IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

CIV-2012-435-72 [2013] NZHC 694

IN THE MATTER OF	the Insolvency Act 2006

AND

IN THE MATTER OF	the bankruptcy of PAULA MICHELLE HEATHCOTE

BETWEEN	PAULA MICHELLE HEATHCOTE Appellant

AND	THE COMMISSIONER OF INLAND REVENUE
Respondent

Judgment:	9 April 2013

JUDGMENT OF ASSOCIATE JUDGE D.I. GENDALL

This judgment was delivered by me on 9 April 2013 at 3.30 pm pursuant to r 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date:  .................................................................

Solicitors:	Inland Revenue Department, Legal & Technical Services, PO Box 1462, Wellington

PM HEATHCOTE V THE COMMISSIONER OF INLAND REVENUE HC WN CIV-2012-435-72 [9 April
2013]

[1]       On 27 March 2013 I issued a judgment in this proceeding and made orders adjudicating  the  judgment  debtor  Paula  Michelle  Heathcote  (Ms  Heathcote) bankrupt.

[2]       Today, 9 April 2013 I received for the first time from the registry office of this Court an unsigned document purported to be dated 28 March 2013 and filed on behalf of Ms Heathcote described as:

(1)	Notice of Application for Leave to Appeal to Court; [and]

(2)	Notice of Application to Prevent the Official Assignee from Advertising
Bankruptcy.

Dated 28 March 2013.

[3]       If indeed this “Application” was filed on 28 March 2013, the delay in it reaching me may have been due to the intervening Easter vacation.

[4]       In any event, I now turn to deal with each of these two applications as a matter of some urgency.

Application to Leave to Appeal to Court of Appeal.

[5]       As best I can tell from the application which has been filed in this Court, Ms Heathcote seeks “Leave to Appeal” to the Court of Appeal my 27 March 2013 decision adjudicating her bankrupt.

[6]       Section 414(2) Insolvency Act 2006 provides that an aggrieved person may appeal to the Court of Appeal from a decision of the High Court or a Judge under that Act.   Leave is not required for such an appeal.   Nor in my view is this an appropriate case for this Court to “review, rescind or vary” the 27 March 2013 decision under s 414(1) Insolvency Act 2006, even if, although entirely unclear, that was what Ms Heathcote might have sought here.

[7]       I conclude therefore that Ms Heathcote can lodge this appeal with the Court of Appeal without the need for leave, and this can now occur.

[8]       Under para [2] of her application Ms Heathcote asks:

the court to prevent the Official Assignee from advertising the bankruptcy and hold further administration until further notice.

[9]       As  to  this,  s  65  Insolvency Act  2006  requires  the  Official Assignee  to advertise the adjudication of a bankrupt as soon as practicable after it has occurred. This section however, is subject to s 66 Insolvency Act 2006, which states:

66.	Order   that   Assignee   Must   Not   Advertise   Pending   Appeal   or
Application for Annulment

The Court may order that the Assignee must not advertise the application if the  bankrupt  has  appealed  against  an  order  of  adjudication  or  if  the bankrupt has applied for an annulment of the adjudication.

[10]     Here, there is no suggestion before the Court that any application to annul Ms Heathcote’s bankruptcy has been made.   Instead it is assumed from the single unsupported application noted at para [2] above which is before the Court here, that Ms Heathcote intends to appeal the adjudication decision to the Court of Appeal.

[11]     There was no evidence of any kind provided by Ms Heathcote in support of the present application to prevent advertising.  Nor were any grounds in support of this application specifically included in the Notice of Application document itself.

[12]     A similar application was before the Court in Re:  Parlane ex parte Young, HC, Auckland, CIV-2010-404-5478, 25 July 2011, Associate Judge Osborne.  In that case the bankrupt applied unsuccessfully for orders first, suspending the adjudication until  his  appeal  could  be  heard  and  secondly,  in  the  alternative  for  an  order restraining advertising of the adjudication.  There, the bankrupt argued that if the adjudication was advertised it would affect not only his reputation but also the reputation of the companies the bankrupt was a director of.

[13]     In Re:  Parlane, Associate Judge Osborne dismissed the application and said that:

.... there might be rare cases where the impact on others (possibly businesses, possibly close relatives) might call for a period of non-advertising).

However, in that case he considered that, particularly given the decision which he made to dismiss the application for suspension of the adjudication, the impact on companies of which the bankrupt was a director was not an appropriate basis for restraining advertising.

[14]     In the present case, there is no evidence before me of any hardship which might  eventuate  if  advertising  of  Ms  Heathcote’s  bankruptcy  by  the  Official Assignee proceeds.

[15]     Nor has there been any specific application made by Ms Heathcote to this Court under s 416 Insolvency Act 2006 for an order to suspend her adjudication until her appeal to the Court of Appeal is decided.

[16]     Even if such an application under s 416 Insolvency Act 2006 had been filed here, it is my view that this would be dismissed.  Ms Heathcote’s appeal to the Court of Appeal here as I see it would not be rendered entirely nugatory nor do the present circumstances justify a suspension of the adjudication on the basis of the consequences of the stigma of bankruptcy.  The successful party in this case, the Commissioner of Inland Revenue might also be injuriously affected by the further delays that would occur here by any stay that was ordered. And the public interest in this case as I see it is in the investigation of Ms Heathcote’s circumstances given the tentative concerns regarding her estate raised in my 27 March 2013 judgment.  (On these aspects see Kroon v Westpac Banking Corporation HC, Auckland, 2006-404-
4720, 15 May 2007).

[17]     And, as Associate Judge Osborne noted at para [40] in his decision in Re: Parlane, advertising of an adjudication is a very important function of the Official Assignee’s work as it enables the Assignee to establish and satisfy himself as to the extent of creditors.

[18]     For all these reasons, I refuse the application for an order that the Official

Assignee not advertise Ms Heathcote’s adjudication.

Costs

[19]	As to costs on this matter, if these may be in issue then they are simply reserved at this point.

Associate Judge D.I. Gendall