Ban on creditors' meeting ‘wrong’

Press, 4 July 1978, Page 4

Ban on creditors' meeting ‘wrong’

? A Hamilton A Justice Department ruling barring reporters from creditors’ meetings is wrong in law, according to a legal opinion obtained by the “Waikato Times." The department’s instruction is also “timid and contrary to the interests of justice,” says the legal adviser. The ruling was made by the Official Assignee in Wellington, (Mr E. Gould) and was intended “to effectively exclude media presence, even if the parties consent.” But the question of whether the ruling can over-ride the wishes of the Official Assignee or the creditors at a meeting has yet to be tested in court. The newspaper’s legal adviser’s opinion suggests that a report on bankruptcy proceedings, unless otherwise prohibited, is desirable in the public interest.

"It might well be that out of such a report, a member of the public might have certain matters brought to his attention which the Official Assignee ought to know about, and could result in the assignee’s being materially assisted with a view to an examination of other persons pursuant to section 68,” the opinion said. “I agree that to inhibit

the full and frank disclosure of evidence in any circumstances should be avoided. I fail to see, however, that in the context of the first meeting of a bankrupt’s creditors, this is likely to result from the presence of a representative of a responsible news media.” By implication, a public examination of a bankruptcy allowed the press to be present as of right “and I suggest that this situation be drawn to the notice of the appropriate authorities if the Official Assignee persists in his view.” The opinion said: “Except in the case of certain trade publications, I have yet to see any example of the news media misusing its position by way of publishing facts disclosed at a court hearing where the debtor’s examination by his creditors is in many ways similar to the examination of a bankrupt at the first meeting of creditors.

“In the interest of justice, therefore is the position of a bankrupt to be considered any more favourably than that of a judgment debtor?” Mr Gould’s directive says that attendance at the first meeting of creditors in a bankruptcy is restricted to the bankrupt, the Official Assignee and the creditors, except if

permitted by the Official Assignee or a resolution of the creditors. But the newspaper’s legal adviser says: “. . . There is nothing in the act which prohibits the attendance of a representative of the media who has the consent either of the assignee or the creditors present at the meeting. . .” The act entitled any member of the public to be present at a creditors’ meeting, in the absence of any specific prohibition to the contrary, said the opinion. The directive said that the first meeting of creditors was “clearly designed for exploratory purposes” and required some privacy to enable the parties present to express their business affairs freely. The ruling also bars the media from first meetings of companies being wound up by order of the court, and also from meetings of contributories. It has been sent to official assignees throughout New Zealand and follows a department study of section 37, subsection five, of the Insolvency Act, 1967. The subsection of the act referred to says: “The assignee, or the creditors present at the meeting, by ordinary resolution, may consent to the presence of any other person at any meetings of creditors.”