Official Trustee v Henare
[2019] NZHC 1024
•10 May 2019
IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY
I TE KŌTI MATUA O AOTEAROA KIRIKIRIROA ROHE
CIV-2019-419-357
[2019] NZHC 1024
UNDER The Insolvency (Cross-border) Act 2006 AND UNDER
The High Court Rules
IN THE MATTER
of an application pursuant to Schedule 1, Chapter III, Article 15, and rules 24.56,
24.57 and 18.7 of the Rules
BETWEEN
THE OFFICIAL TRUSTEE IN BANKRUPTCY
Applicant
AND
PINEHUA MARY JOSEPHINE HENARE
Respondent
Hearing: 30 April 2019 Appearances:
P V Cornegé for Applicant
Judgment:
10 May 2019
JUDGMENT OF PAUL DAVISON J
This judgment was delivered by me on 10 May 2019 at 4:30 pm Pursuant to r 11.5 of the High Court Rules
Registrar/Deputy Registrar
Solicitors:
Tompkins Wake, Hamilton
THE OFFICIAL TRUSTEE v HENARE [2019] NZHC 1024 [10 May 2019]
[1] The Official Trustee in Bankruptcy of Australia as trustee of the bankrupt estate of Pinehuia Mary Josephine Henare (the respondent) applies pursuant to the Insolvency (Cross-border) Act 2006 and High Court Rules 2016 for an order that the respondent’s Australian bankruptcy be recognised as a foreign main proceeding and for further associated orders.
[2] The applicant previously applied on a without notice basis and sought leave for service of the application upon the respondent to be dispensed with. By his judgment dated 25 February 2019, van Bohemen J declined the application to dispense with service upon the respondent, granted leave to the applicant to serve the application for recognition upon the respondent in Australia; reserved leave to the applicant to re-apply for an order dispensing with service upon the filing of evidence of the respondent’s consent to such an application; and directed service of the application upon the ANZ Bank in Whakatane as an interested party.1
[3] Following delivery of the judgment of van Bohemen J, the applicant filed an amended on-notice originating application for recognition of the respondent’s Australian bankruptcy as a foreign main proceeding. The application and three supporting affidavits were served upon the respondent on 7 March 2019 with service being proven by an affidavit of service sworn by the process server who effected service upon the respondent.
Service of the application and supporting affidavits upon the ANZ Bank at Whakatane
[4] Counsel for the applicant, Mr Cornegé, advises that service of the application and supporting affidavits upon the ANZ Bank was effected on 19 March 2019. However, by reason of the unavailability of the process server, obtaining proof of service has been delayed and at present is still awaited.
[5] Neither the respondent nor the ANZ Bank have taken any steps following service of the application upon them.
1 The Official Trustee in Bankruptcy v Henare [2019] NZHC 248.
Application for recognition
[6] The Insolvency (Cross-border) Act 2006 (the Act) provides a statutory framework for facilitating insolvency proceedings when a person is subject to insolvency administration in one country, but has assets or debts in another country, or where more than one insolvency administration has commenced in more than one country in relation to a person.2 Rules applying to cross border insolvency proceedings are contained in Schedule 1 of the Act. Relevantly here, the rules relating to recognition of a foreign proceeding are contained in Chapter III of Schedule 1 of the Act.
[7] Article 15 of Chapter III establishes the procedure and prescribes the requirements of an application to the High Court by a foreign representative for recognition of foreign proceedings in which the foreign representative has been appointed. Article 15 provides:
(1)A foreign representative may apply to the High Court for recognition of the foreign proceeding in which the foreign representative has been appointed.
(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.
2 Insolvency (Cross-border) Act 2006, s 3(b)(i).
[8] The terms “foreign proceeding”, and “foreign representative” for the purposes of the Schedule are defined as:3
(a)foreign proceeding means a collective judicial or administrative proceeding in a foreign State, including an interim proceeding, pursuant to a law relating to insolvency in which proceeding the assets and affairs of the debtor are subject to control or supervision by a foreign court, for the purpose of reorganisation or liquidation;
…
(b)foreign representative means a person or body, including one appointed on an interim basis, authorised in a foreign proceeding to administer the reorganisation or the liquidation of the debtor’s assets or affairs or to act as a representative of the foreign proceeding;
[9] Article 17 sets out the criteria for determining recognition of a foreign proceeding. Article 17 provides as follows:
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 Insolvency (Cross-border) Act 2006, Schedule 1, Chapter 1, Article 2.
(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.
[10] The procedural rules relating to cross-border insolvency proceedings are contained in the High Court Rules 2016 in subpart 15 of Part 24. Rule 24.56 of the Rules provides:
Applications for recognition of foreign proceedings
(1)An application by a foreign representative under article 15(1) must be made by originating application under Part 19.
(2)In addition to complying with the requirements of article 15, the application must—
(a)be supported by an affidavit verifying the statement referred to in article 15(3) identifying all foreign proceedings in respect of the debtor that are known to the foreign representative) or by other sworn evidence acceptable to the court:
(b)be served, in accordance with Part 6 of these rules, on the debtor or a New Zealand agent or representative of the debtor unless a Judge directs that the application may in all the circumstances proceed without that service.
(3)A foreign representative who has filed an application under subclause
(1) may apply without notice for relief of a provisional nature under article 19(1).
[11] In Williams v Simpson, Heath J summarised the requirements to establish that the applicant is a “foreign representative” and the foreign bankruptcy in a “foreign proceeding” as follows:4
On that approach, the right to apply has the following elements:
(a)The “foreign proceeding” in respect of which recognition is sought
must be a judicial or administrative proceeding in a foreign state;
4 Williams v Simpson [2011] 2 NZLR 380 (HC) at [23].
(b)The proceeding must be “collective” in nature;
(c)The judicial or administrative proceeding must have arisen out of a law relating to insolvency, in which the debtor’s assets and affairs are subject to control or supervision by a foreign court, for the purpose of reorganisation or liquidation;
(d)The control or supervision must be effected by a “foreign court”; namely “a judicial or other authority competent to control or supervise a foreign proceeding”; and
(e)The applicant must be authorised, in the foreign proceeding, “to administer the reorganisation or the liquidation of the debtor’s assets or affairs or to act as a representative of the foreign proceeding”.
[footnote omitted]
The application and supporting affidavits
Affidavit of Ms Katrina Howard – Case manager
[12] The applicant has filed an affidavit sworn by Ms Katrina Howard (Ms Howard) in support of the application. Ms Howard is the Acting Case Manager in the Insolvency and Trustee Services business line of the Australian Financial Security Authority (AFSA). Ms Howard explains that subject to supervision and direction by her principals, she has the conduct, care and supervision of the bankrupt estate of the respondent. She states that she is authorised by the Official Trustee in Bankruptcy (the Official Trustee) to make her affidavit.
[13] Ms Howard states that the respondent became bankrupt on 8 June 2018 by means of a Debtor’s Petition. A copy of the respondent’s debtor’s petition together with a copy of the respondent’s Statement of Affairs document is annexed and exhibited to Ms Howard’ affidavit. The statement of affairs document is dated 6 June 2018 and signed by the respondent, she declaring that the particulars set out in the statement of affairs are correct.
[14] Ms Howard confirms that the Official Trustee was appointed the trustee of the respondent’s bankrupt estate, and she has attached to her affidavit and exhibited a copy of the Certificate of Appointment.
[15] Ms Howard explains that in her Statement of Affairs, the respondent noted that she owns a property at 12 Emme Allan Road, Kawerau. Mr Roger Rota Brown’s deceased estate is noted on the title as the other owner of the property. Also attached and exhibited to Ms Howard’s affidavit is a copy of Mr Brown’s death certificate issued by the Registrar of Births, Deaths and Marriages, Western Australia, recording that he died at Bunbury in Western Australia on 1 June 2014. The respondent is named on the death certificate as Mr Brown’s de facto partner. Ms Howard also attaches and exhibits a document that appears to be Mr Brown’s Will dated 27 June 2013 by which he left all his estate to the respondent.
[16] Ms Howard says that in order for the Official Trustee to deal with the Kawerau property it is necessary that the respondent’s bankruptcy in Australia be recognised in New Zealand, and that a New Zealand agent is appointed to conduct any required action regarding the property in New Zealand.
[17] Addressing the issue of the respondent’s centre of main interest, Ms Howard notes that the respondent’s Statement of Affairs records that the respondent resides in Australind, Western Australia, and that her two previous residential addresses were also located there. In her Statement of Affairs the respondent says that she has lived at her current address in Western Australia since January 2013, and that she also owns four further properties located in Western Australia which were purchased between September 2006 and January 2013. Ms Howard further notes that while born in New Zealand, the respondent holds a Western Australian driver’s licence, and is employed as a commercial cleaner by Bunbury Cleaning Services in Bunbury, Western Australia.
[18] Addressing the issue of whether there are any other foreign proceedings in respect of the respondent that are known to the foreign representative, Ms Howard refers to the contents of the respondent’s Statement of Affairs and notes that the respondent says that she is not involved in any other legal processes or disputes. Ms Howard says that she is aware that the ANZ Bank which holds a mortgage over the respondent’s Australian properties, may take possession of some or all of the properties, however this would only affect the extent of property available in the respondent’s bankruptcy. Ms Howard states that apart from those matters she is not aware of any other court proceedings involving the respondent.
[19] Ms Howard confirms that on behalf of the Official Trustee she has requested Ms Joanne McCarthy who holds the position of Deputy Official Assignee in New Zealand to act as her agent in New Zealand in relation to the respondent’s bankrupt estate.
Affidavit of Mathew Osborne – Legal Officer AFSA
[20] The application is further supported by an affidavit of Matthew Osborne, who is a Principal Legal Officer with AFSA. Mr Osborne confirms that the respondent became bankrupt on 8 June 2018, and by operation of s 160 of the Australian Bankruptcy Act 1966, the Official Trustee is the trustee of the respondent’s bankrupt estate.
[21]Mr Osborne states:
5The administration of the bankrupt estate of the Bankrupt is an Australian bankruptcy proceeding, which:
(a)is a collective administrative proceeding in relation to the making of the Debtor’s Petition and on-going oversight in relation to the administrative functions and duties the Official Trustee performs during the period from the time the Bankrupt was declared bankrupt to the time she is discharged from the bankruptcy;
(b)is collective in nature. That is, it is for the benefit of all the Bankrupt’s creditors entitled to prove their debt in her bankruptcy, the debts proved are to rank equally except as otherwise provided, and creditors are to be paid proportionately, subject to statutory priorities: sections 82 and 108, 109 of the Bankruptcy Act 1966;
(c)arose out of the law relating to insolvency, namely the Bankruptcy Act 1966 in which the bankrupt’s assets and affairs are subject to control or supervision by a “foreign court”, namely either the Federal Circuit Court of Australia or the Federal Court of Australia, for the purpose of reorganisation or liquidation: section 30 of the Bankruptcy Act 1966. The control or supervision is effected by an authority competent to control or supervise foreign proceedings, namely the Official Trustee: sections 18, 19, 58, and 134 of the Bankruptcy Act 1966; and
(d)The Official Trustee is authorised to administer the reorganisation or the liquidation of the Bankrupt’s assets or affairs and to act as a representative of the foreign proceeding: sections 18, 19, 58, 108, 109 and 134 of the Bankruptcy Act
1966 and section 11 of the Cross-border Insolvency Act 2008
(Cth).
Discussion
[22] I am satisfied that Ms Howard is a duly authorised and appointed foreign representative of the Official Trustee for the purposes of making the present application, and I am satisfied that the respondent’s centre of main interest is that of Western Australia where she has been residing for a substantial time.
[23] Article 15 (2) of the Act provides that an application for recognition shall be accompanied by a certified copy of the decision commencing the foreign proceeding and appointing the foreign representative, or a certificate from the foreign court confirming the existence of the foreign proceeding. In the absence of such evidence, the Court is able to consider any other acceptable evidence to establish the existence of the foreign proceeding and the appointment of the foreign representative.
[24] Because the respondent was adjudicated bankrupt following her lodgement of a debtor’s petition, there is no “decision commencing the foreign proceeding and appointing the foreign representative”. Nor is there a “certificate from the foreign court affirming the existence of the foreign proceeding and the appointment of the foreign representative”. I am nevertheless satisfied by the affidavit evidence of Ms Howard and Mr Osborne that the Official Trustee’s administration of the respondent’s bankrupt estate in Australia is a foreign proceeding as defined. The Official Trustee has established that as trustee of the respondent’s bankrupt estate, “the assets and affairs of the debtor are subject to control or supervision by a foreign court, for the purpose of reorganisation or liquidation”.
[25] The respondent’s Australian bankruptcy is an administrative proceeding in a foreign state pursuant to which the respondent’s assets and affairs are subject to the control of the Australian Court for the purposes of the administration of her bankrupt estate. The administrative proceeding in Australia is collective in nature by being undertaken for the benefit of all of the respondent’s creditors who prove debts in bankruptcy and who become entitled to receive a pro rata distribution from the respondent’s bankrupt estate.
[26] Finally, I am satisfied that all the procedural requirements of the Act and Rules have been met and complied with.
The appointment of Joanne Margaret McCarthy (Official Assignee) as the applicant’s New Zealand agent
[27] The applicant seeks an order entrusting the administration or realisation of all of the respondent’s assets located in New Zealand to Ms Joanne Margaret McCarthy. Ms McCarthy has sworn an affidavit confirming that she is an Official Assignee employed by the Insolvency and Trustee Service of the Ministry of Business Innovation and Employment and is based in Hamilton. Ms McCarthy states that the Hamilton office of the Insolvency and Trustee Service is the liaison office with the Australian Financial Security Authority (AFSA) in respect of requests for assistance with Australian bankruptcies. She further states that she has been asked by Katrina Howard to assist with the respondent’s bankruptcy where necessary in relation to the realisation of the respondent’s assets located in New Zealand. Ms McCarthy consents to being appointed as the applicant’s agent and being entrusted with the administration or realisation of the respondent’s assets located in New Zealand.
[28] I am satisfied that the appointment of Ms McCarthy to administer or realise the respondent’s assets located in New Zealand is an appropriate and necessary means by which the Australian bankruptcy proceedings and administration of the respondent’s bankruptcy estate can be properly and effectively conducted.
Result
[29]I make the following orders:
(a)That the respondent’s Australian bankruptcy arising out of a debtor’s petition under s 55(2) of the Australian Bankruptcy Act 1996 be recognised as a foreign main proceeding.
(b)Entrusting the administration or realisation of all of the respondent’s assets located in New Zealand to Joanne Margaret McCarthy (Official Assignee).
(c)Granting leave to the applicant to serve the orders made by the Court outside New Zealand.
[30] I further direct that pending proof of service of the application and supporting affidavits upon the ANZ Bank, that the orders made therein shall lie in Court. Upon the filing of satisfactory proof of service of the application upon the ANZ Bank, the Court shall issue a minute and confirm that the orders made herein shall hereafter come into effect.
Paul Davison J
1
1