Sheppard v Blanchett - [2012] NZHC 789

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2011-404-7505 [2012] NZHC 789

UNDER Part 5 of the Insolvency Act 2006

IN THE MATTER OF a Proposal made by David Andrew Tauber

BETWEEN BRUCE SHEPPARD Applicant

ANDDAVID MURRAY BLANCHETT AND COLIN MCCLOY AS LIQUIDATORS OF A.P.G. HOLDINGS LIMITED (IN LIQUIDATION)
Respondents

Hearing: 23 April 2012

Appearances: M J Whale for Applicant
M D Branch and S J Rawcliffe for Respondents

Judgment: 23 April 2012

ORAL JUDGMENT OF ASSOCIATE JUDGE R M BELL

Solicitors:
Lowndes Associates (M J Whale) P O Box 7311 Auckland 1141, for Applicant
Email: whale@lowndeslaw.com

Harkness Henry (M D Branch and S J Rawcliffe), Private Bag 3077 Hamilton 3240 for Respondents
Email: murray.branch@harkness.co.nz / sarah.rawcliffe@harkness.co.nz

SHEPPARD V BLANCHETT AND McCLOY AS LIQUIDATORS OF A.P.G. HOLDINGS LIMITED (IN LIQUIDATION) HC AK CIV-2011-404-7505 [23 April 2012]

[1] This is an application under s 333 of the Insolvency Act 2006 for the approval by the court of a proposal that has been accepted by the required majorities of creditors under s 331 of the Act. The insolvent is David Andrew Tauber. The liquidators of A P G Holdings Ltd (In Liquidation) are the only creditors to oppose the application.

[2] The grounds in the notice of opposition are that the proposal is not reasonable and is not calculated to benefit the general body of creditors, and that there has not been compliance with subpart 2 of Part 5 of the Insolvency Act, specifically s 327(2). In submissions, the liquidators also relied on the third ground of opposition under s 333 that it is not expedient that the proposal be approved.

[3] At the start of the hearing, there was also an appearance by Dominion Finance (In Receivership and In Liquidation). Dominion Finance is a judgment creditor of Mr Tauber. Dominion Finance had brought a bankruptcy application against Mr Tauber, relying on a judgment of this court. The bankruptcy application was adjourned until today. This morning Ms Mansell for Dominion Finance said that it wished to withdraw the application for adjudication in bankruptcy, whatever the outcome of the application for approval of the proposal. That application has accordingly been withdrawn with leave.

Mr Tauber’s insolvency and his proposal

[4] Mr Tauber’s statement of affairs shows assets worth $10,512 made up of

$3000 in a bank account, $7000 in a KiwiSaver account, and some sporting equipment which he values at $500. In his statement of assets, he also lists shareholdings in a number of companies. He says that the shares in the companies have no value. Some of the companies are corporate trustees and in many cases he is a discretionary beneficiary of the trusts. Some of the companies have assets – Score Trustees Ltd, Honk Marine Ltd, Honk Farms Ltd, TG Nominees Ltd, Education Holdings (2008) Ltd and Apartments Ltd. The assets of those companies are subject to securities in favour of various secured creditors: Westpac New Zealand, Hong

Kong and Shanghai Bank, ASB Bank, and Asia Syndicate Finance Ltd.…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Sheppard v Blanchett

Details

AGLC: Sheppard v Blanchett [2012] NZHC 789
Case: [2012] NZHC 789
Decision Date: 23 April 2012

CaseChat Overview and Summary

Sheppard v Blanchett [2012] NZHC 789 is an application under s 333 of the Insolvency Act 2006 for the approval by the court of a proposal that has been accepted by the required majorities of creditors under s 331 of the Act. The insolvent is David Andrew Tauber. The liquidators of A P G Holdings Ltd (In Liquidation) are the only creditors to oppose the application. The court considered the proposal under s 333(3) of the Insolvency Act. The court found that the proposal was not reasonable and not calculated to benefit the general body of creditors because it did not provide for the liquidators of A P G Holdings Ltd. The court also found that it was not expedient that the proposal be approved because it rewarded Mr Tauber for adopting a policy of reduced accountability. The court refused to approve the proposal.

Orders