Tonks v Commissioner of Inland Revenue HC Christchurch CIV 2010-409-80

[2010] NZHC 972

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

CIV-2010-409-000080

BETWEEN  MARK BRENDON TONKS Judgment Debtor

ANDCOMMISSIONER OF INLAND REVENUE

Judgment Creditor

Hearing:         21 June 2010

Appearances: Judgment Debtor in person

P W Saunders & K L Reid for Judgment Creditor

Judgment:      21 June 2010

JUDGMENT OF ASSOCIATE JUDGE DOHERTY

The application

[1]      The judgment debtor has applied to set aside a bankruptcy notice issued in respect of a judgment of the District Court on 25 August 2009 for $159,316.56 in favour of the judgment creditor.

[2]      The application sets out a number of allegations and grounds to support it but at hearing the judgment debtor’s argument distilled to the single point that he has satisfied  the debt  by an “instrument  presented  in  full  settlement  of  the  amount claimed”.

[3]      The “instrument” is a copy of the judgment of the District Court, signed by a Deputy Registrar, which has various hand-written notations on it including a 5¢ New Zealand  stamp  endorsed  with  the  date  “17-09-2009”.    A  scanned  copy  of  the

“instrument” is attached to this judgment.

TONKS V COMMISSIONER OF INLAND REVENUE HC CHCH CIV-2010-409-000080  21 June 2010

[4]      The judgment debtor’s argument may be summarised as follows:

i)The “instrument” is an unconditional order for payment of “sum certain” written by the Registrar on the Crown account, and is thus a bill of exchange.

ii)The entity “Mark Brendon Tonks” is a Crown entity and the issuer of a public security (“the instrument”) under the Public Finance Act 1989.

Payment/bill of exchange

[5]      The judgment debtor’s argument is that the “instrument” is a bill of exchange because  it  is  an  unconditional  order  for  the  payment  of  money  written  by  the Registrar of the District Court on the Crown account.

[6]      A bill of exchange is defined in the Bill of Exchange Act 1908 as “an unconditional order in writing, addressed by one person to another, signed by the person giving it, requiring the person to whom it is addressed to pay on demand, or at a fixed or determinable future time, a sum certain in money to or to the order of a specified person, or to bearer”.

[7]      The judgment debtor’s argument is misconstrued.  The “instrument” does not conform to that definition.  The form, even altered by the hand-written notations, is nothing more than notice that the District Court entered judgment against the judgment debtor in favour of the judgment creditor for the amount appearing on the face of the document.

Crown entity

[8]      Under the Public Finance Act (s 2(1)), a Crown entity has the meaning given to it by s 7(1) of the Crown Entities Act 2004.  The entity “Mark Brendon Tonks” (which the judgment debtor distinguished from the natural person “Mark Brendon Tonks”) does not come within any of the five categories of entity as set out in the latter  section.    Nor  does  the  “instrument”  come  within  the  definition  of  public

security under the Public Finance Act (s 2(1)) in that it could not be construed as “any loan or credit agreement, guarantee, indemnity, bond, note, debenture, bill of exchange, Treasury bill, Government stock and any other security representing part of the public debt of New Zealand”.

Bankruptcy notice

[9]      The form and service of the bankruptcy notice is unremarkable and complies with the Insolvency Act 2006 and the High Court Rules.

[10]     The judgment debt has not been paid (either by money or by any equivalent such as a bill of exchange).  There has not been any security or other agreement with the judgment creditor, nor has it been shown that there is a counterclaim, set-off or cross-demand against the judgment creditor.  In any event, r 5.61 of the High Court Rules precludes the judgment debtor from advancing any set-off or counterclaim given that the judgment was in respect of recovery of taxes.

Outcome

[11]     The judgment debtor’s arguments must fail.  The application is dismissed.

Costs

[12]     There are costs to the judgment creditor on a category 1A (schedules 2 and 3

High Court Rules) basis.

ASSOCIATE JUDGE DOHERTY

Solicitors:

Inland Revenue Department, Christchurch

Copy to Judgment Debtor