The High Court in Wilkins v Official Assignee  NZHC 1742 considered the circumstances in which a court may look behind a judgment debt following a contested hearing.
From 2004, Mr Wilkins applied to become a tenant of Housing New Zealand (HNZ) and was successful in obtaining income related rent subsidies from HNZ. It came to light that Mr Wilkins had failed to disclose, among other things, that he was the sole shareholder and director of a company that owned Auckland properties. Mr Wilkins pled guilty to using a document to defraud.
The District Court, in the civil context, awarded the sum of almost $120,000 in HNZ's favour. Mr Wilkins was adjudicated bankrupt. HNZ claimed the debt owing from his estate and the claim was accepted by the Official Assignee. Mr Wilkins applied to the High Court to look behind the judgment debt awarded by the District Court and set aside the Assignee's decision.
The High Court accepted the following approach laid out by the Australian High Court in Corney v Brien (1951) 54 CLR 343 for these circumstances:
- The court can generally accept a judgment debt as sufficient proof, particularly when the judgment results from a defended hearing
- The circumstances where the court may inquire into the validity of a judgment debt are not closed – there are no inflexible rules
- Fraud, collusion and a miscarriage of judgment are examples of when the court may choose to inquire into a judgment debt.
Mr Wilkins did not make out a prima facie case of miscarriage of justice or any other circumstance that could justify the court enquiring into the judgment debt. Mr Wilkins' application was dismissed.
See Court decision here.