Heeni v The Commissioner of Inland Revenue [2020] NZHC 2764

Heeni v The Commissioner of Inland Revenue [2020] NZHC 2764 [21 October 2020]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYI TE KŌTI MATUA O AOTEAROATĀMAKI MAKAURAU ROHECIV-2019-404-128[2020] NZHC 2764IN THE MATTER OF the Insolvency Act 2006BETWEEN AROHA HEENIApplicantAND THE COMMISSIONER OF INLANDREVENUERespondentHearing: 11 September 2020Appearances: Ms Heeni in person, with her support person Noa EhineC Van Der Merwe for the RespondentJudgment: 21 October 2020RESERVED JUDGMENT OF ASSOCIATE JUDGE SMITHThis judgment was delivered by me on 21 October 2020 at 3pmpursuant to r 11.5 of the High Court RulesRegistrar/Deputy RegistrarSolicitors:Inland Revenue, AucklandCopy to:A Heeni, Auckland[1] Ms Heeni was adjudicated bankrupt on the application of the respondent (theCommissioner), by order made by Associate Judge Bell on 14 May 2020. Ms Heenidid not appear at the hearing on 14 May 2020, and she now applies for an order unders 309(1)(a) of the Insolvency Act 2006 (the Act) annulling the adjudication order.The bankruptcy[2] According to the Commissioner's application for the adjudication order, whichwas duly verified as required by the High Court Rules 2016, Ms Heeni owed taxes andpenalties totalling $736,644.78. The Commissioner calculated that sum as follows:(1) amount due on a final judgment given in the Waitakere District Court on 5November 2018 - $330,506.28(2) additional penalties and interest - $406,138.50.[3] A bankruptcy notice had earlier been served on Ms Heeni, but her applicationto set that notice aside was dismissed in an oral judgment given by Associate JudgeBell on 31 October 2019.1 The Commissioner then filed her application for theadjudication order.Associate Judge Bell's judgment on Ms Heeni's application to set aside thebankruptcy notice[4] The Associate Judge first noted that Ms Heeni had not filed any appeal againstthe District Court judgment, and had not applied for a stay of execution. The DistrictCourt decision was therefore final.[5] Associate Judge Bell referred to Ms Heeni's contention that the Commissionerhad made incorrect assessments of Ms Heeni's income tax liabilities. His Honourrecorded that he had pointed out to Ms Heeni at an earlier call of the setting asideapplication that assessments of income tax are final and conclusive under s 109 of theTax Administration Act (the TAA) once the period for challenge had expired, and theperiod for challenge had expired in Ms Heeni's case. The only avenue of relief that1 Commissioner of Inland Revenue v Heeni [2019] NZHC 2843.might have been available to Ms Heeni would have been a request by her to theCommissioner to review the assessments under s 113 of the TAA. But that was notsomething the Court could compel.[6] Ms Heeni had supplied some further information to the Commissioner after theearlier hearing, but she was unable to persuade the Commissioner that the assessmentswere wrong and should be reviewed under s 113. An officer of the Inland RevenueDepartment gave evidence that she had reviewed the further information provided byMs Heeni, but was satisfied that the original assessments should stand.[7] No other ground for setting aside the bankruptcy notice having been advanced,the Associate Judge dismissed Ms Heeni's application.The notice issue[8] There is a question as to whether Ms Heeni had proper notice of theadjudication hearing on 14 May 2020.[9] The bankruptcy application was first called in this Court before AssociateJudge Sargisson on 19 March 2020. Ms Heeni was present in Court with her supportperson, Mr Makaere, as was Mr Van Der Merwe representing the Commissioner. TheAssociate Judge recorded in her Minute of the hearing that Ms Heeni wished to takethe opportunity to oppose the bankruptcy application. Ms Heeni was directed to fileany notice of opposition, with a supporting affidavit, by 28 April 2020. The AssociateJudge directed that any affidavit in opposition was to set out any factual matters reliedon by Ms Heeni for the exercise of the Court's discretion to refuse an order under s 37of the Act, on the grounds that it would be just and equitable to refuse an order ofadjudication. The case was then adjourned to 14 May 2020.[10] Associate Judge Sargisson's Minute of the 19 March 2020 hearing records thatMr Makaere asked for a transcript of the hearing, but that request was declined on thebasis that the Court would not ordinarily grant such a request in relation to a mentionshearing (particularly as the Judge's Minute of the hearing would record the directionsmade).[11] Ms Heeni apparently did not take in the timetable orders made by the AssociateJudge at the hearing on 19 March 2020, although Mr Van Der Merwe has confirmedthat the orders were made in open Court when both he and Ms Heeni were present.[12] The Associate Judge's Minute of the 19 March 2020 hearing was emailed toMs Heeni on 23 March 2020. Unfortunately, it was sent to the wrong email address.Ms Heeni's correct email address contains the expression "bookkeeper", but the lasttwo letters of that expression were omitted from the email address to which the Minutewas sent. Ms Heeni says that she never received the Minute.[13] When she had not received the Minute by 24 March 2020, Ms Heeni sent anemail to the Registrar requesting a copy of it. She asked in the alternative for atranscript of the 19 March 2020 hearing. She then said:I rely on this to appreciate my movement going forward – I note the days arealready going past from the Thursday 19th now to Tuesday 24th I also am veryaware of timeframes that have been given for me to complete the informationthat is within the minute of the Judge.[14] It is not disputed that this email was sent to the Registrar. Unfortunately, it wassent at 4.09pm on 24 March 2020, and it was not picked up before the commencementof the Level 4 lockdown for the coronavirus. Ms Heeni did not receive any reply.[15] Ms Heeni apparently did not follow up again with the Court or theCommissioner after she sent her email to the Court on 24 March 2020, and she did notfile any notice of opposition or affidavit in opposition as directed.[16] At 12.27pm on 13 May 2020, the day before the adjourned hearing, the casemanager sent an email to Ms Heeni and Mr Van Der Merwe reminding both of themof the list call at 10.45am the following day. This email was sent to Ms Heeni's correctemail address, but apparently she did not receive it in time for the 14 May 2020hearing. At 3.04pm on 14 May 2020, after she had been adjudicated bankrupt, she sentan email to the Registrar saying:I have just this minute received this first correspondence by email from you are you saying that I was supposed to appear today?? This was not providedto me at an earlier time to state a notice to attend please be reminded that Istill have not received the minute of the Judge as I requested.[17] The situation was then referred to Associate Judge Bell. His Honour issued thefollowing Minute on 15 May 2020:On 14 May 2020 I made an order adjudicating Ms Heeni bankrupt andawarding costs to the Commissioner. Today I have been advised that Ms Heenihas contacted the Court Registry saying that she did not have notice of thehearing yesterday.She says that Associate Judge Sargisson's Minute of 19 March 2020 was sentto an incorrect email address.One of Ms Heeni's remedies may be to apply for annulment of heradjudication under s 309(1)(a) of the Insolvency Act 2006 on the ground thatshe should not have been adjudicated bankrupt.She will need to file an application and an affidavit setting out the facts sherelies on and serve it on the Official Assignee and the Inland Revenue.Any application will be put in a bankruptcy list on a date fixed by theRegistrar.Ms Heeni's annulment application[18] Ms Heeni filed her application for an annulment order on 17 June 2020. Theapplication relied on the following grounds:(1) The reference in the Minute of Associate Judge Sargisson to the "just andequitable" grounds in s 37 of the Act; and(2) The reference in Associate Judge Bell's Minute of 15 May 2020 to thepossibility that Ms Heeni might apply for an annulment order on the groundthat she should not have been adjudicated bankrupt.[19] With her application, Ms Heeni filed a short affidavit, referring to the CourtMinutes set out above and the fact that she did not receive a copy of Associate JudgeSargisson's Minute. She said that she believed she had an equitable right to have thesituation rectified, so that she could make an appearance and have the matterappropriately resolved. Ms Heeni went on to say:[5] Having provided Inland Revenue with three returns, one of which wasan independent forensic audit, from the complete set of true accountswhich are in my sole possession, I am totally mystified as to howInland Revenue can disregard and discard the evidence in order toarbitrarily insert its own figures as a true and accurate record; thuscreating a "default" debt in its favour and requiring payment.[6] In respect of point 5 above Inland Revenue, at no time, has provideddocumentary evidence supporting its "default" amount.Other material filed for Ms Heeni in support[20] On 27 August 2020, Ms Heeni submitted a document described as a "furtheraffidavit", which she had signed but which had not been properly attested as anaffidavit. I will treat the document as a supplementary submission in support of herapplication.[21] The document is difficult to follow, but it appears that Ms Heeni was seekingin it (in some way that is not clear to the Court) to rely on Te Ture Whenua Maori Act1993, ss 2(3) and 5. Ms Heeni submitted that there was a "variable" in the case, in that"Constructive Trust CIV-2019-404-000128 has been established to administrate thematter at hand". That CIV number is the number (administratively assigned by theRegistrar) which identifies this proceeding. Ms Heeni was said to be one of the objectsof the constructive trust "as the sole beneficiary", and the judicial officer appointed topreside at the hearing of the annulment application was purportedly appointed trusteeof the claimed trust.[22] Ms Heeni asked in the "further affidavit" that the "corpus" of the trust beapplied to settle the matter at hand in the best interests of Ms Heeni as beneficiary.[23] Ms Heeni went on in the "further affidavit" to seek compensation for thenegative effects the bankruptcy proceedings have had on her. She said that afterextended consultation with her kaumatua, she has assessed that the trustee shouldprovide her with "succour and assistance", in the sum of $10 million (to be paid ingold bullion). In the event that there was insufficient capacity in the trust to pay thatsum, Ms Heeni purportedly authorised "the trustee" to access her beneficial interestsin terms of "The Maori Real Estate Management Act 1867 as well as in terms of TeTure Whenua Maori Act 1993, s 242".[24] In addition to the "further affidavit", Ms Heeni submitted a document dated 10September 2020 headed "Notice of Requirement to Settle Matters in Accord withEquity Law". This document referred to the purported constructive trust, and to MsHeeni's "further affidavit" document. The document went on to record repeatedrequests said to have been made of the Commissioner for full disclosure of how theCommissioner arrived at the debt, and the Commissioner's alleged failure to providethat disclosure. Ms Heeni said that the Commissioner has only ever provided a"Summary of Account", specifically using the word "Assessment" ("thereby denotingthat a proper and lawful true set of full accounts cannot have been used to lawfullyestablish the claimed debt").[25] The Notice document then challenged Ms Hilary Mattyasovsky's affidavitsworn on 3 September 2020, on the basis that Ms Mattyasovsky did not have first-hand knowledge of the matters contained in the affidavit.[26] Ms Heeni submitted a further brief "Notice" document on the morning of thehearing. In it, Ms Heeni emphasised her claim to standing as the sole beneficiary ofthe claimed constructive trust, and she acknowledged the Court and counsel for theCommissioner as the "appointed trustees". She required "the trustees" to exercise theirfiduciary duties and settle the matter as per the stipulations in the "further affidavit".[27] Ms Heeni purported to file a "Third and Final Notice of Requirement to SettleMatters in Accord with Equity Law", on 12 October 2020. No leave was granted forthe filing of this further submission, which appears in any event to repeat argumentsmade in earlier documents filed by or for Ms Heeni.The Commissioner's notice of opposition[28] In a brief notice of opposition, the Commissioner contended that it is clear thatMs Heeni should have been adjudicated bankrupt. The debt to the Commissionerremains unpaid, and none of the grounds in s 309 of the Act have been satisfied. TheCommissioner contended that there is a public interest in maintaining Ms Heeni'sbankruptcy.[29] The Commissioner's opposition was supported by an affidavit of MsMattyasovszky, a collections officer employed by the Commissioner. MsMattyasovszky summarised the background of the proceedings to date, including theDistrict Court proceeding in the Waitakere District Court in which the Commissionerobtained judgment for $330,462.80, and subsequent proceedings in this Courtfollowing the issue of the bankruptcy notice.The Official Assignee's report[30] The Official Assignee ("the Assignee") provided a report on the annulmentapplication on 21 August 2020. Ms Heeni had not then filed her statement of affairs inthe bankruptcy, but the report referred to the following known assets:(i) properties in Cobham Crescent, Kelston, and Stephen Avenue,Henderson.(ii) an interest in the Tu Arahi Trust, and another trust of unknownname.(iii) company shares in companies called BIZNZ Solutions Limited,BTNZ Limited, and Internet Promotions International Limited.(iv) insolvent transfer of a share in Foci Solutions Limited.(v) business called Bookkeeper Express.[31] The Assignee was not aware of any secured creditors. Unsecured creditorshave filed claims totalling $1,095,981.81, made up as follows:(i) Bank of New Zealand $7,730.57.(ii) Bookkeeper Express Limited (in liquidation) $252,620.(iii) Commissioner of Inland Revenue $835,631.24[32] The Assignee noted that there are two further creditors with relatively smallclaims who have not yet filed proofs of debt. The Assignee's fees and disbursementsto date totalled $12,176.95.[33] The report advised that the Assignee would abide the Court's decision as towhether an annulment order should be made.Applications for annulment orders – legal principles[34] Section 309 of the Act materially provides:309 Court may annul adjudication(1) The court may, on the application of the Assignee or any personinterested, annul the adjudication if—(a) the court considers that the bankrupt should not have beenadjudicated bankrupt; or[35] For an application under s 309(1)(a) to succeed, there must generally have beensome defect in the procedure, or abuse of process, where subsequent evidence showsthat not all of the facts were before the Court making the adjudication order (as longas the unknown facts would have made a difference on the adjudication application).[36] Section 309 applications have been held to require a two-stage approach. First,the Court must be satisfied that one of the grounds in s 309(1) has been made out.Secondly, the Court must decide whether to exercise its discretion to annul theadjudication. In the exercise of that discretion, regard is had to the public interest, andto the wishes of the parties to the application.2[37] In Frederickson v Centurion Finance Ltd, the Court found that a bankrupt'salleged lack of knowledge of the adjudication proceeding may have been a "materialfact" for the purposes of ss (1)(a) of s 119 of the Insolvency Act 1967 (the forerunnerof s 309(1)(a) of the Act), but the Court nevertheless refused to grant an annulment onthe basis that the presence of the bankrupt at the adjudication proceeding could not2 Re Guest, ex parte BNZ Finance Ltd [1991] 1 NZLR 250 (HC), (1990) 4 PRNZ 351.have changed the outcome.3 The bankrupt had failed to demonstrate that the Courtwould not have adjudicated him bankrupt had he been present.[38] As the Court made clear in Re Hunter, ex parte Commissioner of InlandRevenue, once an order of adjudication is made and the bankrupt's rights of appeal areexhausted, the bankrupt is bound by the underlying judgment.4 The bankrupt cannotchallenge the judgment upon which the adjudication was made in an annulmentapplication, as the right to challenge the judgment vests in the Assignee — Boaler vPower,5 cited in Re Ironstone Holdings Ltd, ex parte Prasad.6[39] The decided cases make it clear that s 309(1)(a) should be interpreted narrowly.As Associate Judge Sargisson said in Re Willis, ex parte Willis, the s 309(1)(a)procedure is not a vehicle for going behind or challenging a judgment debt on whichthe bankruptcy was founded. Section 309(1)(a) does not provide a forum for abankrupt to re-litigate the merits of the adjudication application.7The tax assessments[40] Section 106 of the TAA empowers the Commissioner to make a defaultassessment in the absence of a tax return filed by a taxpayer. The section materiallyprovides:106 Assessment where default made in furnishing returns(1) If any person makes default in furnishing any return, or if theCommissioner is not satisfied with the return made by any person, or ifthe Commissioner has reason to suppose that any person, although theperson has not made a return, is a taxpayer, the Commissioner may makean assessment of the amount on which in the Commissioner's judgmenttax ought to be imposed and of the amount of that tax, and that personshall be liable to pay the tax so assessed, save so far as the personestablishes on objection or in proceedings challenging the assessment thatthe assessment is excessive or that the person is not chargeable with tax.3 Frederickson v Centurion Finance Ltd HC Auckland B259-01, 11 February 2005.4 Re Hunter, ex parte Commissioner of Inland Revenue (2000) 19 NZTC 15722 (HC) at [48] - [52].See also Kipping v UDC Finance Ltd [2012] NZHC 1707 at [62].5 Boaler v Power [1910] 2 KB 229 (CA).6 Re Ironstone Holdings Ltd, ex parte Prasad [2013] NZHC 3529 at [21].7 Re Willis, ex parte Willis [2017] NZHC 2586 at [38].(1D) If a person who is required to provide a GST tax return for a GSTreturn period does not provide a GST tax return for the return period,or provides a GST tax return with which the Commissioner is notsatisfied, the Commissioner may make an assessment of the GSTpayable by the person for the return period.(1E) A person who is assessed under subsection (1D) is liable to pay theGST assessed unless the person establishes in proceedingschallenging the assessment that the assessment is excessive, or thatthe person is not chargeable with GST.[41] In this case, Ms Heeni failed to file income tax returns for each of the tax years31 March 2013 through to 31 March 2016. The Commissioner issued notices of defaultassessment to Ms Heeni under s 106 of the TAA for those years. The notices of defaultassessment were issued in May 2017, with advice to Ms Heeni that if she wished todispute the assessments she must file a notice of proposed adjustment ("NOPA"),along with the tax returns, within four months. Ms Heeni did not file any NOPAswithin the four month period.[42] The Commissioner's decisions to issue the default assessments were"disputable decisions" under s 3 of the TAA. That meant that Ms Heeni could onlychallenge the assessment by objection proceedings under Part 8 of the TAA, or bychallenge proceedings under Part 8A. Ms Heeni did neither, and the assessments arenot now open to challenge in any court. That is the effect of s 109 of the TAA, whichprovides:109 Disputable decisions deemed correct except in proceedingsExcept in objection proceedings under Part 8 or a challenge under Part 8A,—(a) no disputable decision may be disputed in a court or in anyproceedings on any ground whatsoever; and(b) every disputable decision and, where relevant, all of its particulars aredeemed to be, and are to be taken as being, correct in all respects.[43] The purpose and effect of s 109 has been considered by the Supreme Court ona number of occasions. In Tannadyce Investments v Commissioner of Inland RevenueTipping J, delivering the judgment of the majority of the Supreme Court, said:88 Tannadyce Investments v Commissioner of Inland Revenue [2011] NZSC 158, [2012] 2 NZLR153 at [53].[53] The definition of a disputable decision includes an assessment, sothe effect of s 109 is that no assessment or other disputable decision, asdefined, may be disputed in any court or in any proceedings on any groundwhatsoever, except in proceedings taken under the [TAA]. It is clear that bymeans of s 109 Parliament was concerned to ensure that disputes andchallenges capable of being brought under the statutory procedures werebrought in that way and were not made the subject of any other form ofproceeding in a court or otherwise.[54] The words "on any ground whatsoever" [in s 109] must have beendesigned to emphasise the comprehensive nature of the embargo on bringingproceedings outside the statutory framework. Conversely, Parliament musthave contemplated, by the use of those words, that disputable decisions couldand should be contested and challenged under the statutory procedures on anyground whatsoever[44] The purpose of s 109 was again considered by the Supreme Court in Skinner vR.9 The Court noted that the articulation of the purpose of s 109 in Tannadycehighlights the emphasis on the function of s 109 as being designed to channelproceedings contesting the accuracy or legality of an assessment or other disputabledecision into the procedural framework of Part 4A and Part 8A of the TAA. Thatprevents collateral challenges or proceedings that are not subject to the sameprocedural requirements and time limitations as those prescribed in Part 4A andPart 8A.10Discussions and conclusionsDid something go wrong with the procedure that led to the adjudication order beingmade?[45] I accept that Ms Heeni did not receive Associate Judge Sargisson's Minute ofthe hearing on 19 March 2020. That Minute stated the date by which Ms Heeni was tofile and serve her notice of opposition and affidavit, and the date (14 May 2020) whenthe case would next be called in Court. Ms Heeni was present in Court when thatinformation was provided by the Associate Judge, but I accept many litigants findCourt appearances very stressful, and they may not take in what is said by the Courtin the course of the hearing. And when the Minute was unfortunately sent to the wrongemail address, Ms Heeni did follow up with a request for a copy of it soon after thehearing.9 Skinner v R [2016] NZSC 101, [2017] 1 NZLR 289.10 At [17].[46] An important factor in Ms Heeni's favour on the notice of hearing issue, is thatthe country went into Level 4 lockdown within a matter of a day or so after Ms Heenisent her follow-up email to the Court on 24 March 2020. While essential services(including the Court Registry) did continue, most people's routines were seriouslydisrupted. Auckland Bankruptcy list hearings scheduled for April 2020 were alladjourned. Ms Heeni had sent her email to the Court explaining that she neededconfirmation of the dates fixed at the 19 March hearing, and when she did not receivea response to that email it would have been natural enough for her to have assumedthat the Court had the matter in hand, and that she would receive further advice fromthe Registrar once arrangements had been sorted out for what could have been anextended lockdown period.[47] Ms Heeni did receive advice by email on 13 May 2020 that the hearing wouldtake place the following day, but it appears that she did not check her emails betweenthe time that email was sent (12.27pm on 13 May 2020) and the afternoon of 14 May2020. By then it was too late: the adjudication order had been made.[48] In Norris Ward McKinnon v Kaye, Associate Judge Doogue consideredwhether any error, no matter arising from what cause, concerning the hearing date,would suffice to justify the making of an annulment order.11 The Associate Judgeconcluded on that issue:12I consider that the legal requirements can be formulated by stating that thecourt is unlikely to exercise its discretion to order annulment unless it issatisfied that the applicant took reasonable steps to protect his or her owninterests and in particular made a reasonable effort to ascertain what the truehearing date was.I accept that in determining what is a reasonable effort is not necessarilyexcluding considerations personal to the party served. Obviously questions ofliteracy, familiarity with the English language, illness and the like could allaffect the ability of the parties serve (sic) to come to a correct understandingof what the document meant.[49] In the very unusual circumstances of this case (Minute going to the wrongemail address, prompt request by Ms Heeni for written advice of the adjourned hearingdate, and the supervening Covid lockdown period requiring the adjournment of many11 Norris Ward McKinnon v Kaye [2016] NZHC 3089.12 At [26] - [27].scheduled cases in any event), I do not think it would be fair to conclude that Ms Heenifailed to take steps that a reasonable lay litigant in her position would reasonably havetaken to ascertain the hearing date. And while notice of the adjourned hearing date waseventually sent to her correct email address, it was only sent in the middle of the daybefore the hearing. In the particular circumstances of this case I do not think Ms Heenican be criticised for failing to check her emails for a period of around 24 hours. Shehad asked for advice about the hearing date approximately seven weeks earlier, andshe would reasonably have expected to receive more than half a day's advance noticeof the adjourned hearing.[50] For all those reasons, I am satisfied that something did go wrong with theprocedure in this case, and that the defect in the procedure played a material part inMs Heeni's failure to appear at the hearing on 14 May 2020.The exercise of the Court's discretion[51] The law is clear that, on an annulment application, I cannot entertain argumentto the effect that the tax debt is not owing. The tax debt is the subject of a judgment inthe District Court, and that judgment has not been the subject of any appeal or settingaside application. Any appeal or setting aside application would in any event be amatter for the Official Assignee, not Ms Heeni.[52] Ms Heeni relied on the Minutes of Associate Judge Sargisson dated 19 March2020 and Associate Judge Bell dated 15 May 2020, but there is nothing in thoseMinutes which could be relied upon as a basis for enquiring into the validity of theunderlying judgment on which the adjudication application was based.[53] Associate Judge Sargisson said in her Minute of 19 March 2020 that thejurisdictional grounds for an order of adjudication had been established. Thejurisdictional grounds for an adjudication order are set out in s 13 of the Act, and oneof them is that the debtor owes the creditor $1,000 or more.13 The Associate Judge was13 Section 13 of the Insolvency Act 2006 provides:13 When creditor may apply for debtor's adjudicationA creditor may apply for a debtor to be adjudicated bankrupt if—clearly satisfied that was the position, and when she referred to the possibility of MsHeeni raising arguments under s 37 of the Act she was not inviting further argumentfrom Ms Heeni on whether or not the debt was owing.[54] Associate Judge Sargisson's reference to the "just and equitable" jurisdictionof the Court was a reference to the Court's discretion to refuse to make an adjudicationorder under s 37(c) of the Act, even where the debt is clearly owing to the creditor.Section 37 of the Act provides:37 Court may refuse adjudicationThe court may, at its discretion, refuse to adjudicate the debtor bankrupt if—(a) the applicant creditor has not established the requirements set out insection 13; or(b) the debtor is able to pay his or her debts; or(c) it is just and equitable that the court does not make an order ofadjudication; or(d) for any other reason an order of adjudication should not be made.[55] In this case, there is an issue as to whether the Court would still haveadjudicated Ms Heeni bankrupt if she had been present at the hearing on 14 May 2020.I do not think it is sufficiently clear that the Court would have done so, that I can applyauthorities such as Frederickson v Centurion Finance Ltd and conclude that therewould be no point in annulling the adjudication order and allowing the bankruptcyapplication to continue. Once the Court is satisfied that the judgment debtor has nothad sufficient notice of the hearing at which the adjudication order is made, I thinkthere would normally need to be a very clear case that annulment would be pointlessfor the Court to exercise its discretion against making an annulment order. I am notsatisfied that the evidence satisfies that test in this case.(a) the debtor owes the creditor $1,000 or more or, if 2 or more creditors join inthe application, the debtor owes a total of $1,000 or more to those creditorsbetween them; and(b) the debtor has committed an act of bankruptcy within the period of 3 monthsbefore the filing of the application; and(c) the debt is a certain amount; and(d) the debt is payable either immediately or at a date in the future that is certain.[56] The primary matter of concern is that Ms Heeni told me at the hearing that sheis concerned that her mokopuna should be cared for in an appropriate manner, and shewas concerned how that could be achieved while she remained an undischargedbankrupt. She did not say how many children she has to care for, or how they havebeen looked after since her company was put into liquidation, but those may well beconsiderations to be taken into account by the Court in the exercise of its discretionunder s 37(c) or (d) of the Act. I appreciate that it might be said that Ms Heeni couldhave produced evidence on those matters in support of her annulment application, butshe has been acting without legal assistance, and I think it would have beenunderstandable if she assumed that, whatever arguments she might wish to advance inopposition to the bankruptcy application, the problems that arose with the writtennotice of 14 May 2020 hearing gave her a trump card on the annulment application.[57] Ms Heeni did not delay in making her application to annul the adjudicationorder, and I think it is important that a litigant in her position should not be prejudicedby any reasonable risk that she might not have had a fair opportunity to present hercase. In my view she should be given a further opportunity to present any relevantevidence in respect of her family/whanau situation, and how a bankruptcy mightimpact on her ability to support herself and any children in her care.[58] However any further evidence or argument designed to show that she does notowe the debt claimed by the Commissioner is unlikely to be allowed. That is an issueon which Associate Judge Bell ruled against Ms Heeni on her application to set asidethe bankruptcy notice, and she did not appeal that judgment.[59] Nor was there any merit in the "further affidavit", or in the various Notices toSettle. They did nothing to assist Ms Heeni's position. The constructive trustargument, which neither Ms Heeni nor Ms Ehine (who I allowed to address me at thehearing) was able to satisfactorily explain, was clearly hopeless (there could be noquestion of the Court somehow acting as a "trustee" for Ms Heeni, to somehow settlethe proceeding on her behalf). Nor was there any merit in the purported claim for $10million in damages.[60] Various references were made in the documents filed by Ms Heeni toprovisions in Te Ture Whenua Maori Act 1993, but I do not think any of thosereferences assisted Ms Heeni's case. For example, reference was made to s 242 of thatAct, which permits the "Court" to order that any money held in trust for any Maori bepaid to the person beneficially entitled to the money. There was no evidence beforeme that Ms Heeni is beneficially entitled to any money held in trust that might besufficient to meet her substantial debts, and even if there were, this Court would haveno jurisdiction to order that such money be paid to Ms Heeni or her creditors – theword "Court" in s 242 refers to the Maori Land Court (or the Maori Appellate Courtas appropriate), not this Court.[61] Ms Heeni may have little prospect of successfully resisting the bankruptcyclaim, but the issues relating to the written notice of the hearing, and the risk that MsHeeni might not have had a fair opportunity to put her case before the Court, persuademe that the justice of the case requires that I make the annulment order sought. As thatorder will not involve a determination of the merits of the Commissioner'sadjudication application, the Commissioner's existing adjudication application willneed to be reheard, on a date to be fixed by the Court.Result:[62] I make the following orders:(1) Under s 309(1)(a) of the Act, annulling the adjudication order made on14 May 2020;(2) Directing that the Commissioner's adjudication application is to be thesubject of a rehearing. The case is to be called for mention in thebankruptcy list on 12 November 2020 at 10.45am, with a view to afixture then being allocated for a half day hearing.(3) Ms Heeni is to file and serve a formal notice of opposition, and furtheraffidavits directed to any arguments she may have under s 37(c) or (d)of the Act, by 5pm on 5 November 2020.(4) I make no order for costs.Associate Judge Smith