HANNA (A BANKRUPT) V THE OFFICIAL ASSIGNEE HC AK CIV 2005-419-001089

HANNA (A BANKRUPT) V THE OFFICIAL ASSIGNEE HC AK CIV 2005-419-001089 21 May 2009IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY IN BANKRUPTCY CIV 2005-419-001089IN THE MATTER OF the Insolvency Act 1967 AND IN THE MATTER OF an application for early discharge from bankruptcy under ss 108 and 110 of the Insolvency Act 1967 BETWEEN DEAN RUSSELL HANNA (A BANKRUPT) Applicant AND THE OFFICIAL ASSIGNEE Respondent Hearing: 21 May 2009 Counsel: MT Milroy for applicant PJ Morris for respondent Judgment: 21 May 2009 at 10:20am(ORAL) JUDGMENT OF ASSOCIATE JUDGE FAIRE [on application for discharge of bankruptcy]Solicitors: Foster Milroy, PO Box 207, Hamilton for applicant Stace Hammond, PO Box 19 101, Hamilton for respondent[1] In my judgment of 4 July 2008 I dealt with an application made by Mr Hanna for an order for his early discharge from bankruptcy. [2] I will not review the matters covered in that judgment. Suffice to say I concluded that judgment as follows:[29] When I consider the possibilities available to the Court and which I have outlined in [8] of this judgment, I am of the view that this application is premature. The concerns of the Official Assignee are sound and balanced, in my view, in this case. However, it may not necessarily require that Mr Hanna wait the statutory three years to seek his discharge. If he is able to establish that he can obtain steady employment and in a supervised environment, then the case for a conditional discharge may, at that time, be justified. I would expect a period of not less than nine month's involvement in such employment to occur before any further application for discharge from bankruptcy is made. [30] Accordingly, I intend to invoke the Court's power as set out in s 108(d) of the Insolvency Act 1967 by directing that an application for discharge may be made at the earliest date, not less than nine months from the date of this judgment.Orders[31] I order: a) The application is declined; b) Mr Hanna may, however, make a further application for discharge from bankruptcy not earlier than nine months from the date of this judgment.[3] Mr Hanna applies again for an order for early discharge of bankruptcy. [4] The Official Assignee has reported. He gives a summary of the current position. I set out the appropriate paragraphs from that report as follows:Bankrupt's affidavit5. IN respect to the bankrupt's I make the following observations:¾ he advises that he has been in supervised employment in the area of family law since his last application for discharge. I note that such employment in a supervised environment was recommended in thejudgment before the bankrupt made a further application.¾ He does not intend to engage in the area of commercial law and prefers instead to specialise in family law.¾ He instructed his solicitor to apply for this early discharge as the 9 months ordered in the judgment expired on 4 March 2009. This is an error of the bankrupt in reading the judgment as the period did not in fact expire until 4 April 2009.Supporting affidavit of Cheryl Yvonne Simes6. IN respect to the supporting affidavit of Cheryl Yvonne Simes I make the following observations:¾ the bankrupt has been in full time employment since 28 April 2008. This is the first such indication to the Assignee that he is in such employment. The bankrupt has a statutory obligation to inform the Official Assignee of such matters. He would then be assessed as to whether he was in a position to contribute excess income towards his bankruptcy creditors.¾ He has acquired practical legal experience in a supervised legal environment and his employer does not doubt his honesty.¾ The affidavit traverses his employer's various business requirements and the financial necessity for her business to be able to engage assistant barristers prepared to work in the area of family law. Whilst these issues may be important to her business they are not relevant in my view or material to whether or not the bankrupt should receive an early discharge from his bankruptcy.Decision7. THE bankrupt appears to have met the terms of the Court's judgment of 4 July 2008 by being in supervised employment for some time. His employer speaks well of him. 8. I am concerned that the bankrupt has omitted to inform my office that he is now in full employment and that my office had not been afforded the opportunity of assessing his ability to remit any financial contributions in the bankruptcy for the benefit of creditors. It may be appropriate for the Court to establish whether the bankrupt should be ordered to make regular contributions towards his creditors for the remainder of the normal three (3) year bankruptcy term, notwithstanding whether the current application for discharge is successful or not. 9. IN my previous report to this Honourable Court I voiced my concerns regarding the bankrupt's lack of business acumen. The Court in its judgment also noted similar characteristics and naivety, amongst other deficiencies. My concerns are not met at this time, and especially given that the bankruptcy still has nine months to run. 10. THE bankrupt states that he has no intention of entering into business in his won right at this stage. It may be appropriate that if the Courtgrants the bankrupt's application, any discharge from bankruptcy be made conditional upon him not entering into any form of business until the date that he would have received his automatic discharge from bankruptcy or such further period of time that this Honourable Court may think fit. Such an order may be made in terms of s 111 of the Insolvency Act 1967. 11. AS the bankrupt appears to have met the terms of the earlier judgment of this Honourable Court I do not oppose this latest application. I will abide by the decision of this Court in its inherent discretion to determine the fresh application before it.[5] Since the report was prepared the bankrupt has met again with the Official Assignee. I have been provided with a consent document which sets out appropriate conditions to be attached to any order of discharge which have been agreed to by the Official Assignee and the bankrupt. They deal specifically with all the concerns, except one, that were raised in the Official Assignee's report. The matter not specifically covered deals with the early filing of the application. [6] Counsel now agree that, as the time for the making of the application as prescribed in my judgment of 4 July 2008 has now passed, I should not decline this application on the basis that it was filed early. It could have been filed in April leading to a hearing today in any event. [7] Accordingly, I excuse that technical non-compliance with the order I made on 4 July 2008.Conclusions[8] I conclude that a conditional order of discharge is appropriate in this case.Orders[9] I order that Dean Russell Hanna be discharged from bankruptcy subject to the following conditions:a) That after his discharge from bankruptcy, the bankrupt is prohibited until 26 February 2010 from doing all or any of the following things without the leave of the Court: i) Entering into or carrying on any business or class of business either alone or in partnership with any person; ii) Being engaged in the management or control of any business carried on by or on behalf of, or being in the employ of any of the following persons, namely His wife A lineal ancestor or descendent of his The wife or husband of such an ancestor or descendent His brother, The wife of such a brother, His sister, or The husband of such a sister; iii) Acting as a director or taking part directly or indirectly in the management of any company or class of company; b) The bankrupt is to pay contributions at the rate of $50 per week until 26 February 2010. Should the bankrupt be admitted to the bar as a barrister and solicitor he agrees that the amount of his weekly contributions to creditors will increase proportionately with his increase in remuneration as a result of his admission and the higher rate of payment will continue until 26 February 2010.Costs[10] Counsel confirm that the Official Assignee's costs have been paid and, on that basis, no further order is sought at this time. _____________________ JA Faire Associate Judge