Gilmour v Official Assignee [2012] NZHC 1075 (17 May 2012)

Last Updated: 20 December 2012

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2009-404-7024 [2012] NZHC 1075

UNDER the Insolvency Act 2006

IN THE MATTER OF the bankruptcy of ROBERT FARRER GILMOUR

BETWEEN ROBERT FARRER GILMOUR Applicant

AND OFFICIAL ASSIGNEE Respondent

Hearing: 16 May 2012

Appearances: P Dale for Applicant

K Wakelin for Official Assignee

Judgment: 17 May 2012

_{JUDGMENT OF ASSOCIATE JUDGE BELL}

This judgment was delivered by me on 17 May 2012 at ..4:50pm

pursuant to Rule 11.5 of the High Court Rules.

...................................

_{Registrar/Deputy Registrar}

Solicitors:

Short & Partners (T Burcher), P O Box 137 241 Parnell Auckland 1151, for Applicant

Meredith Connell, DX CP24063 Auckland for Respondent

_Email: [e-mail]

Copy for:

Paul Dale/Vibeke Fletcher, P O Box 130 Auckland 1140, for Applicant

_Email: [e-mail] / [e-mail]

GILMOUR V OFFICIAL ASSIGNEE HC AK CIV-2009-404-7024 [17 May 2012]

[1] This is an application for early discharge under s 294 of the Insolvency Act

2006. The application is not opposed. The Official Assignee has provided a report under s 296 of the Insolvency Act.

[2] Dr Gilmour was adjudicated bankrupt on 14 December 2010. It is accordingly approximately 17 months since his adjudication. The Official Assignee has submitted claims of six creditors totalling $1,022,963.46. The major creditor is Simpson Grierson who claimed for $883,790.72 (including costs on its application of

$6096.38). Three of Dr Gilmour’s other creditors are barristers.

[3] Dr Gilmour had been involved in intellectual property litigation in Australia and New Zealand. His liability to Simpson Grierson arose out of their representing him in New Zealand and also their instructing an Australian firm of lawyers for litigation in Australia. The other legal fees related to matrimonial property litigation.

[4] Simpson Grierson took proceedings against Dr Gilmour in 2008. The proceedings resulted in Stevens J giving judgment against Dr Gilmour in August

2009.[1] During 2008, Dr Gilmour and his wife separated.

[5] After the judgment of Stevens J, Simpson Grierson issued a bankruptcy notice against Dr Gilmour in late 2009. Dr Gilmour hoped to resolve his relationship property issues with his wife, and was granted adjournments on the bankruptcy application but, when settlement could not be reached, an order was made for his adjudication.

[6] There are trusts associated with Dr Gilmour and his wife: Biomed Trust, E A Gilmour Trust and the R F Gilmour Trust. Mrs Gilmour took proceedings in the Family Court seeking orders for division of relationship property. The Official Assignee became involved in the Family Court proceeding following Dr Gilmour’s

_{adjudication in bankruptcy. The Family Court proceedings were resolved in a}

private mediation which resulted in a Deed of Settlement of 26 January 2012 between the Official Assignee, Mrs Gilmour, the trustees of the R F Gilmour Trust, the trustees of the E A Gilmour Trust and the trustee of the Biomed Trust. Under that settlement, the trustees of the E A Gilmour Trust agreed to pay the sum of

$200,000 to the Official Assignee. All other claims amongst the parties were abandoned and released. As well as the $200,000 obtained from that settlement, the Official Assignee has also gathered in Dr Gilmour’s half share of the surrender value of a life insurance policy of about $100,000. The Official Assignee has made partial distributions to all creditors.

[7] The Official Assignee has investigated avenues of possible recovery for creditors and is satisfied that as a result the Deed of Settlement, there are no other assets or potential avenues of recovery for creditors. The Official Assignee believes that there might be claims against the Biomed Trust and the R F Gilmour Trust but believes that any such claims were not certain and would have been likely to result in lengthy, protracted and expensive litigation. Further, these trusts apparently had few realisable assets. The parties have been sensibly in resolving pragmatic issues under the Deed of Settlement.

[8] In an application for early discharge, the bankrupt has the onus of persuading the court that he should be discharged.

[9] The report of the Official Assignee shows that the administration of the bankruptcy is, for all practical purposes, almost complete. There are no reasons relating to the administration of the bankruptcy that require Dr Gilmour’s discharge to be deferred.

[10] The Official Assignee is required to report on the causes of bankruptcy. They are Dr Gilmour’s inability to pay the costs of litigation he had incurred. The Official Assignee accepts that Dr Gilmour’s separation from his wife added to difficulties in realising assets to meet his liabilities. While these events led to his insolvency, there is nothing in his conduct that requires the court to take a punitive approach.

[11] His adjudication has achieved the end of accountability, one of the purposes of bankruptcy.

[12] The Official Assignee reports that Dr Gilmour has been co-operative throughout his bankruptcy. The Official Assignee has no concerns about the performance of his duties since adjudication.

[13] A discharge from bankruptcy allows a bankrupt to resume a normal life, freed from the disabilities of bankruptcy and from his debts. There is a public good in a debtor being able to resume normal activities. However, in Dr Gilmour’s case there are added benefits. It is clear that Dr Gilmour is a highly qualified and talented member of the community who is capable of making ongoing contributions in the field of medicine, particularly on the commercial side of the medical industry.

[14] None of the creditors have opposed his application for discharge. I am satisfied there are no good reasons to defer his discharge. Accordingly, I make an order for his discharge from bankruptcy.

[15] I fix the Official Assignee’s costs at $6,500 and order Dr Gilmour to pay them. The order for discharge is not to be sealed until he has paid those costs.

.........................................

R M Bell
Associate Judge

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[1] Simpson Grierson v Gilmour HC Auckland, CIV-2008-404-867, 27 August 2009.