decision was reviewed by another individual in the Assignee’s office. He concurred with Ms Serrant’s decision, saying “[i]t is unfortunate but it on balance is required”. Despite that, the Assignee has deferred taking any steps to realise the property until this application for review was heard and determined.
Principles relating to judicial review
[29] The starting point for consideration of Mr Hewitson’s claim is that it is brought as an application for judicial review and not a general appeal. As French J said in Aorangi School Board of Trustees v Ministry of Education:1
… contrary to popular belief, judicial review is not an appeal. It is not about the Court considering the information afresh and coming to its own views. Judicial review is primarily limited to an examination of the process, and if successful usually results in the decision maker being required to start afresh, as opposed to quashing the decision for all time.
[30] My role is simply to ensure that the decision which is challenged was made according to law, following a proper process and was one which the decision maker could reasonably have come to. It is not to otherwise reconsider the merits of the decision.
1 Aorangi School Board of Trustees v Ministry of Education [2010] NZAR 132 (HC) at [8].
Grounds of review
[31] The pleadings did not clearly articulate the relevant ground or grounds of review. Mr Hewitson did no more than say that the Assignee was:
… seeking to take advantage of a misunderstanding concerning the status of the Applicant at the time of receipt of assistance from his father in 2014 and will, if not prevented, obtain the benefit of funds which would otherwise never have been available to the [Assignee] and it is [an] unconscionable and unreasonable exercise of the statutory powers available to the Respondent.
[32] Mr Eagles, counsel for Mr Hewitson, accepts that all property acquired between the commencement of bankruptcy and discharge from bankruptcy vests in the Assignee by virtue of s 102 of the Act. He also accepts the Assignee must, in the usual course, apply the money they receive following the realisation of the property of the bankrupt, to paying preferential then general creditors. It is only the surplus after those payments (plus any interest on them) are made, which the Assignee can pay to the bankrupt.
[33] However, Mr Eagles identified s 163 of the Act as giving the Assignee scope to leave (or return) property to the bankrupt rather than distribute it to creditors. Section 163 provides:
163 Assignee may make allowance to bankrupt
The Assignee may make an allowance out of the property of the bankrupt to the bankrupt or any relative or dependant of the bankrupt for the support of the bankrupt and his or her relatives and dependants.
[34] Mr Eagles submits that the Assignee has a wide discretion under s 163 to leave property with the bankrupt for their support. In reaching the decision that the Regent Street property would have to be sold and the proceeds prioritised to creditors, he submits the Assignee failed to have regard to two relevant considerations. These were:
(a)the circumstances in which the house was acquired, being the father and son’s mistake as to whether he had been discharged from bankruptcy; and
(b)the change in circumstances of the creditors.
If proper regard was had to those factors, Mr Eagles submits that the Assignee could reasonably have decided to return the Regent Street property to Mr Hewitson pursuant to s 163.
Submissions for the Official Assignee
[35] Ms Clarke, for the Assignee, filed comprehensive submissions. In them, she says the decision to sell the property needed to be considered against the statutory scheme of the Act. She points out that the Assignee’s powers, duties and functions are specified by the Act and can be exercised only in pursuance of, and in compliance with, its provisions.2
[36] Ms Clarke points out that the scheme of the Act generally assumes the Assignee will realise (as required) and distribute the bankrupt’s property to creditors. That assumption is reinforced by a number of the Act’s provisions. These include:
(a)All property of the bankrupt vests in the Assignee automatically and the Assignee does not have to intervene or take any other step.3 Accordingly, all the bankrupt’s property is available as a starting point to repay debts.
(b)There is a general duty on the bankrupt to assist in the realisation of the bankrupt’s property and the distribution of the proceeds to creditors.4
(c)Income received by a bankrupt during the bankruptcy vests in the Assignee and, after considering the circumstances of the bankruptcy, and making a reasonable allowance for the maintenance of the bankrupt and his or her relatives and dependants, the Assignee may require the bankrupt to pay an amount or amounts during the bankruptcy towards the bankrupt’s debts.5
2 Hamilton v Bank of New Zealand (1904) 24 NZLR 109 (CA) at 144.
3 Insolvency Act 2006, ss 101 and 102.
4 Sections 138 and 141.
5 Section 147.
(d)Bankruptcy continues notwithstanding the death of the bankrupt.6
(e)There is no general provision for returning property to the bankrupt, but there are provisions allowing the bankrupt to retain specified items.7
(f)Creditors are to be reimbursed fully, including interest where there are funds available for this.8
(g)The Act includes a mandatory order of distribution, and property is only returned to the bankrupt after all other distributions (including interest) are made.9
(h)Where the Court orders repayment to the Assignee of a contribution from the bankrupt to another person’s property, the Assignee must not pay anything to the bankrupt before the creditors are paid in full (including interest) and the recipient of the contribution has been paid.10
(i)Undistributed money is held by the Public Trust for 12 months pending any claims from an entitled person. Only after that is the money transferred into the bankruptcy surplus account.11
(j)The Act anticipates the result of the administration of the bankrupt’s estate will be either:
(i)the bankrupt’s debts are paid in full; or
(ii)if there are insufficient assets to pay all debts, the whole of the bankrupt’s property has been realised.12
6 Section 78.
7 Sections 158 and 164(1).
8 Sections 265 and 266.
9 Sections 273–281.
10 Sections 213–215.
11 Sections 282–289.
12 Section 228.
[37] Ms Clarke goes on to say the importance Parliament has placed on ensuring the bankrupt’s property is made available to creditors is reinforced by the fact the Act places the onus on the bankrupt to show why property should not be subject to the Act.13 The bankrupt is required to be forthcoming and co-operative in responding to the Assignee’s questions about his or her conduct, dealings and property,14 and there are stringent sanctions for failing to meet obligations under the Act.15
[38] Ms Clarke also points out that there is only a limited requirement for the Assignee to consider the bankrupt’s particular circumstances when administering the property. The circumstances of the bankrupt are only required to be taken into account when deciding whether the bankrupt is to make a contribution from income towards payment of the debts during bankruptcy and in deciding whether to make an allowance from the bankrupt’s property for the support of the bankrupt or his or her dependants.16
[39] The Assignee does, however, have a general discretion as to how to administer property under s 224. That section states:
224 Assignee’s discretion
(1)The Assignee may use his or her own discretion in the administration of the bankrupt’s property, but must have regard to the resolutions of the creditors at creditors’ meetings.
(2)The Assignee or a creditor may apply to the court for directions if the Assignee or creditor believes that a resolution of the creditors—
(a)conflicts with this Act or any legal rule; or
(b)is unjust or unfair.
It is clear the only explicit consideration is the resolution of creditors at creditors’ meetings. Given the scheme of the Act, there can be no error in declining to return the Regent Street property to Mr Hewitson in the face of unpaid creditors’ claims unless, as discussed below, the case fell within a special category of cases where it would be unfair or inequitable for the Assignee to retain the property.
13 For example, ss 60 and 147–148.
14 Section 184.
15 Sections 419–437.
16 Sections 147 and 163.
[40] Because Mr Eagles suggests there is a route, through s 163, to return the Regent Street property to Mr Hewitson, Ms Clarke makes the following submissions about the scope of this section:
(a)An allowance is not a right, it is purely at the Assignee’s discretion and that discretion is very broad.
(b)The word “allowance” is not defined in the Act, but in its ordinary meaning, it has the characteristic of being a limited amount of money to cover expenses.
(c)The fact the section provides for an allowance to be made “out of the property of the bankrupt” (emphasis added) suggests it will not be the whole of the bankrupt’s property, but rather a portion of the property.
(d)There is authority that an allowance means a cash payment and, as a matter of practicality, to make such a payment the property would need to be sold first.17
(e)While the Assignee has a broad discretion to pay an allowance, this is “for the support of the bankrupt and his or her relatives and dependants”. It would be inappropriate to use this provision for the primary purpose of mitigating Mr Hewitson’s misapprehension.
Discussion
[41] I accept, for the reasons explained by Ms Clarke, that there is a presumption underpinning the scheme of the Act that a bankrupt’s assets will be realised for his or her creditors and there are only limited exceptions to this principle.
[42] In the present case, Mr Hewitson relies on s 163 which provides an exception to that principle for the sole purpose of supporting the bankrupt or his or her relatives and dependants. There are obviously then two relevant considerations to the exercise
17 Stagg v Inland Revenue Commissioner [1959] NZLR 1252 (SC) at 1257.
of this discretion. The first is what support the bankrupt or his relatives and dependants require. The second is the interests of the creditors who have not yet been paid in full.
[43]At issue is whether the matters raised on Mr Hewitson’s behalf are:
(a)relevant considerations; and
(b)if they are, whether they were considered by the Assignee.
Were the circumstances in which Mr Hewitson acquired the Regent Street property, including his mistaken belief he was no longer bankrupt, relevant to the decision?
[44] Mr Eagles submits that the Assignee ought to have also taken into account the circumstances in which the property was acquired, including the mistaken belief of Mr Hewitson and his father that he was discharged from bankruptcy. However, it is difficult to see how this can properly be considered relevant to the decision to sell the Regent Street property. The errors were not induced by the Assignee nor is there any other circumstance raised which would make it inequitable for the Assignee to proceed with the sale in those circumstances.
[45] In saying that, Ms Clarke helpfully drew to the Court’s attention the rule in ex parte James, which holds that the Assignee, as an officer of the Court, is not permitted to take advantage of the strict legal rights available to them, if to do so would mean that they were acting unjustly, inequitably or unfairly.18 This rule could, in appropriate circumstances, be relevant to a decision by the Assignee to return property rather than retain it in the bankrupt’s estate.
[46] However, the cases applying the rule all concern the protection of third parties who have inadvertently enriched the bankrupt’s estate. As was discussed in Re Clark, the following conditions must be present for the rule to operate:19
(a)there must be some form of enrichment of the assets of the bankrupt by the person seeking to have the rule applied;
18 Re Condon, ex parte James (1874) LR 9 Ch App 609 (CA).
19 Re Clark (A Bankrupt), ex parte the Trustee v Texaco Ltd [1975] 1 WLR 559 (Ch D) at 563-564.
(b)except in the most unusual cases, the claimant must not be in a position to submit an ordinary proof of debt;
(c)if an honest person, who would be personally affected by the result, would nevertheless be bound to admit “it’s not fair that I should keep the money; my claim has no merit” then the rule will apply; and
(d)the rule applies only to the extent necessary to nullify the enrichment of the bankrupt’s estate.
[47] However, as Ms Clarke points out, this is not a claim invoking the rule, and in any event, the first condition is not met as it is not Mr Hewitson who enriched his own assets but rather it was his father. The third condition is also not met. The reason Mr Hewitson finds himself in this situation is that he did not act to protect his own interests and the Assignee has not acted unreasonably or unconscionably.
[48] I accept that this is not a case which engages the rule. I also accept the Assignee has acted reasonably and responsibly in administering Mr Hewitson’s estate and this is not a case where it would be unconscionable to retain the Regent Street property. The Assignee was proactive in engaging with Mr Hewitson and advising him of his obligations when he was fist adjudicated bankrupt. Ms Serrant also repeatedly warned him of the consequences of not filing the Statement of Affairs.
[49] It is the responsibility of the bankrupt to ensure that the Statement of Affairs reaches the office of the Assignee and the bankrupt carries the consequences if it does not.20 While Mr Hewitson says he did do this in May 2010, it seems surprising Mr Hewitson did not check it had been received, given its importance in marking the start of the three-year period before automatic discharge, particularly when Ms Serrant was readily contactable by phone or email. I also accept that the lack of correspondence from the Assignee after May 2010 could not have been taken as a sign the Statement had arrived. Ms Serrant had made it clear in May 2010 that she would no longer be chasing Mr Hewitson for the Statement of Affairs and this explains the lack of correspondence from that point onwards.
20 McKee v Official Assignee [2013] NZHC 340 at [19].
[50] In any event, Mr Hewitson did not rely on Ms Serrant’s advice but his own understanding that he would be discharged automatically three years from the commencement of bankruptcy. This misunderstanding cannot be visited on the Assignee. Finally, Mr Hewitson did not check his status on the Insolvency Register, which was available for the public to search online, before proceeding to acquire assets.
[51] In short, there is nothing in the manner the Regent Street property was acquired, or in the errors Mr Hewitson and his father made as to his bankruptcy status, which is directly relevant to, or could bring into question, the Assignee’s decision to proceed to sell the Regent Street property, as required by the Act. In any event, the Assignee clearly considered this background and whether it should be sold and decided that “[i]n all fairness” to the unpaid creditors, the property should be sold.
Was the change in circumstances of the creditors relevant to the decision?
[52] The second matter Mr Eagles submits was relevant to the decision whether to sell the Regent Street property for the benefit of Mr Hewitson’s creditors was the fact that there was a change in circumstances of the creditors which, by implication, meant the need to repay them was no longer of primary importance.
[53] I accept that where a creditor no longer exists (for example a company has been deregistered and there is no real prospect of it being reinstated on the register because its directors are deceased), that could be relevant to whether an allowance should be made under s 163 for the support of a bankrupt, or otherwise to the exercise of the general discretion given to the Assignee under s 224 of the Act. However, that is not the case here. Apart from two preferential creditors who were owed small amounts, the balance of the judgment creditors only received a payment of 25 cents in the dollar from the distribution of the sale proceeds of the Regent Street property in August 2010. Ms Clarke advises that $337,123.28 is still owed to Mr Hewitson’s creditors. In addition, the Assignee’s unrecovered time costs are $15,987.42, and there are outstanding disbursements of $19,413.12. Further, interest will need to be paid on the claims if there is a surplus after the property is sold.
[54] Mr Hewitson’s evidence falls well short of establishing that all the creditors either no longer exist or no longer seek payment. He has omitted altogether to ascertain the position of the trustees of the Walnut Grove Trust. While there is hearsay evidence about the position of Mr Saville and his company, Mr Eagles acknowledges that Mr Saville may not maintain his indifference to being repaid in full if there was a real prospect of repayment. Although Mr Colvin is now deceased, his estate remains eligible to receive a further distribution. I also cannot discount the possibility that the creditor companies which are no longer trading may take steps to be reinstated on the register if there is a prospect of receiving the balance Mr Hewitson owes them.
[55] For all these reasons, I do not consider there is evidence of a change in circumstances of the creditors that is material to the Assignee’s decision to sell. There remain significant amounts owing to creditors and the only way to realise funds to meet those debts is to sell the Regent Street property.
[56] I am satisfied that the Assignee had regard to all relevant considerations when deciding whether to sell the Regent Street property and the decision to sell it was reasonably open to the Assignee. I therefore do not need to go on to consider whether there would have been scope under s 163 to return the whole property rather than a sum of money as argued by the Assignee. In any event, no specific information has been provided by Mr Hewitson as to the extent of his unmet needs for support, perhaps because this was not really the basis of his application. His claim is really that it would be unfair for the Assignee to take advantage of Mr Hewitson’s mistake which resulted in him reacquiring the property when he would not have done so had he realised he was still bankrupt.
Conclusion
[57] I am satisfied the Assignee’s decision to sell the Regent Street property was made having regard to the relevant considerations. These include that:
(a)The scheme of the Act is directed first and foremost at achieving repayment of creditors.
(b)Mr Hewitson’s personal circumstances were taken into account to the extent they were relevant, but they were not considered to override the primary purpose of the administration of a bankrupt estate, which is to realise assets for the repayment of creditors.
(c)The alleged change in circumstances of the creditors did not change the position. There is no conclusive evidence that any creditor no longer exists in law, and in any event, there remain substantial unpaid debts to creditors over which no question mark is raised.
[58] Finally, if the Regent Street property was sold, Mr Hewitson has not lost the opportunity to establish, on evidence, that he has an unmet need for support under s 163. That possibility does not impugn the Assignee’s decision to sell the property.
Result
[59]Mr Hewitson’s application for judicial review is dismissed.
Costs
[60]Costs are reserved.
[61] The respondent seeks costs on a 2B basis. This appears appropriate. If costs cannot be agreed, any claim for costs must be made within 20 working days from the date of this judgment. Any response is to be filed within a further 10 days of such application being filed and served. Costs will be determined on the papers unless I need to hear from the parties.
Solicitors:
Eagles Eagles & Redpath, Invercargill Crown Law, Wellington
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