Proof is required, not promises. Graeme Pierre Flavell was bankrupted on a $51,500 debt owed liquor wholesaler Seven Brews Ltd with the High Court unmoved by Mr Flavell’s claim that given time he could pay off the debt.
The Seven Brews debt followed court action taken against Mr Flavell. It refused an offer by Mr Flavell to make payment by instalments; an upfront payment of $2000 with monthly payments of $1500 to follow. It would take at least three years to clear the debt, if payments were made as promised.
The High Court was told Mr Flavell has been making instalment payments to other creditors, while refusing to make any payment to Seven Brews unless it agreed to the deal on offer.
Mr Flavell told the court he had ‘current’ major creditors owed $85,600.
He claimed work prospects looked good, with his current employment in food manufacturing. Bankruptcy would hamper overseas travel as part of this job, he said.
Bankrupts are prohibited from leaving New Zealand, but may travel with consent of Insolvency Service.
Associate Judge Paulsen decided little weight could be given to Mr Flavell’s claims to potential sources of cash sufficient to pay his debts.
Mr Flavell claims to be owed $86,500 by a company called Equinox New Zealand Ltd.
Equinox is in liquidation, insolvent. Mr Flavell provided no evidence that Equinox liquidators had accepted from him a proof of debt, or whether Equinox’ creditors are likely to receive any payment.
Mr Flavell provided no evidence of his current employment, and no evidence of any surplus income from this job being potentially available to pay down past debts.
Insolvency Service has power to have bankrupts pay down part of pre-bankruptcy debts out of current income. This requirement will accommodate Mr Flavell’s expressed wish to pay present debts out of future income, Judge Paulsen indicated.
Seven Brews Ltd v. Flavell – High Court (7.05.25)
25.116