Ward v Official Assignee - [2020] NZHC 1991

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2019-404-2722

[2020] NZHC 1991

UNDER the Insolvency Act 2006

IN THE MATTER OF

an application to annul a bankruptcy

BETWEEN

GORDON HAROLD LESLIE WARD

Applicant

AND

OFFICIAL ASSIGNEE

Respondent

Hearing: 3 August 2020

Appearances:

C McLean for the Applicant C Jones for the Respondent

C van der Merwe for the Commissioner of Inland Revenue

Judgment:

7 August 2020

JUDGMENT OF ASSOCIATE JUDGE R M BELL

This judgment was delivered by me on 7 August 2020 at 3:00pm
pursuant to Rule 11.5 of the High Court Rules

…………………………. Registrar/Deputy Registrar

Solicitors:
McLean Law Limited (Callum McLean), New Lynn, Auckland, for the Applicant Official Assignee’s Office (Charles Jones), Auckland, for the Respondent
Inland Revenue (Cloete van der Merwe), Manukau, for the Commissioner

WARD v OFFICIAL ASSIGNEE [2020] NZHC 1991 [7 August 2020]

[1] Mr Ward applies for his bankruptcy in 2015 to be annulled on the ground that he ought not to have been adjudicated bankrupt.1 That is a difficult application because Mr Ward applied for his own adjudication. The reason for his application is to obtain standing under s 329 of the Companies Act 1993 to apply for NZ Wheel Clamping Co Ltd to be restored to the Companies register.

[2] Mr Ward was a director and fifty per cent shareholder of NZ Wheel Clamping Co Ltd. It was ordered into liquidation on 11 March 2014 on the application of the Commissioner of Inland Revenue because it was unable to pay its debts. At the end of the liquidation, it was removed from the register on 26 June 2019.

[3] Mr Ward wants to restore the company to the register because he believes that the company has an asset which the liquidators did not realise, a GST refund. One difficulty for his application to restore the company under s 329 of the Companies Act 1993 is that he does not have standing. When the company was removed from the register, he was not a shareholder or a director, because he had become bankrupt in 2015. On his bankruptcy his shares in the company vested in the Official Assignee and he was disqualified from holding office as a director. With that he did not have standing to apply for the company to be restored to the register.2 To overcome the standing problem, he has applied to annul his bankruptcy. He wants the annulment to be retrospective from his adjudication on 15 July 2015 so that he can be treated as a shareholder of the company when it was removed from the register. Section 309 of the Insolvency Act 2006 provides for the annulment of adjudications, but there is only one ground for which an annulment is retrospective from the date of adjudication – s 309(1)(a). Under that ground, the court can annul an adjudication if the court considers that the bankrupt should not have been adjudicated bankrupt.

[4] Mr Ward became bankrupt on…

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 Ward v Official Assignee

Details

AGLC: Ward v Official Assignee [2020] NZHC 1991
Case: [2020] NZHC 1991
Decision Date: 7 August 2020

CaseChat Overview and Summary

Gordon Harold Leslie Ward applied to the High Court of New Zealand to annul his own bankruptcy on the ground that he should not have been adjudicated bankrupt. The reason for his application is to obtain standing under s 329 of the Companies Act 1993 to apply for NZ Wheel Clamping Co Ltd to be restored to the Companies register. Mr Ward was a director and fifty per cent shareholder of NZ Wheel Clamping Co Ltd which had been ordered into liquidation. Mr Ward wants to restore the company to the register because he believes that the company has an asset which the liquidators did not realise, a GST refund. The court was required to decide whether the bankrupt should not have been adjudicated bankrupt under s 309(1)(a) of the Insolvency Act 2006. The court held that Mr Ward's application to annul his bankruptcy should be dismissed. The court found that the application was made after a significant delay and that it would be hopelessly impractical to annul the bankruptcy retrospectively and wind the clock back. The value of finality should not be disturbed by Mr Ward’s wish to annul his bankruptcy. The court found that Mr Ward had not shown that his adjudication was legally flawed. He apparently followed the appropriate procedures in filing his own application with the Official Assignee. He has not suggested that there was anything that made his adjudication invalid or legally unsound. The court found that the fact that the debtor elects bankruptcy, rather than alternatives, and the fact that with hindsight the debtor believes that other alternatives would have been better, does not mean that the debtor should not have been adjudicated bankrupt.

Orders