Official Trustee in Bankruptcy v Umeki

[2018] NZHC 874

IN THE HIGH COURT OF NEW ZEALAND

AUCKLAND REGISTRY

CIV-2018-404-594

[2018] NZHC 874

UNDER

The Insolvency (Cross-border) Act 2006 and the High Court Rules

IN THE MATTER OF

An application pursuant to sch 1, Chapter III, art 25 of the Act, and rr 24.56, 24.57 and

18.7 of the Rules

BETWEEN

THE OFFICIAL TRUSTEE IN BANKRUPTCY

Applicant

AND

EMI UMEKI

Respondent

CIV-2018-404-595

BETWEEN

THE OFFICIAL TRUSTEE IN BANKRUPTCY
Applicant

AND

SHINYA UMEKI

Respondent

Hearing:

30 April 2018

Appearances:

P N Teei for Applicant

No appearance by or on behalf of the Respondents

Judgment:

1 May 2018

JUDGMENT OF POWELL J

This judgment was delivered by me on

01.05.18 at 3.30 pm, pursuant to Rule 11.5 of the High Court Rules. Registrar/Deputy Registrar

Date……………

Solicitors:

P Teei, Henderson, Auckland

THE OFFICIAL TRUSTEE IN BANKRUPTCY v UMEKI & ANOR [2018] NZHC 874 [1 May 2018]

[1]    The present applications have been brought by Shinya Kimura, an attorney at law in Osaka, Japan, in his capacity as the Official Trustee in Bankruptcy (“Official Trustee”) for Emi Umeki and Shinya Umeki, the respondents in CIV-2018-404-594 and CIV-2018-404-595 respectively.

[2]    The respondents, who are husband and wife, were both declared bankrupt in Osaka; Mr Umeki on 10 October 2017 and Mrs Umeki on 5 December 2017 (“Osaka bankruptcy proceedings”). Both remain in Japan1 but since that date enquiries made by the Official Trustee have confirmed that they have a joint bank account in New Zealand with the Bank of New Zealand, and also own two properties located at:

(a)27 Harriet Street, Mangere, Auckland, New Zealand Identifier 263762, North Auckland Registry,

An estate in fee simple, Lot 3, Deposited plan 364977.

(b)51 Harriet Street, Mangere, Auckland, New Zealand Identifier 282215, North Auckland Registry,

An estate in fee simple, Lot 42, Deposited plan 369516.

[3]    The Official Trustee has brought the applications pursuant to the Insolvency (Cross-border) Act 2006 (“the Act”), requesting that the High Court recognise the Osaka bankruptcy proceedings and thereby enable the New Zealand assets of the respondents to be dealt with by the Official Trustee.

The Applications

[4]    The applications are brought pursuant to Article 15 of Schedule 1 to the Act, which provides rules applying to cross-border insolvency proceedings. Article 15 provides:

Article 15 Application for recognition of a foreign proceeding

(1)A foreign representative may apply to the High Court for recognition of the foreign proceeding in which the foreign representative has been appointed.

1      Orders dispensing service of the applications were made by Palmer J on 11 April 2018.

(2)An application for recognition shall be accompanied by:

(a)a certified copy of the decision commencing the foreign proceeding and appointing the foreign representative; or

(b)a certificate from the foreign court affirming the existence of the foreign proceeding and of the appointment of the foreign representative; or

(c)in the absence of evidence referred to in subparagraphs (a) and (b), any other evidence acceptable to the Court of the existence of the foreign proceeding and of the appointment of the foreign representative.

(3)An application for recognition shall also be accompanied by a statement identifying all foreign proceedings in respect of the debtor that are known to the foreign representative.

(4)The Court may require a translation of documents supplied in support of the application for recognition into an official language of New Zealand.

[5]In turn Article 17 provides:

Article 17 Decision to recognise a foreign proceeding

(1)Subject to article 6, a foreign proceeding shall be recognised if:

(a)the foreign proceeding is a proceeding within the meaning of subparagraph (a) of article 2;

(b)the foreign representative applying for recognition is a person or body within the meaning of subparagraph (d) of article 2;

(c)the application meets the requirements of paragraph (2) of article 15; and

(d)the application has been submitted to the High Court.

(2)The foreign proceeding shall be recognised:

(a)as a foreign main proceeding if it is taking place in the State where the debtor has the centre of its main interests; or

(b)as a foreign non-main proceeding if the debtor has an establishment within the meaning of subparagraph (f) of article 2 in the foreign State.

(3)An application for recognition of a foreign proceeding shall be decided upon at the earliest possible time.

(4)As soon as practicable, after the Court recognises the foreign proceeding under paragraph (1) of this article, the foreign

representative shall notify the debtor, in the prescribed form, that the application has been recognised.

(5)The provisions of articles 15, 16, 17, and 18 do not prevent modification or termination of recognition if it is shown that the grounds for granting it were fully or partially lacking or have ceased to exist.

[6]    Given this position, and having considered the Official Trustee’s affidavit and the supporting documents, it is clear that the Official Trustee has complied with the requirements of Articles 15 and 17. In particular I am satisfied that the Osaka bankruptcy proceedings brought against the respondents are not manifestly contrary to the public policy of New Zealand for the purposes of Article 6, and should be recognised as a foreign main proceeding pursuant to Article 17 on the basis that:

(a)The proceedings brought against the respondents are “judicial proceedings … in a foreign state … pursuant to a law relating to insolvency in which proceeding the assets and affairs of [the respondents are respectively] subject to control or supervision by a foreign court, for the purpose of reorganisation or liquidation in terms of Article 2(a)”.

(b)The Official Trustee is a person “authorised in a foreign proceeding to administer the reorganisation or the liquidation of the [respondents’ respective] assets or affairs” for the purposes of Article 2(d).

(c)The Official Trustee has sworn an affidavit in respect of each of the respondents and in each case has annexed a document (in Japanese with an English translation) which he confirms to be certified copies of the court orders placing the two respondents in bankruptcy and appointing him as the Official Trustee in each case. Pursuant to Article 16 this Court is specifically “entitled to presume the documents submitted in support of the application for recognition are authentic, whether or not they have been legalised”.

[7]    Having recognised the Osaka bankruptcy proceedings against the respondents as foreign main proceedings, noting no unsecured creditors of either of the respondents

have been identified in New Zealand and that the mortgagees of the New Zealand properties are protected by the terms of their respective mortgages and are thereby adequately protected, I am satisfied that relief pursuant to Article 21(2) should be made as sought by Mr Teei on behalf of the Official Assignee. I make the orders accordingly.

Decision

[8]The applications are granted and the following orders made:

(a)The proceeding CIV-2018-404-594 brought by the Official Trustee against Emi Umeki are:

(i)Recognised as foreign main proceedings pursuant to Article 17(2)(a) of Schedule 1 to the Insolvency (Cross- border) Act 2006;

(ii)The distribution of all of Emi Umeki’s assets located in New Zealand are entrusted to the Official Trustee, Shinya Kimura, pursuant to Article 21(2) of Schedule 1 to the Insolvency (Cross-border) Act 2006;

(iii)The Official Trustee is entitled to costs on a 2B basis on the application; and

(iv)Leave is reserved for the Official Trustee to apply to the Court in the event that further orders pursuant to Article 21(1) of Schedule 1 to the Insolvency (Cross-border) Act 2006 are required to discharge his duties.

(b)The proceeding CIV-2018-404-595 brought by the Official Trustee against Shinya Umeki are:

(i)Recognised as foreign main proceedings pursuant to Article 17(2)(a) of Schedule 1 to the Insolvency (Cross- border) Act 2006;

(ii)The distribution of all of Shinya Umeki’s assets located in New Zealand are entrusted to the Official Trustee, Shinya Kimura, pursuant to Article 21(2) of Schedule 1 to the Insolvency (Cross-border) Act 2006;

(iii)The Official Trustee is entitled to costs on a 2B basis; and

(iv)Leave is reserved for the Official Trustee to apply to the Court in the event that further orders pursuant to Article 21(1) of Schedule 1 to the Insolvency (Cross-border) Act 2006 are required to discharge his duties.

Powell J