Wood v Humm (NZ) Limited t/a Farmers Card

[2025] NZHC 248

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2024-409-339

[2025] NZHC 248

UNDER

The Insolvency Act 2006

IN THE MATTER

of the proposal of James Daniel Wood

BETWEEN

JAMES DANIEL WOOD

Insolvent

AND

AND AND AND

AND

HUMM (NZ) LIMITED T/A FARMERS CARD

Creditor

HARMONEY SERVICES LIMITED
Creditor

HEARTLAND BANK LIMITED
Creditor

LATITUDE FINANCIAL SERVICES LIMITED

Creditor

HUMM (NZ) LIMITED T/A Q MASTERCARD

Creditor

Hearing:	20 February 2025
Appearances:	Y S B V Yang for Applicant trustee (no other appearances)
Judgment:	21 February 2025

JUDGMENT OF ASSOCIATE JUDGE LESTER

WOOD v HUMM (NZ) LIMITED T/A FARMERS CARD [2025] NZHC 248 [21 February 2025]

[1]                  The insolvent, Mr Wood, seeks approval of a creditors’ Proposal under pt 5 of the Insolvency Act 2006 (the Act).

[2]                  After the circulation of  an  initial  Proposal,  an  amended  Proposal  dated  20 October 2024 was distributed to creditors on 22 October 2024 with a creditors’ meeting held on 31 October 2024.

[3]                  At the creditors’ meeting the following creditors voted in favour of the Proposal:

Creditor	Vote	For	Against
Humm t/a Farmers MasterCard	For	$944.19
Harmoney Services Limited	For	$51,583.40
Heartland Bank Limited	For	$33,946.64
Humm t//a Q Mastercard	For	$1,003.34

[4]                  In addition to the above Proposal, there is a further creditor, Latitude Financial Services Limited (Latitude) which did not take part in the Proposal. I will address its position further when I briefly address the issue of service.

[5]                  The Proposal sees Mr Wood making payments of $350 per week over a five year period which will return to creditors approximately 80 cents in the dollar, less the costs of the Proposal.

Service

[6]                  All creditors were served with the amended Proposal by email. For those creditors who voted in favour of the Proposal, it is a given that they received the Proposal. While Latitude did not vote in the Proposal, it confirmed receipt of the Proposal by email. Latitude has also been served with this application and acknowledged receipt of the proceedings.

[7]                  Accordingly, I am satisfied that all creditors were given notice of the amended Proposal, including details of the creditors’ meeting and have been given notice of the present application.

[8]                  The intent of the Proposal is only to deal with unsecured debt. Mr Wood intends to meet his one secured indebtedness as if the Proposal had not been passed. Strictly speaking, secured creditors should be served with the Proposal as they may wish to disclaim their security and participate in the Proposal, however, given the level of the secured debt here, the position of the secured creditor could not impact on the outcome of the Proposal.

[9]                  For a proposal by an insolvent under Subpart 2 of pt 5 of the Act to be passed, it must be accepted by at least a majority in number and three quarters in value of the creditors who vote.1 Those requirements are satisfied here.

[10]              Section 327 of the Act requires the Proposal to be in the prescribed form and accompanied by a statement of affairs verified by affidavit. I am satisfied that those formal requirements have been complied with.

[11]              Under s 333(3) of the Act, I may refuse to approve the Proposal if I consider the terms of the Proposal are not reasonable or are not calculated to benefit the general body of creditors, or for any reason it is not expedient that the Proposal be approved.

[12]              Here, commercially experienced creditors have accepted the Proposal. The Proposal is intended to return over three-quarters of Mr Wood’s indebtedness.

[13]As was held in Farmer v Rowley:2

The Court should accept the view of creditors, or the majority of them and grant approval unless it is apparent that one of the grounds for refusing approval exists.

[14]              Given the level of support for the Proposal and in the absence of opposition to the application, I am satisfied  it  is  appropriate  there  be  an  order  as  sought  in the application filed 18 July 2024 approving the Proposal made to creditors at the creditors’ meeting held on 31 October 2024.

1      Insolvency Act 2006, s 331(3).

2      Farmer v Rowley [1992] NZLR 195 (CA) at 205, citing Re Bennetts’ Proposal HC Christchurch M306/81, 1 February 1982 at 9.

[15]There are orders accordingly.

Costs

[16]There is no order as to costs.

Associate Judge Lester

Solicitors:
Chapman Tripp