THE OFFICIAL ASSIGNEE OF NAPIER V FEARN OF 7 MAHIA PLACE, PALMERSTON NORTH, BANKRUPT HC PMN CIV-2006-454-577

THE OFFICIAL ASSIGNEE OF NAPIER V FEARN OF 7 MAHIA PLACE, PALMERSTON NORTH, BANKRUPT HC PMN CIV-2006-454-577 2 April 2007IN THE HIGH COURT OF NEW ZEALAND PALMERSTON NORTH REGISTRY CIV-2006-454-577BETWEEN THE OFFICIAL ASSIGNEE OF NAPIER Applicant AND KEITH ROLAND FEARN OF 7 MAHIA PLACE, PALMERSTON NORTH, BANKRUPT Respondent Judgment: 2 April 2007 In accordance with r540(4) I direct the Registrar to endorse this judgment with a delivery time of 2.15pm on the 2nd day of April 2007.JUDGMENT OF ASSOCIATE JUDGE D.I. GENDALL[1] The applicant was adjudicated bankrupt on the petition of the Commissioner of Inland Revenue at the Palmerston North High Court on 29 January 2007. [2] The applicant now applies for an annulment of this adjudication pursuant to s119 Insolvency Act 1967. [3] Section 119(1) Insolvency Act 1967 states:119 When Court may annul adjudication(1) In any of the following cases the Court may be order, on the application of the Assignee or any person interested, annul the adjudication – (a) Where the Court is of the opinion that the order of adjudication should not have been made: (b) Where the Court is satisfied that the debts of the bankrupt have been fully paid or satisfied:(c) Where the Court is of the opinion that the liability of the bankrupt to pay his or her debts should be revived because since the date of adjudication there has been a substantial change in the financial circumstances of the bankrupt: (d) Where the Court has approved a composition under Part 12 of this Act.[4] On 28 March 2007 the Official Assignee filed his report in terms of s119 Insolvency Act 1967. That report indicates that all creditors' claims have been paid and notes that the Official Assignee has no objection to an annulment of the bankruptcy being granted, provided that the Official Assignee's costs and disbursements are paid on completion of the administration. [5] In his report the Official Assignee notes that sufficient funds were recovered from a bank investment held by the applicant early in the bankruptcy administration to fully satisfy all known creditors. A list of assets and liabilities of the applicant shows a significant surplus of assets over liabilities. [6] No creditor has filed any objection to the application for annulment. Indeed, as I have noted, all creditors have been paid and the Official Assignee has formally consented to the order for annulment sought by the applicant. [7] In the present case I am satisfied in terms of s119(1)(b) that the debts of the applicant have been fully paid or satisfied. In terms of s119(1)(b) it is clear that an annulment can be granted if all debts of the bankrupt are paid or satisfied – Re Hansen (a bankrupt) [1971] NZLR 927. That has happened here. It follows that this is an appropriate case for the Court to exercise its discretion under s119(1)(b), and to annul the applicant's adjudication in bankruptcy. [8] Orders are now made, therefore: a) That the order of adjudication in bankruptcy of the applicant dated 29 January 2007 is annulled pursuant to s119(1)(b) Insolvency Act 1967. b) This order is not to be sealed until the Court has received confirmation that the Official Assignee's reasonable costs and disbursements on completion of the administration have been paid.[9] If costs are in issue, which I imagine is unlikely, counsel may file appropriate memoranda and I will decide that issue on the basis of the material filed. 'Associate Judge D.I. Gendall'Solicitors:Inland Revenue Department Technical & Legal Support, Wellington for Applicant Grant O'Donnell, Palmerston North for Respondent