It was not a breach of privacy for Xero to disclose personal financial transactions of David Henderson’s spouse as part of Insolvency Service investigations into his financial activities.
Mr Henderson was bankrupted in 2010 following collapse of his Christchurch property developments headed by Property Ventures Ltd. His subsequent relationship with Insolvency Service could not be described as cordial. Insolvency Service obtained court orders extending his bankruptcy to 2017 with a ban on him managing any business until December 2022.
As part of its bankruptcy investigations, Insolvency Service issued section 171 notices to Xero in 2014, requiring production of online financial records for a company called AFB Treasury Ltd. Xero baulked; Mr Henderson was neither director nor shareholder of the company; control lay with Mr Henderson’s spouse, Kristina Buxton. AFB Treasury financial records were released on further evidence from Insolvency Service that Mr Henderson appeared to be using AFB to run a business whilst bankrupt, in breach of the Insolvency Act. Xero requested the financial information be kept confidential, used only for the purpose of investigating Mr Henderson’s bankruptcy. The existence of section 171 notices is not disclosed to individuals under investigation. Insolvency Service confidential demands for information over-ride Xero’s policy of advising customers when account information is being disclosed to others.
Ms Buxton sued Xero, alleging it was a breach of privacy to disclose her personal financial information when target of Insolvency Service investigations was her husband. In particular, she objected to disclosure of information about payments made for medical treatment.
Identification of AFB Treasury data held by Xero was a valid use of section 171 information requests, the High Court ruled. Xero could not be liable for any breach of privacy when complying with a valid section 171 notice.
Buxton v. Xero Ltd – High Court (18.02.21)
21.034