Williams v Simpson no.10 HC Hamilton CIV 2010-419-1174
[2011] NZHC 109
•22 February 2011
IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY
CIV 2010-419-1174
UNDER the Insolvency (Cross-border) Act 2006
BETWEEN STEVEN JOHN WILLIAMS Applicant
ANDALAN GERAINT SIMPSON Debtor
Hearing: 21 February 2011 (by telephone) Counsel: K J Crossland for Applicant
P F Gorringe for Debtor
M Strang for Commissioner of Inland Revenue
G Caro for Official Assignee
No appearance by, or on behalf of trustees of B V Adams No 2 Trust
Judgment: 22 February 2011
JUDGMENT (NO. 10) OF HEATH J
This judgment was delivered by me on 22 February 2011 at 4.00pm pursuant to Rule 11.5 of the High
Court Rules
Registrar/Deputy Registrar
Solicitors:
Stace Hammond P O Box 19-101 Hamilton 3244Tompkins Wake, PO Box 258, Hamilton Kerry Burroughs, PO Box 19307, Hamilton Anderson Lloyd, PO Box 201, Queenstown
Inland Revenue Department, PO Box 761, Waikato Mail Centre, Hamilton
Companies Office, PO Box, Auckland
Counsel:
P Gorringe, PO Box 7098, HamiltonD M O’Neill, PO Box 815, Hamilton
P J Morgan QC, PO Box 19021, Hamilton
WILLIAMS V SIMPSON HC HAM CIV 2010-419-1174 22 February 2011
Introduction
[1] On 12 October 2010, I made an order under s 8 of the Insolvency (Cross- border) Act 2006 (the Act) extending aid to Mr Williams, the trustee in bankruptcy of the Estate of Mr Simpson. Mr Simpson had, previously, been adjudged bankrupt by the High Court of Justice of England and Wales (the English Court),[1] on the petition of Society of Lloyds (Lloyds). By the time the order in aid was made, there was evidence that Mr Simpson had substantial assets in New Zealand and elsewhere that
had been concealed from Mr Williams.
[1] Williams v Simpson (No. 5) HC Hamilton CIV 2010-5419-1174, 12 October 2010.
[2] Over time, I have made various orders declaring property to be that of Mr Simpson and authorising the Official Assignee, who was appointed as the Court’s agent, to realise the property. I directed that the proceeds be held in trust pending further order of the Court. Only two sets of payments have been authorised; living expenses, to be assessed by the Official Assignee, for Mr Simpson and costs incurred by the solicitors for Mr Williams in New Zealand, up to and including 20 January
2011.
[3] The proceeding was listed for a telephone conference before me on 21
February 2011. After hearing from counsel and reading the Official Assignee’s supplementary report of 15 February 2011, I indicated that I would make orders directing the Official Assignee to transfer moneys to Mr Williams for the purpose of paying creditors who had proved in the bankrupt estate. I was unable, due to time constraints, to provide a judgment setting out precisely what I intended to authorise. While indicating the general nature of the orders I would make, I told counsel that a formal judgment would follow.
Realisation of assets by Official Assignee
[4] The total value of assets realised by the Official Assignee since the order in aid of 12 October 2010 is $3,090,728.33.[2] That amount is made up as follows:
[2] All dollar amounts are stated as New Zealand dollars.
(a) Bullion sold to Perth Mint Australia, the net proceeds of which were
$2,273,473.93;
(b)Overseas currency and shares held by Craigs Investment Partners, the net proceeds of which totalled $212,002.06;
(c) Moneys held in an SBS bank account in the name of Henmur Ltd,
$528,179.21;
(d) Currency located: $32,708.46;
(e) Moneys paid to the Official Assignee by OMFinancial: $32,483.57;
(f) Interest earned by the Official Assignee to 15 Feburary 2011:
$11,917.10.
[5] In addition, moneys held in an English bank account in the name of an alias used by Mr Simpson (J W Smith) has been realised in the United Kingdom, by Mr Williams.
Payments authorised by the Court
[6] To date, the Official Assignee has paid $13,892.39 to Mr Simpson, to cover living and other necessary expenses.
[7] The solicitors instructed by Mr Williams have been paid $55,092.67. That account was paid on 20 January 2011. There remains an unpaid invoice for
$25,206.57. There is some further work in progress.
Claims by New Zealand based creditors
[8] Three claims have been made by creditors based in New Zealand: the trustees of the B V Adams No 2 Trust: ($43,762.50); Southern Cross Hospitals Ltd:
($2,025.11) and the Commissioner of Inland Revenue: ($15,900.75). Those claims total $61,688.36.
The English bankruptcy estate
[9] Mr Williams has provided a schedule that shows the estimated amount required to meet all outstanding costs and claims, as at 13 April 2011. Using an exchange rate of 1.00NZD to 0.465560GBP, the amount required to settle in full is estimated at £1,250,592.10.
[10] In the meantime, Mr Simpson has applied to the English Court to annul his bankruptcy. It is likely that there will be a surplus available to Mr Simpson, once all New Zealand assets are repatriated to Mr Williams and proved debts paid. The next hearing date for the annulment application is 13 April 2011. All concerned hope that the estate position can be finalised well before that date.
Orders
[11] To reflect the positions taken by counsel at the conference, I order:
(a) The Official Assignee shall pay to Mr Williams the net amount held by him after payment of
(i)all costs and disbursements that he has incurred, up to the date of distribution
(ii)debts to Southern Cross Hospitals Ltd and the Commissioner of Inland Revenue
(iii)The unpaid invoice of the solicitors for Mr Williams and any further account, not exceeding $5000. Any further fees and disbursements in excess of that amount shall be referred to me for approval before they are paid.
(iv)A lump sum representing a continuation of Mr Simpson’s weekly allowance, up to a period of one week after the date on which Mr Simpson’s annulment application is next to come before the English Court: 13 April 2011.
(b) If the Official Assignee considers it necessary, he may retain up to
$20,000 from the monies payable to Mr Williams, to cover any unexpected costs or expenses. The Official Assignee may determine at his discretion when any balance should be distributed to Mr Williams.
(c) The Official Assignee shall not pay the claim made by the trustees of the B V Adams No 2 Family Trust.
(d)Leave to apply to any party is reserved, in case any further directions are required.
[12] In relation to the orders I have made:
(a) The Southern Cross Hospital’s debt was incurred some years prior to the English bankruptcy. Mr Simpson now accepts the debt is owing. To avoid unnecessary overseas’ exchange remittance fees being incurred, the Official Assignee shall pay this debt directly.
(b)The Commissioner of Inland Revenue’s claim has been reduced significantly. The possibility of a claim existing was acknowledged by Mr Simpson in the statement of affairs he completed for Mr Williams, after he was adjudged bankrupt. To avoid the slight possibility of any dispute over the validity of a tax claim from New Zealand being admissible in an English bankruptcy, I authorise payment of the Commissioner’s debt directly from the Official Assignee. In making that declaration, I take into account also the relatively modest amount involved.
(c) The B V Adams No 2 Family Trust is closely linked to Mr Simpson.
The Official Assignee considers that the “provisional” claim for legal costs incurred on behalf of the Trust may not have been approved by one of the trustees, Mr Clough. Mr Clough has taken a different view to his co-trustee, Ms Mann, on ownership issues that were previously in dispute, in respect (particularly) of bullion located at Mr Simpson’s Ann Street residence in Hamilton. In those circumstances, the claim is better left for determination in the English bankruptcy or, alternatively, directly between the trustees and Mr Simpson, in the event that there is a surplus for Mr Simpson after closure of the estate.
Addendum
[13] I express my appreciation to the Official Assignee, Mr Currie, for the conscientious, sensitive and expeditious way in which he has dealt with issues arising from his appointment as the Court’s agent on 17 September 2010, when interim relief was ordered in favour of Mr Williams by way of a search warrant to ascertain whether bullion was held at his Hamilton residence.[3]
[3] Williams v Simpson HC Hamilton CIV 2010-5419-1174, 17 September 2010.
[14] The expedition with which Mr Currie has dealt with the assets under his stewardship reflects well on him and ought to be seen as a model of how such functions should be undertaken.
[15] I thank counsel for their assistance. In particular, I express my appreciation to Mr Crossland for the detailed research he undertook to provide me with full argument on difficult questions of law that had not previously arisen in New Zealand under the cross-border insolvency regime.
[16] There is one aspect of this case which has caused me concern. After much reflection, I have decided that a Police investigation is required. The Registrar is directed to forward a copy of this judgment, together with previous judgments and
minutes given in this proceeding and the notes of evidence taken before Associate
Judge Faire on 21 September 2010 to the New Zealand Police at Hamilton. The Registrar shall also make available the Court file for inspection (and copying of any documents) if requested by a police officer.
[17] I ask that the Police investigate whether there is evidence of perjury, on the part of Mr Simpson, in respect of the evidence he gave to Judge Faire about the ownership of bullion located at the Ann Street property and his denial of using the name “J W Smith” as an alias.
[18] I express no view on whether there is or is not sufficient evidence to take either of those issues further. However, I consider it appropriate for those questions to be investigated by the Police, in order to ensure there has been no undermining of
the Court’s processes.
P R Heath J
Delivered at 4.00pm on 22 February 2011
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