LUKE PAUL SIMKISS Insolvent AND ANZ BANK NEW ZEALAND LIMITED Creditor HARMONEY SERVICES LIMITED Creditor HUMM (NZ) LIMITED t/a Q MASTERCARD

[2024] NZHC 3586

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2024-404-2092

[2024] NZHC 3586

UNDER

the Insolvency Act 2006

IN THE MATTER OF

the proposal of Luke Paul Simkiss

BETWEEN

LUKE PAUL SIMKISS

Insolvent

AND

ANZ BANK NEW ZEALAND LIMITED

Creditor

HARMONEY SERVICES LIMITED
Creditor

HUMM (NZ) LIMITED t/a Q MASTERCARD

Hearing:	28 November 2024
Counsel:	M D Arthur / Y S B V Yang for the Provisional Trustee
Judgment:	29 November 2024
Reissued:	11 December 2024

JUDGMENT OF ASSOCIATE JUDGE BRITTAIN

This judgment was delivered by me on 29 November 2024 at 12.00 midday.

Pursuant to Rule 11.5 of the High Court Rules.

…………………..

Registrar/Deputy Registrar

Solicitors/Counsel:

Chapman Tripp, Auckland

SIMKISS v ANZ BANK NEW ZEALAND LTD [2024] NZHC 3586 [29 November 2024]

[1]    Luke Paul Simkiss (the insolvent) has made a proposal to creditors for the payment of his debts, under sub-pt 2 of pt 5 of the Insolvency Act 2006 (the Act). The provisional trustee, Christine Liggins (the trustee), has applied to the Court for approval of the proposal under s 333(1) of the Act.

[2]The insolvent has three unsecured creditors (the creditors) totalling

$59,464.10:

(a)ANZ Bank New Zealand Ltd - $8,082.03;

(b)Harmony Services Ltd - $39,150.64; and

(c)Humm (NZ) Ltd t/a Q Mastercard - $12,231.43.

[3]The insolvent does not have any secured creditors or preferential creditors.

[4]The insolvent has personal assets with an estimated value of $20,000.

[5]    The insolvent is currently employed and proposes making 156 weekly payments of $275 to the trustee, which will result in distributions to the creditors totalling approximately 100 cents in the dollar in respect of the creditors’ claims admitted by the trustee to date.

[6]    The proposal provides that the fees and expenses of the trustee will be paid in accordance with the scale prescribed in reg 40 of the Insolvency (Personal Insolvency) Regulations 2007.

[7]    The provisional trustee called a meeting of the creditors on 19 September 2024, pursuant to s 330 of the Act, for the passing of a resolution accepting the proposal. Section 331(3) of the Act provides:

(3)The resolution accepting the proposal must be decided by a majority in number and three quarters in value of the creditors who –

(a)vote; and

(b)are personally present or are represented at the meeting by a person specified in s 332 or have voted by postal vote.

The proposal was approved by a unanimous resolution of the creditors, by postal votes.

[8]    All known creditors have been provided with notice of the hearing of this application. No documents have been filed in opposition, and no party appeared in opposition when the matter was called in Court on 28 November 2024.

[9]Section 333 of the Insolvency Act provides:

333     Court must approve proposal

(1)After the proposal has been accepted by the creditors, the trustee must, as soon as practicable,—

(a)apply to the court for approval of the proposal; and

(b)send notice of the hearing of the application in the prescribed form to the insolvent and to each known creditor.

(2)The court must, before approving a proposal, hear any objection that is made by or on behalf of a creditor.

(3)The court may refuse to approve the proposal if it considers that—

(a)the provisions of this subpart have not been complied with; or

(b)the terms of the proposal are not reasonable or are not calculated to benefit the general body of creditors; or

(c)for any reason it is not expedient that the proposal be approved.

(4)The court must not approve a proposal if it does not provide for the payment, before any other debts are paid, of—

(a)those debts that would have priority under this Act if the insolvent was adjudicated bankrupt; and

(b)the trustee’s fees and expenses that are properly incurred by the trustee in respect of the proposal; and

(c)costs incurred by a person other than the insolvent in organising and conducting a meeting of creditors for the purpose of voting on a proposal.

(5)Subsection (4)(a) does not apply to the extent that a creditor waives the priority that the debt of that person would otherwise have had.

(6)When it approves the proposal, the court may correct any formal or accidental error or omission, but must not alter the substance of the proposal.

[10]   The Court has a discretion to refuse to approve a proposal in the circumstances set out in s 333(3).  The Court’s refusal is mandatory in the circumstances set out in  s 333(4).

[11]   The discretionary factor in s 333(3)(b), whether the proposal is reasonable, is to be assessed objectively from the perspective of the “commercially experienced prudent creditor”.1

[12]   In Herbert v New Zealand Guardian Trust Co Ltd, the Court of Appeal held that when considering reasonableness, the Court is required to exercise its independent judgment but that it must be influenced by the commercial judgment of creditors.2 The Court held that unless there are special public interest or other commercial considerations present, the assessment of the general body of creditors ought to be accepted.

[13]   The third discretionary factor is whether there is any reason why it is not expedient    that    the    proposal    be    approved.3  As Asher J explained in Kelly v Structured Finance Ltd:4

The word “expedient” is capable of a broad meaning. It can mean “practicable”, but also has the wider meaning of “suitable” or “appropriate”.

… I consider that s 333(3)(c) requires an open-ended approach, and that any attempt to focus it on a specific matter would be to impose a limitation that does not arise from the words of the subsection.

[14]   I am satisfied that the provisions of sub-pt 2 of pt 5 of the Act have been complied with, and that the terms of the proposal are reasonable and calculated to benefit the general body of creditors. It is expedient that the proposal be approved.

[15]None of the disqualifying criteria in s 333(4) apply.

[16]   Accordingly, I approve the proposal of the insolvent dated 31 July 2024 attached as “A” to the trustee’s report to the Court dated 31 October 2024.

[17]There is no order as to costs.

Associate Judge Brittain

1      Kelly v Structured Finance Ltd [2009] 2 NZLR 785 (HC) at [45] approved by the Court of Appeal in Magsons Hardware Ltd t/a Mitre 10 Mega v Bogiatto [2011] NZCA 378 at [29].

2      Herbert v New Zealand Guardian Trust Co Ltd [2012] NZCA 442.

3      Insolvency Act 2006, s 333(3)(c).

4      Kelly v Structured Finance Ltd, above n 1, at [53].