IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY CIV-2010-409-000559 [2015] NZHC 1759 IN THE MATTER of the Insolvency Act 2006 AND IN THE MATTER of the bankruptcy of DAVID IAN HENDERSON BETWEEN AND HAVENLEIGH GLOBAL SERVICES LIMITED AND FM CUSTODIANS LIMITED Judgment Creditors (Substituted Creditors) DAVID IAN HENDERSON Judgment Debtor Hearing: 22 July 2015 Appearances: C R Vinnell for Official Assignee D I Henderson (Bankrupt) in Person T Cooley as counsel assisting the Court (excused from the hearing) Ruling: 29 July 2015 PRE-EXAMINATION RULING (NO. 3) OF ASSOCIATE JUDGE OSBORNE as to application for adjournment Introduction [1] David Ian Henderson (Mr Henderson) was adjudicated bankrupt on 29 November 2010. HAVENLEIGH GLOBAL SERVICES LIMITED v HENDERSON [2015] NZHC 1759 [29 July 2015]
[2] He was to have been automatically discharged from bankruptcy in January 2014. [3] The Assignee, in November 2013, filed a Notice of Objection to Mr Henderson s discharge, pursuant to s 292 Insolvency Act 2006. [4] The Court has allocated 10.00 am, 3 August 2015 as the commencement of the public examination of Mr Henderson as required by s 295 of the Act. Mr Henderson has been summoned accordingly. [5] On 19 June 2015, the Assignee filed her report as required by s 296(1) of the Act. [6] The Court has directed Mr Henderson to serve early next week briefs of any evidence and additional documents which Mr Henderson intends to adduce at the public examination. The Assignee s application [7] The Assignee applies for an adjournment of the public examination of Mr Henderson. She does so because Mr Henderson has recently been charged with offences under the Insolvency Act 2006. The facts giving rise to the criminal proceedings will be the subject of questions asked of Mr Henderson at the public examination. Mr Henderson asserts that his fair trial rights cannot be waived or abrogated. The Assignee perceives that the Crown s ability to conduct the criminal proceedings may be prejudiced if the public examination proceeds as scheduled. [8] Mr Henderson opposes the adjournment application. He wishes to obtain without delay the Court s decision pursuant to s 298 of the Act relating to his discharge from bankruptcy.
Background Slow progress towards the conduct of the public examination [9] Following the Assignee s objection to Mr Henderson s discharge, the Court allocated June 2014 as the provisional date of examination. In accordance with the Act, Mr Henderson was summoned to be examined on that date. The date was nevertheless provisional as the Assignee wished to obtain access to further documents relating to Mr Henderson before concluding the report which she is required to file before an examination. 1 [10] In March 2014, I gave an interlocutory judgment in favour of the Assignee in relation to the Assignee s accessing documents (the discovery judgment). 2 Mr Henderson appealed the discovery judgment but his appeal was subsequently in July 2014 deemed to have been abandoned. In March 2015, Mr Henderson was granted an extension of the time to apply for an appeal fixture. 3 Mr Henderson in April 2015 withdrew his appeal. [11] In the course of 2014, the Assignee pursued further information and documents relating to Mr Henderson through summoning individuals for private examination under s 165 of the Act and through issuing notices for the delivery of documents under s 171 of the Act. [12] In the meantime Mr Henderson s public examination had been adjourned from its initial (provisional) date in June 2014 on a number of occasions. Upon the withdrawal of Mr Henderson s appeal in April 2015, this Court directed that the public examination would be finally adjourned to commence on a confirmed basis on 3 August 2015 (four days reserved). Assignee s consideration of criminal charges [13] At case management conferences in 2014 and early 2015 which related to the public examination, counsel for the Assignee informed the Court and Mr Henderson 1 2 3 Insolvency Act 2006, s 296. Re Havenleigh Global Services ex parte Henderson [2014] NZHC 499. Henderson v Official Assignee [2015] NZCA 104.
that the Assignee was considering the possibility of presenting charges against Mr Henderson in relation to offences under the Act. While the concept of charges against Mr Henderson remained merely a possibility, the Assignee appropriately took the position at case management conferences that she would not oppose any application by Mr Henderson to further adjourn the public examination. Mr Henderson expressed concern at the prospect that he would be subjected to a public examination while the potential for criminal charges existed. Mr Henderson steadfastly adopted the position that he did not support adjournment and that the Assignee would have to accept Mr Henderson s right, in the event that criminal proceedings against Mr Henderson ensued, to argue that his fair trial rights had been prejudiced. Charging documents are filed against Mr Henderson [14] On 9 July 2015, the Assignee, by the Crown Solicitor in Christchurch, filed charging documents in the Christchurch District Court alleging that Mr Henderson: failed without reasonable excuse to comply with Section 149 of the Insolvency Act 2006 in that while being an undischarged bankrupt he, without the consent of the Assignee or the Court, either directly or indirectly entered into, carried on, or took part in the management or control of a business, namely St Asaph Investments Limited [and St Asaph Investments 2011 Limited and AFB Treasury Limited]. [15] I am informed by Mr Vinnell that enquiries of the District Court as to the time it will take for the charges to be heard have indicated that (whether the matter proceeds as a Judge-alone trial or a jury trial) it is likely that between 11 and 15 months will pass from first appearance to trial. [16] Accordingly, and allowing time for this Court to re-allocate a date for public examination and for those involved to prepare again for the examination, I conclude that it is likely that an adjournment to await the outcome of the criminal charges may entail the public examination taking place in early 2017.
The discretion to grant an adjournment [17] Both Mr Vinnell for the Assignee and Mr Henderson for himself accept that the decision to grant or refuse an adjournment is within the discretion of the Court. [18] A public examination is not civil litigation in the normal sense of litigation between two parties. 4 The Court must consider on this adjournment application not only the interests of the Assignee in the performance of her duties (and the public and creditors interests she represents) but the personal interests of Mr Henderson as an undischarged bankrupt. The Court must also for itself consider matters of broader public interest which fall for consideration by the Assignee in the context of her duties and powers. They are ultimately in this context a matter for the Court s consideration. Practice in relation to adjournments [19] Past practice in relation to adjournment applications is a useful benchmark as to outcomes which have in the past been found to be appropriate and just and as to considerations which have informed the Courts decision-making. [20] I focus on the situation in which a person may be facing distinct proceedings in the civil and criminal jurisdictions respectively. I will refer to the situation as one of concurrent proceedings. [21] There is no general rule in relation to concurrent proceedings that the civil case must await the conclusion of the criminal proceeding. [22] This Court rejected a submission to the contrary in Davidson v Registrar of Companies. 5 In that case, a director involved in the Bridgecorp collapse of mid- 2007 was the subject of a report which recommended he be prohibited under s 385 of the Companies Act 1993 from management of companies. The Registrar of Companies had persisted with his enquiry while criminal proceedings were pending 4 5 See Griffin v Pantzer [2004] FCAFC 113, (2004) 137 FCR 209 at 202 per Allsop J; followed in Havenleigh Global Services Ltd v Henderson [2015] NZHC 1762 at [62] (Pre-examination Ruling (No. 2)). Davidson v Registrar of Companies [2011] 1 NZLR 542 (HC).
against the director. The Deputy Registrar refused to await the criminal proceedings. He heard submissions. He imposed a s 385 prohibition of two and a half years. [23] In dismissing Mr Davidson s appeal, Miller J found that the Deputy Registrar had not erred by refusing to stay the prohibition process. 6 His Honour referred to s 405 of the Crimes Act which provides that: 7 No civil remedy for any act or omission shall be suspended by reason that such act or omission amounts to an offence. Miller J adopted the approach endorsed by Lord Bingham in Johnson v Gore Wood & Co, in holding that a decision whether to stay and litigation while criminal proceedings run their course requires: 8 a broad, merits-based judgment which takes account of public and private interests involved and also takes account of all the facts of the case, focusing attention on the crucial question whether in all the circumstances a party is misusing or abusing the process of the court [24] In Davidson v Registrar of Companies, Miller J considered whether the process of the Court was being misused or abused by a comparison of the concurrent proceedings. 9 His Honour observed: [148] The two proceedings do traverse some of the same ground. The Securities Act prosecution will focus on two questions: whether the prospectuses were in fact misleading, assessed objectively, and, if so, whether the defendants can demonstrate absence of fault. The Registrar s process has also examined whether the prospectuses were misleading. Both examine questions of individual justification or excuse. [149] But no abuse of process arises. The two proceedings serve different and lawful purposes, the one being concerned with criminal liability, the other with protection of the public from unfit directors and managers. Such people having identified themselves through their conduct, the Registrar should not delay in prohibiting them. Consistent with that, I observe that s 386(7) provides that an appeal from the Registrar does not operate as a stay. [25] Mr Vinnell referred me to other New Zealand decisions dealing with the issues raised by concurrent proceedings. 10 The discussions and outcomes in these 6 7 8 9 At [144] [151]. At [145]. At [147], citing Johnson v Gore Wood & Co [2000] UKHL 65, [2002] 2 AC 1 [HL] at 31; also adopted by the majority in Z v Dental Complaints Assessment Committee [2008] NZSC 55, [2009] 1 NZLR 1 at [127] per McGrath J; see also at [2] per Elias CJ. Davidson v Registrar of Companies, above n 5.
cases emphasise the absence of a general rule that civil cases must await the outcome of criminal trials. [26] That the practice in New Zealand has been similar to that in England is illustrated in the principal judgment given in the Court of Appeal in Jefferson Ltd v Bhetcha, in which Megaw LJ stated: 11 I should be prepared to accept that the court which is competent to control the proceedings in the civil action would have a discretion to stay the proceedings, if it appeared to the court that justice the balancing of justice between the parties so required But in the civil court it would be a matter of discretion, and not of right. There is no principle of law that a plaintiff in a civil action is to be debarred from pursuing that action in accordance with the normal rules for the conduct of civil actions merely because so to do would, or might, result in the defendant, if he wished to defend the action, having to disclose, by an affidavit under Order 14, or in the pleading of his defence, or by way of discovery or otherwise, what his defence is or may be, in whole or in part, with the result that he might be giving an indication of what his defence was likely to be in the contemporaneous criminal proceedings. The protection which is at present given to one facing a criminal charge the so-called right of silence does not extend to give the defendant as a matter of right the same protection in contemporaneous civil proceedings. [27] The earlier English case of Re Atherton arose in a situation similar to the present. 12 Phillimore J ordered a bankrupt, who was remanded on a criminal charge, to answer at a public examination under s 118 Bankruptcy Act 1883 (UK) questions as to his conduct, dealings and property (as part of the Court s consideration of an application for discharge). The headnote to the official Report accurately reflects the judgment: 13 A debtor, who is in custody or under remand on a criminal charge, is bound at his public examination in bankruptcy to answer all such questions touching his conduct, dealings, and property as the Court may put or allow to be put to him, even although the answers may incriminate him; and the scope of the inquiry is not limited by ss. 17 and 69 of the Bankruptcy Act, 1883, to offences under s. 11 of the Debtors Act 1869, or in connection with 10 11 12 13 General Distributors Ltd v Hilliard HC Auckland CIV-2008-404-1057, 16 July 2008; Nathans Finance NZ Ltd (In Rec) v Doolan HC Auckland CIV-2010-404-2360, 15 October 2010; Mayo- Smith v Rosenberg [2013] NZHC 274, [2014] NZAR 23; Commissioner of Police v Burgess [2011] 2 NZLR 703 (HC); Commissioner of Police v Wei [2012] NZCA 279. Jefferson Ltd v Bhetcha [1979] 1 WLR 898 (CA) at 904-905, adopted in General Distributors Ltd v Hilliard, above n 10, at [20] [21]. Re Atherton [1912] 2 KB 251. At 251.
his bankruptcy, but extends to all matters which the Court may take into consideration under s. 8 of the Bankruptcy Act, 1890, on the application for his discharge. The usual practice of not pressing such questions in relation to the alleged offence while the criminal charge is hanging over the debtor, but of adjourning the public examination until after the trial, is only a rule of convenience. [28] In a thoroughly researched article on self-incrimination in insolvency examinations, Stephen Lloyd refers to English cases leading up to Re Atherton and observes: 14 It appears that, even into the 20 th century, when it was treated as settled the bankrupts were required to answer self-incriminating questions, examination was often deferred until after the criminal trial had been completed unless there was a compelling reason for not doing so. The conclusion that bankrupts were obliged to answer, even in circumstances where they were facing trial for matters which might be raised in the examination, followed from the Court s assessment of the purposes of the statute. Those purposes would be frustrated by permitting bankrupts to refuse to answer questions on the basis that the answer might expose them to penal consequences. Just as the purposes of the statute require that bankrupts must answer incriminating questions where necessary, the purposes of the statute also closely confined the duty to answer such questions. The bankrupt would only be compelled to answer potentially incriminating questions where the answer would further the purposes of the statute. [29] In delivering the principal judgment in the decision of the Full Court of the Federal Court of Australia in Griffin v Pantzer, Allsop J comprehensively reviewed the same line of English cases, as well as American and Australian authorities. His Honour s conclusions are materially similar to those contained in Stephen Lloyd s article. 15 [30] Two overseas authorities in relation to concurrent proceedings which are cited in New Zealand cases are Jefferson Ltd v Bhetcha, (which I have referred to at [26] above), and McMahon v Gould in which Wootten J, in the Supreme Court of New South Wales, embarked upon an extensive review of authorities. 16 The review 14 15 16 Stephen Lloyd X7, Lee, and Chancery s Treatment of Self-Incrimination in Insolvency Examination (2015) 37 Syd LR 89 at 103 (citations omitted). Griffin v Pantzer, above n 4, at [74] [213]. Anthony Lo Surdo Bankrupts Avoiding Self- Incrimination (2004) 42(10) LSJ 56. McMahon v Gould (1982) 7 ACLR 202 (NSWSC).
led Wootten J to propound a set of guidelines to assist in the determination of applications such as that now before this Court. The guidelines are these: 17 (a) (b) (c) (d) (e) (f) (g) (h) (i) (j) Prima facie a plaintiff is entitled to have his action tried in the ordinary course of the procedure and business of the court; It is a grave matter to interfere with this entitlement by a stay of proceedings, which requires justification on proper grounds; The burden is on the defendant in a civil action to show that it is just and convenient that the plaintiff's ordinary rights should be interfered; Neither an accused nor the Crown are entitled as of right to have a civil proceeding stayed because of a pending or possible criminal proceeding; The court s task is one of the balancing of justice between the parties, taking account of all relevant factors; Each case must be judged on its own merits, and it would be wrong and undesirable to attempt to define in the abstract what are the relevant factors; One factor to take into account where there are pending or possible criminal proceedings is what is sometimes referred to as the accused s right of silence, and the reasons why that right, under the law as it stands, is a right of a defendant in a criminal proceeding; However, the so-called right of silence does not extend to give such a defendant as a matter of right the same protection in contemporaneous civil proceedings. The plaintiff in a civil action is not debarred from pursuing action in accordance with the normal rules merely because to do so would, or might, result in the defendant, if he wished to defend the action, having to disclose, in resisting an application for summary judgment, in the pleading of his defence, or by way of discovery or otherwise, what his defence is likely to be in the criminal proceeding; The court should consider whether there is a real and not merely notional danger of injustice in the criminal proceedings; In this regard factors which may be relevant include: (i) (ii) the possibility of publicity that might reach and influence jurors in the civil proceedings; the proximity of the criminal hearing; 17 At 206-207 (citations omitted).
(iii) (iv) (v) (vi) the possibility of miscarriage of justice eg by disclosure of a defence enabling the fabrication of evidence by prosecution witnesses, or interference with defence witnesses; the burden on the defendant of preparing for both sets of proceedings concurrently; whether the defendant has already disclosed his defence to the allegations; the conduct of the defendant, including his own prior invocation of civil process when it suited him; (k) (l) The effect on the plaintiff must also be considered and weighed against the effect on the defendant. In this connection I suggest below that it may be relevant to consider the nature of the defendant's obligation to the plaintiff; In an appropriate case the proceedings may be allowed to proceed to a certain stage, eg, setting down for trial, and then stayed. [31] The McMahon v Gould guidelines were adopted as helpful in this Court by Master Williams QC in ADT Securitas Ltd v Geange. 18 The Insolvency Act 2006 the statutory regime as it affects Mr Henderson [32] Section 295(2) of the Act makes specific provision for the timing of the public examination. The subsection provides that: The Assignee must summon the bankrupt as soon as practicable after the expiry of the 3-year period referred to in section 290(1). [33] It has been recognised that a breach of the Assignee s obligation to comply with the predecessor section to s 295(2) of the Act (namely s 109(1) of the 1967 Act) will entitle the bankrupt, by an application for judicial review, to pursue mandamus. 19 [34] At his public examination, Mr Henderson will be required to answer questions about his conduct, dealings, and property. 18 19 ADT Securitas Ltd v Geange (1992) 6 PRNZ 100 (HC) at 103 104; see also General Distributors Ltd v Hilliard, above n 10 at [15] [22] and [38] per Heath J; Nathan Finance NZ Ltd (in rec) v Doolan, above n 10 at [39] [42] per Associate Judge Doogue; Mayo-Smith v Rosenberg, above n 10, at [10] [13] per Goddard J; Commissioner of Police v Wei above n 10, at [49]. Anderson v Official Assignee [1996] 2 NZLR 167 (HC) at 174 175 per John Hansen J. The bankrupt s application for other remedies was dismissed in the High Court, a decision upheld in the Court of Appeal see Anderson v Official Assignee CA150/96, 25 February 1997.
[35] Mr Henderson will be compelled to answer such questions and will not be excused from answering them on the grounds that the answers may incriminate him. 20 [36] Section 185 of the Act provides Mr Henderson with a protection in relation to his answers at the public examination. The section renders inadmissible in criminal proceedings a statement made by the defendant when publicly examined as a bankrupt. But to the extent that Mr Henderson volunteers affidavit evidence of himself or other witnesses, in addition to his answers at the public examination, the inadmissibility rule will not apply. 21 [37] Notwithstanding that the inadmissibility rule protects the bankrupt from the use of his public examination answers in later criminal proceedings, the Courts have recognised that a prosecutor may gain several significant advantages from the further examination. For instance, in a case such as the present, the Assignee (either directly or through counsel) has the benefit of the responses and explanation given by the bankrupt at the examination and the benefit of hearing and seeing any witnesses who speak to issues which will later be the subject of criminal trial. 22 [38] The Courts both in Australia and New Zealand have recognised that the adjournment of civil proceedings to the completion of criminal proceedings may, on the other hand, provide tactical advantages to a defendant in the sense of not playing their hand ahead of a criminal trial. Advantages may include depriving the prosecution of any opportunity to check the defendant s version of events and to obtain evidence to refute it. In General Distributors Ltd v Hilliard, Heath J followed the approach in this regard of Wootten J in McMahon v Gould and of Master Williams QC in ADT Securitas Ltd v Geange. 23 20 21 22 23 Insolvency Act 2006, s 184. See Ministry of Business Innovation and Employment v Peters [2015] NZDC 2396 at [52]. At [35]. General Distribution Ltd v Hilliard, above n 10, at [38], citing McMahon v Gould, above n 16, and ADT Securitas Ltd v Geange, above n 18.
The significance of s 25(d) New Zealand Bill of Rights Act 1990 (NZBORA) [39] By s 25(d) NZBORA, Mr Henderson (with charging documents filed in the District Court) has as one of his minimum rights: the right not to be compelled to be a witness or to confess guilt. [40] For the Assignee, Mr Vinnell expresses concern that Mr Henderson may argue at any criminal trial that his fair trial rights arising under s 25(d) NZBORA have been breached. [41] I express my doubt as to whether that would necessarily be so because the right under s 25(d) expressly arises in relation to the determination of the charge. I observe also that, while Judge P A Cunningham, in Ministry of Business Innovation and Employment (MBIE) v Peters, ultimately dismissed all charging documents, her Honour did not do so by reference to a breach of s 25(d). Judge Cunningham relevantly observed: [100] I am less sure about the alleged breach of s 25(d), that a defendant cannot be compelled as a witness. This is because I am not in any position to decide if Mr Peters will or will not give evidence given what has gone before. [42] Judge Cunningham s key finding in dismissing the charging documents related to the issue of self-incrimination in light of the timing of the concurrent proceedings. Mr Peters examination under the Insolvency Act had occurred in mid- 2013. He was discharged from bankruptcy on 23 December 2013. 24 [43] Subsequently, in March 2014, the documents charging Mr Peters with offences were filed in the District Court. [44] Of these events, Judge Cunningham observed: [98] Section 23(4) NZBORA states that anyone arrested for an offence or suspected offence has the right to refrain from making any statement. This is often referred to as the right to silence. 24 Re Marac Finance Ltd, ex parte Peters; [2013] NZHC 3568; the detailed reasons being provided subsequently in Re Peters, ex parte Marac Finance Ltd [2014] NZHC 1755, [2015] NZCCLR 2.
[99] In my view Mr Peters has already disclosed his hand including from his evidence in chief and by answers he gave under cross-examination in his application to be discharged from his bankruptcy. In addition he has disclosed what evidence other witnesses might give on his behalf. This can be viewed as being equivalent to a breach of his right to silence. I say this because at the time he chose to present his evidence in chief and that of other witnesses was not only before charges were brought against him, but before he knew consideration was being given by the Assignee to bringing charges against him. Accordingly any suggestion that his right to silence can be maintained pre-trial is illusory. Will a criminal trial breach Mr Peters fair trial rights? [101] In terms of the privilege against self incrimination, I agree that this privilege has been lost by virtue of that fact that Mr Peters was unaware if charges would be brought against him and what those might be at the time of the High Court proceeding. He has answered questions in the High Court proceeding he may not have chosen to answer had he known about the charges. [102] I am of the view that Mr Peters fair trial rights have and will be compromised in any criminal proceeding (see paras [99] and 101] above). [45] Her Honour does not further explain the suggestion in her paragraph [101] that Mr Peters may have chosen not to answer certain questions in his public examination had he known of the charges. By s 184 of the Act, Mr Peters was compelled to answer questions provided they related to his conduct, dealings or property. [46] Courts both in New Zealand and elsewhere, in relation to the abrogation in bankruptcy examinations of the privilege against self-incrimination, have recognised that the legislative purpose behind obtaining the bankrupt s fullest response should not be compromised by pending or even subsequently issued criminal proceedings. I have noted the observations of Stephen Lloyd upon his review of the authorities, recognising that: 25 Those purposes would be frustrated by permitting bankrupts to refuse to answer questions on the basis that the answer might expose them to penal consequences. 25 Above at [28].
[47] In Rees v Kratzmann, Windeyer J dealt with cognate provisions under the Companies Act 1961 (Qld). 26 His Honour reviewed the English authorities, finding that the traditional common law objected to compulsory interrogations. 27 Windeyer J demonstrated the different approach in the bankruptcy jurisdiction thus: 28 a debtor upon his public examination in bankruptcy cannot refuse to answer questions on the ground that the answers may incriminate him, the purpose of the bankruptcy statute being to secure a full and complete examination and disclosure of the facts relating to the bankruptcy in the interests of the public. [48] In short, Parliament has recognised that the public interest attaching to complete disclosure of a bankrupt s affairs effectively trumps certain protections which the bankrupt would normally have with regard to any criminal proceedings. Any heightened exposure that the bankrupt may have as a consequence of his or her bankruptcy procedure is then ameliorated in the Insolvency Act by s 185, which renders the bankrupt s statements made at any examination inadmissible in criminal proceedings against the bankrupt. Mr Henderson s entitlement to have his discharge considered [49] A point was reached earlier this year whereby the Assignee was ready to present her report for Mr Henderson s public examination, with a single reservation as to whether the public examination should proceed at this point having regard to the Assignee s continuing consideration of possible charges. Issues of access to documents and ability to complete the report had been overcome. [50] When the Assignee objects to a bankrupt s automatic discharge, she is required to summon the bankrupt (for public examination) as soon as practicable after the bankrupt s 3-year period has expired. 29 26 27 28 29 Rees v Kratzmann (1965) 114 CLR 63. At 80, Windeyer J quoted Blackstone s Commentaries: For at the common law, nemo tenebatur porodere seipsum: and his fault was not to be wrung out of himself, but rather to be discovered by other means, and men : Sir William Blackstone Commentaries on the Laws of England (Oxford, 1765 1769) vol 4 at 296. At 80. Insolvency Act 2006, s 295(2).
[51] The Court, consistently with the requirements for the summons to issue as soon as practicable, has the responsibility to ensure that the examination is able to proceed in a timely manner. 30 So long as the public examination does not take place, the bankrupt remains affected by the full measure of intrusions upon his or her status. The Court cannot anticipate before the public examination is conducted whether the appropriateness of immediate discharge will be established. The fact that an immediate discharge may be granted serves to emphasise that only in exceptional circumstances should the Court defer a public examination which the bankrupt wants to take place. 31 Analysis Mr Henderson s knowledge of the criminal charges [52] Parliament, in line with other Commonwealth legislatures, and through the express provisions of ss 184 and 185 of the Act, has recognised the propriety of investigations continuing into the conduct, dealings or property of the bankrupt, including by examination, when criminal proceedings are either actually or potentially in train. [53] In Mr Henderson s case, unlike the situation of the bankrupt in MBIE v Peters, the bankrupt is aware of the criminal charges he faces. To the extent he is considering presenting at his examination additional evidence either of himself or other witnesses, Mr Henderson has foreknowledge of the criminal proceedings so as to be able to make an informed decision as to any additional evidence for the public examination. [54] To the extent that Mr Henderson will still be required at his public examination to answer questions which may incriminate him, such is the consequence of the legislative provisions and of the importance Parliament places on enabling the Assignee to perform her duties to promote the public interest. 30 31 Above at [32] [33]. One exceptional circumstance, which occurred in relation to Mr Henderson s bankruptcy, arises when the Assignee has been unable to obtain all the documents or other information which will inform her report. In such a case the Court is likely (as occurred earlier in relation to this public examination) to adjourn the public examination to enable the Assignee to complete her investigation or inquiries.
The impact of any adjournment of Mr Henderson s examination [55] I turn to consider the delay likely to occur if an adjournment were granted. The prospect would be that Mr Henderson s public examination might occur in early 2017. In other words, Mr Henderson might well be publicly examined some three years after he was due to be automatically discharged. This Court should contemplate such a delay only in the most extreme circumstances. [56] The Assignee has acted responsibly in applying for an adjournment. Mr Henderson has himself repeatedly raised his concerns as to his fair trial rights. His express reservation of those rights, should his public examination now proceed, foreshadows the application Mr Henderson might make for either the stay or the dismissal of the charging documents. [57] There is a public interest to be taken into account as Mr Vinnell submits. The views of the Assignee as to the public interest, with her responsibilities under the Act, are entitled to be accorded substantial respect by this Court. Mr Vinnell understandably focused submissions on the impact of the bankrupt s successful arguments as to fair trial rights in MBIE v Peters and the consequential dismissal of all charges against Mr Peters. I regard as legitimate the Assignee s concerns that stay or dismissal arguments will subsequently be pursued and might succeed. In considering the adjournment application, I must take into account the impact upon the public interest should Mr Henderson pursue such fair trial rights arguments and should charges be dismissed. In that event, in relation to charges which the Assignee and Crown Solicitor have considered appropriate, Mr Henderson would not be subjected to trial. [58] That said, I view MBIE v Peters as a substantially different case to the present. Mr Peters was found by Judge Cunningham in the public examination to have disclosed his hand when unaware that charges would be brought against him. Mr Henderson, in preparing for his public examination, has already been served with the charging documents. He opposes the Assignee s application for adjournment while well aware of his obligations under the Insolvency Act to answer the
comprehensive range of questions which will be put to him at his public examination, including as to offences he may have committed while bankrupt. [59] In the event the Court declines the adjournment application, Mr Vinnell submitted that the Court might record formally that Mr Henderson has been advised that his public examination may have an adverse effect on his defence of charges, but that he has decided to proceed anyway. To the extent that such a warning might be considered to promote the public interest in protecting the viability of the criminal charges, Mr Vinnell s suggestion is understandable. But I do not view a formal recording as suggested by Mr Vinnell as necessary the Insolvency Act provisions are plain in their meaning and consequence, as I have discussed in this judgment. [60] Mr Vinnell noted in relation to any delay of the public examination that it remains uncertain whether the examination would result in an immediate discharge in any event. The suggestion is that an adjournment may not in fact prejudice Mr Henderson. But the Court is not in a position to anticipate the outcome of the examination. If the adjournment is granted, there will be a tangible prejudice to Mr Henderson in that his opportunity to give evidence and to present submissions in support of immediate discharge has gone for the time being. The prejudice in that situation is all the more when more than 18 months has passed since Mr Henderson was to have been automatically discharged from bankruptcy. [61] I do not disregard Mr Vinnell s observation to the effect that the Assignee s lengthy investigations into Mr Henderson s complex affairs were not assisted by the period of Mr Henderson s challenge to the 2014 discovery judgment. However, an adjournment which might well push the public examination back to early 2017 could not be justified upon the basis of its being in some way a response to delays which Mr Henderson has himself caused. The Court and the parties are in a position to proceed with the public examination on 3 August 2015 and Mr Henderson has a legitimate interest in having it so proceed.
The balancing [62] Balancing all these considerations, I am not satisfied that it would be appropriate or just to adjourn the public examination whether on an indefinite basis or to a provisional date in either late 2016 or early 2017. Outcome [63] The application will be dismissed. [64] As Mr Henderson has represented himself, no issue as to costs arises. Even had Mr Henderson been represented, I would likely have taken the view that the Assignee s position had been appropriately adopted in the public interest and that costs should lie where they fall. Order [65] I order: (a) the Assignee s application for adjournment of Mr Henderson s public examination is dismissed, (b) there is no order as to costs. Associate Judge Osborne Solicitors: Anthony Harper, Christchurch Kensington Swan, Auckland Copy to Mr D I Henderson, Christchurch