Samson Corporation Limited v Prinsloo (aka Taylor)
[2025] NZHC 1685
•24 June 2025
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2022-404-000067
[2025] NZHC 1685
UNDER the Insolvency Act 2006 IN THE MATTER
of the bankruptcy of Charlice Prinsloo
BETWEEN
SAMSON CORPORATION LIMITED
Judgment Creditor / Respondent
AND
CHARLICE PRINSLOO (a/k/a Tammy Taylor)
Bankrupt / Applicant
Hearing: 18 June 2025 Appearances:
B Martelli and T P Donaldson for the Respondent G Jindal for the Applicant
C Jones for the Official Assignee
Judgment:
24 June 2025
JUDGMENT OF ASSOCIATE JUDGE COGSWELL
This judgment was delivered by me on 24 June 2025 at 4.00 p.m. pursuant to Rule 11.5 of the High Court Rules.
Registrar/Deputy Registrar Date.......................................
Solicitors:
Martelli Yaqub Lawyers Ltd, Auckland Ormiston Legal, Auckland
SAMSON CORPORATION LTD v PRINSLOO [2025] NZHC 1685 [24 June 2025]
Introduction
[1] Charlice Prinsloo was adjudicated bankrupt on 21 September 2022 following a creditor’s application by Samson Corporation Limited (the creditor).
[2] Ms Prinsloo seeks early discharge from bankruptcy under s 294 of the Insolvency Act 2006 (the Act).
[3]The application is opposed by the creditor.
[4] The Official Assignee takes no position on Ms Prinsloo’s application and abides the decision of the Court.
[5]The Official Assignee filed a report under s 296 of the Act which confirms that:
(a)the administration of the bankrupt’s estate is complete;
(b)no assets were available for distribution to creditors; and
(c)there are no realistic prospects of recovery under the current circumstances.
The issue
[6] The issue is whether the Court’s discretion should be exercised in favour of Ms Prinsloo or whether she should be required to complete her full three-year term of bankruptcy.
[7] Ms Prinsloo seeks discharge early so that she may be admitted to the bar as a solicitor in Australia. The creditor says that her conduct in breaching the insolvency regime rules should prohibit an early discharge.
Background
[8] The bankruptcy of Ms Prinsloo arose from the failure of a business she operated known as Tammy Taylor Nails. The business was operated from commercial premises leased from the creditor.
[9] Ms Prinsloo’s liability arose from a personal guarantee given to secure the company lessee’s lease obligations to the creditor.
[10] Like others, Ms Prinsloo’s business was adversely affected by the COVID-19 pandemic, which resulted in the business being closed for lengthy periods of time, with the resulting failure to meet lease commitments.
[11] Her attempts to sell the business were unsuccessful, in part, due to an inability to assign the lease.
[12] She was bankrupted on 21 September 2022. The creditor was the lessor of her business.
[13] She failed to provide her statement of financial affairs for nearly seven months and only did so after several reminders from the Official Assignee.
[14] It was finally given on 14 March 2023. There are no assets available for creditors and no income required to be contributed to her creditors.
[15] She was given permission of the Official Assignee to travel to South Africa for family reasons. She did travel there but instead of returning to New Zealand, she travelled to Australia, where she has remained.
[16] Her current position is that she is married, with two young children. She lives in Australia. She has completed her Bachelor of Laws at Central Queensland University and fulfilled all pre-admission practical training requirements for admission to the Victorian Bar.
[17] She currently works as a paralegal. She is trying to be admitted to the bar in Australia so that she may work as a solicitor there. She is, however, unable to be admitted to the bar whilst her bankruptcy continues. She does not intend to return to New Zealand.
[18] Some discussion took place about whether Ms Prinsloo had overstated the impact of her bankruptcy to be admitted to the Victorian Bar. The creditor submitted that the letter on which that position was based was not as definitive as it was characterised and that discharging the bankruptcy would not necessarily result in her admission to practice.
[19] I have reviewed the letter. The letter notes that “the [Executive Committee of the Victorian Legal Admissions Board] considered all the material provided by you, and is unable to issue a compliance certificate until your bankruptcy has been discharged.”
[20] I consider it follows that, should the bankruptcy be discharged, the Victorian Board will more likely than not admit Ms Prinsloo to the Bar. I find therefore that the current bankruptcy is an impediment to her being admitted to the Bar.
[21] Ms Prinsloo says that her lack of fault in the business failure, her inability to contribute to her creditors, her otherwise good character, the small size of the debts and her inability to seek admission to the Victorian Bar are all factors that support her early discharge.
[22] She says that there was no immorality in her business failure, but rather that it occurred as a result of factors beyond her control, namely the COVID-19 pandemic. I find that there was no commercial immorality in relation to her business failure.
[23]She says that enabling her to practice law serves the public interest because it:
(a)it allows her to contribute pro-actively to the legal profession;
(b)potentially improves her capacity to make a better life for herself and her family; and
(c)demonstrates that the insolvency system supports genuine rehabilitation.
[24] She says that continuing her bankruptcy for the full three-year term serves no additional deterrent purpose given her own particular circumstances and demonstrated responsibility.
[25] Put simply, Ms Prinsloo’s position is that the business failed through no fault of her own, and she seeks to turn her life around to become a contributing member of society by now being admitted to the Victorian Bar in Australia and practising law.
[26] She says that continuing her bankruptcy serves no purpose. She adds that she has no intention of returning to New Zealand, does not intend to re-enter business in New Zealand, and there is no future risk to the New Zealand public in her discharge being granted.
[27] Accordingly, she seeks an order for discharge of her bankruptcy so that she may be admitted to the bar and commence practice as a barrister and solicitor.
The Law
[28] Section 294 of the Act permits a bankrupt to apply for early discharge of their bankruptcy.
[29] Section 296 of the Act requires the Official Assignee to give a report when a bankrupt applies for early discharge and that has been done in this case.
[30] Section 298 of the Act confers a broad discretion on the Court as to the orders to be made upon application for discharge. That discretion is to be exercised having regard to all the circumstances of the case. The Court is able to discharge the bankrupt but may impose terms on that discharge such as prohibiting the bankrupt from carrying on or taking part in business for a specified period.1
1 Section 299(1)(a) and (2)(a).
[31] The approach to be adopted on applications for discharge was considered by the Court of Appeal in ASB Bank v Hogg, where the Court considered the two alternative views on the approach to be adopted, noting that in Re Webb the Court stated:2
When the Parliament determined that three years is to be the period during which restrictions are to apply unless the Court orders otherwise, there must in my judgment be some substantial and compelling reason for the Court to alter that period.
[32]In Hogg the Court also noted the alternative view expressed in Re Anderson
that an applicant need not show special circumstances to succeed, but:3
must show some cogent ground or grounds for the exercise of the discretion in his or her favour and the mere consciousness of the stigma of a bankruptcy cannot of itself be enough.
[33] Having considered the two approaches, the Court in Hogg determined that it preferred the broader approach adopted in Re Anderson. That section (s 294 of the Act, as it now is) created a discretionary jurisdiction which is wide and unfettered.
[34] I pause here to note that this is not a case where the applicant is seeking to discharge the bankruptcy because of the “mere consciousness of the stigma of a bankruptcy”. Rather, the fact of bankruptcy is currently preventing her from being admitted to the Victorian Bar to practice as a solicitor. It is significantly more than a “mere consciousness”, it is an actual impediment.
[35] Further, in Huang v Qeynos New Zealand Ltd the Court in considering an application for early discharge noted that the public interest in bankruptcy is not in the punishment of the debtor, but rather in avoiding the risk of further conduct to the detriment of the community.4
2 ASB Bank v Hogg [1993] 3 NZLR 156 (CA); citing Re Webb HC Gisborne B 69/88, 4 August 1989.
3 Hogg, above n 2, at 157; citing Re Anderson HC Hamilton B213/89, 14 April 1992.
4 Huang v Qeynos New Zealand Ltd (formerly known as Carters) [2022] NZHC 1426 at [46] and [48].
[36] In Huang the Court went on to note that it must have regard to the business activities which the bankrupt is likely to engage in upon discharge from bankruptcy. Ms Prinsloo does not intend to return to New Zealand and does not intend to re-enter business, she seeks employment as a solicitor in Australia.
[37] Huang also noted that rather than there being a desire for punishment, there is a public interest in the bankrupt being once again able to earn a living and to contribute to society. That is a factor that supports the rehabilitative approach of the insolvency regime and supports Ms Prinsloo’s application.
[38] In discussion with the creditor’s counsel, they confirmed that they do not advance a submission that there is any issue about the commercial morality of Ms Prinsloo. Hence, there is no opposition to the early discharge on the grounds of commercial immorality. That is a proper concession to make given the evidence before the Court.
[39] Finally, in the bankruptcy of Bryers v Official Assignee,5 the Court noted a further factor that ought to be taken into account when exercising its discretion to grant a discharge is the size of the deficiency in the bankruptcy. Where it is large, there is authority to the effect that weight ought to be given to that matter when considering the timing of the discharge.6
[40]In the present case, the debt is not large.
[41] It was clarified that all of Ms Prinsloo’s debts set out in the Official Assignee’s report are debts arising directly from the failed business. This is not a case where the debtor has recklessly incurred debts across a wide range of creditors. It is a case where a business has failed because of COVID-19 and the debts the subject of the bankruptcy are related to that failure.
5 Bryers v Official Assignee [2015] NZHC 384.
6 At [17].
The position of the Official Assignee
[42] The Official Assignee gave its report under s 296 of the Act. The Official Assignee abides the decision of the Court.
[43] Mr Jones on behalf of the Official Assignee confirmed that the statement of affairs was filed, but some seven months late. It was filed on 14 March 2023.
[44] Under s 290(1) of the Act the three-year period of bankruptcy only commences when the statement of affairs is received. This moves the relevant three-year period for automatic discharge from 22 September 2025 to 14 March 2026.
[45] Mr Jones confirmed that having reviewed the earnings of Ms Prinsloo in Australia that there was no surplus income available which would result in a call for contributions to be made to Ms Prinsloo’s creditors.
[46] Mr Jones noted that the Official Assignee would take, and had taken, a pragmatic approach to the technical breaches by Ms Prinsloo, including her failing to obtain permission to remain in Australia and her delay in filing the statement of affairs. At most, the enforcement steps in relation to those breaches would have been a warning letter.
The creditor’s position
[47]The creditor opposes the early discharge.
[48] It notes that Ms Prinsloo was bankrupted for a total sum of $83,842 which was owed to the creditor and arose from the failure of the business and the consequent lease obligations that were incurred by her as guarantor. The creditor has not received any dividend in the bankruptcy.
[49] The creditor points out that there is some conduct of Ms Prinsloo which the Court may consider supports its opposition. Those factors are:
(a)Ms Prinsloo’s delay in providing her statement of affairs to the Official Assignee for a period of nearly seven months;
(b)the fact that Ms Prinsloo applied to leave New Zealand temporarily to visit family in South Africa but ultimately ended up living in Australia without permission from the Official Assignee; and
(c)that Ms Prinsloo did not advise the Official Assignee about her employment in Australia.
[50] The creditor complains that it has not received any payments during the course of the bankrupt’s bankruptcy. However, with reference to the Official Assignee’s report it is clear that there was and is no income or assets available for distribution to creditors.
[51] I have considered Ms Prinsloo’s actions including her decision to move to Australia without the permission of the Official Assignee. Whilst that conduct is not to be approved and is technically a breach of the insolvency requirements imposed on her, the actual causative effect as far as the creditor is concerned is minimal.
[52] Having reviewed the bankrupt’s affairs, the Official Assignee is satisfied that there is and were no funds available for distribution to the creditor. Her relocation to Australia did not cause any further losses or prevent the creditor recovering any amounts from Ms Prinsloo’s bankruptcy, as there were none. The Official Assignee reviewed her income in Australia and reached the view that no contribution was possible.
[53] Finally, the creditor argues that her conduct in defaulting under the lease obligations for over a year caused greater losses to it. However, the creditor had rights of enforcement under the lease and did not have to rely on Ms Prinsloo surrendering the lease. If it was entitled to, it could have cancelled the lease for breach.
Discussion
[54] Standing back and viewing the position as a whole, I consider that the interests of the bankruptcy regime are met by granting the discharge to Ms Prinsloo as sought.
[55] I do not consider that there is any commercial immorality in the business failure that led to her financial exposure to the creditor, nor do I consider that the creditor has suffered any losses as a result of Ms Prinsloo’s relocation to Australia.
[56] I take note that the Official Assignee’s report confirms there has not, and never has been any surplus assets or income available for distribution to creditors, and that it takes no position on the application.
[57] The Court does not approve of Ms Prinsloo’s breaches of the bankruptcy regime, but ultimately, they are a factor to be considered along with the others.
[58] I consider that Ms Prinsloo has proactively taken steps to improve her life via training as a lawyer, and that she should be given the opportunity to now enter the profession and further improve her circumstances. She can “start again”.
[59] Ms Prinsloo has confirmed that she does not intend to return to New Zealand or enter into business here. I consider it appropriate to make the discharge conditional on that. The appropriate period, given her delay in filing her statement of financial affairs, is the full three-year period from when she filed her statement.
Decision
[60] Having considered the provisions of ss 294, 298 and 299 of the Act, and the evidence submitted on behalf of Ms Prinsloo, I make the following orders:
(a)I grant Ms Prinsloo’s application for an order for discharge under s 294 of the Act. The order is to take effect immediately.
(b)I make an order under s 299 of the Act prohibiting Ms Prinsloo from doing any of the things set out in s 299(1)(a)–(e) of the Act until 14 March 2026.
[61] Ms Prinsloo has sought and been granted an indulgence from the Court. In those circumstances, I do not consider that she is entitled to costs, and I make an order that costs lie where they fall.
Associate Judge Cogswell
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