Commissioner of Inland Revenue v Kittow [2012] NZHC 1842 (26 July 2012)

Last Updated: 18 August 2012

IN THE HIGH COURT OF NEW ZEALAND NAPIER REGISTRY

CIV-2011-441-635 [2012] NZHC 1842

IN THE MATTER OF the Insolvency Act 2006

AND

IN THE MATTER OF the bankruptcy of CHRISTOPHER RAYNER KITTOW

BETWEEN THE COMMISSIONER OF INLAND REVENUE

Judgment Creditor

AND CHRISTOPHER RAYNER KITTOW Judgment Debtor

Hearing: 26 July 2012 (Heard at Napier)

Counsel: A J York for the Judgment Creditor

CR Kittow the Judgment Debtor in person

Judgment: 26 July 2012

_{ORAL JUDGMENT OF ASSOCIATE JUDGE D.I. GENDALL}

_{Solicitors: Inland Revenue Department, PO Box 1462, Wellington}

THE COMMISSIONER OF INLAND REVENUE V CR KITTOW HC NAP CIV-2011-441-635 [26 July 2012]

[1] Before the Court is an application seeking an order to have the judgment debtor adjudicated bankrupt.

[2] The debt in question according to a Solicitors Certificate provided by counsel for the judgment creditor today now stands at the sum of $533,561.50.

[3] This debt, as I understand it, includes core outstanding GST and income tax which was originally assessed at about $217,000.00.

[4] A reasonably small amount by way of part payment of the tax involved has been made by the judgment debtor but a significant amount even for core tax still remains.

[5] The present bankruptcy proceeding is based upon a District Court judgment for the original tax amount plus penalties and interest owing at the time given on an admission of claim on 18 May 2011.

[6] This is the fifth call of this matter.

[7] Previously it had been adjourned to enable the judgment creditor to consider repayment proposals advanced by the judgment debtor.

[8] The last repayment proposal confirmed to me today by the judgment debtor was for payment of approximately one half of the core outstanding taxation debt amounting to about $80,000.00 on a progressive basis over a period of three years. This proposal has been rejected by the judgment creditor however. Ms York appearing as counsel for the judgment creditor indicated that, notwithstanding the small amount which had been offered given the substantial tax debt which was outstanding, the Commissioner still had concerns as to the ability of the judgment creditor to make the payments in question.

[9] Mr Kittow the judgment debtor appeared in person before me today.

[10] Mr Kittow indicated that he is no longer trading personally but is in full-time employment. He stated that other than this outstanding taxation debt, he has only a small number of outstanding debts for credit card and current accounts.

[11] As to his asset position, Mr Kittow confirmed that he has few assets in his own name. It does seem that the property in which he resides is owned by a company and some of the shares in this company may be owned by Mr Kittow.

[12] Ms York for the Commissioner, however, indicated that the present value of this property is about $810.000.00 and it is subject to a current mortgage or mortgages securing some $800,000.00. There is, therefore, little if any equity in the property.

[13] The judgment debtor’s position he advanced today was simply a request for the Court to adjourn this matter further in the hope that the Commissioner would reconsider his decision and accept the latest proposal from Mr Kittow. Again, this proposal was for a time payment arrangement to be entered into involving only one half of the core taxation debt outstanding.

[14] There does not seem to be any dispute by the judgment debtor as to the total level of debt outstanding to the Commissioner. Certainly the District Court consent judgment upon which this proceeding is based was not appealed nor has any application been made to set it aside.

[15] Under all the circumstances here, I am of the view that this matter must now be drawn to a conclusion.

[16] As I have noted above, this is the fifth call of this matter, the first call occurring on 15 February 2012.

[17] In my view, considerable leniency has been provided to the judgment debtor in the hope that he would be able to make arrangements with the judgment creditor to settle what is indeed a large debt. That has not come to fruition.

[18] There is no doubt here that the judgment debtor has committed an act of bankruptcy in that he has failed to comply with the Bankruptcy Notice served upon him.

[19] There is no direct evidence before me as to Mr Kittow’s financial position other than his confirmation before me today that he has little by way of assets and does not dispute this large growing debt owing to the Commissioner.

[20] Under all the circumstances here there seems to me to be no alternative but for the order sought to be made.

Orders

[21] An order is now made adjudicating the judgment debtor, Christopher Rayner

Kittow, bankrupt.

[22] Costs are awarded to the judgment creditor on a 2B basis together with disbursements as fixed by the Registrar.

[23] These orders are timed at 10.18 am.

‘Associate Judge D.I. Gendall’