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Webb v Webb

In the relatively recent Cook Islands case of Webb v Webb, the Privy Council ([2020] UKPC 22) considered the relevance of a New Zealand tax debt to matrimonial property proceedings in the Cook Islands. The proceedings were brought under the New Zealand Matrimonial Property Act 1976 as incorporated into Cook Islands law. The two main issues in this regard were (a) whether a personal tax debt owed by Mr Webb to the New Zealand Inland Revenue had to be enforceable in the Cook Islands in order to be deductible from the value of Mr Webb’s matrimonial property located in that country and (b) whether the debt was enforceable against the matrimonial property in the Cook Islands or whether it was barred by the “foreign tax principle”. We provide a critical analysis of the the Board’s reasoning on these issues here. The case may be of particular relevance to New Zealand law. In relation to the first issue, the Board considered whether the meaning of “debt” in s 20(5) of the Act is confined to debts that are enforceable against the matrimonial property in question. This question could still arise in New Zealand under s 20D of the Property (Relationships) Act 1976. In relation to the second issue, the case raises general questions about the relevance of the foreign tax principle in the context of cross-border insolvency.

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