Minter Ellison Rudd Watts v Hampton - [2018] NZHC 1866

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2011-409-002055

[2018] NZHC 1866

UNDER the Insolvency Act 2006

BETWEEN

MINTER ELLISON RUDD WATTS

Judgment Creditor

AND

DAVID JOHN HAMPTON (A BANKRUPT)

Judgment Debtor

Hearing: 23, 24 July 2018

Appearances:

G E Slevin for Official Assignee

P Shamy and S Kinsler for Commissioner of Inland Revenue Judgment Debtor in Person

Judgment:

26 July 2018

JUDGMENT OF VENNING J

This judgment was delivered by me on 26 July 2018 at 2.15 pm, pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date……………

Solicitors:Insolvency and Trustee Service, Christchurch Crown Law, Wellington
Meredith Connell, Wellington

Counsel: G E Slevin, Christchurch
Copy to: Judgment Debtor

WATTS v HAMPTON (A BANKRUPT) [2018] NZHC 1866 [26 July 2018]

Introduction

[1] David John Hampton was adjudicated bankrupt on the application of Minter Ellison Rudd Watts on 5 June 2013. The Commissioner of Inland Revenue was a supporting creditor.

[2] Mr Hampton filed a Statement of Affairs on 19 June 2014 and was due to be automatically discharged from bankruptcy on 19 June 2017. On 16 June 2017 the Official Assignee lodged an objection under s 292 of the Insolvency Act 2006 (the Act) to Mr Hampton’s discharge.

Examination

[3] The examination procedure under s 295 and ss 173 to 181 of the Act was engaged. The Commissioner of Inland Revenue later sought leave under s 292 to also object to Mr Hampton’s automatic discharge.

[4] Mr Hampton initially sought to have his examination deferred pending the outcome of an appeal to the Supreme Court by Chesterfields Preschool Ltd concerning its liquidation. The decision was delivered on 23 November 2017.1

[5] In the meantime, on 8 November 2017, Mr Hampton had himself applied for a discharge from bankruptcy under s 294 of the Act.

[6] The Commissioner gave notice on 25 May 2018 opposing Mr Hampton’s application for discharge and also gave a notice under s 297 of the Act of the further grounds she intended to oppose his discharge on.

[7]Mr Hampton’s public examination under s 295 was held on 23 July 2018.

[8] The Official Assignee filed a report for the purposes of the examination as required by s 296 of the Act.

1 Chesterfields Preschools Ltd (in liq) v Commissioner of Inland Revenue [2017] NZSC 176.

Procedural issues

[9] At the outset of the examination Mr Hampton sought leave to withdraw his application for discharge “pending completion of a redrafted misfeasance statement of claim”. It is not possible to withdraw the application for discharge conditionally in that way. But nothing turns on the point. Given the objection by the Official Assignee the Court was required to hold an examination in any event. The issues that would arise on Mr Hampton’s application for discharge arise to be considered in the course of the examination triggered by the Official Assignee’s objection.

[10] Mr Shamy accepted the Commissioner no longer needed to pursue her application for leave…

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.

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Details

Case: [2018] NZHC 1866
Decision Date: 26 July 2018

CaseChat Overview and Summary

This case involved a dispute over the discharge of David John Hampton, who had been adjudicated bankrupt by Minter Ellison Rudd Watts on 5 June 2013. The Official Assignee lodged an objection to Mr Hampton's discharge under section 292 of the Insolvency Act 2006, and the Commissioner of Inland Revenue later joined the objection. Mr Hampton sought a discharge from bankruptcy under section 294 of the Act, but the Official Assignee and the Commissioner opposed the application. The court held an examination under section 295 and sections 173 to 181 of the Act to determine whether Mr Hampton should be discharged and, if so, on what terms. The court considered various factors, including Mr Hampton's conduct before and after the bankruptcy, his failure to meet tax obligations, and his failure to comply with the requirements of the Insolvency Act 2006. The court found that Mr Hampton's conduct suggested that he had not changed his attitudes towards his tax liability and that he still did not accept the findings of the Courts which had confirmed his personal tax liability. The court concluded that it was in the public interest to restrict Mr Hampton's ability to engage in business for a time, and ordered that he be discharged from bankruptcy on conditions that he be prohibited from entering into, carrying on or taking part in the management or control of any business and be banned from being a company director without leave of the Court for a period of four years.

The final orders of the court were that Mr Hampton would be discharged from bankruptcy on 30 July 2018, subject to the conditions outlined above.

Orders