Olliver
[2025] NZHC 1218
•19 May 2025
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2024-404-000712 [2025] NZHC 1218
UNDER the Insolvency Act 2006 of a proposal under part 5 Subpart 2 of the Insolvency Act 2006 by GREGORY MARTIN OLLIVER of 7 Cheverton Place,
St Heliers, Auckland, 1071
Hearing: 15 May 2025 Appearances:
A Ward for the Provisional Trustee
R B Hucker / M Swan for the Insolvent
T B Fitzgerald / S Komie for the secured creditor, 1543 Capital Fund 1 LP
S McClean for Bank of New Zealand K Eastwood for K3 Legal
Judgment:
19 May 2025
JUDGMENT OF ASSOCIATE JUDGE COGSWELL
This judgment was delivered by me on 19 May 2025 at 4.00 p.m. pursuant to Rule 11.5 of the High Court Rules.
Registrar/Deputy Registrar Date.......................................
Solicitors:
Anderson Lloyd, Dunedin Bell Gully, Auckland Molloy Hucker, Auckland
Urlich Milne Lawyers Ltd, Auckland
RE OLLIVER [2025] NZHC 1218 [19 May 2025]
Introduction
[1] The Provisional Trustee, Kevin John Whitley, seeks orders that the Court approve a Proposal to the creditors of Gregory Martin Olliver (the Insolvent), dated 9 December 2024 (Proposal), made under Pt 5, Sub-pt 2 of the Insolvency Act 2006 (Act).
[2] Applying to the Court for approval of the Proposal is the final stage in the process allowing an insolvent to avoid bankruptcy by making a proposal to creditors for the payment or satisfaction of the insolvent’s debts.1
[3]When the application was called there were the following appearances:
(a)A Ward for the Provisional Trustee;
(b)R B Hucker / M Swan for the Insolvent;
(c)T B Fitzgerald / S Komie for the secured creditor, 1543 Capital Fund 1 LP;
(d)Ms McClean for Bank of New Zealand;
(e)Ms Eastwood for K3 Legal.
[4] There was no appearance on behalf of any other creditor or otherwise objecting to the Proposal.
[5] Having heard from counsel for the Provisional Trustee and having considered the following:
(a)the with notice application for approval of proposal dated 18 February 2025;
1 Insolvency Act 2006, s 326; and as contained in sub-pt 2 of pt 5 of the Act.
(b)the statement of affairs and affidavit of Insolvent affirmed on 9 December 2024;
(c)the Proposal dated 9 December 2024 under sub-part 2 of Part 5 of the Act;
(d)the report of the Provisional Trustee on the Proposal dated 18 February 2025,
I approve the Proposal.
Proposal process and approval by the Court
[6] The first stage in seeking the Court’s approval is for a proposal to be filed satisfying the requirements of s 327 of the Act. This includes nominating a trustee for collection and distribution of instalments paid. This person is the provisional trustee until the proposal is approved.
[7]This Proposal is the second proposal promulgated by the Insolvent.
[8] The first was considered and rejected by the Insolvent’s creditors. It was, therefore, cancelled.2
[9] The current Proposal is dated 9 December 2024. This judgment deals with approval of this Proposal by the Insolvent.
[10] The second stage is for the Provisional Trustee to call a meeting of the Insolvent’s creditors pursuant to s 330 of the Act and for the passing of a resolution accepting the Proposal by a majority of the creditors in number and three quarters in value of the creditors who vote.
[11] The Provisional Trustee must then apply to the Court for approval of the Proposal and send notice of the hearing of the application in the prescribed form to the Insolvent and every known creditor.
2 s 328(4) of the Act.
[12]Section 333 of the Act provides:
333 Court must approve Proposal
(1)After the proposal has been accepted by the creditors, the trustee must, as soon as practicable,—
(a)apply to the court for approval of the proposal; and
(b)send notice of the hearing of the application in the prescribed form to the insolvent and to each known creditor.
(2)The court must, before approving a proposal, hear any objection that is made by or on behalf of a creditor.
(3)The court may refuse to approve the proposal if it considers that—
(a)the provisions of this subpart have not been complied with; or
(b)the terms of the proposal are not reasonable or are not calculated to benefit the general body of creditors; or
(c)for any reason it is not expedient that the proposal be approved.
(4)The court must not approve a proposal if it does not provide for the payment, before any other debts are paid, of—
(a)those debts that would have priority under this Act if the insolvent was adjudicated bankrupt; and
(b)the trustee’s fees and expenses that are properly incurred by the trustee in respect of the proposal; and
(c)costs incurred by a person other than the insolvent in organising and conducting a meeting of creditors for the purpose of voting on a proposal.
(5)Subsection (4)(a) does not apply to the extent that a creditor waives the priority that the debt of that person would otherwise have had.
(6)When it approves the proposal, the court may correct any formal or accidental error or omission, but must not alter the substance of the proposal.
[13] From the use of the words “may” and “must” in ss 333(3) and (4), the Court retains a discretion whether to refuse to approve a proposal in the circumstances set out in s 333(3), whereas the Court’s refusal is mandatory in the circumstances set out in s 333(4).
[14] The first discretionary requirement, s 333(3)(a), is to consider whether the requirements of subpart 2 of the Act have been complied with. I do so below.
[15] In terms of the second of the discretionary circumstances in s 333(3)(b), whether the proposal is reasonable, this is to be assessed objectively from the perspective of the “commercially experienced prudent creditor”.3
[16] In Herbert v New Zealand Guardian Trust Co Ltd the Court of Appeal held that when considering reasonableness, the Court is required to exercise its independent judgment but that it must be influenced by the commercial judgment of creditors.4 The Court held that unless there are special public interest or other commercial considerations present, the assessment of the general body of creditors ought to be accepted.
[17] The third discretionary basis is whether there is any reason why it is not expedient that the Proposal be approved.5 As Asher J explained in Kelly v Structured Finance Ltd:6
The word “expedient” is capable of a broad meaning. It can mean “practicable”, but also has the wider meaning of “suitable” or “appropriate”.
… I consider that s 333(3)(c) requires an open-ended approach, and that any attempt to focus it on a specific matter would be to impose a limitation that does not arise from the words of the subsection.
[18] Section 333(4) requires the Court to refuse the proposal if the proposal does not provide for the payment before other debts are paid of:
(a)debts that would be preferential in a bankruptcy;
(b)the trustee’s fees and expenses properly incurred by the trustee in respect of the proposal; and
(c)the costs of any other person other than the insolvent in relation to the meeting of creditors.
3 Kelly v Structured Finance Ltd [2009] 2 NZLR 785 (HC) at [45] approved by the Court of Appeal in Magsons Hardware Ltd t/a Mitre 10 Mega v Bogiatto [2011] NZCA 378 at [29].
4 Herbert v New Zealand Guardian Trust Co Ltd [2012] NZCA 442.
5 Insolvency Act 2006, s 333(3)(c).
6 Kelly v Structured Finance Ltd, above n 3, at [53].
Relevant background to the Proposal
[19]The Insolvent sets out the background to his Proposal in detail.
[20] The Insolvent’s sworn statement of affairs and affidavit traverses the lengthy history of litigation he was involved in and the effects on his affairs that that had.
[21] He also deals with the real property that is to be realised to satisfy the obligations in the Proposal. That real property is the land occupied by the Gulf Harbour Golf Course. It is owned by trusts related to him. It is intended that it be refinanced or sold.
[22] Errol Wayne Bailey has sworn an affidavit in support of the Proposal that states that he is a director of the company that is the registered owner of the Gulf Harbour Golf Course and that the sale of this land will be sufficient to fully repay all of the Insolvent’s creditors.
[23] The Insolvent deposes to having no other assets available to meet the debts set out in his Proposal and that creditors will receive nothing in the event that he is bankrupted.
[24] The Proposal obliges the Insolvent to refinance or realise assets owned by his related trusts and to apply distributions from those trusts to payment of his debts. In relation to realisation, the Insolvent states that there are contracts for the sale of some assets to other parties already to hand, or being negotiated.
[25] Under the Proposal, upon completion of those transactions the Insolvent’s related trusts will distribute funds to the Provisional Trustee to enable him to pay the Insolvent’s creditors in full. Those related trusts have granted a security undertaking in favour of the Provisional Trustee over the net proceeds of sale received by the related trusts to secure the payments to be made by the Provisional Trustee under the Proposal. That security undertaking is also given in favour of the High Court.
[26] The Proposal was amended at the creditors’ meeting to reduce the moratorium period during which creditors may not take action against him from two years to six
months. This gives the Insolvent incentive to promptly take the steps required to refinance or realise the assets owned by his related trusts and distribute the net proceeds to his creditors.
[27] The Provisional Trustee gave notice of the creditor’s meeting to all known creditors of the Insolvent.
[28]The meeting of creditors was held on 23 January 2025.
[29] The Insolvent disclosed eight unsecured creditors totalling $2,311,536, and three secured creditors owed $50,600,000.
[30]Under the terms of the Proposal, in summary:
(a)the Insolvent intends to refinance or realise related party assets, including the Gulf Harbour Golf Course land and make payment of:
(i)all debts secured against the Gulf Harbour Golf Course property;
(ii)all debts directed by the Insolvency Act 2006 to be paid in priority to all other debts in the distribution of property of the Insolvent;
(iii)the Trustee’s fees and expenses that are properly incurred by the trustee in respect of the Proposal;
(iv)the costs incurred by a person other than the Insolvent in organising and conducting a meeting of creditors for voting on the Proposal;
(v)the debts of the creditors are to be discharged in full or reduced proportionally should the net proceeds be insufficient to repay them in full;
(b)there is to be a moratorium preventing any action being taken other than by an entitled secured creditor for a period of six months.
[31] The proposal provides that the fees and expenses of the trustee will be paid from the proceeds of realisation of the sale of the real property.
[32]In relation to voting, it was reported to the meeting that:
(a)seven votes were received by email;
(b)that two votes against had been received totalling $2,572,972.36, and five votes for totalling $58,162,693.61.
[33] The result of the creditors’ meeting was that the Proposal was accepted by a requisite majority in number of creditors, and three-quarters in value of the creditors who voted, as per s 331 of the Act. The Proposal was, therefore, carried.
[34]The Provisional Trustee provided his report to the Court on 18 February 2025.
[35]The report addresses the requirements of the Act as they relate to the Proposal.
[36] The report concludes that the Insolvent will fully repay his creditors.7 The Provisional Trustee says that this is more advantageous to the creditors than would be achieved through any alternative method, including bankruptcy.
Have the requirements of Sub-pt 2 been complied with?
[37] The Provisional Trustee confirms in his 18 February 2025 report that notice of the Proposal was given to all known creditors of the Insolvent that a meeting of creditors would be held and when that meeting would take place. He says that all creditors were given notice of the creditors’ meeting date of 23 January 2025.
7 Noting the caveat at paragraph 30(a)(v) above
[38] Section 331(3) of the Act sets out the requirements for acceptance of a proposal at the creditors’ meeting, providing:
(3)The resolution accepting the proposal must be decided by a majority in number and three quarters in value of the creditors who—
(a)vote; and
(b)are personally present or are represented at the meeting by a person specified in s 332 or have voted by postal vote.
[39] These thresholds therefore only relate to those creditors voting. The resolution of creditors accepting the Proposal was therefore decided by the required majority in number of those voting and over three quarters in value, satisfying the requirements of the Act.
[40] The Proposal sets out that the Trustee’s fees and expenses will be met as required by s 327 of the Act and Form B9 of the High Court Rules 2016. They are in accordance with reg 40 of the Insolvency (Personal Insolvency) Regulations 2007.
[41] In addition, the Provisional Trustee has confirmed that all known creditors of the Insolvent were advised of the hearing date for the application to the Court for approval of the Proposal.
[42] I am satisfied that the procedural requirements under sub-pt 2 of pt 5 have been complied with.
Is the Proposal reasonable under s 333(3)(b)?
[43] The Provisional Trustee’s report to the Court dated 18 February 2025 refers to the Insolvents’ statement of affairs and affidavit of 9 December 2024. The insolvent’s assets total less than $20,000, his unsecured creditors total $2,311,563.00, and his secured creditors total $50,600.00. His debts therefore considerably exceed the value of his realisable assets.
[44] The Proposal sets out how the Insolvent proposes to fully repay his creditors following the refinance or realisation of related party assets, including the Gulf
Harbour Golf Course land. The Provisional Trustee’s view is that the Insolvent’s proposal is an advantageous one for creditors in that it provides a better result than would be achieved under bankruptcy.
[45] There are no apparent public interest or other commercial considerations that ought to prevent the assessment of the general body of creditors being accepted (as held in Herbert).8
[46] I consider that the Proposal is reasonable and calculated to benefit the general body of creditors, who will receive full repayment of their debts.
Is there any reason that it is not expedient for the Proposal to be approved?
[47] I do not consider that there is anything in the Proposal to suggest that it would not be expedient for the Proposal to be approved.
Section 333(4) matters
[48] In terms of s 333(4) matters, in this case there are no preferential debts, and the Proposal provides that the Trustee’s fees and expenses will be paid. None of the matters for which the Act mandates refusal therefore prevent approval of this Proposal.
Conclusion
[49]I am satisfied that:
(a)the provisions of Sub-pt 2 of Pt 5 of the Act have been complied with;
(b)the terms of the Proposal are reasonable and calculated to benefit the general body of the creditors;
(c)it is expedient that the Proposal be approved; and
(d)there are no grounds under s 333(4) of the Act which mandate against approval of the Proposal.
8 Herbert v New Zealand Guardian Trust Co Ltd, above n 4.
[50] For the reasons set out above, I approve the Proposal of Gregory Martin Olliver dated 9 December 2024 pursuant to s 333 of the Insolvency Act.
Application under s 335 of the Act
[51] The Insolvent has also filed a with notice application for orders under s 335 of the Act, that the secured creditors (as defined) in the Proposal shall be entitled to exercise all rights and remedies as provided for in the Proposal, and permission is given to the secured creditors to exercise such rights under s 335(3) of the Act upon, and in the event of, the Court approving the Proposal.
[52] I am advised by counsel that this application is made to give certainty regarding amendments to the Proposal that were approved at the meeting of creditors on 23 January 2025. The Proposal allowed for secured creditors to exercise any rights or remedies in regard to their securities and debts during the period of the Proposal, which otherwise provided for a six month moratorium on the enforcement of any creditors’ remedies.
[53] The Proposal was presented to creditors on the basis that the secured creditors would be entitled to exercise such rights on the Court approving the Proposal.
[54] In granting the orders sought, the Insolvent submits that there would be no alteration to the priorities that the creditors would have under the Proposal, or the obligation on secured creditors to account for the proceeds of any realisation of assets under s 185 of the Property Law Act 2007. The orders are sought to give certainty and avoid any suggestion that the secured creditors are not entitled to exercise such rights.
[55] There has been no opposition filed to this application. All of Mr Fitzgerald and Mr Komie on behalf of 1543 Capital Fund One LP, Ms McClean for Bank of New Zealand and Ms Eastwood for K3 Legal confirmed that they did not oppose the making of the orders sought in the application.
[56] Accordingly, I make the orders sought, being that a secured creditor (as defined) in the Proposal of the Insolvent shall be entitled to exercise all rights or
remedies as provided for in the Proposal, and permission is given to the secured creditor to exercise such rights under s 335(3) of the Act.
Result
[57] I approve the Proposal of Gregory Martin Olliver dated 9 December 2024 pursuant to s 333 of the Insolvency Act 2006.
[58] A secured creditor (as defined) in the Proposal of the Insolvent shall be entitled to exercise all rights or remedies as provided for in the Proposal and permission is given to the secured creditor to exercise such rights under s 335(3) of the Insolvency Act 2006.
[59] The bankruptcy petition by Bank of New Zealand against the Insolvent is adjourned to 5 December 2025 at 10.00 am.
Associate Judge Cogswell
0
2
0