Official Assignee v Van der Walt
[2017] NZHC 1664
•19 July 2017
IN THE HIGH COURT OF NEW ZEALAND INVERCARGILL REGISTRY
CIV-2017-425-000039 [2017] NZHC 1664
IN THE MATTER of Section 147 Insolvency Act 2006 AND
IN THE MATTER
of the bankruptcy of Abraham Nicolaas van der Walt
BETWEEN
THE OFFICIAL ASSIGNEE Applicant
AND
ABRAHAM NICOLAAS VAN DER WALT
First Respondent
SOUTHERN DISTRICT HEALTH BOARD
Second Respondent
Submissions: 13 July 2017 and 17 July 2017 (Determined on the papers) Appearances:
G E Slevin for Official Assignee
R T Chapman for First Respondent
(M Naulls for Second Respondent excused)Judgment:
19 July 2017
JUDGMENT OF ASSOCIATE JUDGE OSBORNE ON APPLICATION UNDER S 147 INSOLVENCY ACT 2006
[1] Abraham Nicholaas van der Walt was adjudicated bankrupt on 19 November
2015. His statement of affairs was received by the Official Assignee on 19 July
2016. Therefore his automatic discharge from bankruptcy will not occur until July
2019.1
1 Insolvency Act 2006, s 290(1).
THE OFFICIAL ASSIGNEE v VAN DER WALT [2017] NZHC 1664 [19 July 2017]
[2] The Assignee, pursuant to s 147 Insolvency Act 2006 assessed, Mr van der Walt’s ability to make contributions to the payment of his debts and gave Mr van der Walt notice of the Assignee’s requirement that he pay contributions. The Assignee made three such assessments and requirements:
(a) On 4 March 2016, the Assignee assessed Mr van der Walt’s contributions and required him to make contributions of $4391.57 each fortnight (from 18 March 2016).
(b)On 7 October 2016, the Assignee re-assessed Mr van der Walt’s contributions and required him to make contributions of $1359.90 each fortnight (from 20 October 2016).
(c) On 14 March 2017, the Assignee again re-assessed Mr van der Walt’s contributions and required him to make contributions of $3333.40 each fortnight (from the first week of April 2017).
[3] Mr van der Walt made seven contribution payments of irregular amounts until
14 June 2016, totalling $30,758.24 (including an overpayment of $17.25). He has not made contribution payments since June 2016.
This application
[4] Under ss 147 and 106 of the Act, the Assignee applies for orders requiring payment of contributions (including arrears) and requiring Southern District Health Board (the Board), as Mr van der Walt’s employer, to make the payments.
[5] The Board abides the Court’s decision.
[6] Mr van der Walt opposes the application upon the basis that his assessed contribution ($3333.40 each fortnight) is excessive. Mr van der Walt asserts that an appropriate contribution would be $2333.40 each fortnight.
The statutory regime
[7] Section 147 of the Act provides:
147 Bankrupt may be required to contribute to payment of debts
(1) If required by the Assignee, the bankrupt must pay an amount or periodic amounts during the bankruptcy as a contribution towards payment of the bankrupt’s debts.
(2) The Assignee may impose conditions in respect of the payments.
(3) Before the Assignee may require the bankrupt to make the payment or payments, the Assignee must—
(a) have regard to all the circumstances of the bankruptcy and the bankrupt’s conduct, earning power, responsibilities, and prospects; and
(b) allowance for the maintenance of the bankrupt and his or her relatives and dependants.
(4) The court may, on the application of the Assignee, order the bankrupt to pay the amount or amounts required by the Assignee.
(5) The court may, on the application of the Assignee, the bankrupt, or any creditor,—
(a) vary, suspend, or cancel the bankrupt’s obligations to make the
payments under this section:
(b) vary, suspend, or discharge any order made under subsection
(4):
(c) remit any arrears owing by the bankrupt.
[8] The s 147 provisions for a bankrupt’s contributions are to be seen against the background of the general rule that the personal earnings of a bankrupt between adjudication and discharge vest in the Assignee.2 That general rule is to be viewed as subject to the limitation that the bankrupt is entitled to a reasonable allowance for the maintenance of the bankrupt and his or her relatives and dependents (as statutorily prescribed in s 147(3)(b) of the Act). The statutory limitation reflects the common law.3
[9] The Court implements s 147 of the Act against this background. I
respectfully adopt the considerations identified by Associate Judge Matthews in
Official Assignee v van Heerden.4 The relevant considerations include:5
2 Insolvency Act 2006, s 102(1); Re Bertrand [1980] 2 NZLR 72 (CA) at 74.
3 Re Bertrand, above n 2, at 74 – 78.
4 Official Assignee v van Heerden [2016] NZHC 360.
5 At [7].
(a) The fundamental consideration of the Court is whether the bankrupt will be able to meet the contributions assessed by the Assignee.6
(b)The bankrupt is not to be emotionally and financially crippled by the contributions ordered.7
(c) The contributions should strike a reasonable balance between the public interest and enabling a person after surrendering all their required assets to start again with a clean slate and the private interests of the creditors in the bankrupt estate in receiving some payment when the bankrupt is capable of achieving high earnings.8
To this list of considerations I would add:
(d) Regard must be had to the bankrupt’s occupation and station in life.9
[10] In Re Dransfield, Anderson J, having referred to what might seem the anomalous principle just stated (at [9](d)) explained:10
There are perceivable advantages to creditors during the term of bankruptcy and to society generally that a bankrupt should be encouraged to pursue and gain financial rehabilitation. Human nature being what it is a bankrupt is unlikely to strive for high financial reward during bankruptcy, whilst living in penury. On the other hand, attainable high earnings may be sought by a bankrupt in order to retain sufficient for reasonable maintenance and to restore financial credibility in the market so as to obtain the benefit of such partially redeemed reputation after discharge from bankruptcy.
[11] It is long settled that the burden of proof of establishing what the reasonable allowance is for the maintenance of the bankrupt and relatives and dependents (under
s 147(3)(b) of the Act) is upon the bankrupt.11 To the extent that the judgment of
6 Re Dransfield HC Auckland B1540-1/90, 26 August 1993 at 3.
7 Official Assignee v Gilgen HC Hamilton B178/97, 12 July 2001 at [28].
8 Re Sirett, HC New Plymouth B15/77, 12 November 1980; Re Anderson, HC Hamilton, B213/89,
14 April 1992 at 55.
9 Re Walter [1929] 1 Ch 647 at 653; Re Anderson, above n 7, at 56.
10 Re Dransfield, above n 6, at 4.
11 Emden v Carte, (1881) 17 Ch D 768 at 769; Re Anderson, above n 7, at 56.
Associate Judge Matthews in Re van Heerden may suggest that there is a burden upon the Assignee,12 I respectfully decline to follow that approach.
[12] Section 148 of the Act deals with a further aspect of onus of proof, placing the onus on a bankrupt who defaults in making payments required under s 147 to show that the default was not wilful.
[13] It has been long settled that the Court’s power in this jurisdiction to order payment involves the exercise of a discretion, unfettered by rules as to its exercise in particular fact situations.13
Calculation of the reasonable allowance under s 147(3) of the Act
[14] Section 147(3)(a) of the Act first directs the Assignee to consider all the circumstances of the bankruptcy and the bankrupt’s conduct, earning power, responsibilities, and prospects. Having done that, the Assignee is required under s 147(3)(b) to make reasonable allowance for the maintenance of the bankrupt and his or her relatives and dependents.
[15] Through the adoption in s 147(3)(b) of the objective qualifier “reasonable”, the allowance to be made to the bankrupt will not necessarily equate to actual expenses being incurred by the bankrupt.14
[16] Historically, the Assignee’s assessment was undertaken on a line-by-line budget analysis. In recent years the Assignee has adopted a methodology which produces an overall assessment of reasonable living costs by reference to average expenditure figures published by Statistics New Zealand, and the Working for Families thresholds used by the Inland Revenue Department to calculate tax credits. Both those data take into account the numbers of dependents in the family. The intention is to establish a consistent and objective formula by which a bankrupt’s reasonable living costs and ability to make contributions can be initially assessed. In
a second step, the Assignee’s case officer considers the bankrupt’s actual
12 Re van Heerden, above n 4, at [17].
13 Re Saunders ex parte Saunders [1895] 2 QB 424 per Lord Esher MR at 426, per Kaye LJ at 427;
Re Anderson, above n 7, at 56.
14 Re van Heerden above n 4, at 18.
circumstances with reference to the figure so derived. The individual bankrupt may be incurring or not incurring particular costs (such as rent or mortgage costs) which require consideration. In the second step consideration the case officer will also seek to ensure that contribution at a given level will not cause hardship to the bankrupt or his relatives or dependents. At a third step the case officer seeks to ensure that there is some discretionary income left in the bankrupt’s hands. The Assignee’s calculation methodology then allocates the net income figure produced into bands of weekly “surplus” of $0 - $50, $50 - $100, $100 - $200, $200 - $300 and above $300. Marginal rates are then applied to each band to determine how much of the “net income” the bankrupt with average household expenses should be able to pay as a contribution to his or her debts, while retaining an increasing allowance to cover both maintenance and support and the need for an incentive to improve the bankrupt’s situation by way of retained earnings that can be spent in anyway the bankrupt chooses.
[17] This methodology (also the subject of evidence in this case) was considered and accepted by Associate Judge Matthews in Re van Heerden.15 Mr Chapman, for Mr van der Walt, accepts in this case that the Assignee’s methodology has been accurately applied.
[18] The issue Mr van der Walt raises is whether (at the final step of assessment) the Assignee’s assessment failed to allow Mr van der Walt to maintain a reasonable work-life balance, for reasons I will come to.
[19] The assessments were detailed in the Assignee’s three letters dated
15 February 2016, 7 October 2016 and 14 March 2017.
[20] The contributions assessed and required on the first and second assessments do not require detailed consideration. For Mr van der Walt, Mr Chapman’s submissions have focused on the third assessment alone. That said, Mr van der Walt’s evidence touches briefly on events from mid-2016 and I will
consider those also to the extent relevant.
15 Above n 4.
Mr van der Walt’s case
Overview
[21] Mr Chapman’s submissions as to the appropriate level of contribution are forward-looking and focus on the 14 March 2017 requirement of a contribution of
$3333.40 per fortnight (from a total net pay of $7549.07). The 14 March 2017 assessment reflects the application of the Assignee’s calculation methodology, adjusted by a sum of slightly over $1100 having regard to Mr van der Walt’s personal circumstances, particularly his medical expenses of $800 per fortnight.
Mr van der Walt’s employment
[22] The following is taken from Mr van der Walt’s affidavit:
(a) He is employed in a fulltime position as a psychiatrist with the Southern District Health Board, based at Invercargill but with responsibilities also in the Queenstown area.
(b)He has a 40 hour work week (8.00 am to 5.00 pm) but with duties on an after-hours roster.
(c) His after-hours work varies (often one to two nights per week) during which time he is on-call and is frequently called in for some hours.
(d) His remuneration includes a standard allowance for after-hours work.
(e) His working days are very full involving demanding and stressful work.
Health
[23] Mr van der Walt has suffered atrial fibrillation for 20 years and suffered a particular episode in April 2016. He was prescribed medication by his general practitioner. Subsequently, in August 2016, a cardiologist recommended a change of medication and a reduction of his work hours to improve life balance and fitness.
Changes to work commitments
[24] Accordingly, in July 2016 Mr van der Walt reduced his work hours to 0.6 of a fulltime position, with proportional reduction of working days and after-hours work.
[25] From 20 February 2017 Mr van der Walt returned to full-time work when his heart condition improved.
[26] Mr van der Walt’s current total net pay for his fulltime role is $7549.07 per
fortnight (compared with $4529 when working on a 0.6 basis).
Mr van der Walt’s reasons for requesting further financial allowance
[27] Mr van der Walt devoted the final seven paragraphs of his affidavit to his reasons for seeking greater allowance under s 147(3)(b) of the Act. He states:
17.If I am to continue in a full time role, I need to have additional disposal income in order for me to enjoy a proper work life balance. I am not prepared to continue working full time if my health is going to be compromised. My heart condition is affected by stress. My brother died suddenly at age 58 from a heart attack.
18.Regular time out and weekends away from Invercargill are important to maintain a healthy work/life balance. I have a sister in Wellington who I would like to be able to visit from time to time. I am currently living with my partner in her house and we are to be married on 25
August 2017. We do not have any dependants but we enjoy spending our non-working time together. We enjoy outdoor activities, walking and tramping and exploring the Southland and Otago area.
19.On the advice of my cardiologist I joined a gym. The cost of the gym membership is $40.00 per fortnight. I would also like to utilise the services of a personal trainer, which would be an additional $60.00 per hour for one hour a week.
20.I also regularly have a weekly massage from a professional masseuse at $80.00 a session.
21.When I travel to Queenstown every second Thursday for the clinic, my partner comes with me. I often take Friday off work and stay on in Queenstown for the weekend (two or three nights). We normally stay at the Ridges Hotel, which is $150 to $200 per night, plus meals.
22. My partner and I also enjoy dining out as a means of relaxation.
23.I do not consider it unreasonable to be allowed some additional disposable income to try and have a reasonably balanced and normal lifestyle to compensate for working full time in a demanding and
stressful psychiatric role. Based on the Official Assignee’s assessments I am left with no more disposable income if I work full time. Increasing my hours to full time increases my contribution to my bankruptcy by approximately $1,000.00 per week without any compensating allowance necessary for me to achieve this extra earning potential.
Further evidence as to Mr van der Walt’s circumstances and requirements
[28] Despite requests of the Assignee for a completed statement of affairs, Mr van der Walt did not provide a statement of affairs to the Assignee until 19 July 2016 (eight months after adjudication). A payslip dated 17 January 2016 shows that his net fortnightly income in that period was $7549.07 (the same figure as he deposes he now earns). The Assignee based her 4 March 2016 assessment on that figure.
[29] Mr van der Walt stopped making any fortnightly contributions from 14 June
2016. He continued working fulltime until 25 July 2016. He then reduced his work hours (to 0.6 fulltime) with a net income of $4529 per fortnight.
[30] In his statement of affairs (provided to the Assignee on 19 July 2016), Mr van
der Walt showed a net weekly deficit of $546. Mr van der Walt’s expenses included
$400 per week for medical expenses (the sum subsequently fully recognised by the Assignee in her assessment). In addition Mr van der Walt’s weekly expenses were stated to include $450 for holidays, $50 for alcohol and $200 for entertainment. Mr van der Walt also declared that he was each week paying for board of $800 and groceries of $400. Russell Fildes, the Official Assignee who provided affidavit evidence in this case, deposes that the bankrupt in fact lives with his partner in a house which she owns and has his salary paid into a bank account in her name, from which he periodically makes large ad hoc payments to another bank account in her name. The Assignee’s requests of Mr van der Walt to provide supporting information for his claimed expenses have gone unanswered.
[31] On 7 October 2016, the Assignee gave notice to Mr van der Walt of her second assessment. He did not notify any objection. He did not resume any payments.
[32] In February, the Assignee learned that Mr van der Walt had resumed fulltime employment from 20 February 2017. That led to the Assignee’s third assessment, notified to Mr van der Walt on 14 March 2017.
[33] He has continued not making any payments to the Assignee, a situation which has now continued for 13 months.
[34] Mr van der Walt has not provided evidence as to his assets. He does not depose to an inability to pay arrears if they are ordered. The bank statements obtained by the Assignee show that when Mr van der Walt’s payments ceased in June
2014 the particular bank account was more than $12,000 in credit. By early August
2014 it was more than $16,000 in credit. The unavoidable inference is that Mr van der Walt, while able to pay any contributions to the Assignee, has elected not to do so, not that he has been unable to do so.
Mr van der Walt’s bankrupt estate
[35] The Assignee has produced a schedule of Mr van der Walt’s known creditors at the time of his bankruptcy. The most significant is his former wife who obtained an Australian judgment for maintenance (since registered in New Zealand) and has filed a proof of debt for $243,941.36 (together with the costs of the adjudication). The processing of proofs of debt has not been completed. There may be other provable debts.
[36] Through the payments made by Mr van der Walt up to June 2016, he contributed $30,758.24 to his bankrupt estate. The funds held in the estate today are somewhat less than that by reason of the Assignee’s payment of fees and disbursements. No payment has yet been made to a creditor (whether Mr van der Walt’s former wife or otherwise).
The issues
[37] The issues which I must consider are:
(a) Has the Assignee complied with the requirements of s 147(3) of the
Act?
(b)Should the Court order Mr van der Walt to pay to the Assignee the sum of $3,333.40 per fortnight (or such lesser amount as may be required by the Assignee from time to time), in the circumstances of this case?
(c) Should the Court order Mr van der Walt to pay arrears of contributions he has not made?
[38] The consequential order sought by the Assignee – as to payment by the Board of any sums ordered, has not been put in issue by Mr van der Walt.
First issue: Has the Assignee complied with s 147(3) of the Act?
[39] The evidence for the Assignee clearly establishes that the Assignee on the third assessment (as on the previous two assessments) undertook an assessment exercise which had regard to the circumstances required to be considered under s 147(3) of the Act and made allowance for the maintenance of the bankrupt. The issue taken by Mr van der Walt is essentially as to whether the allowance is reasonable. By reason of the authorities I have cited (above at n 10), the burden of proof of establishing the reasonable allowance is upon the bankrupt.
[40] For Mr van der Walt, Mr Chapman has appropriately conceded the accuracy
of the Assignee’s first and second step calculations.
[41] The issue on the facts is as to whether it was reasonable to adjust the underlying calculation by a sum of slightly over $1,100 per fortnight to allow for Mr van der Walt’s circumstances (as the Assignee did). Alternatively, would a further allowance of $1,000 per fortnight to enable Mr van der Walt to “maintain a reasonable work/life balance” be reasonable (as Mr van der Walt contends)?
[42] The Assignee’s judgement in relation to reasonable contribution is entitled to significant respect from this Court. Under s 147 of the Act, she has the responsibility, noted by Anderson J in Re Dransfield), of “striking the right symbiotic balance in settling bankrupts’ contributions”.16 As Anderson J there observed, the relatively few applications which are made under what is now s 147 of the Act indicate that the Assignee nearly always succeeds in striking an acceptable balance.
It is appropriate that the burden of disproving the reasonableness of the allowance
for the bankrupt’s maintenance is on the bankrupt himself.
[43] I have set out the evidence in some detail. The third assessment, which is the impugned assessment, is the culmination of a series of assessments which have been carried out responsibly and carefully by the Assignee in the light of the information the case officers have been able to obtain and some information which Mr van der Walt has provided.
[44] The assessment was that, from a net fortnightly income of $7,549.07, a reasonable allowance for the maintenance of the bankrupt is $4,215.67 (or $2,107.88 per week).
[45] I have referred in (above at [30]) to expenses which Mr van der Walt claimed in the only statement of affairs (19 July 2016) which he has provided to the Assignee. I accept the submission for the Assignee that little weight can be attached to the expense claims in that statement of affairs given Mr van der Walt’s failure to provide supporting information to the Assignee when requested. Furthermore, the Assignee would have been entitled, whether or not verification of expenses was provided, to view numerous of the expenses as unreasonable. An example is the
$600 per week for holidays and entertainment. A second example, given Mr van der Walt’s domestic arrangements and the payments which are already made out of his bank account, is the $800 per week for board. Any view on the part of Mr van der Walt that his claiming of such expenses reasonably balanced the private interests of the creditors in his bankrupt estate should be dispelled. If anything, the Court might reasonably have a concern as to whether the $800 per fortnight allowance for
medical expenses was appropriately included in the Assignee’s assessment. As with
16 Re Dransfield, above n 5, at 4.
other expenses, Mr van der Walt has not provided documentary evidence as to that claimed expense. It is to the credit of the Assignee, having regard to the personal nature of medical issues, that she was prepared when making the 14 March 2017 assessment, to accept the medical expenses claim as stated by Mr van der Walt. But, as noted by Mr Slevin in his submissions for the Assignee, more than a year has now passed from what appears to have been the April 2016 health crisis. It is just on a year since Mr van der Walt saw his cardiologist for reconsideration of his treatment. It is almost five months since Mr van der Walt returned to full time work when his heart condition had improved. In the absence of any previous documentary records or updated evidence of expenses, the situation lends itself to one in which Mr van der Walt’s medical expenses may have been falling without Mr van der Walt identifying that fact. I find it significant that in his affidavit he identifies smaller items as specific as professional massages ($160 per fortnight), gym membership ($40 per fortnight) and personal training services ($120 per fortnight) but fails to identify any specific medical expenses of the relatively large amount claimed over the same period.
[46] As with all exercises of assessment which have to be completed periodically, there will be fluctuations in expenses. Some heads of expense may increase and others decrease. The impression from Mr van der Walt’s past limited reporting and his evidence in this case indicates that while Mr van der Walt is ready to identify his increased or new expenses he is less ready to alert the Assignee to improvements in his financial circumstances.
[47] On the information which was available to the Assignee when completing her three assessments, she clearly complied with the requirements of s 147(3) of the Act. It may be the case that the most recent assessment was overly-generous to Mr van der Walt in that it allowed him a full “credit” for medical expenses when he has failed to provide verification that those expenses have been or continue to exist at the level of $800 per fortnight.
Should the Court order payment?
[48] I have found that the Assignee’s three assessments were each reasonable on
the information she possessed.
[49] As it is only the 14 March 2017 assessment which is here impugned, I revisit that from the perspective of additional information which Mr van der Walt has provided through this proceeding. That information is as set out at [27] above.
[50] I identify the following as the most significant issues raised by Mr van der
Walt:
(a) Health –
Mr van der Walt is understandably concerned to avoid having his heart condition affected by stress. This cannot be a concern as to being effectively forced to work longer hours than he thinks appropriate. He himself made a decision to return to full-time work after his health had improved. He has since maintained that full-time work without making any contributions to his estate. There is no room to infer that his present work commitments imperil his health.
(b) Money needed for fitness and relaxation –
Mr van der Walt identifies particular costs associated with his fitness and particular expenses incurred in relation to relaxation. He has not presented an up-to-date budget to indicate whether or not his fitness expenses and general living expenses can be accommodated within the allowance made by the Assignee. Nor has he presented a budget of the combined household income (of himself and his partner) from which their shared living and entertainment expenses can be expected to be met. The burden of proving relevant conclusions is upon Mr van der Walt. He has not satisfied the Court that a fortnightly allowance exceeding $4,200 is insufficient to meet his reasonable living and other expenses.
(c) Work-life balance –
Beyond specific expenses needed for his fitness, Mr van der Walt refers to the need for a proper work-life balance, illustrated by reference to a desire to visit a sibling in Wellington from time to time and an interest in maintaining outdoor activities. The time to commit to those matters is not affected by any decision as to the Assignee’s assessment. To the extent that such matters require financing, Mr van der Walt has not satisfied the Court that the financing of work-life balance activities cannot be achieved within the Assignee’s allowance.
(d) Lack of compensation for increasing hours to full-time –
Mr van der Walt complains that he is left with no more disposable income through working full-time because of the Assignee’s assessments. The relevant assessment in this regard is the 14 March
2017 assessment, reached in the light of Mr van der Walt’s return to full-time work. Mr van der Walt’s complaint that he is left with “no more disposable income if I work full-time” cannot be sustained on the mathematics of the three assessments. Through the first two assessments, Mr van der Walt was left with a fortnightly sum (in the hand) of approximately $3,160. Following the Assignee’s reassessment on his return to full-time work, Mr van der Walt is left with $4,215.67. From that he is required to meet all his living expenses (including health-related expenses), but it cannot be suggested on the evidence provided that the allowance made for Mr van der Walt’s personal expenses has not increased his disposable income.
[51] Against the background of those specific matters raised by Mr van der Walt, I then assess the Assignee’s application by reference to the considerations set out above at [9]:
(a) Mr van der Walt’s ability to meet the contributions – Mr van der Walt has a demonstrated ability to meet contributions.
(b)Avoidance of emotional or financial crippling – the evidence does not establish that Mr van der Walt will be either emotionally or financially crippled.
(c) Balancing of creditors’ and Mr van der Walt’s interests – Mr van der Walt had accrued significant debts by the time he was adjudicated bankrupt. He has the means through his relatively high earnings to make significant contributions to his bankrupt estate while at the same time re-establishing his economic life. The three sets of allowances established by the Assignee were reasonable and the third continues to be so.
(d)Regard to Mr van der Walt’s occupation and station in life – the allowances arrived at by the Assignee are not such as to demean Mr van der Walt in his professional life. There is preserved to him a significant income for his personal requirements. The allowances the Assignee has made do not come close to the situation posited in Re Dransfield of
expecting a bankrupt to live in penury.17
Outcome
[52] I am satisfied that, in relation to each of the allowances made by the Assignee in March 2016, October 2016 and March 2017, the Assignee reached a reasonable determination. Mr van der Walt has not discharged the burden of proof upon him of establishing that a higher allowance was reasonably required.
[53] In the absence of evidence from Mr van der Walt that he is not in a financial position to pay the arrears of contributions, it is appropriate to order such payment. In the event it transpires that Mr van der Walt cannot pay the arrears promptly in a single instalment, there will be leave reserved to him to apply for variation of the arrears order in relation to the timing of payment/s. Any variation would be unlikely unless it is supported by detailed, verified information as to assets, liabilities and movements in Mr van der Walt’s financial position over the period since he was
adjudicated bankrupt.
17 Re Dransfield, above n 5, at 10.
Costs
[54] The Assignee has succeeded wholly on her application.
[55] She is entitled to costs if she seeks them.18 I will be reserving costs. In the event that costs and disbursements cannot be resolved by agreement, the Court will deal with costs on the papers, with counsel for the Assignee to first file submissions and counsel for Mr van der Walt to respond within five working days (four page limit for each submission).
Orders
[56] I order:
1. With effect from 21 July 2017 (first instalment on 4 August 2017), the first respondent shall pay to the applicant the sum of $3,333.40 fortnightly (or such lesser amount as the Assignee may notify in writing from time to time) as a contribution towards payment of the bankrupt’s debts.
2. The first respondent shall within 10 working days pay to the applicant on account of arrears of contributions the following sums in relation to the following periods –
● $13,174.80 for the period 14 June 2016 – 25 July 2016
● $25,838.10 for the period 25 July 2016 – 14 April 2017
●$23,316.55 for the period 14 April 2017 – 21 July 2017 (but with an allowance of $17.25 from what would otherwise have been arrears of $23,333.80)
3. To the extent that there are any monies which are or may become payable by the second respondent to the first respondent by way of
salary, the second respondent shall from those monies, immediately upon
18 An applicant for relief need not (in her application) ask for general relief: High Court Rules, r 5.31(2).
service of this order upon the second respondent, pay $3,333.40 per fortnight to the Official Assignee on behalf of the bankrupt as a first charge on those monies until such time as:
(i) the bankrupt has been discharged from bankruptcy; and
(ii) the arrears have been recovered by the applicant.
4. The costs and disbursements of the application are reserved.
5. Leave is reserved to the first respondent by memorandum and supporting evidence to request a variation of the arrears orders in relation to the timing of payment.
Associate Judge Osborne
Solicitors:
Inland Revenue Department, Insolvency and Trustee Service, Christchurch
Cruickshank Pryde, Invercargill
2