Murray v Official Assignee - [2014] NZHC 1710

IN THE HIGH COURT OF NEW ZEALAND WHANGAREI REGISTRY

CIV-2014-488-44 [2014] NZHC 1710

UNDER The Insolvency Act 2006

IN THE MATTER

of an appeal in terms of s 226 of the Act against the decision of Official Assignee, Joanne Basher (file ref 866805 at Christchurch on 12 March 2014 deciding to terminate a no-asset procedure

BETWEEN

SHELLEY FAY MURRAY Appellant

AND

THE OFFICIAL ASSIGNEE Respondent

Hearing: 24 June 2014

Appearances:

A Holgate for the Appellant
G Caro for the Respondent

Judgment:

25 July 2014

JUDGMENT OF ELLIS J

This judgment was delivered by me on Tuesday 25 July 2014 at 10.00 am pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date:………………………….

Counsel/Solicitors:
A Holgate, Barrister, Whangarei
C Perry, Matthews Perry Lawyers, Kensington, Whangarei
G Caro, Insolvency and Trustee Service, Auckland

MURRAY v THE OFFICIAL ASSIGNEE [2014] NZHC 1710 [25 July 2014]

[1] Ms Murray appeals against a decision made by the Official Assignee on 12

March 2014, terminating the no-asset procedure (NAP) into which Ms Murray had been admitted under s 363 of the Insolvency Act 2006 (the IA).

Background: the no asset procedure

[2] The NAP did not exist in New Zealand law prior to the enactment of the IA. It is dealt with in Part 5, Sub-part 4 of that Act. The object of the procedure is to “provide another option for individuals with minimal debt and few assets, who have no means to repay the debt”.1 It is intended to offer such persons a procedure that is less onerous than bankruptcy.

[3] Section 363 of the IA sets out the criteria governing entry to the NAP. It provides that:

(1) The Assignee may admit a debtor to the no asset procedure if the
Assignee is satisfied on reasonable grounds that –

(a) the debtor has no realisable assets; and

(b) the debtor has not previously been admitted to the no asset procedure; and

(c) the debtor has not previously been adjudicated bankrupt; and

(d) the debtor has total debts (excluding any student loan balance) that are not less than $1,000 and not more than
$40,000; and

(e) under a prescribed means test, the debtor does not have the means of repaying any amount towards those debts.

[4] Subsection (2) relevantly provides that the “realisable assets”:

… include any assets (for example, gifted assets) that might be recoverable by the Assignee if the debtor were adjudicated bankrupt on the date of application for entry to the no asset procedure and if the irregular transaction provisions in subpart 7 of Part 3 applied.

[5] The effect of Sub-part 7 of Part 3 is stated in s 192(2) to be that:

1 Ministry of Economic Development, Draft Insolvency Law Reform Bill: Discussion Document, Wellington, April 2004, at 36.

… the irregular transactions listed in subsection (1)(a) to (d) may be cancelled on the Assignee’s initiative, and that, in appropriate cases, the Assignee may recover property or money from a party to an irregular transaction with the…

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 Murray v Official Assignee

Details

AGLC: Murray v Official Assignee [2014] NZHC 1710
Case: [2014] NZHC 1710
Decision Date: 25 July 2014

CaseChat Overview and Summary

Shelley Fay Murray appeals a decision of the Official Assignee, Joanne Basher, to terminate a no-asset procedure (NAP) under the Insolvency Act 2006. The NAP is a procedure designed to offer individuals with minimal debt and few assets, who have no means to repay the debt, an alternative to bankruptcy. Section 363 of the Act sets out the criteria for entry into the NAP, including having no realisable assets and total debts between $1,000 and $40,000. The Official Assignee terminated Ms Murray's participation in the NAP on the basis that she was wrongly admitted to the procedure because she had a realisable asset. The inadequacy of the consideration received for the transfer of the property by Ms Murray to Waipoua Land Limited (WLL) in December 2012 was considered a realisable asset under s 363(2) of the Act. The court found that the Official Assignee was correct to conclude that Ms Murray was wrongly admitted to the NAP on the grounds that she had a realisable asset. The court also found that Ms Murray was disqualified under s 364 from admission into the NAP on two other grounds, namely that there are reasonable grounds for concluding that Ms Murray concealed assets with the intention of defrauding her creditors, and that there were reasonable grounds for concluding that a creditor intended applying for Ms Murray's adjudication and, in the event of her adjudication, it was likely that the outcome for the creditor would be materially better than if she had been admitted to the NAP. The appeal is dismissed accordingly.

Orders