DAVID STEWART HENDERSON V THE COMMISSIONER OF INLAND REVENUE HC AK CIV-2009-404-004351

DAVID STEWART HENDERSON V THE COMMISSIONER OF INLAND REVENUE HC AK CIV-2009-404-004351

Adjournment denied and adjudication ordered: the court refused to halt the adjudication because of excessive delay (18+ months), significant public interest in prompt resolution and minimizing risk to third parties, prior statutory non-compliance in the first proposal, the slender and disputed margin by which the second proposal purportedly passed, likely further delay and prejudice to creditors; accordingly the court exercised its discretion to adjudicate the debtor bankrupt.

Citation
openlaw-edb01e7e_06af_4bf4_950c_7bd559f97670.pdf
Parties
Judgment Debtor/applicant: David Stewart Henderson; Judgment Creditor/respondent: Commissioner of Inland Revenue; Trustee/applicant: D J Ross; Supporting Creditor/respondent: Bank of Western Australia Ltd; Supporting Creditor/respondent: Downer Construction (New Zealand) Ltd
Court
High Court
Jurisdiction
New Zealand
Judgment Date
9 June 2011
Procedural Posture
Bankruptcy Application and Approval of a Debtor's Proposal Under the Insolvency Act 2006 / Interlocutory Hearing on Adjournment and Preliminary Questions; Court Dismissed Adjournment and Adjudicated Debtor Bankrupt
Outcome
Application for adjournment dismissed; order adjudicating David Stewart Henderson bankrupt made; costs awarded to Commissioner and supporting creditors
Legal Topics
Proposal Under Part 5, Adjournment of Adjudication, Creditor Voting Entitlement, Preliminary Questions on Threshold, Voidable Transactions
Insolvency Bankruptcy Civil Procedure Commercial Proposal Under Part 5 Adjournment of Adjudication Creditor Voting Entitlement Preliminary Questions on Threshold +1 more

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Parties

David Stewart Henderson

Judgment Debtor/applicant

Commissioner of Inland Revenue

Judgment Creditor/respondent

D J Ross

Trustee/applicant

Bank of Western Australia Ltd

Supporting Creditor/respondent

Downer Construction (New Zealand) Ltd

Supporting Creditor/respondent

Procedural Posture

Bankruptcy Application and Approval of a Debtor's Proposal Under the Insolvency Act 2006 / Interlocutory Hearing on Adjournment and Preliminary Questions; Court Dismissed Adjournment and Adjudicated Debtor Bankrupt

Legal Issues

  1. 1 Whether the court should adjourn the creditor's application for adjudication to permit determination of a proposal under Part 5
  2. 2 Whether the debtor's proposal was accepted by the requisite majority (majority in number and three quarters in value)
  3. 3 Whether the court should determine a separate preliminary question on voting entitlements before full approval hearing

Ratio Decidendi

Adjournment denied and adjudication ordered: the court refused to halt the adjudication because of excessive delay (18+ months), significant public interest in prompt resolution and minimizing risk to third parties, prior statutory non-compliance in the first proposal, the slender and disputed margin by which the second proposal purportedly passed, likely further delay and prejudice to creditors; accordingly the court exercised its discretion to adjudicate the debtor bankrupt.

Court Disposition

Application for adjournment dismissed; order adjudicating David Stewart Henderson bankrupt made; costs awarded to Commissioner and supporting creditors

Orders

  • Application for adjournment dismissed
  • David Stewart Henderson is adjudicated bankrupt