Trustees Executors Ltd v Official Assignee - [2015] NZCA 118

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IN THE COURT OF APPEAL OF NEW ZEALAND

CA206/2014
[2015] NZCA 118

BETWEEN	TRUSTEES EXECUTORS LIMITED Appellant
AND	THE OFFICIAL ASSIGNEE Respondent

Hearing:	18 March 2015
Court:	Randerson, Harrison and Wild JJ
Counsel:	C M Stevens and N D Chapman for Appellant M J Andrews, R D Garden and G E Slevin for Respondent P D McKenzie QC as counsel assisting the Court
Judgment:	17 April 2015 at 10:00 am

JUDGMENT OF THE COURT

AThe respondent’s application for leave to adduce further evidence on appeal is granted.
BThe appeal is allowed.
CThe cross-appeal is dismissed.
DThe declarations made in the High Court are set aside save for declaration (a).
E This Court declares that the KiwiSaver interests of the bankrupts do not vest in the respondent under ss 101 or 102 of the Insolvency Act 2006.
FThe respondent must pay the appellant one set of costs for a standard appeal on a band A basis with usual disbursements. We certify for second counsel.

____________________________________________________________________

REASONS OF THE COURT

(Given by Randerson J)

Table of Contents

Para No

Introduction
Background facts
The key statutory provisions
The findings in the High Court
The legislation in more detail

The Insolvency Act
The KiwiSaver Act

First issue – does the KiwiSaver interest of a bankrupt vest in the OA under ss 101 and 102 of the IA or is s 127 of the KSA effective to prevent vesting?

The rival contentions
Analysis

Second issue – did the High Court err in finding that bankruptcy does not always constitute significant financial hardship under the early withdrawal provisions of the KSA?

The OA’s case
Analysis

Conclusion
Result

[1]
[8]
[12]
[16]
[22]
[25]
[34]

[47]
[47]
[49]

[62]
[62]
[67]
[80]
[82]

Introduction

The principal issue in this appeal is whether the respondent (the OA) is entitled to the benefit of the KiwiSaver accounts of persons who are adjudicated bankrupt. The respondent (TEL) is the trustee of the KiwiSaver accounts of two bankrupts, Mr T and Mr H, who are the immediate focus of this appeal. However, the parties recognise that the resolution of the issue will affect many bankrupts who contribute to KiwiSaver schemes.
The OA submitted in the High Court that:
(a)The KiwiSaver accounts were “property” for the purposes of ss 101 and 102 of the Insolvency Act 2006 (the IA).
(b)The balances in the bankrupts’ KiwiSaver accounts at the date of adjudication and any additional sums accumulating during the period of their bankruptcy vested in the OA.
(c)The OA was entitled to access the funds held in the KiwiSaver accounts under the provisions of the KiwiSaver Act 2006 (the KSA), in particular sch 1 (the KiwiSaver Rules) that allow for early withdrawal of the funds in the case of “significant financial hardship”.
Ronald Young J accepted the OA’s submissions on the first two issues but not on the third.[1] He found that the OA could not automatically access the KiwiSaver accounts under…

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 Trustees Executors Ltd v Official Assignee

Details

AGLC: Trustees Executors Ltd v Official Assignee [2015] NZCA 118
Case: [2015] NZCA 118
Decision Date: 17 April 2015 at 10:00 am

CaseChat Overview and Summary

Trustees Executors Limited (Appellant) appealed a High Court decision which held that the Official Assignee (Respondent) could not access the KiwiSaver accounts of bankrupts, Mr T and Mr H, under the KiwiSaver Act 2006 (KSA). The primary issue was whether the KiwiSaver interests of bankrupts vested in the Official Assignee under the Insolvency Act 2006 (IA) or whether s 127 of the KSA prevented such vesting. A secondary issue was whether the High Court erred in finding that bankruptcy did not always constitute significant financial hardship under the early withdrawal provisions of the KSA. The Court of Appeal held that the KiwiSaver interest of a bankrupt did not vest in the Official Assignee and that bankruptcy did not always constitute significant financial hardship under the early withdrawal provisions of the KSA. Consequently, the appeal was allowed, the cross-appeal was dismissed, and the declarations made in the High Court were set aside save for declaration (a) that the Bankrupts’ KiwiSaver Interests, including rights, interests and claims of every kind relating to the Bankrupts’ KiwiSaver Interests, were property for the purposes of the IA. The Official Assignee must pay the Appellant one set of costs for a standard appeal on a band A basis with usual disbursements.

Orders