OFFICIAL ASSIGNEE IN BANKRUPTCY OF THE PROPERTY OF BARRY PERCY KILLICK V BARRY PERCY KILLICK (BANKRUPT) HC WN CIV 2004-485-2010

OFFICIAL ASSIGNEE IN BANKRUPTCY OF THE PROPERTY OF BARRY PERCY KILLICK V BARRY PERCY KILLICK (BANKRUPT) HC WN CIV 2004-485-2010 8 September 2008IN BANKRUPTCY IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY CIV 2004-485-2010IN THE MATTER OF section 111 of the Insolvency Act 1967 AND IN THE MATTER OF the bankruptcy of BARRY PERCY KILLICK BETWEEN OFFICIAL ASSIGNEE IN BANKRUPTCY OF THE PROPERTY OF BARRY PERCY KILLICK Applicant AND BARRY PERCY KILLICK (BANKRUPT) Respondent Hearing: 8 September 2008 Appearances: M Reddy - Counsel for Official Assignee No appearance - Respondent Judgment: 8 September 2008REASONS FOR DECISION OF ASSOCIATE JUDGE D.I. GENDALLSolicitors: Gibson Sheat, Lawyers, PO Box 2966, WellingtonIntroduction[1] In the banco list this morning there was an application by the Official Assignee for an order prohibiting Barry Percy Killick ("the bankrupt") a bankrupt from carrying on in business after his discharge. [2] Ms Reddy appeared for the Official Assignee. There was no appearance for the bankrupt. [3] Ms Reddy however indicated to the Court that she had spoken to the bankrupt earlier this morning and that he indicated he had no objection to the order sought in the present application. [4] That said, and having considered the submissions then advanced by Ms. Reddy for the Official Assignee, the application before the Court succeeded. [5] Orders were made as follows: (a) The Respondent is prohibited after discharge from doing the following things without leave and until further order of this Court is made: (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, the Respondent's wife, lineal ancestor or descendant of the Respondent, the wife or husband of such an ancestor or descendent, a brother of the Respondent, the wife of such a brother, a sister of the Respondent, and the husband of such a sister; (iii) acting as director or taking part directly or indirectly in the management of any company or class of company.(b) The applicant, Official Assignee, is authorised to publish this order in the New Zealand Gazette and the New Zealand Insolvency and Trustee service website. [6] When those orders were made, I indicated that my detailed reasons for this decision would follow. I now set out those reasons.Reasons[7] The present application is made notionally pursuant to s. 111 Insolvency Act 1967 (or its successor s. 299 Insolvency Act 1967.) S. 111 states:"111. Court may order bankrupt not to engage in business after discharge(1) Without restricting the provisions of section 110 of this Act, the Court, when granting the order of discharge or at any earlier time, may make an order prohibiting the bankrupt after his discharge from doing all or any of the following things without the leave of the Court: (a) Entering into or carrying on any business or class of business either alone or in partnership with any person; (b) 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, the bankrupt' (2) Any such prohibition may be for a specified period or without any time limit. (3) The Court may at any time cancel or vary any such order.[8] The bankrupt was adjudicated bankrupt on 26 September 2005 with respect to a debt of $12,086.57 owing to Kapiti Coast Flooring Limited which was the subject of a default judgment in the District Court at Porirua on 1 September 2004.[9] The present application brought by the Official Assignee was filed on 9 July 2008. An affidavit in support of the application sworn 4 July 2008 has been filed by Russell David Fildes a Deputy Official Assignee at Wellington. [10] Mr Fildes deposes in this affidavit that the bankrupt is 61 years old and this is his third business related bankruptcy. Like the present bankruptcy, both his previous bankruptcies of 28 August 1985 (later discharged on 28 August 1988) and 25 March 1991 (later discharged on 25 March 1994) related to a failed building company. [11] He deposes that the bankrupt is currently on an unemployment benefit. Mr Fildes states, however, that the bankrupt advises him that he is "helping out his son who is involved in property development". [12] It seems that the present bankruptcy in September 2005 again resulted while the bankrupt was working for his son as a builder. It was his involvement in this capacity that the bankrupt apparently acknowledges did result in his insolvency. [13] The bankrupt's son in question, Mr Brenden Barry Killick was himself adjudicated bankrupt in this Court on 18 February 2008. [14] The bankrupt's statement of affairs filed on 14 October 2005 listed no creditors but showed his personal assets as totalling $700.00 and comprising hand tools, a bed, 2 chairs and general items. [15] Notwithstanding this, 10 creditors have apparently filed claims in the bankrupt's estate. These totalled $31,697.10. A further 10 creditors the quantum of whose debts were not notified to the Official Assignee did, however, file claims in the bankruptcy. Most of these claims it seems are from the building industry. [16] As at 4 July 2008 the Official Assignee confirms the bankrupt had made no contribution towards any of his creditors. The Official Assignee indicates that it is anticipated there will be no dividend available to creditors. [17] The grounds advanced by the Official Assignee in seeking prohibition of the bankrupt are essentially:(1) This is the bankrupt's third bankruptcy which has resulted from similar business failures to his previous bankruptcies. The Official Assignee has said he considers the future protection of the commercial community as a critical issue here. (2) The Official Assignee believes that a business prohibition would be the most effective way of both protecting the commercial community upon the bankrupt's discharge (which is due to take place on 26 September 2008) and allowing the bankrupt to make a fresh start. (3) In addition, the bankrupt has apparently advised the Official Assignee that he is not interested in being in business once he has been discharged. (4) As I have indicated above, Ms Reddy for the Official Assignee has indicated that the bankrupt has stated he has no objection to the prohibition orders sought being made. (5) Finally, although the present proven debts in the bankrupt's bankruptcy amount to $31,697.10, the Official Assignee believes the actual indebtedness is substantially higher and that similar further losses are likely to be suffered by creditors in the future if the bankrupt is permitted to carry on business unsupervised. He has been the subject of 3 bankruptcies over a period of 23 years and has been an undischarged bankrupt for 9 of those years. (6) Accordingly, the Official Assignee contends that it is in the public interest that the bankrupt should not be in business as prescribed in s. 111 Insolvency Act 1967 (and s. 299 Insolvency Act 2006) after discharge from his bankruptcy without the consent of this Court as he has shown himself to be a risk to the commercial and business community. It is noted though that notwithstanding this, a prohibition order does not prevent the bankrupt from seeking gainful employment as an employee.[18] I accept that there is considerable substance in these submissions. In my view the circumstances of the present case are similar to those that prevailed inRandhawa v Official Assignee High Court Hamilton, 25/8/89, B296/89, Master Towle and Re Raymond High Court Auckland, 5/12/02, B853/98, Master Lang where orders were maintained prohibiting the bankrupt from engaging in business. [19] For these reasons and given that the bankrupt does not oppose the prohibition order now sought, I am satisfied that the present application should succeed. The orders made as outlined at paragraph [5] above are confirmed. [20] If there may be any issue as to costs in this matter, and I presume this is not the case, then counsel may file appropriate memoranda.'Associate Judge D.I. Gendall'