Strang - [2023] NZHC 369

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE

CIV-2016-485-430

[2023] NZHC 369

UNDER the Insolvency Act 2006

IN THE MATTER

of the bankruptcy of GRAHAM JOHN STRANG and an application by the Official Assignee for orders pursuant to ss 106 and/or 147 of the Insolvency Act 2006

Hearing: 16 February 2023

Appearances:

D Kerr for the Official Assignee No appearance by or for bankrupt

Judgment:

2 March 2023

JUDGMENT OF ASSOCIATE JUDGE JOHNSTON

[1] Graham John Strang was adjudicated bankrupt on 7 February 2017. The three-year bankruptcy period provided for in s 290 of the Insolvency Act 2006 (the Act) expired on 22 October 2022. The surprisingly lengthy duration of his bankruptcy reflects the fact that Mr Strang did not comply with s 290(1) of the Act and provide the Official Assignee with a statement of affairs for nearly three years.

[2] On 11 October 2022 the Official Assignee filed a notice of objection to Mr Strang’s discharge.

[3]That triggered the need for a public examination pursuant to s 295.

RE STRANG [2023] NZHC 369 [2 March 2023]

[4] The Official Assignee filed a report relating to Mr Strang’s affairs pursuant to ss 176 and 296 which is before the Court, and served Mr Strang with a summons and a copy of the report.

[5]The examination was set down for 10.00 am on 16 February 2023.

[6]Mr Strang did not answer the summons and present himself for examination.

[7] Mr Kerr for the Official Assignee acknowledged that the Court had jurisdiction to issue a warrant for Mr Strang’s arrest. This is provided for in s 180 of the Act. However, the Official Assignee did not ask the Court to issue a warrant. Mr Kerr said that the Official Assignee’s case that Mr Strang should not be discharged could be advanced in his absence.

[8] The Official Assignee’s argument is not complex. Mr Kerr began by reminding the Court that Mr Strang had been bankrupted on two previous occasions and that during the second of those bankruptcies he fraudulently incurred credit in his mother-in-law’s name without her knowledge, and that this had resulted in his mother-in-law’s bankruptcy. Mr Kerr also referred me to the evidence to the effect that during the same bankruptcy Mr Strang had worked as a self-employed electrician without approval. Mr Strang has a conviction for obtaining credit whilst still an undischarged bankrupt.

[9] The Official Assignee’s report disclosed that Mr Strang was required to make contributions to his debts during the course of his current bankruptcy. He failed to comply with the Official Assignee’s demand. That resulted in a court order requiring him to make contributions and for a time his then employer deducted the necessary amount from his wages and made payments. However, as a result of the Covid pandemic, Mr Strang was released from his obligations to make those payments. He then changed employers. He did not inform the Official Assignee of this change, and,…

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.

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Details

Case: [2023] NZHC 369
Decision Date: 2 March 2023

CaseChat Overview and Summary

In the High Court of New Zealand, Associate Judge Johnston presided over the case of Mr. Graham John Strang, who was adjudged bankrupt in 2017. The Official Assignee, who filed a notice of objection to Mr. Strang’s discharge, sought orders pursuant to sections 106 and/or 147 of the Insolvency Act 2006. The key legal issues included whether Mr. Strang's bankruptcy should be extended and, if so, under what conditions. The court considered the Official Assignee's report, Mr. Strang's non-compliance with his obligations, and the interests of the creditor, the bankrupt, and the public. Mr. Strang's absence and failure to respond to the summons further influenced the decision.

Associate Judge Johnston found that Mr. Strang's conduct warranted the continuation of his bankruptcy. The court noted Mr. Strang's previous bankruptcies, fraudulent activities, and failure to comply with the Official Assignee's demands. The decision was guided by the need to protect the interests of the creditor, the Commissioner of Inland Revenue, and the public. The judge emphasised that Mr. Strang's continued bankruptcy would allow for further attempts to recover costs and ensure compliance with bankruptcy obligations. The court also decided to impose conditions on Mr. Strang to minimise the risk to the public during the extended bankruptcy period. The final orders included continuing Mr. Strang's bankruptcy for another three years and imposing specific conditions on his business activities.

Orders