Official Assignee v ASB Bank Limited - [2019] NZHC 1736

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IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2019-404-000274

[2019] NZHC 1736

UNDER Part 19 of the High Court Rules and s 225 of Insolvency Act 2006

IN THE MATTER OF

an application for directions

BETWEEN

THE OFFICIAL ASSIGNEE

Applicant

AND

ASB BANK LIMITED

Respondent

Hearing:
31 May 2019

Further submissions by applicant on 21 June 2019 Further submissions by respondent on 5 July 2019

Appearances:

S Symon and N Porter for Applicant C Vinnell for Respondent

Judgment:

23 July 2019

JUDGMENT OF WYLIE J

This judgment was delivered by Justice Wylie On 23 July 2019 at 11.00 am
Pursuant to r 11.5 of the High Court Rules Registrar/Deputy Registrar

Date:…………………………

Solicitors/counsel:
Crown Solicitor at Auckland Anthony Harper, Auckland

THE OFFICIAL ASSIGNEE v ASB BANK LTD [2019] NZHC 1736 [23 July 2019]

Introduction

[1] The applicant – The Official Assignee (the Assignee) – applies to the Court for directions, pursuant to s 225 of the Insolvency Act 2006 (the Act), as follows:

(a)where a bankrupt has deposited money, or directed that money be deposited, into a bank account in the name of a third party and where the bankrupt does not have signing authority on the account, do the transactions relate to the “bankrupt’s property, conduct or dealings” for the purposes of issuing a notice pursuant to s 171 of the Act; and

(b)if so, are:

(i)documents establishing the identity and providing personal details of the bank account holder;

(ii)the bank account statements; and

(iii)notes or other documents relating to the account

in the possession or under the control of a bank, documents “relating to the bankrupt’s property, conduct or dealings” which must be delivered to the Assignee.

[2] The application is made against ASB Bank Limited (the ASB) because the Assignee is investigating the affairs of two persons, a Mr Bayne and a Mr Bailey, both of whom, whilst bankrupt, are alleged to have directed persons with whom they had done business, to pay monies into accounts held by the ASB. The respective accounts were not in the names of Mr Bayne and Mr Bailey, and they did not have signing authority on them. Rather, the accounts were in the names of third parties. The Assignee gave notice to the ASB under s 171 of the Act requiring it to deliver up documentation in relation to the accounts said to have been nominated by the bankrupts. The ASB refused to deliver the documentation to the Assignee because it did not consider that the documents sought related to either bankrupt’s “property, conduct or dealings”, and because complying with the Assignee’s notices would

impinge the rights of third party customers and cut across duties of confidentiality it owes to those third parties as its customers.

[3] Mr Vinnell, appearing for the ASB, emphasised that the bank recognises and routinely complies with notices issued by the Assignee pursuant to s 171…

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: [2019] NZHC 1736
Decision Date: 23 July 2019

CaseChat Overview and Summary

In the High Court of New Zealand, Justice Wylie dealt with an application by the Official Assignee under section 225 of the Insolvency Act 2006, seeking directions regarding the scope of section 171 of the same Act. The Official Assignee is investigating the affairs of two bankrupts, Mr Bayne and Mr Bailey, who allegedly directed payments into bank accounts not in their names and over which they had no signing authority. The Official Assignee issued notices to ASB Bank Limited under section 171, seeking documentation related to the accounts. ASB Bank refused to comply, arguing that the documents did not relate to the bankrupts' property, conduct, or dealings and that compliance would infringe the privacy rights of the third-party account holders.

The court found that where a bankrupt directs payments into a third-party account, the transactions do relate to the bankrupt's property, conduct, or dealings. However, the Official Assignee's power to require the production of documents under section 171 must be exercised with solid grounds and in accordance with the Insolvency Act. The bank holding the personal information must believe on reasonable grounds that non-compliance with confidentiality principles is necessary for authorised purposes. The court directed that while bank account statements recording payments made into a third party account at the bankrupt's direction must be delivered to the Official Assignee, documents identifying the third-party account holder and unrelated to the bankrupt are not required to be disclosed. The decision balances the Official Assignee's investigatory powers with the privacy rights of third parties.

Orders