02 December 2015

Bankruptcy: Inland Revenue v. Meredith

Northland contractor Timothy Vivian Meredith was bankrupted by Inland Revenue on unpaid taxes and penalties of $1.03 million in what is a double bankruptcy.  He was bankrupted whilst currently bankrupt. 
The High Court was told Mr Meredith was bankrupted in April 2008.  He did not co-operate with the Insolvency Service, never providing a statement of his financial position.  The three year period for automatic discharge from bankruptcy does not start running until a statement is provided.  Whilst bankrupt, he carried on business activities in breach of the Insolvency Act.
Inland Revenue said Mr Meredith had failed to pay any GST or income tax on his business activities for up to six years since the April 2008 bankruptcy.  Associate judge Bell ordered Mr Meredith be bankrupted again.  Mr Meredith told the court he did not have assets sufficient to pay a $1.03 million tax debt.  He purported to clear the $1.03 million tax debt by what he called a bill of exchange drawn on his own IRD tax account.  There were no funds in the Inland Revenue account; in fact he owed Inland Revenue.  Judge Bell said the supposed bill of exchange was no more than a worthless promissory note.  
Inland Revenue v. Meredith –High Court (2.12.15)

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