THE COMMISSIONER OF INLAND REVENUE V PO BARNETT AS TRUSTEE IN THE BARNETT FAMILY TRUST HC WN CIV-2011-454-29

THE COMMISSIONER OF INLAND REVENUE V PO BARNETT AS TRUSTEE IN THE BARNETT FAMILY TRUST HC WN CIV-2011-454-29

The court found s13 satisfied: the District Court judgment for $652,863.25 exceeded the $1,000 threshold, the debtor failed to comply with a Bankruptcy Notice within three months constituting an act of bankruptcy, and the debt was certain and payable; the debtor produced no evidence he could pay and his defenses, including that the judgment was a bill of exchange, were legally untenable under the Bills of Exchange Act 1908, so the court exercised its discretion under s37 to grant adjudication and adjudicated the debtor bankrupt.

Citation
openlaw-50df4348_9a63_4c35_a13d_aee509617184.pdf
Parties
Judgment Creditor: The Commissioner of Inland Revenue; Judgment Debtor: Peter Owen Barnett as trustee in the Barnett Family Trust
Court
High Court
Jurisdiction
New Zealand
Judgment Date
2 August 2011
Procedural Posture
Adjudication Under Insolvency Act 2006 / Hearing and Judgment (application Filed 1 April 2011; Hearing 29 July 2011; Judgment 2 August 2011)
Outcome
Adjudication order granted; judgment debtor adjudicated bankrupt
Legal Topics
Adjudication of Debtor, Bankruptcy Notice, PAYE Tax Debt, Court Discretion Under S37, Bills of Exchange Act Interpretation
Insolvency Bankruptcy Tax Law Civil Procedure Negotiable Instruments Adjudication of Debtor Bankruptcy Notice PAYE Tax Debt +2 more

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Parties

The Commissioner of Inland Revenue

Judgment Creditor

Peter Owen Barnett as trustee in the Barnett Family Trust

Judgment Debtor

Procedural Posture

Adjudication Under Insolvency Act 2006 / Hearing and Judgment (application Filed 1 April 2011; Hearing 29 July 2011; Judgment 2 August 2011)

Legal Issues

  1. 1 Whether statutory requirements for adjudication under s13 were met
  2. 2 Whether the debtor committed an act of bankruptcy by failing to comply with a Bankruptcy Notice
  3. 3 Whether the debt was certain and payable

Ratio Decidendi

The court found s13 satisfied: the District Court judgment for $652,863.25 exceeded the $1,000 threshold, the debtor failed to comply with a Bankruptcy Notice within three months constituting an act of bankruptcy, and the debt was certain and payable; the debtor produced no evidence he could pay and his defenses, including that the judgment was a bill of exchange, were legally untenable under the Bills of Exchange Act 1908, so the court exercised its discretion under s37 to grant adjudication and adjudicated the debtor bankrupt.

Court Disposition

Adjudication order granted; judgment debtor adjudicated bankrupt

Orders

  • An order is made adjudicating the judgment debtor, Peter Owen Barnett, a bankrupt.
  • Costs are awarded to the judgment creditor on this application on a Category 2B basis together with disbursements as fixed by the Registrar.