Henderson v Official Assignee [2015] NZHC 1341 (12 June 2015)

Last Updated: 23 June 2015

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

CIV-2015-419-000067 [2015] NZHC 1341

BETWEEN	DAVID IAN HENDERSON Appellant
AND	THE OFFICIAL ASSIGNEE Respondent

Hearing:	20 May 2015
Representation:	D I Henderson (Appellant) - in person P V Cornegé for the Respondent
Judgment:	12 June 2015

JUDGMENT OF ASSOCIATE JUDGE OSBORNE ON BANKRUPT'S APPEAL

HENDERSON v THE OFFICIAL ASSIGNEE [2015] NZHC 1341 [12 June 2015]

Table of Contents

Introduction ..........................................................................................................[1] Travel approval – the regime ..............................................................................[4] Travel approval – the statutory framework [4] The two mandatory considerations [11] The interests of the bankrupt [13] The interests of the creditors [32] The balancing of the bankrupt’s and creditors’ interests [37] The Assignee’s policy in relation to travel approval [42] Mr Currie’s understanding of the legislative policy [45] The standard of review by the Court under s 226 Insolvency Act .................[50] Chronology..........................................................................................................[63] Events of 2014 .....................................................................................................[64] The 26 June 2014 application [65] “Consent will not be forthcoming” [77] The relationship between Mr Henderson and Mr Currie in 2014 [83] Mr Henderson’s Official Information Act request for the ITS policy [91] The Assignee’s failure to make a decision in 2014 [93] The evolution of Mr Henderson’s travel plans [97] The 2015 refusal ...............................................................................................[109] The Assignee’s two main reasons for refusing travel approval [109] Reason 1: lack of corroborative evidence [111] Reason 2: management of a business [114] Mr Currie’s application of Murray v The Official Assignee [128] The concept of approval in principle [135] Mr Vinnell as “the Assignee’s agent” [139] The 2015 refusal – overall conclusion [144]

A way ahead? [147] Costs ..................................................................................................................[148] Order .................................................................................................................[150]

Introduction

[1] David Henderson was adjudicated bankrupt in 2010. He remains bankrupt as the Official Assignee has lodged an objection against his discharge from bankruptcy. Mr Henderson’s public examination is to be heard in August 2015.

[2] Mr Henderson applied to the Assignee for consent to leave New Zealand. The Assignee refused the application.

[3] Mr Henderson now applies to the Court to reverse the Assignee’s decision.

Travel approval – the regime

Travel approval – the statutory framework

[4] Section 433(1)(f) Insolvency Act 2006 establishes an offence when a bankrupt leaves New Zealand without the consent of the Assignee. It provides:

433 Offences in relation to Assignee

(1) A bankrupt (B) commits an offence if B—

...

(f) while a bankrupt and without having first obtained the consent of the Assignee,—

(i) leaves, or attempts to leave, New Zealand, temporarily or permanently; or

(ii) makes preparations for leaving New Zealand, temporarily or permanently.

[5] Regulation 11 Insolvency (Personal Insolvency) Regulations 2007 (the Personal Insolvency Regulations) regulates the bankrupt’s application for consent to leave New Zealand. It provides:

11 Bankrupt's application for Assignee's consent to leave New

Zealand

(1) A bankrupt's application to the Assignee for consent to leave New

Zealand must—

(a) be in writing; and

(b) be signed by the bankrupt; and

(c) contain the following information: (i) the bankrupt's full name:

(ii) the bankrupt's current address, telephone number, and any other contact detail (such as a mobile telephone number or an email address):

(iii) the intended date of departure:

(iv) whether the departure is temporary or permanent:

(v) if the departure is temporary, the intended date of return:

(vi) the reasons for departure:

(vii) the bankrupt's address while overseas:

(viii) any other information that the Assignee may require. (2) In deciding the application, the Assignee must have regard to the

interests of the bankrupt and the bankrupt's creditors, but may otherwise decide it in his or her absolute discretion.

(3) The Assignee may—

(a) refuse the application; or

(b) grant it without conditions; or

(c) grant it subject to any conditions that the Assignee thinks fit.

[6] Regulation 10 Personal Insolvency Regulations provides in a parallel manner for a bankrupt’s application for consent to enter into business.¹ Regulation 10(2) also sets out matters to which the Assignee must have regard and concludes that he or she:

.... may otherwise decide it in his or her absolute discretion.

The provisions of reg 10(3), which deals with the decisions which the Assignee may make on the application, are identical to those in reg 11(3).

1. There being a prohibition under s 149 Insolvency Act 2006 against the bankrupt’s involvement in the management of any business without the Assignee’s consent. See below at [114]–[127].

[7] The Personal Insolvency Regulations do not provide any forms to be used in relation to the applications.

[8] The Assignee has developed a form of application to travel overseas. It is publicly available on the website of the Insolvency and Trustee Service.² A very similar, earlier version of the form is in evidence as Mr Henderson made (but subsequently did not pursue) a travel application in December 2011.

[9] Section 226 of the Insolvency Act permits a bankrupt (or other person) to apply to the Court to reverse or modify a decision. In full, s 226 provides:

226 Appeal from Assignee's decision

(1) A person (including the bankrupt or a creditor) whose interests, monetary or otherwise, are detrimentally affected by an act or decision to which this section applies may apply to the court to reverse or modify the act or decision.

(2) This section applies to—

(a) an act or decision of the Assignee; or

(b) a decision of a District Court Judge in carrying out an examination under section 165.

(3) The application must be made—

(a) within 15 working days of the act or decision; or

(b) within the additional time that the court allows.

(4) The court may confirm, reverse, or modify the act or decision.

(5) A creditor who is aggrieved by a decision of the Assignee rejecting the creditor's claim may make an application under section 239.

[10] I summarise the statutory framework as established by the provisions I have identified:³

• Before leaving, attempting to leave or making preparations for leaving

_{New Zealand, a bankrupt must first obtain the consent of the Assignee.}⁴

² Insolvency and Trustee Service “Forms” (18 November 2014)

_{www.insolvency.govt.nz/cms/support/forms.}

³ _{Above at [4]–[6].}

⁴ Insolvency Act 2006, s 433(1)(f), above at [4].

• A bankrupt’s application to the Assignee for consent to leave New Zealand must be in writing and signed and must contain both the information prescribed in the Insolvency Act 2006 and any other information the Assignee requires.⁵

• A bankrupt must similarly obtain the consent of the Assignee (or the Court) before being involved in the management or control of any business.⁶

• The Assignee’s decision in relation to any travel application must have regard to the interests of the bankrupt and the bankrupt’s creditors.⁷

• The Assignee’s decision in relation to any business management application must have regard to the interests of the bankrupt, the bankrupt’s creditors and the community.⁸

• In relation to both travel applications and business management applications, the Assignee may (apart from the requirement to have regard to the stated interests) otherwise decide the application in his or her absolute discretion.⁹

• In relation to both travel applications and business management applications, the Assignee may refuse an application or grant it conditionally or unconditionally.¹⁰

The two mandatory considerations

[11] By reason of reg 11(2) Personal Insolvency Regulations, the Assignee must

_{have regard to the interests of the bankrupt and of the bankrupt’s creditors.}

⁵ _{Insolvency (Personal Insolvency) Regulations 2007, reg 11(1), above at [5].}

⁶ _{Insolvency Act 2006, s 149.}

⁷ _{Insolvency (Personal Insolvency) Regulations 2007, reg 11(2).}

⁸ _{Regulation 10.}

⁹ _{Regulations 10(2) and 11(2).}

¹⁰ Regulations 10(3) and 11(3).

[12] As it is a central ground of Mr Henderson’s appeal that the Assignee failed to have regard to Mr Henderson’s interests, it is convenient to first focus on that requirement.

The interests of the bankrupt

[13] While I was not referred in submissions to any authority interpreting the meaning of “the interests” in reg 11(2), there is no reason to believe that Parliament intended a construction of “interests” narrowly confined to a concept of property or material interests. It is clear from both the evidence in this case and the Australian cases that a great proportion of travel applications on both sides of the Tasman involve what are often referred to as “humanitarian” reasons, relating to travel for

such personal matters as social interests and health.¹¹ The Assignee and Trustees

themselves appear to adopt a broad construction.

[14] Significantly, the requirement upon the Assignee to consider the interests of the bankrupt was first imposed upon the promulgation of the Personal Insolvency Regulations in 2007. Previously, under the Insolvency Regulations 1970, the interests of the bankrupt had not been a mandatory consideration. Regulation 41

Insolvency Regulations 1970 provided:

41 Assignee's discretion to grant or refuse application

The Official Assignee, having regard to the interests of the creditors, may in his discretion refuse any such application or grant it either unconditionally or upon or subject to such conditions as he thinks fit.

[15] The different provisions of the earlier legislation led to the judgment of Penlington J in Murray v The Official Assignee.¹² His Honour summarised his decision in relation to the law relating to a bankrupt leaving New Zealand as follows:¹³

By reading s.128(1)(f) of the Insolvency Act 1967 and rr 40 and 41 of the Insolvency Regulations 1970 together, it is plain that the legislature intended that a bankrupt should not in the normal course of events go out of New Zealand during his bankruptcy and, that if he should desire to do so, then

¹¹ See, for example, Re Tyndall, ex parte Official Receiver [1977] FCA 15; (1977) 17 ALR 182 at

_{187. Further New Zealand cases are discussed at [18] below.}

¹² _{Murray v The Official Assignee HC Hamilton B318/92, 9 September 1992.}

¹³ At 18–19.

that should only occur with the consent of the Assignee if that departure will not adversely affect the interests of the creditors or the departure will actually provide a benefit to the creditors.

[16] Penlington J then expressly referred to the reg 41 requirement upon the Assignee to determine the application “having regard to the interests of the creditors”. His Honour discussed the analysis necessary in relation to the interests of the creditors and the information necessary for the Assignee to ascertain “whether the proposed journey is likely to yield any benefit or any detriment to the creditors”.¹⁴

[17] In 2007, in Rao v The Official Assignee, Clifford J followed Murray v The Official Assignee in a case which was determined, on account of the timing of the bankruptcy, under the Insolvency Act 1967.¹⁵

[18] Both Penlington and Clifford JJ recognised that there might be cases where a bankrupt should be allowed to leave New Zealand. They give the example of humanitarian grounds which outweigh the interests of the creditors (such as the necessity of life-saving surgery not available in New Zealand).¹⁶ But in both decisions the approach rested upon both the express mandatory consideration of the interests of the creditors and the legislative policy of the time. The rationale for this

legislative policy was seen as a part of the duty upon a bankrupt to do “the utmost in his power” to “aid the realisation of his property and the distribution of the proceeds amongst his creditors”.¹⁷ As Clifford J summarised it in Rao v The Official Assignee:¹⁸

All those matters are directed towards the interests of the creditors and that statutory policy could be frustrated if the bankrupt was to leave New Zealand.

¹⁴ _{At 20.}

¹⁵ _{Rao v The Official Assignee HC Wellington CIV-2006-485-004, 17 October 2007.}

¹⁶ Murray v The Official Assignee, above n 12, at 19 per Penlington J; and in Rao v The Official

_{Assignee, above n 15, at [33] per Clifford J.}

¹⁷ Insolvency Act 1967, s 60, quoted in Murray v The Official Assignee, above n 12, at 19; Rao v

_{The Official Assignee, above n 15, at [32].}

¹⁸ Rao v The Official Assignee, above n 15, at [32].

Clifford J further observed:¹⁹

As held in Murray, the purpose of the restraint on the bankrupt’s personal liberty is so that the Official Assignee can require the cooperation of the bankrupt in the discharge of his statutory functions.

[19] The conclusions in Murray v The Official Assignee and Rao v The Official Assignee involved application of the Insolvency Act 1967 and the Insolvency Regulations 1970.

[20] However, by the New Zealand Bill of Rights Act 1990 (NZBORA) Parliament provided greater recognition of a number of rights and freedoms, including freedom of movement under s 18 of the Act.

[21] In relation to the Insolvency Law Reform Bill of 2005, the Attorney-General provided a report to Parliament as to the consistency of the provisions in the Bill with NZBORA.

[22] The Attorney stated in his opinion:²⁰

SECTION 18: FREEDOM OF MOVEMENT

20. Section 18 of the Bill of Rights Act affirms the right to freedom of movement within New Zealand, including the right to leave New Zealand (section 18(3)).

21. The Bill proposes to enact three clauses which impact on a debtor or bankrupt's ability to enter and leave New Zealand:

clause 20 - Departure from New Zealand;

clause 420 - Offence in relation to Leaving New Zealand; and clause 427(1)(f) - Summary offences.

22. These clauses place criminal or civil sanction on a debtor or bankrupt should they prepare or attempt to leave, or leave New Zealand. This has a chilling effect on a debtor or bankrupt's ability to leave New Zealand which gives rise to an issue under section 18(3) of the Bill of Rights Act.

¹⁹ _{At [49].}

20. Ministry of Justice Legal Advice: Consistency with the New Zealand Bill of Rights Act 1990: Insolvency Law Reform Bill (5 December 2005) (citations omitted).

23. Where an issue arises, a provision may nevertheless be consistent with the Bill of Rights Act if it can be considered a reasonable limit that is justifiable in terms of section 5 of the Bill of Rights Act.

Clause 20 - Departure from New Zealand

24. Clause 20 (Departure from New Zealand) provides that a debtor commits an act of bankruptcy if the debtor prepares to leave, attempts to leave, or leaves New Zealand (or remains overseas) with the intent of defeating or delaying her or his creditors. If a debtor breaches clause 20 then he or she can be adjudicated bankrupt as the debtor is deemed to have committed an act of bankruptcy.

25. The important objective behind this clause is to enable creditors to apply to have the debtor adjudicated bankrupt in an effort to recover some or all of the debt owed and to deter debtors from fleeing their financial responsibilities. The Ministry of Economic Development (MED) has advised that in most cases it is extremely difficult for creditors to recover debts from debtors outside of New Zealand, and yet relatively easy for debtors to travel or emigrate, taking realisable assets with them, in order to avoid their creditors.

26. In our view, this clause is a rational and proportionate response to the problem as it only applies to situations where the debtor is intending to defeat or delay his or her creditors. Furthermore, a debtor leaving with that intent is merely deemed by the Bill to have committed an act of bankruptcy which may lead to the debtor being adjudicated bankrupt - the clause does not prevent a debtor from leaving New Zealand.

27. On balance, we consider that the limitation clause 20 places on the right to leave New Zealand as affirmed in section 18(3) of the Bill of Rights Act is justified.

Clause 420 - Offence in relation to Leaving New Zealand and

Clause 427(1)(f) - Summary Offences

28. Clause 420 (Offence in relation to leaving New Zealand) makes it an offence for a bankrupt to prepare or attempt to leave, or leave New Zealand (either temporarily or permanently) and take with her or him property to the value of $1000 or more that ought, by law, to be divided among the creditors. In addition, it will be an offence for a bankrupt to leave or prepare to leave New Zealand within three years of being adjudicated bankrupt without the permission of the Assignee (clause 427(1)(f) - Summary offences).

29. These offences are aimed at preventing abuse of the bankruptcy procedures in the Bill by a bankrupt, and in particular the following mischiefs:

• the bankrupt travelling to avoid delivering property or information to the Assignee, or otherwise avoiding compliance with any obligation relating to bankruptcy;

• the bankrupt removing assets from New Zealand or accessing property located overseas with the intention of preventing the Assignee from recovering that property;

• the bankrupt funding travel with money that has been vested in the Assignee or could otherwise be applied to repaying creditors; and

• the bankrupt travelling when that would otherwise prejudice administration of the bankruptcy.

These offences serve a significant and important objective of preventing abuse of the bankruptcy process by a bankrupt.

30. We consider that these clauses appear to be a rational and proportionate means of achieving the objective as they only apply to situations where a bankrupt is abusing the bankruptcy process (for example by failing to get the consent of the Assignee, or defeating his or her creditors by removing assets and money from New Zealand). A bankrupt is able to leave New Zealand where she or he is not taking property which ought to be divided among creditors, or with the permission of the Assignee, and an Assignee cannot unreasonably withhold consent. Furthermore, a bankrupt can appeal the Assignee's decision under clause 224 (Appeal from Assignee's decision).

31. We consider that the limitations clauses 420 and 427(1)(f) place on the right to leave New Zealand as affirmed in section 18(3) of the Bill of Rights Act are reasonable.

[23] Thus, the Attorney explained the limitations imposed upon a bankrupt by what became s 433(1)(f) of the Act (being clause 427(1)(f) of the Bill) as being intended to prevent abuse of bankruptcy procedures by a bankrupt, and to prevent particular mischiefs, namely a bankrupt:

• travelling to avoid obligations under the Act;

• removing or otherwise putting assets out of the reach of the Assignee;

• using money which had vested in the Assignee or could otherwise be used to repay creditors; or

• travelling when it would otherwise prejudice the administration of the bankruptcy.

[24] The report’s conclusion that an Assignee, under the Act, cannot unreasonably withhold consent suggests that reasonableness was to be measured having regard to the need to prevent abuse of bankruptcy procedures, as illustrated by the four identified mischiefs.

[25] The express incorporation in the 2007 Act of a new requirement upon the Assignee (to consider the interests of the bankrupt) reinforces the tenor of the Attorney’s report. The primary purpose of the travel restriction was to avoid those mischiefs and, otherwise not to interfere with the bankrupt’s freedom of movement under NZBORA.

[26] The principle enunciated in Murray v The Official Assignee, whereby “a bankrupt should not in the normal course of events go out of New Zealand during his bankruptcy” was plainly abrogated by the enactment of the Insolvency Act 2006.²¹

[27] This appears to have aligned New Zealand’s approach to the bankrupt’s personal interest with the position which has long pertained under the Commonwealth of Australia legislation. The latter position was identified by Deane J in the Federal Court’s leading decision of Re Tyndall, ex parte Official Receiver, when his Honour concluded:²²

Bankruptcy does not, of itself, involve any criminal offence. A citizen should be free to travel if and when his commercial activities or personal desires prompt him to do so. Restrictions upon such travel under the bankruptcy legislation must be seen as being aimed at ensuring the proper administration of the bankruptcy laws and the bankrupt estates under such laws and not as a penalty imposed upon a citizen as a consequence of inability to pay debts leading to the making of a sequestration order.

[28] Having stated that principle, Deane J went on to observe that the requirements of the prompt and efficient administration of a bankrupt’s estate will in some cases justify the Assignee’s refusal to grant leave to travel overseas.²³ Deane J concluded that that was so in Tyndall’s case. The bankrupt’s application to the Court

_{was accordingly dismissed.}

²¹ _{Murray v The Official Assignee, above n 12, at 18.}

²² _{Re Tyndall, ex parte Official Receiver, above n 11, at 190.}

23. At 191; followed in Weiss v Official Trustee in Bankruptcy [1984] FCA 2; (1983) 1 FCR 40 at 43 per Bowen J.

[29] In Re Hicks, ex parte Lamb, Heerey J formulated a list of three issues which he observed were not necessarily conclusive but nevertheless at the forefront of matters to be considered by the Court in relation to a travel appeal.²⁴ The list of issues has been repeatedly adopted in the Federal Court of Australia.

[30] Of the three-issue list, to which I will return below at [35], the first issue represents Deane J’s formulation of a test appropriate to the bankrupt’s personal interests (while at the same time having relevance to the creditors’ interests), namely:²⁵

(1) Is the proposed visit genuine?

A second test which could be added in relation to the bankrupt is:

(2) Is the proposed visit in the bankrupt’s interest?

[31] The categories of genuine personal interest of the bankrupt cannot be exhaustively defined. They will be as varied as the human condition. Some interests are obvious, including:

(a) the bankrupt’s freedom of movement under s 18 of NZBORA; and

(b) the so-called “humanitarian” situations such as:

(i) travel for lifesaving surgery, cited by Penlington J in Murray v

The Official Assignee;

(ii) travel to assist a bankrupt’s recently-widowed mother-in-law, in relation to which Gyles J allowed an appeal in Eide v Official Assignee;²⁶

(iii) travel by the bankrupt to Malaysia as a contract administrator and estimator employed by a development company to explain

²⁴ _{Re Hicks, ex parte Lamb [1994] FCA 1473; (1994) 217 ALR 195, at 198.}

²⁵ _{At 198.}

²⁶ Eide v Official Assignee HC Auckland B975, 22 September 1997, cited and distinguished by

Clifford J in Rao v The Official Assignee, above n 15, at [40]–[42].

aspects of the venture within the bankrupt’s expertise to the

joint venturers in Malaysia;²⁷

(iv) travel (with the bankrupt’s wife) in order to attend a

wedding;²⁸ and

(v) travel to visit a fiancée.²⁹

The interests of the creditors

[32] The Assignee’s second mandatory consideration under reg 11(2) Personal

Insolvency Regulations is the interests of the bankrupt’s creditors.

[33] As I have noted, this consideration has been carried forward from the 1967 legislation. The same consideration is expressly required in relation to consents to manage a business under reg 10 Personal Insolvency Regulations. Various aspects of creditors’ interests which may arise have been well-traversed over the years.

[34] In Murray v The Official Assignee, Penlington J illustrated why it may be in the interests of the creditors that a bankrupt does not leave New Zealand:³⁰

A bankrupt is under a duty to do “the utmost in his power” to “aid in the realisation of his property and the distribution of the proceeds amongst his creditors”. ... To this end he is required, inter alia, to give a complete and accurate list of his property and his creditors and debtors to the Assignee, to attend the Assignee whenever called upon so to do; to disclose any after acquired property; to deliver any property that is divisible amongst his creditors which is in his possession or control, and generally to assist the Assignee in the administration of his estate. While the bankruptcy continues the bankrupt is liable to be publicly examined. All these matters are directed towards the interests of the creditors and so if the bankrupt leaves these shores the attainment of the statutory objectives could be impaired or frustrated.

Obviously, of course, there will be cases in which it might be in the interests of the creditors that the bankrupt should be allowed to leave New Zealand ... An example ... might be the rendering of on the spot assistance to the Assignee and the assembling and the orderly disposal of foreign assets.

²⁷ _{Re Hicks, ex parte Lamb, above n 24, at 196.}

²⁸ _{Hill v Piscopo [2008] FMCA 574 at 14 per Driver FM.}

²⁹ _{Dunwoody v Official Receiver [2005] FMCA 1634 at 31 per Riethmuller FM.}

³⁰ Murray v The Official Assignee, above n 12, at 198.

[35] The Australian authorities to which I have referred illustrate ways in which a bankrupt’s remaining in the jurisdiction would enhance the administration of the bankrupt’s estate. The list of three factors identified by Heerey J in Re Hicks, ex parte Lamb provides one approach to the consideration of the discretion.³¹ The questions favoured by the Federal Court and adapted for New Zealand law, are as follows:

(a) Is the proposed visit genuine? (To which I would interpolate – is the

proposed visit in the bankrupt’s interest?)

(b) Is the bankrupt likely to return to New Zealand as promised? (c) Will the visit hamper the administration of the estate?

[36] It is self-evident that the efficient administration of the bankrupt’s estate will be in the creditors’ interests.

The balancing of the bankrupt’s and creditors’ interests

[37] By reason of the number of reported Australian cases which have considered the interests of the bankrupt, there is significant guidance in the Australian cases as to an appropriate balancing of what may be competing interests. I was not referred to any New Zealand authority (which would have to post-date the 2007 Act) on point.

[38] As an appropriate recognition of the balancing exercise, I adopt the observation of Deane J in Re Tyndall, ex parte Official Receiver:³²

The provisions of ... the Act recognise that a bankrupt’s legitimate desires to travel overseas must, in an appropriate case, be subordinated to what is necessary for the proper and efficient administration of his estate in bankruptcy and the administration of the bankruptcy law.

[39] Equally, the Australian courts have considered the situation in which the bankrupt’s absence from the jurisdiction is effectively neutral. For instance, in

³¹ _{Re Hicks, ex parte Lamb, above n 24, at 198.}

³² Re Tyndall, ex parte Official Receiver, above n 11, at 191.

Mayger v Prentice, Gyles J explained of the reasons the Trustee in Bankruptcy might take into account that:³³

... foremost amongst them would be any legitimate claims [the Trustee] would have to the attention of the applicant during the period he would be away. In other words, if there is no pressing reason for the bankrupt to be in touch with the Trustee over this period, then that would be a cogent factor for the Trustee to take into account.

[40] The Court of Final Appeal of Hong Kong has in a different legislative setting adopted an approach to a bankrupt’s right to travel which is underpinned by a similar respect for the bankrupt’s interests.³⁴ In The Official Receiver and Trustee in Bankruptcy of Chan Wing Hing v Chan Wing Hing, Li CJ stated that:³⁵

(1) The restriction must be rationally connected to the protection of the rights of others.

(2) The means used to impair the right to travel must be no more than is necessary to protect the rights of others.³⁶

[41] The approach taken in the Australian and Hong Kong appellate Courts lines up squarely with the New Zealand Attorney-General’s 2005 explanation as to the reasonableness of the travel restriction under the Insolvency Law Reform Bill.

The Assignee’s policy in relation to travel approval

[42] The Assignee, through the Insolvency and Trustee Service (ITS), maintains a document entitled “Module 18 – Overseas Travel” to guide staff in relation to the processing of applications for overseas travel (“the ITS travel document”). The document includes a page dealing with the ITS policy in relation to such applications as well as other issues of administration.

[43] The document includes the following:

1. INTRODUCTION

During the period in which an individual is an undischarged bankrupt, many consider leaving New Zealand for various reasons. These may include

³³ _{Mayger v Prentice [2000] FCA 99 at [11].}

³⁴ The Official Receiver and Trustee in Bankruptcy of Chan Wing Hing, a bankrupt v Chan Wing

_{Hing [2006] HKCV 1213 (HKFCA).}

³⁵ _{At [35].}

³⁶ Leung Kwok Hung v HKSAR [2005] HKCFA 40; (2005) 8 HKCFAR 229 at [36].

holidays, family reasons, travel in relation to employment and permanent departure.

In many cases consent is given for recreational holidays abroad or in association with employment – especially if another party is paying for the trip and expenses associated with the travel, i.e. another family member/friend or a competition win.

However, permanent leave from New Zealand involves more consideration. Whatever the form of leave, the process of consideration is the same.

2. KEY PRINCIPLES

Note: Every request for leave should be presented to the Official Assignee in writing and the bankrupt must obtain the Official Assignee’s written consent before departing from New Zealand.

An overall thought to keep in mind when considering applications to leave New Zealand should be “What disadvantage is there to creditors if consent is given?”

3. LAW AND POLICY

...

ITS POLICY

All applications received for leave are assessed in association with the administration and the nature of the bankrupt estate involved. In many cases, discretion can be exercised as to whether or not the full formal procedure is followed. They are made on a case by case basis.

...

Current National policy is as follows:

...

• The application should include details relating to travel as noted in the covering letter re travel or in the “Overseas travel while bankrupt” pamphlet. In cases where another party is funding the trip, written confirmation from the other party should accompany the request for travel.

...

Timeframe: Applicants are to receive written notification of whether or not consent has been given or declined within 10 working days.

...

6. INSOLVENCY PROCEDURE

...

When assessing the application consider:

• Bankrupt’s reasons for leaving;

_{• Whether travel is temporary or permanent;}

_{• What administrative/investigative matters remain outstanding;}

_{• Will the contemplated travel delay the administration?}

_{• Have creditors raised issues such as undisclosed assets, which}

require the bankrupt’s input/explanation?;

• Any complaints from creditors/public;

• Purpose of the travel. eg is the bankrupt seeking leave upon humanitarian grounds such as sick family members residing

overseas?;

• Costs associated with the travel aboard and who is funding it

(including airline tickets and accommodation expenses);

• Whether the money being used for the overseas trip should rightfully be collected for the benefit of creditors;

• Amount of deficiency in the bankrupt estate;

_{• Likelihood of a dividend;}

_{• Bankrupt’s domestic and working situation;}

_{• Will the bankrupt’s family remain in NZ?}

_{• When is the bankrupt due for discharge;}

_{• Dates of departure and return (if applicable);}

_{• Overseas contact address;}

• Details of how the trip will benefit creditors – especially in cases where the request is for permanent departure or if in association with

employment – can contributions be negotiated from the wages that the bankrupt is able to receive while out of New Zealand?

Note: Each request should be considered on its own merits.

[44] The ITS travel document by its nature does not alter the statutory framework in relation to travel applications as I have stated it. It is however of some relevance to the present case in that it identifies for Ministry of Business, Innovation and Employment (MBIE) staff considerations which are to be taken into account, some of which may be said to relate to the bankrupt’s interests. But the document does not refer to reg 11 Personal Insolvency Regulations, let alone set out the express requirements under reg 11(2) to have regard to the interests of the bankrupt and the bankrupt’s creditors. Included in the document’s list of matters to be considered on an application are some matters which represent the bankrupt’s interests (such as travel on humanitarian grounds) but there is no identification of the bankrupt’s interest in his or her freedom to travel under NZBORA. The document does not acknowledge that the principle applicable under the 1967 Act; whereby a bankrupt should not in the normal course of events go out of New Zealand during his or her

bankruptcy – is no longer applicable under the 2006 Act .³⁷ This omission could lead MBIE staff – as it did Mr Currie – to incorrectly apply Murray v The Official Assignee.³⁸

Mr Currie’s understanding of the legislative policy

[45] In his 20 January 2015 refusal letter, Mr Currie identified as his first point of response the following:

1. It is my view that the purpose of the relevant provision of the Insolvency Act 2006 is to limit the travel a bankrupt can make outside New Zealand during his or her bankruptcy. In the ordinary course, a bankrupt should not be permitted to leave the country unless there is some good reason for him or her to do so.

[46] On the day following the refusal, in Mr Henderson’s email to Mr Currie he referred to Mr Currie’s paragraph [1] and responded:

Your view does not correlate with that of your peers. I have spoken now to several Assignees who tell me that the policy is intended to be permissive so long as it is not impacting negatively on the creditors of the bankrupt.

Please provide me details of all the authorities you rely upon when you assert; “in the ordinary course, a bankrupt should not be permitted to leave the country unless there is some good reason for him or her to do so”.

[47] Mr Henderson then went on to seek examples and an explanation of “good reason”.

[48] On 19 February 2015, Mr Currie responded to that request (and others contained in the 21 January email) by referring to the cases of Murray v The Official Assignee and Rao v The Official Assignee. Mr Currie also provided a table of travel applications which had been approved over the previous four years which was as

_follows:

³⁷ _{Murray v The Official Assignee, above n 12.}

³⁸ See below at [48]–[49].

Calendar Year	Travel applications approved
2011	1,477
2012	1,452
2013	1,314
2014	1,214

[49] Two notable points emerge from Mr Currie’s statements and evidence and from the ITS travel document. First, Mr Currie clearly proceeded upon an understanding of the law that requires a travel decision to be based on the proposition that a bankrupt should not in the normal course of events go out of New Zealand during bankruptcy in the absence of a “good reason”. Secondly, the ITS travel document does not identify as a consideration the bankrupt’s freedom of movement under s 18 NZBORA.

The standard of review by the Court under s 226 Insolvency Act

[50] There was uncertainty as to the correct approach to be adopted by the Court on a s 226 appeal. As summarised by the authors of Brookers Insolvency Law and Practice:³⁹

There have been divergent approaches in the past as to how the appellate jurisdiction under s 86 of the Insolvency Act 1967 (now s 226) is to be dealt with, in particular, whether the Court should consider the merits of the application on a de novo basis or whether it is merely an enquiry as to whether the administrative decision of the Assignee was correct.

A point was reached where between 2000 and 2010 it appeared reasonably settled that applications under s 226 should be approached on the basis that they are heard

_{de novo.}⁴⁰

³⁹ _{Brookers Insolvency Law and Practice (looseleaf ed, Thomson Reuters) at [IN226.03].}

⁴⁰ See the commentary in Brookers Insolvency Law and Practice, above n 31, at [IN226.03] and

Laws of New Zealand Personal Bankruptcy and Insolvency (Reissue 1) at [258], footnote 6.

[51] However, in Glynbrook 2001 Limited v The Official Assignee the Court of Appeal clarified that the standard of review by this Court depends on the nature of the Assignee’s impugned action or decision.⁴¹ The Court said:

[84] When considering the question of the standard of review under s 86 [of the Insolvency Act 1967 (now s 226)] of the Act, it is necessary to distinguish between the discretionary powers of the High Court under s 86 to confirm, reverse, or modify the Official Assignee's act or decision and to make such order as it thinks fit and the nature of the statutory provisions under which the Official Assignee acted or decided. This distinction is important because the standard of review by the High Court will depend on whether or not the Official Assignee was making a decision that is subject to a general right of appeal or exercising a discretionary statutory power, which is subject to a more limited right of appeal.⁴²

[52] In Glynbrook, the Court was concerned with the Assignee’s power of sale of the bankrupt’s property.⁴³ The Court of Appeal concluded that the High Court in Glynbrook was not exercising a general right of appeal but an appeal against a decision made in the exercise of a discretion. White J delivering the judgment of the Court, said:⁴⁴

... This meant that, as the Supreme Court explained in Kacem v Bashir, the criteria for a successful appeal were stricter: (1) error of law or principle; (2) taking account of irrelevant considerations; (3) failing to take account of a relevant consideration; or (4) the decision was plainly wrong. On an appeal of this nature the High Court was therefore not required to follow the approach mandated by the Supreme Court in Austin, Nichols & Co Inc v Stichting Lodestar, which applies to a general right of appeal. In light of Austin, Nichols and Kacem v Bashir, characterisation of the appeal as de novo does not assist resolution of the issue in this case, where the real issue is the standard of review.

[53] I interpolate that Mr Henderson’s Notice of Appeal filed in February 2014 closely follows the Kacem v Bashir criteria. In the notice, he stated that the Assignee erred by:

(a) taking into account irrelevant matters;

_{(b) failing to take into account relevant matters;}

⁴¹ _{Glynbrook 2001 Limited v The Official Assignee [2012] NZCA 289.}

⁴² _{Kacem v Bashir [2010] NZSC 112, [2011] 2 NZLR 1 at [32].}

⁴³ _{Pursuant to s 72(1) Insolvency Act 1967.}

⁴⁴ Glynbrook 2001 Limited v The Official Assignee, above n 41, at [87] (citations omitted).

(c) basing her decision on material errors of fact; and

(d) pre-determining the decision.

(He later amended his notice to provide further particulars but the key points of appeal remained as initially filed).

[54] The approach of the Court of Appeal in Glynbrook has since been applied in Gollan v Official Assignee.⁴⁵ In this case, Associate Judge Faire applied the stricter criteria in Kacem v Bashir to an appeal against the decision of an Assignee on whether or not to continue the proceedings commenced by a bankrupt before adjudication.

[55] In Haines House Removals Ltd v Jamieson,⁴⁶ Duffy J, upon an analysis of the

1967 legislation, came to the conclusions that:

(a) the discussion in Glynbrook as to the standard of review was obiter and may well have been per incuriam;⁴⁷ and

(b) the preferable view is that s 86 Insolvency Act 1967 required the High Court to hear all the material de novo but to be careful not to interfere with the Official Assignee’s discretion too easily.⁴⁸

[56] In relation to an appeal under s 226 Insolvency Act 2006 from an Assignee’s decision on a travel application, I adopt the Court of Appeal’s formulation of the standard of review in Glynbrook. The 2006 Act has elevated the discretion to determine travel applications and business management applications to an “absolute discretion”. The present appeal therefore deals with an appeal from the exercise of a discretion of a different nature to that which arose in Haines House Removals Ltd v Jamieson. That case concerned the Assignee’s discretion to make decisions such as

_{to discontinue legal proceedings in the course of managing the bankrupt’s estate.}⁴⁹

⁴⁵ _{Gollan v Official Assignee [2012] NZHC 1869.}

⁴⁶ _{Haines House Removals Ltd v Jamieson [2013] NZHC 653, (2013) 21 PRNZ 505.}

⁴⁷ _{At [39].}

⁴⁸ _{At [39].}

⁴⁹ Insolvency Act 1967, s 84.

[57] Furthermore, the case before Duffy J and the earlier High Court authorities to which she referred were decided under the Insolvency Act 1967. Her Honour recorded that before the enactment of the Interpretation Act 1999, headings in a statute were not part of the interpretative material.⁵⁰ The 2006 Act, which is applicable in this case, was enacted after the commencement of the Interpretation Act 1999. The heading to s 226 of the Insolvency Act 2006, with its reference to

“appeal”, is therefore a matter which may be considered in ascertaining the meaning of the provision.⁵¹

[58] The 2010 Laws of New Zealand commentary, which pre-dated the Court of Appeal’s Glynbrook judgment, captured the implications of the words “absolute discretion” in the following discussion:⁵²

The Assignee may in his or her “absolute discretion” refuse any application by a bankrupt to go overseas. The relevant predecessor regulation spoke only of the Assignee’s “discretion”. The addition of the word “absolute” suggests that it may be more difficult for a Court to maintain the previously settled approach to an appeal against a decision of the Assignee on a de novo basis as opposed to an enquiry into whether the administrative decision of the Assignee was correct.⁵³

[59] I will therefore apply the stricter criteria in Kacem v Bashir as identified by the Court of Appeal in Glynbrook.⁵⁴ I note that the adoption of such an approach on appeals in relation to a travel decision puts the New Zealand courts on the same footing as the Federal Court of Australia in relation to the Australian Commonwealth legislation which was in force until 1966.

[60] In Australia, the provisions of the Bankruptcy Act 1924 (Cth) in line with the contemporary English bankruptcy legislation, permitted the Court, in relation to an

_{appeal by an “aggrieved” person, to “confirm, reverse, or modify the Act or decision}

⁵⁰ _{Haines House Removals Ltd v Jamieson, above n 46, at [27].}

⁵¹ _{Interpretation Act 1999, s 5.}

⁵² Laws of New Zealand Personal Bankruptcy and Insolvency, above n 39, at [258] (citations

omitted). The “Predecessor Regulation” referred to in the commentary was Regulation 41

Insolvency Regulations 1970 [SR 1970/260] which was revoked by s 443(2) Insolvency Act

_2006.

⁵³ The “Predecessor Regulation” referred to in the commentary was Regulation 41 Insolvency

_{Regulations 1970 [SR 1970/260] which was revoked by s 443(2) Insolvency Act 2006.}

⁵⁴ Kacem v Bashir, above n 42.

complained of”.⁵⁵ These powers directly paralleled the provisions of the current

New Zealand legislation in s 226 Insolvency Act 2006.

[61] In Re Tyndall, Deane J explained the difference between Australia’s s 148

Bankruptcy Act 1924 and the current s 178 Bankruptcy Act 1966 in the following way:⁵⁶

The provisions of the old s 148 corresponded closely with comparable provisions of English bankruptcy legislation. It was established that, under these English provisions, the courts would only interfere with the decision of a trustee if it appeared that the trustee was acting unreasonably or in bad faith (see, eg, Re Peters; Ex parte Lloyd (1882) 47 LT 64 at 65; Re a Debtor; Ex parte Debtor v Dodwell [1949] Ch 236 at 241; [1949] 1 All ER 510; and Leon v York-O-Matic Ltd [1966] 1 WLR 1450 at 1454–5). The principles laid down in such decisions were stated, in at least two Australian cases, to be applicable to the provisions of s 148 of the Bankruptcy Act 1924 (see per Clyne J in Re Carson; Ex parte Carson (1960) 19 ABC 108 at 122; [1961] ALR 118, and in Re Hall (1957) 20 ABC 21 at 29). The differences between the wording of s 148 of the Bankruptcy Act 1924 and the wording of s 178 of the present Act clearly makes it impossible, however, to regard what was said in any of those English or Australian cases as being automatically applicable to an application pursuant to the provisions of s 178 of the present Act.

The critical differences in wording between s 148 of the 1924 Act and s 178 of the present Act are that the present Act does not require that the applicant be a person “aggrieved” as did the previous Act and the English bankruptcy legislation and that the present Act does not make the focal point of the jurisdiction the confirming, reversing or modifying of “the act or decision complained of”. Under s 178, the bankrupt, a creditor or any other person affected by an act, omission or decision of the trustee is empowered to apply to the court. The express requirement that the applicant be a person “aggrieved” no longer exists. Nor is the court, in express terms, required to approach the matter on the basis that the appropriate question is whether “the act or decision complained of” should be confirmed, reversed or modified. Once the matter is properly before the court, the court is empowered — and obliged — to make such order in the matter “as it thinks just and equitable”.

[62] Thus, the case law in relation to the former Australian Commonwealth and English legislation (as cited in Re Tyndall) provides persuasive authority relevant to the standard of review still applicable in New Zealand, as identified by the Court of

_{Appeal in Glynbrook.}

⁵⁵ Bankruptcy Act 1924 (Cth), s 148. Compare Bankruptcy Act 1914 (United Kingdom) 4 & 5

_{Geo V c 59, s 80.}

⁵⁶ Re Tyndall, ex parte Official Receiver, above n 11, at 185–186.

Chronology

[63] Relevant events include:

• 29 November 2010 – Mr Henderson is adjudicated bankrupt;

• 28 November 2013 – Assignee objects to Mr Henderson’s discharge from

bankruptcy, requiring public examination;

• 15 January 2014 – Mr Marshall (on behalf of Assignee) responds to enquiry by Mr Henderson in relation to travel consent setting out details the Assignee requires and attaching MBIE’s application form;

• 7 May 2014 – Assignee requires Mr Henderson to provide a completed income and expenditure form by 21 May 2014;

• 19 June 2014 – Mr Henderson writes to Mr Smol (Chief Executive of MBIE) to pursue discharge from bankruptcy in order to pursue involvement in biogas project;

• 26 June 2014 – Mr Henderson writes to Assignee through Mandy McDonald

with a “formal request to leave New Zealand” (Schedule A to this judgment );

• 27 June 2014 – Mr Smol refers Mr Henderson to Mr Currie;

• 1 July 2014 – Mr Henderson replies to Mr Smol, refusing to work with Mr Currie and stating that he was now making immediate arrangements to leave the country for a more appropriate and pro-business regime;

• 1 July 2014 – Assignee lodges a formal border alert with the authorities;

• 4 July 2014 – Assignee treats Mr Henderson’s travel request as an informal application, refers Mr Henderson to the “prescribed form”, and states that “at this stage I have concluded that any consent will not be forthcoming. There are administration issues and proceedings currently before the Court all yet to

be concluded” (Schedule B to this judgment);

• August to November 2014 – Mr Henderson has correspondence and discussions with Assignee or representatives as to his proposed travel and related matters. Mr Henderson does not provide a completed application form;

• From November 2014 – Mr Vinnell, as Assignee’s solicitor, takes most of the

correspondence and telephone calls from Mr Henderson;

• 24 November 2014 – Mr Vinnell writes to Mr Henderson as to travel, suggesting use of online form of application and noting the Assignee’s previous expression of the unlikelihood of consent being granted. Mr Vinnell also refers to outstanding statement of income;

• 9 December 2014 – Messrs Henderson and Vinnell meet, discussing Mr Henderson’s travel application and the Assignee’s requirement of an income and expenditure form;

• 17–19 December 2014 – Mr Vinnell confirms to Mr Henderson that the Assignee will not treat research of travel arrangements and discussions as to employment opportunities overseas as constituting preparations to leave New Zealand in terms of s 433 Insolvency Act 2006;

• 5 January 2015 – Mr Henderson writes to Mr Vinnell seeking “approval in principle” before finalising airfares and accommodation and completing the online application form, to pursue meetings with parties interested in employing him (Schedule C to this judgment);

• 9 January 2015 – Mr Vinnell advises Mr Henderson that the Assignee requires the further detail identified in the form;

• 14 January 2015 – Mr Vinnell writes to Mr Henderson, stating that Mr

Henderson’s 5 January 2015 request has been treated as a formal application

and recording that the Assignee requires further detail and corroborative evidence as set out in the letter;

• 14 January 2015 – Mr Henderson replies by email, responding to each requested item and recording that further details cannot be provided until travel arrangements have been concluded;

• 14 January 2015 – Conversation between Messrs Vinnell and Henderson, Mr Henderson offering to have New Zealand personnel arranging overseas meeting for biogas project meet with Mr Vinnell, an offer refused by Mr Vinnell;

• 15 January 2015 – Ian Hyndman provides written confirmation that he is

paying Mr Henderson’s costs of travel;

• 16 January 2015 – Conversation between Mr Henderson and Mr Currie, Mr Henderson pursuing a response to his request for approval in principle, discusses intention to be employed in a new entity in the United States using biogas technology and intention to be away for seven to 10 days;

• 19 January 2015 – Mr Henderson emails Mr Currie, referring to telephone discussion and stating that Mr Currie’s position would be treated as an implicit declination of the application;

• 20 January 2015 – Mr Currie writes to Mr Henderson, refusing his travel application (Schedule D to this judgment);

• From 20 January 2015 – Mr Henderson engages in further conversations and correspondence with Mr Currie and others;

• 12 February 2015 – Mr Henderson files his notice of appeal in this proceeding.

Events of 2014

[64] The events of 2014 are the first relevant events chronologically. The events themselves are identified in the above chronology. It is unnecessary to traverse them in further detail on a chronological basis. I will instead address them by the subject matter of complaints made by Mr Henderson in support of the appeal.

The 26 June 2014 application

[65] Mr Henderson complains that a travel application he made on 26 June 2014 was not handled appropriately by Mr Currie. (He complains also that Mr Currie, at that point, pre-determined the outcome of the application, to which I return below separately at [77]).

[66] Mr Henderson wrote by email to the Assignee, through Mandy McDonald, on

26 June 2014 (Schedule A). In this email, Mr Henderson stated that his departure from New Zealand was intended to be permanent.

[67] The email commenced with a request that Ms McDonald treat it as a “formal request pursuant to the provisions of the Insolvency Act for consent to leave New Zealand”. In the email, Mr Henderson set out (albeit in some cases in very brief detail) an answer to each matter identified in reg 11(1)(c) Personal Insolvency Regulations.

[68] The email was referred to Mr Currie as the Assignee handling Mr

Henderson’s estate.

[69] Mr Currie deposes that he took the view that Mr Henderson had not made a formal application. In his 4 July 2014 letter in response, he referred Mr Henderson to the “prescribed form”. He stated that he had concluded that any such consent will not be forthcoming, noting that there were administration issues and proceedings currently before the Court or yet to be concluded. He recorded that he had lodged a formal border alert with the authorities given Mr Henderson’s 1 July 2014 statement to the effect that he was making immediate arrangements to leave the country.

[70] Mr Henderson complains that the “refusal” of Mr Currie at that point was unreasonable. He says that the response was designed to punish and intimidate him, that Mr Currie made no efforts to consider his interests or those of Mr Henderson’s creditors, and that the only administrative issue outstanding was his public examination.

[71] Mr Currie was called for cross-examination by Mr Henderson. Mr Henderson put it to Mr Currie that the 26 June 2014 email was Mr Henderson’s first travel application which started the process off.

[72] Mr Currie replied that the 26 June 2014 email was a “form of application”, but that “it wasn’t appropriate” as it was “rather vague”.⁵⁷ Mr Currie therefore “felt it was inappropriate to deal with this as a formal administration, formal request”.⁵⁸

[73] It is clear, notwithstanding Mr Currie’s answers, that Mr Henderson on 26

June 2014 made a formal request for consent to leave New Zealand. I infer that Mr Currie treated the application as “informal” in the sense that he regarded it as being deficient in its supporting detail.

[74] The failure of the Assignee to treat Mr Henderson’s 26 June 2014 email as a formal request led to unproductive and increasingly unsatisfactory exchanges through 2014. For reasons I will come to, the Assignee was clearly correct in requesting further detail from Mr Henderson. However, Mr Henderson (while not providing further detail) repeatedly insisted that his request be treated as a formal request. Had the Assignee then made his decision on the basis of the information before him, matters would have been brought to an appropriate head at a much earlier point.

[75] However, it is the ultimate refusal of 20 January 2015 which is the subject of this appeal rather than the approach taken in correspondence in 2014.

⁵⁷ Henderson v The Official Assignee Transcript HC Christchurch CIV-2015-419-000067, 20 May

_{2015 at 18.}

⁵⁸ At 18.

[76] In the circumstances I deal somewhat briefly with Mr Henderson’s criticisms of Mr Currie’s 4 July 2014 response:

(a) Failure to consider the email as a formal request – I conclude that Mr Currie should have treated the email as a formal request and, to the extent he required additional information, should have treated that as additional to the request already made.

(b) Mr Currie’s reference to “the prescribed form” – the reference to a “prescribed” form was inapt (the form simply being MBIE’s form of convenience) and an explanation (as later occurred) that it was simply a convenient form would have been more appropriate at the time.

(c) Mr Currie’s conclusion that consent would not be forthcoming – I

return to the issue of pre-determination below at [77].

(d) Outstanding administrative issues – Mr Henderson complains that the only outstanding administrative issue was his public examination. He asserts that it would have been easy to arrange and confirm his attendance at the examination. In fact, there were at least three outstanding matters in relation to the administration, namely an unfulfilled request for a statement of income and expenditure; an unsatisfied (due to Mr Henderson’s appeal) High Court order in relation to discovery of documents for his public examination; and the holding of the public examination itself. Those were clearly matters of importance in the administration which reasonably required Mr Henderson’s presence in New Zealand (as contrasted with the “permanent departure” referred to in his application). Mr Currie’s stated concern over those issues was justified and the 4 July 2014 letter appropriately put Mr Henderson on notice that they would be critical issues in relation to any approval.

(e) The issue of a border alert – in his 1 July 2014 email to the Chief

Executive of MBIE, Mr Henderson stated both that he would not

work with Mr Currie and that he would be informing his creditors and was now making immediate arrangements to leave the country for a more appropriate and pro-business regime. While Mr Henderson submitted to me that his email was concerned with “immediate arrangements” rather than “immediate departure”, the possibility of immediate departure was implicit in his email. A departure without

consent constitutes a serious offence under the Act.⁵⁹ The border alert

was appropriate. In the event, the issuing of the border alert and Mr Henderson’s reaction to it cannot inform the assessment of the Assignee’s decision subsequently made in January 2015 but they further intensified the stand-off which arose in relation to the Assignee’s insistence on a “formal application” supported by further detail.

“Consent will not be forthcoming”

[77] Mr Currie’s letter of 4 July 2014 contained the statement that “... at this stage

I have concluded that any such consent will not be forthcoming”.

[78] The statement in Mr Currie’s letter suggested a pre-determination. The Assignee had to consider the creditors’ interests (in having Mr Henderson remain in New Zealand to deal with outstanding administration issues and proceedings). But the balancing of creditors’ and bankrupt’s interests required by the legislation could not occur until the formal application with all the supporting detail requested by the Assignee had been received. Mr Henderson was understandably upset upon receiving a letter containing the statement that consent would not be forthcoming.

[79] There was nevertheless a rationale to Mr Currie’s statement as to consent not being forthcoming. Mr Currie explained the statement by reference to outstanding administrative matters. The Assignee had objected to Mr Henderson’s discharge from bankruptcy with the consequence that there was a public examination looming (at that point provisionally scheduled). To prepare for that examination the

_{Assignee, by an interlocutory discovery order, had the right to inspect electronic}

⁵⁹ See above at [4].

records of Mr Henderson, a process delayed by Mr Henderson’s appeal against the order. Mr Henderson had yet to provide requested details of his income and expenditure. Without those matters being attended to, Mr Henderson’s absence from New Zealand was likely to hinder the administration of his estate. Therefore if the very brief details provided by Mr Henderson were not supplemented, the travel application could scarcely have been granted. Thus there is an explanation for Mr Currie’s 4 July 2014 statement. But Mr Currie had stated his position in relation to refusal of consent without identifying for Mr Henderson the ways in which the administration issues might be overcome. For example, the need for Mr Henderson to be available to attend his public examination could be dealt with by arrangements

assuring Mr Henderson’s return.⁶⁰ The terms in which Mr Currie made his statement

did not immediately convey a sense that those administration issues could be addressed and overcome.

[80] Mr Currie’s solicitor, Mr Vinnell, in a subsequent letter on 24 November

2014, referred to Mr Currie as having “expressed the unlikelihood of consent being granted and the reasons for this”. However, the 4 July 2014 letter had in fact contained the statement that at that stage Mr Currie had concluded that consent would not be granted.

[81] As it was, Mr Currie returned to Mr Henderson’s application in January 2015 to make a decision on the application as it had developed, including such additional information as Mr Henderson had provided since July 2014. Mr Henderson was entitled to be suspicious that Mr Currie’s apparent pre-determination in July 2014 may have carried forward. On the balance of probabilities, having regard to the documentary record and having heard Mr Currie, I am satisfied that Mr Currie in fact came to make his January 2015 decision afresh. The reasoning which Mr Currie deployed in his 20 January 2015 refusal letter indicates the range of considerations (including matters arising relatively recently) that Mr Currie took into account. The outstanding administration issues which loomed large for the Assignee in July 2014 had apparently diminished in significance and other factors (to which I will come)

_{now dominated the decision.}

⁶⁰ As it was by the Australian Trustee in Re Hicks, ex parte Lamb, above n 24, at 198; and Hill v

Piscopo, above n 28, at [16]–[18].

[82] Even had I not concluded that Mr Currie made his January 2015 decision afresh, the indication of pre-determination as at July 2014 would in a sense fall away as the Court, on this appeal, is in a position to uphold, reverse or modify the refusal in the light of the reasons identified by Mr Currie in January 2015.

The relationship between Mr Henderson and Mr Currie in 2014

[83] Mr Henderson, in his evidence and submissions, made swingeing criticisms of Mr Currie’s conduct in the latter half of 2014. Mr Henderson criticises Mr Currie as having frustrated Mr Henderson’s attempts to resolve his travel application. Particular criticisms are that Mr Currie and his staff:

• refused to answer information requests;

• refused to return phone calls;

• refused offers to meet including Mr Henderson’s offers to travel to

Hamilton, at his expense;

• refused to provide full reasons to clarify the travel application refusal;

and

• refused to provide ITS’ internal policy on processing travel applications. [84] Mr Henderson concludes that Mr Currie’s sole purpose in his dealings with

Mr Henderson was to punish Mr Henderson.

[85] I find nothing in the documentary record to support an inference that Mr Currie was intent on punishing Mr Henderson. Nor did his answers in cross- examination point to such an intent. Mr Currie’s fundamental focus was on Mr Henderson’s bankrupt estate and on its administration. To the extent that Mr Currie took Mr Henderson’s rights in relation to travel to be settled by Penlington J’s formulation in Murray v The Official Assignee, I recognise that there was a consequent presumption against travel in the ordinary course simply by reason of Mr

Henderson’s bankruptcy.⁶¹ This might be considered at least a consequence of, if not a punishment for, being bankrupt. But in approaching the matter in that way, Mr Currie was applying what he understood to be the law (although, as I have found, the principle in question had been abrogated). The evidence does not support a conclusion that Mr Currie’s motivation through this period or subsequently was to punish Mr Henderson.

[86] Mr Henderson’s specific criticisms of Mr Currie’s conduct, such as failure to return phone calls, go to issues of process and not to the substance of the ultimate decision to decline the application. I nevertheless consider the events of June to December 2014. Mr Currie was the Assignee designated by the Official Assignee of New Zealand to conduct the administration of Mr Henderson’s estate. It is clear from the documents that by June 2014 Mr Henderson had a fraught relationship with Mr Currie. Indeed, Mr Henderson stated in his 1 July 2014 email to Mr Smol that:

I will not work with Mr Currie ... I am left to infer his improper actions are

therefore part of his agenda.

[87] In his 7 August 2014 email to Mr Currie, Mr Henderson rejected the appropriateness of the border alert (which I have found, to the contrary, to have been appropriate). He stated to Mr Currie that the border alert had been made because Mr Currie was a bully and was keen to intimidate him. Mr Henderson continued:

It is nasty, childish stuff and a continuation of a maladministration of my estate that your colleague started.

[88] There was apparently an earlier background to Mr Henderson’s approach but his criticisms of the Assignee’s responses fall to be considered over the period of the responses, from June to December 2014. In that period, and against the background of Mr Henderson’s views as expressed in June 2014, Mr Currie’s preference for written communication, which avoided the uncertainties and the potential hostility of oral communication, made sense. To the extent that Mr Henderson criticises the Assignee for failing to provide information in response to requests, my overall conclusion from the documents is that it is a generalised criticism which lacks

_{substantial merit when the document trail is read. I take by way of example, Mr}

⁶¹ Murray v The Official Assignee, above n 12.

Henderson’s email of 7 August 2014. As well as containing Mr Henderson’s hostile criticisms of Mr Currie, it pointed to a number of outstanding requests for information. Mr Currie, on the same day, provided to Mr Henderson detailed information on the range of issues pursued by Mr Henderson. Then, on 27 August

2014, in response to what Mr Currie records to be Mr Henderson’s further emails of

7, 8 and 20 August 2014 and Mr Henderson’s recent voicemail messages to Ms

McDonald, Mr Currie replied with further information.

[89] Mr Currie’s preference for written correspondence was understandable and, in the circumstances, appropriate. So, too, was Mr Currie’s decision in late- November 2014 to have his solicitor, Mr Vinnell, meet directly with Mr Henderson to see whether matters could be advanced both in relation to the travel application and the outstanding statement of income and expenditure.

[90] That said, three aspects of the June to December 2014 period call for further consideration.

Mr Henderson’s Official Information Act request for the ITS policy

[91] Mr Henderson has criticised the Assignee for delays in providing a copy of the ITS travel policy document. The evidence does not establish exactly when that document was first requested by Mr Henderson or provided to him. Mr Henderson refers in his correspondence to a complaint which he has made to the Ombudsman. The exact details of any breach of the Assignee’s duties in that regard can be identified and dealt with in that jurisdiction. Any consequences of delay in provision of the policy document cannot be decisive or even significant on this appeal. Mr Henderson had the document by the time he filed his second affidavit on this appeal and has been in a position to address any matters it raises.

[92] To the extent that the ITS travel policy document contains a statement of ITS policy, it requires reconsideration and reformulation. The processing of an application without the mandatory requirements of reg 11(2) in front of the staff member may prove unsatisfactory. In any event, the bankrupt’s interests and his or her freedom to travel (subject to obtaining approval) require express identification if such a document is to be used as the basis for assessing applications. Finally, if it is

statement of codification of policy, then at least the policy elements should be available for prompt release to bankrupts who are considering or preparing an application.

The Assignee’s failure to make a decision in 2014

[93] I have found that Mr Henderson’s 26 June 2014 email was an application for consent to travel as it stated.

[94] Evidence has been given on this appeal that basic or simple travel applications are generally dealt with by the Assignee within a few working days. This is the approach apparently taken to the so-called humanitarian cases such as those involving travel to see family. There will be more complicated cases involving the pursuit of employment opportunities overseas which call for further information and possibly enquiry. The ITS travel document appears to deal with those applications under the heading “timeframe” where staff are told that applicants are to receive written notification of approval or refusal within 10 working days. Such timetabling appears administratively appropriate when applicants have plans to finalise and events to attend.

[95] An initial problem arose in this case when Mr Currie decided not to treat Mr Henderson’s application as a formal application, which it clearly was. Mr Currie should have requested such additional information as he required and then specified a time after which he would make his decision whether or not the requested information was received. Mr Currie’s failure to approach the application in this way led to the peculiar situation in August 2014 whereby Mr Henderson (understandably) was viewing his application as having been declined whereas Mr Currie was still inviting Mr Henderson to furnish a formal application.

[96] As it is, the time which elapsed during this unsatisfactory stand-off cannot be recovered. The Court has to determine this appeal by reference to the 20 January

2015 refusal.

The evolution of Mr Henderson’s travel plans

[97] In June 2014, Mr Henderson’s travel plans revolved around a biogas engine project (“the biogas project”). This was the subject of his email to MBIE’s chief executive, Mr Smol, on 19 June 2014. Those involved in the biogas project were all Cantabrians. They had envisaged a manufacturing facility in Christchurch. Because Mr Henderson was still bankrupt, he wished to involve MBIE in discussions. The Christchurch project was in the early stages of development and those involved decided to look to manufacture overseas. By June 2014, Mr Henderson stated that he had been offered the personal rights to operate the engine for the production of electricity in New Zealand, conditional upon his discharge from bankruptcy. Ownership rights would be significantly vested in any remaining creditors in his estate. In his 26 June 2014 email to Mr Smol, Mr Henderson invited Mr Smol’s interest in the proposal. In his email Mr Henderson concluded that he would otherwise assume that none of this was of relevance to Mr Smol. Mr Henderson concluded, “... I will make my plans to leave the country and advise my creditors accordingly”.

[98] In Mr Smol’s reply to Mr Henderson, he reminded him that the provisions of the Insolvency Act apply to his assets and activities. Mr Smol also strongly recommended him to work with Mr Currie in relation to the project.

[99] Mr Henderson’s 26 June 2014 application (reproduced at Schedule A) was made around the time of his email exchanges with Mr Smol.

[100] In Mr Currie’s 4 July 2014 email reply (Schedule B), Mr Currie requested that Mr Henderson provide all information in relation to Mr Henderson’s involvement in the development of the prototype biofuel motor and any business- related interest Mr Henderson had in the project.

[101] Mr Henderson, in subsequent correspondence, took issue with aspects of Mr Currie’s response and sought further information. His correspondence did not respond to the request for answers in relation to the biofuel motor until 21 September

2014. He then responded that he had no direct business-related interest in the motor. He had provided considerable advice and assistance. He had been offered the New

Zealand licence for it subject to his discharge. He was going to operate the licence exclusively for the benefit of his creditors but the Assignee had “killed that”. Mr Henderson concluded that he did not intend on pursuing any other opportunities or endeavours for the benefit of his creditors.

[102] It therefore appears that by 21 September 2014, the basis of any trip Mr Henderson would make overseas had altered, but without definition of the replacement goal.

[103] Mr Vinnell, by a letter of 24 November 2014, raised a number of matters with Mr Henderson including in relation to travel. He noted the need for Mr Henderson to address all issues identified in previous correspondence by Mr Currie.

[104] Mr Henderson, at his 9 December 2014 meeting with Mr Vinnell, then identified his desire to travel overseas to explore “employment opportunities”.

[105] In a 19 December 2014 email from Mr Vinnell to Mr Henderson, Mr Vinnell noted that it appeared possible from his discussions with Mr Henderson that Mr Henderson was intending to be in business overseas as a self-employed person, which might necessitate an application under s 149 Insolvency Act.

[106] In his 5 January 2015 email to Mr Vinnell (Schedule C), in which Mr Henderson sought approval in principle to travel overseas, he confirmed that his intention was to seek employment offshore with his best opportunities lying in North America, South America and Hong Kong. The first trip, proposed for February

2015, was “most likely to be to North America” for seven to ten days, with meetings in both Los Angeles and New York.

[107] Mr Vinnell responded with the Assignee’s requirements on 14 January 2015 requiring supporting detail of proposed meetings concerning potential employment opportunities, including “some form of corroborative evidence that these employment opportunities do exist”. Mr Henderson responded by phone and email, including an offer that Mr Vinnell meet with a number of the New Zealanders who were going to be directly involved in the overseas meetings. It was clear from Mr

Henderson’s submissions at the hearing that he regarded this as the “corroborative evidence” he would offer. His email response included a further explanation – “the opportunity for me is to work with an offshore Government or investment group to now put together the package for electricity to be generated in their particular jurisdiction from biogas”.

[108] In his letter refusing travel approval on 20 January 2015 (Schedule D), Mr

Currie recorded:

7. Your more recent disclosures indicate you wish to travel overseas in relation to the promotion of a New Zealand business venture involved in the development of an alternative (biogas) fuel engine. Furthermore, you state that the proposed meetings you wish to attend with Citibank (USA) are related to the selling of licenses or rights (franchises) to that engine development. You add further that should these negotiations be successful you anticipate an (unspecified) employment opportunity aligned with these sales to any prospective purchaser. You do not state in what capacity and on whose behalf you intend making these initial approaches in relation to the development of the alternative engine.

8. No evidence has been proffered as to what these employment opportunities may represent, nor what the benefits there may be to our New Zealand bankruptcy creditors.

9. You do not have the Official Assignee’s consent under section 149 of the Insolvency Act 2006 to either directly or indirectly enter into, carry on, or take part in the management or control of any business. This aspect of your bankruptcy remains under investigation by my office.

10. In my view and in the absence of any corroborative information to the contrary, your application to travel overseas to sell rights and/or to obtain funding for the biogas company is consistent with involvement by you in the management of that business (whether directly or indirectly). Indeed, were you not involved in the management of that business, it is unclear why you would wish to travel overseas to promote the product. It is very difficult to see how this travel could relate to genuine, third party, employment opportunities. I am not able to consent in these circumstances. Indeed, were I to do so, I would be consenting to you breaching the Act.

The 2015 refusal

The Assignee’s two main reasons for refusing travel approval

[109] Although Mr Currie (in paragraph [11] of his 20 January 2015 letter) referred to other factors which he had taken into account in making his decision, he has confirmed in his evidence that he declined the application for two primary reasons.

[110] The first related to the lack of sufficient “independent, corroborative evidence” of the overseas opportunities (the basis of the application having changed). The second, primary reason lay in Mr Currie’s assessment that it appeared that Mr Henderson wished to engage in business while overseas.

Reason 1: lack of corroborative evidence

[111] Mr Henderson’s main complaint as to Mr Currie’s repeated insistence on corroborative evidence is that Mr Henderson considered that the necessarily tentative discussions which he had had in relation to the overseas trip did not allow him to provide the firmer details that the Assignee appeared to require. I cannot accept that proposition. In his 14 January 2015 email to Mr Vinnell, Mr Henderson referred by name to four corporations or entities in America, one of whom “I will be meeting with” and the others whom he might meet with but were “still up in the air”. Some form of written corroboration of the arranged meeting and the possible meetings was a reasonable request on the part of the Assignee. Mr Henderson has not stated that there were no written communications between his colleagues and the American entities. Some communications are likely to have taken place by email or other written form. The request for written corroboration was a reasonable way for the Assignee to determine the genuineness of the proposed trip and the subject matter of discussion.

[112] Mr Henderson’s submission was to the effect that in order to obtain some degree of corroboration, Mr Currie should have taken up the opportunity to have Mr Vinnell meet with Mr Henderson’s New Zealand colleagues in January so as to hear from them as to the details of the proposed trip. (Mr Henderson noted their reliability given that they included a former Minister of the Crown, a lawyer and an

accountant). I reject the criticism of Mr Vinnell’s decision not to meet with Mr Henderson’s colleagues. Anything that could be said, could be expressed in writing. To the extent that it was likely that entities in the United States were to be involved in meetings, any email or other exchanges with those entities about such meetings were likely to assist the Assignee’s assessment of the genuineness of the request and the subject matter of the proposed meetings. The fact that dates of travel, accommodation and the like remained to be finalised did not affect Mr Henderson’s ability to provide that level of corroboration.

[113] Mr Henderson subsequently made it clear that he did not wish to provide more specific details of proposed meetings in case the Assignee took it upon himself to contact people thereby identified as such contact might undermine the venture. Mr Henderson reflected this position in his reply submissions when he suggested that a condition of any order I make should be that if information is to be provided to the Assignee, then the Assignee is not to contact the people identified without leave of this Court. Mr Henderson’s concerns as to publicity stem from earlier incidents involving MBIE staff which are now the subject of civil proceedings issued by Mr Henderson against the Attorney-General. I infer that Mr Henderson’s concern as to how any information he provided would be treated contributed to his decision as to the extent of his disclosure. In the event, his failure to provide the requested corroboration or to at least suggest that he would provide such information if there were undertakings as to confidentiality justifies Mr Currie’s placing considerable weight, in his refusal, on his lack of knowledge of those matters.

Reason 2: management of a business

[114] The second of the two key reasons Mr Currie identified for refusing the application was that it appeared to him that Mr Henderson wished to engage in business while overseas.

[115] Pursuant to s 149(1) Insolvency Act 2006, an undischarged bankrupt must not, without the consent of the Assignee or the Court, either directly or indirectly enter into, carry on, or take part in the management or control of any business.

[116] I adopt the broad construction of “management” identified by Ormiston J in

Commissioner for Corporate Affairs (Vic) v Bracht:⁶²

... the concept of ‘management’ for present purposes comprehends activities which involve policy and decision-making, related to the business affairs of a corporation, affecting the corporation as a whole or a substantial part of the corporation, to the extent that the consequences of the formation of those policies or the making of those decisions may have some significant bearing on the financial standing of the corporation or the conduct of its affairs.

... I would see the prohibition as covering a wide range of activities relating to the management of a corporation, each requiring an involvement of some kind in the decision-making processes of that corporation. That involvement must be more than passing, and certainly not of a kind where merely clerical or administrative acts are performed. It requires activities involving some responsibility, but not necessarily of an ultimate kind whereby control is exercised. Advice given to management, participation in its decision-making processes, and execution of its decisions going beyond the mere carrying out of directions as an employee, would suffice.

This interpretation has been consistently followed and applied in New Zealand.⁶³

[117] I adopt also, as correctly informing the approach to whether a person is involved in management, a passage in the judgment of Andrews J in Waters v Ministry of Economic Development.⁶⁴ In determining (on appeal) whether a District Court Judge had incorrectly concluded that a Mr Mann had participated in management in a variety of ways, her Honour concluded:⁶⁵

... I am satisfied that the evidence points to the appellant having accepted that Mr Mann was involved in decisions as to the direction of the company, how the company would run, and other major decisions. The fact that decisions were “joint decisions” and that Mr Mann did not have “sole and unregulated control of the companies” does not mean that Mr Mann was not taking part in the management of the companies. Advice given to management, participation in its decision-making processes, and execution of its decisions, going beyond the mere carrying out of directions as an employee, suffices as participation in the management of the company.

⁶² Commissioner for Corporate Affairs (Vic) v Bracht [1989] VicRp 72; (1988) 14 ACLR 728 (VSC) at 733–734,

_736.

⁶³ See, for instance, Tregurtha v New Zealand Police HC Auckland AP 123/93, 15 October 1993 at

4–6; Knight v Official Assignee [2009] NZHC 215; [2009] NZAR 235 (HC) at [14]–[16]; Waters v Ministry of Economic Development [2013] NZHC 3463 at [30]. See also Brookers Company and Securities Law (online looseleaf ed, Thomson Reuters) at [CA 382.06].

⁶⁴ _{Waters v Ministry of Economic Development, above n 63, at [34].}

⁶⁵ At [34] (citations omitted).

[118] Mr Henderson challenges as unsustainable Mr Currie’s conclusion that Mr Henderson’s travel for the stated purposes was consistent with his involvement in the management of the biogas project.

[119] Additionally, Mr Henderson submits that, even were he to have become involved in management matters while overseas, he would not have committed a breach of s 149 Insolvency Act because the section must be construed as not having extra-territorial effect.

[120] Authority for the proposition that s 149 does not have extra territorial effect may be found in Jamieson v Official Assignee.⁶⁶

[121] In the absence of detailed submissions on the point, I refrain from any observation as to whether s 149 does not have extra-territorial effect. The circumstances in both Jamieson v Official Assignee, and a subsequent case Bryers v Official Assignee, involved bankrupts who were overseas residents and were conducting all their business activities abroad.

[122] In any event, I accept the submissions of Mr Cornegé for the Assignee that that line of authority, if correct, is distinguishable.

[123] Mr Henderson’s various communications indicated that the biogas project was brought together by Cantabrians. They were the people apparently travelling together with Mr Henderson to the United States for the purpose of having American entities fully understand the “proposition” and determining how they would establish an American entity to operate a biogas electricity organisation. Mr Henderson has referred to the “licensing” of such organisations.

[124] In an email to Mr Currie on 22 February 2015, in which he asked Mr Currie to review his travel refusal, Mr Henderson stated:

I am attending the meetings. There will be others from the motor company in attendance. I am the person who developed the commercial model for the

⁶⁶ Jamieson v Official Assignee [2012] NZHC 949, [2012] NZCCLR 8, at [49] per Associate Judge Bell, followed in Bryers v Official Assignee [2015] NZHC 384 at [35] per Associate Judge Doogue.

application of the technology. It is in the role of fully explaining and setting out that model that I would be attending. I understand it best. I can best deal with the inevitable questions. And it is me seeking to be actively and directly involved in the application of that model going forward in some employment capacity.

[125] While Mr Henderson in this passage comes back to his aim of being an employee of an American entity, a fundamental purpose of the travel is to advance the interests of the New Zealand operation by promoting it to American interests and having those entities enter into some licensing or similar arrangement. Mr Henderson on his own statement places himself at the centre of such intended negotiations.

[126] Mr Currie was entitled, if not compelled, to conclude that Mr Henderson would not be merely carrying out directions as an employee but that he would be actively participating in decision-making processes and indeed in the promotion of the biogas project.

[127] Accordingly, Mr Vinnell’s earlier advice to Mr Henderson to consider making an application under s 149 was appropriate. When Mr Henderson pursued his travel application without also applying for consent to participate in management, Mr Currie’s refusal on the grounds identified in relation to potential management was fully justified.

Mr Currie’s application of Murray v The Official Assignee

[128] I have earlier (at [44] and [48]–[49]) identified how Mr Currie’s understanding of the legislative policy involved an application of principles stated in Murray v The Official Assignee and Rao v The Official Assignee.

[129] Mr Henderson’s cross-examination of Mr Currie clearly demonstrated that Mr Currie, in making his decision did not have a focus on Mr Henderson’s interests (as distinct from the interests of his bankrupt estate or his creditors). The following

_{exchange illustrates Mr Currie’s position:}⁶⁷

⁶⁷ Henderson v The Official Assignee Transcript, above n 56, at 37.

Q: All right. So could you explain to the Court what are my interests, if we start with my interests, what of my interests you did consider and how you considered them?

A. I couldn’t see how if any, um, permanent departure from, from New

Zealand would assist your, your creditors and (inaudible).

[130] Later in his evidence, Mr Currie confirmed in answer to a further question that he did not see any interest from Mr Henderson’s perspective.⁶⁸

[131] It is clearly established that Mr Currie failed to have regard to the personal interests of Mr Henderson. He therefore failed to have regard to a relevant consideration. To the extent he applied the principles laid down in Murray v The Official Assignee and Rao v The Official Assignee, Mr Currie reached his decision in part by reference to irrelevant or invalid considerations.

[132] I have not overlooked the fact that in January 2015, Mr Henderson’s public examination had yet to occur. I was not provided with evidence as to what extent Mr Henderson has yet to meet other obligations in relation to the documentation of his estate. Such issues, in terms of the Attorney’s report to Parliament, might have constituted one of the four mischiefs identified (as warranting an intrusion upon freedom of movement):⁶⁹

• the bankrupt travelling to avoid delivering property or information to the Assignee, or otherwise according compliance with any obligation relating to bankruptcy.

[133] However, Mr Cornegé, for the Assignee, stated in his submissions that the Assignee accepted that the validity of his decision rested on the two main reasons addressed in submissions above at [109]–[110].

[134] I take it that it was completely accepted by the Assignee, when he made his decision in January 2015 that, if it was necessary to ensure Mr Henderson’s attendance at his public examination or other provision of information, the Assignee could have imposed conditions on any travel approval. The Assignee need not have

_{refused approval outright if the only consideration was to excuse Mr Henderson’s}

⁶⁸ _{At 39.}

⁶⁹ Above at [22]–[23].

attendance at events or fulfilment of obligations in New Zealand. For Mr Currie, in January 2015, therefore, Mr Henderson’s outstanding requirements in relation to his public examination understandably no longer loomed as an overwhelming objection to granting travel approval.

The concept of approval in principle

[135] When Mr Henderson further pursued his travel application on 5 January

2015, it was expressly upon the basis that he was seeking approval in principle.

[136] Because I am satisfied that the Assignee was correct to assess Mr Henderson’s plans in the United States as calling for an application for consent to enter into business under reg 10 of the Personal Insolvency Regulations, any concept of granting approval in principle to the travel alone would have been unjustified. To be a meaningful application, there was a need (as Mr Vinnell suggested) for Mr Henderson to make applications.

[137] I therefore do not strictly need to rule upon Mr Henderson’s submission that the Assignee ought to have processed his application as an application for approval in principle rather than for outright approval. I indicated to Mr Henderson in the course of submissions that in the absence of such a distinction in the legislation, this Court was unlikely to reach any decision based on the proposition that the Assignee must be prepared to contemplate approval on principle. That said, there will be occasions where it is both administratively possible and reasonably meets the needs of the bankrupt for the Assignee to approach an application in essentially two stages, with the first stage being something in the nature of a “heads up” or “an approval in principle”. A great deal of Mr Henderson’s concerns in this case revolved around the fact that he had to co-operate with a substantial number of other people (both from New Zealand and overseas) and that finalised arrangements were not feasible. There will be cases where a preliminary “heads up” or “approval in principle” from the Assignee is appropriately and reasonably called for but on my assessment this would be as a matter of good administration rather than a legal requirement.

[138] I am satisfied in this case that the ultimate refusal of Mr Henderson’s

application was justified and that the refusal arose from matters within Mr

Henderson’s own control rather than turning principally on ultimate details such as

dates and places of meetings.

Mr Vinnell as “the Assignee’s agent”

[139] Mr Henderson in his evidence frequently referred to Mr Vinnell as “the Assignee’s agent”. Mr Henderson’s contention was that any statements Mr Vinnell made as to the approach to be adopted on the travel application would bind the Assignee. I do not find that anything on the evidence establishes such an agency relationship. The evidence points to Mr Vinnell, as Mr Currie’s solicitor, having discussions with Mr Henderson both as to the travel application and the statement of income and expenditure. The evident purpose was to discuss on the ground (Mr Currie is based at Hamilton) queries or complaints of Mr Henderson. Mr Vinnell’s evidence is that he reported to Mr Currie mainly by email. When Mr Vinnell wrote to Mr Henderson, as he did on 14 January 2015, he clearly recorded that the stated requirements were those of the Assignee.

[140] Mr Henderson deposed that he received from Mr Vinnell assurances that he had all the information needed to process an application. Mr Vinnell deposed that, although he had not left notes of all his discussions with Mr Henderson, he doubted that he had made such a statement. I conclude from the documentary evidence that there must have been some misunderstanding between the two as to what was said. In his 14 January 2015 letter, Mr Vinnell expresses the Assignee’s clear requirement for further, identified information. The letter’s listing of further information which was required is incompatible with any contrary understanding Mr Henderson derived from oral discussions. It was not until six days after the 14 January request for further information that the Assignee refused the travel application.

[141] Mr Henderson deposed that he discussed with Mr Vinnell the concept that Mr

Henderson seek an approval in principle which Mr Vinnell agreed to.

[142] Mr Vinnell says that he recalls having a discussion with Mr Henderson about approval in principle, and was aware that this was the “fundamental approval” Mr Henderson sought.⁷⁰

[143] An aspect of Mr Henderson’s complaint to Mr Vinnell, and again on this appeal, comes from Mr Henderson’s view that the Assignee had unrealistic expectations as to the detail of travel which Mr Henderson could initially provide – much of the overseas travel and meetings had to be firmed up amongst the numerous participants once they knew that Mr Henderson could travel. I find it probable that there was some discussion between Mr Vinnell and Mr Henderson which led Mr Henderson to understand that his application was unlikely to be rejected if every last detail of his travel was not included, so long as he could provide the missing details after they were firmed up. This would have led Mr Henderson to identify his 5

January 2015 request as a request for approval in principle. There was clearly, however, a difference in expectation as to how much further detail Mr Henderson should provide before receiving any approval. In the event, the Assignee’s requirement in Mr Vinnell’s 14 January 2015 letter clearly stated requirements for further information.

The 2015 refusal – overall conclusion

[144] There were aspects of the Assignee’s response to Mr Henderson’s application of 26 June 2014 which gave Mr Henderson grounds of appeal. In particular, Mr Currie’s approach to the application did not have proper regard to the bankrupt’s interests (including the freedom to travel) and therefore involved the application of a principle (enunciated by Penlington J in Murray v The Official Assignee) which had been abrogated.⁷¹ To that extent, Mr Currie’s approach involved the application of irrelevant and inaccurate considerations. There was also, in 2014, an evident predetermination in which a decision was identified before the Assignee had

considered all relevant matters including the bankrupt’s interests. I have found on

the evidence, however, that this latter consideration fell away by the time Mr Currie came to make his decision in January 2015.

⁷⁰ _{Henderson v The Official Assignee Transcript, above n 56, at 4.}

⁷¹ Murray v The Official Assignee, above n 12 at 18–19.

[145] The fact that irrelevant or inaccurate considerations played a part in Mr Currie’s decision-making does not in this case justify the Court’s intervention in this case. For the reasons I have identified in relation to the two main reasons for Mr Currie’s refusal (the lack of corroborative evidence and the apparent business purpose of the travel), the decision to refuse permission was the correct decision. This is so regardless of flawed aspects of Mr Currie’s decision-making. It must also be so regardless of other unsatisfactory aspects of the procedure, including Mr Currie’s original decision not to treat a formal request as a formal request.

[146] I am satisfied that the only correct decision for an Assignee in January 2015 having regard to relevant considerations and disregarding irrelevant considerations was to refuse approval.

A way ahead?

[147] It is always open to a bankrupt to pursue a second or subsequent application for consent to travel. Nothing in this judgment constitutes a finding that Mr Henderson would not have solid grounds to make a further request in relation to the type of travel previously anticipated. To succeed, he would have to meet the Assignee’s reasonable request of information and be prepared to accept reasonable conditions attaching to any consent. If the travel is in relation to the biogas project, he may also need to request approval under reg 10 Personal Insolvency Regulations.

Costs

[148] As Mr Henderson’s application is being dismissed, costs would normally follow the event. The Assignee’s notice of opposition does not indicate whether the Assignee seeks costs and I therefore will be reserving costs.

[149] This appeal has had some factual complexity by reason of the time over which Mr Henderson’s request for consent was outstanding and the failure of the Assignee to deal with the June 2014 request as a formal request at the time. The appeal has also involved consideration of legal principles which have either not been settled or, in one case, were apparently settled but have been abrogated. Those

considerations might suggest that a just outcome should be that costs will lie where they fall.

Order

[150] I order:

(a) Mr Henderson’s application dated 21 April 2015 is dismissed; (b) Costs and disbursements are reserved.

Associate Judge Osborne

Representation:

D I Henderson (in person) Official Assignee

SCHEDULE B

SCHEDULE D