REASONS OF THE COURT
(Given by Dobson J)
Issues on the appeal
 The narrow issue in this appeal is a challenge to the High Court’s confirmation of the Official Assignee’s rejection of a proof of debt claim filed against the estate of a bankrupt by the liquidators of a company of which the bankrupt was the sole director and shareholder. H Investments Ltd (in liq) is the appellant (the company) and the respondent is the Official Assignee (the Assignee) in his capacity as the trustee in bankruptcy of the director, Mr Nyall Hitchcock.
 The liquidators’ proof of debt claim alleged breaches of duty owed by Mr Hitchcock to the company under ss 131, 135, 136 and 137 of the Companies Act 1993 (the CA) during the period he was its alter ego. The claims were that Mr Hitchcock had failed to act in the best interests of the company, had allowed the company to recklessly trade and incur obligations which he did not believe on reasonable grounds the company could perform, and failed to exercise due care and skill. The claims subsequently included a claim for failing to maintain accounting records, contrary to s 194 of the CA.
 The appeal also raises somewhat wider issues of the standard required for a creditor to make out a proof of debt claim in bankruptcy, and where the onus of proof lies in dealing with claims of this nature against the estate of a bankrupt. A further issue, in effect of estoppel, was raised for the first time on appeal.
 Mr Hitchcock was declared bankrupt in July 2013. The Assignee was appointed as his trustee in bankruptcy. The company was described by the liquidators as providing 'contracting and repair services'. In February 2014, the company was placed in liquidation on a creditor’s petition filed on behalf of Inland Revenue (IRD). Shortly thereafter, the liquidators filed a proof of debt with the Assignee to claim against Mr Hitchcock’s estate in bankruptcy for the full extent of debts owed by the company at the time of liquidation, totalling some $163,000.
 A substantial portion of the unpaid creditors in the company’s liquidation comprised amounts claimed by Mr Hitchcock and a family partnership associated with him (the Hitchcock interests). Those creditors executed a deed of waiver on 28 July 2014. The deed was addressed to the company in liquidation, and its liquidators. The parties executing the deed were the Assignee and Mr Hitchcock and his wife as partners of the family partnership that was a creditor of the company in liquidation. The terms of the deed recorded a waiver of those creditors’ rights to claim in the liquidation .
 The effect of the waiver was to reduce the amount of the creditors’ claims against the company in liquidation. On 5 August 2014, the liquidators filed a reduced proof of debt claim in Mr Hitchcock’s bankruptcy for some $50,000, comprising the outstanding claims against the company in liquidation. There were only two creditors, with IRD being by far the largest.
 Some 14 months after filing the reduced proof of debt claim, a barrister instructed by the Assignee (Mr Corneg) requested further information in support of the liquidators’ claim. Further details were provided, but the Assignee relied on advice received from Mr Corneg that the information was insufficient to establish that Mr Hitchcock had breached his duties as a director of the company.
 In January 2016, the Assignee gave notice of rejection of the liquidators’ proof of debt. The liquidators challenged that decision by way of an application to the High Court under s 239 of the Insolvency Act 2006 (the Act). On 19 May 2017, Associate Judge Sargisson dismissed the application, upholding the Assignee’s decision to reject the liquidators’ proof of debt.
The High Court judgment
 The Judge analysed the liquidators’ claim as involving the following propositions. The company’s financial statements suggested it was insolvent from 2010 to 2013 on both a cash flow and balance sheet approach. There was no evidence the company kept proper accounting records that would support a contrary conclusion. Accordingly, the necessary inference was that, by continuing to trade and incur debts, including as now relevant for GST, Mr Hitchcock had breached a range of director’s duties including, in particular, by carrying on the business in a manner likely to create a substantial risk of serious loss to creditors and by allowing the company to incur obligations it could not meet.
 The Associate Judge was critical of the adequacy of research undertaken by the liquidators on numerous aspects of the company’s financial status, and the consequent lack of evidence to support the allegations of breach of director’s duties by Mr Hitchcock. The liquidators’ correspondence advancing the claim that supported its proof of debt stated that the evidence available to the liquidators 'suggested' that Mr Hitchcock had continued to trade the company whilst insolvent. The Associate Judge considered that the standard of evidence could indeed 'suggest' insolvent trading but that such a standard was materially inadequate when a claimant against a bankrupt’s estate needs to establish the basis for an unliquidated demand.
 The Judge was not persuaded that the liquidators could make out insolvency during the relevant period on either cash flow or balance sheet bases. In the years between 2010 and 2013, the company had apparently met all its trade creditors apart from payments of GST to IRD. The Judge was not satisfied that failure to pay the IRD was a case of inability to pay, when there was a prospect that it was a case of refusal to pay. In terms of the balance sheet test, the Judge considered that obligations owed to the Hitchcock family interests could be disregarded, and on that basis was not satisfied that the company was insolvent in a balance sheet sense.
 As a component of the assessment of balance sheet solvency, the liquidators took the view that the book value of the company’s assets comprising heavy machinery were substantially overstated. These assets were recorded in the company’s 2013 financial statements at $79,666. The liquidators had invited a person who apparently traded such items to appraise them, and received an informal report that the assets were in bad condition, would be difficult to market, and might not return much more than the cost of disposal. The Associate Judge was critical of the adequacy of this appraisal. The expertise of the appraiser was unknown and the cursory nature of the opinions expressed were considered inadequate as a basis for writing down the value of the assets from the amounts stipulated in the company’s financial statements.
 On all these grounds, the Associate Judge reached the conclusion that, on the balance of probabilities, the liquidators had not established that the company had traded whilst insolvent. Her Honour found that the liquidators had not made out breaches of any of the provisions of the CA by Mr Hitchcock over the relevant period.
 In reaching those conclusions the Judge was influenced by what she saw as the puzzling circumstances surrounding the waiver of the claims of the related party creditors in the company’s liquidation. That waiver supported the approach taken by the Assignee’s expert witness to the significance of those debts for the company’s solvency when still trading. Moreover, the liquidators’ entry into those arrangements reflected, at the time, the company thereby having sufficient realisable assets to discharge the GST debt.
Grounds for the appeal
 In their initial notice of appeal, the liquidators challenged as wrong in fact and law the Judge’s central conclusions on insolvency, breach of director’s duties and causation. Those grounds were subsequently:
(a) expanded by a new claim of, in effect, estoppel based on the terms of the deed of waiver;
(b) further particularised on the issues of insolvency, breach of duty and causation; and
(c) supplemented by another, new, argument that as Mr Hitchcock was 'the effective defendant' and the liquidators had established a prima facie case as to his liability as a director:
(i) it was up to the Assignee to produce evidence from Mr Hitchcock if otherwise available inferences were to be rebutted; and
(ii) the Assignee’s failure to do so meant there were no discretionary matters that might reduce the amount of Mr Hitchcock’s liability once established.
 The terms of the deed of waiver and the circumstances of its execution assumed some importance in the liquidators’ appeal. The recitals at the outset of the deed included the following:
E. The company [acting by the liquidators] has filed a proof of debt in the bankrupt estate [of] Mr Hitchcock.
G. Mr Hitchcock has applied for an annulment of his bankruptcy. In order that all creditors can be paid, and the annulment granted, the Assignee [the Official Assignee as Mr Hitchcock’s trustee in bankruptcy] and the [p]artnership [the Hitchcock interests] have agreed to waive their respective rights to file [c]reditors’ claims in the company’s liquidated estate.
 The covenants in the deed included an acknowledgment by the parties as to the accuracy of the recitals. The operative provision of the deed recorded a waiver by the Assignee and the partnership of all rights to claim in the company’s liquidation and a commitment not to bring any action against the company or its liquidators or staff.
 Mr Branch submitted for the liquidators on appeal submitted that they were entitled to assume at the time that reduction of the claims against Mr Hitchcock’s estate in bankruptcy to this extent would enable him to find the resources necessary to discharge the remaining claims against his estate in bankruptcy, so as to achieve an annulment of his bankruptcy. Anticipating such an outcome involved an assumption that their proof of debt for the reduced amount of some $50,000 would be accepted by the Assignee.
 Mr Branch argued that the meaning reasonably conveyed by the terms of the deed was that if the liquidators reduced the extent of their claim against Mr Hitchcock’s estate, which they could do once the Hitchcock interests abandoned their claim against the company in liquidation, then the claims against Mr Hitchcock’s estate in bankruptcy would be reduced to an extent that interests on his behalf could fund payment of those claims, thereby entitling Mr Hitchcock to an annulment.
 Implicit in that sequence of events was acceptance by the Assignee of the liquidators’ claim as presented in the proof of debt claim for the reduced amount. Mr Branch argued that completion of the deed of waiver by the Assignee committed him to that course.
 Mr Branch did not define this as giving rise to an estoppel preventing the Assignee from subsequently being able to resile from an implied acceptance of the liquidators’ proof of debt claim. However, that was the essential nature of this part of the appeal. The argument had not been raised in the High Court.
 An estoppel may arise to prevent A asserting what would otherwise be a lawful entitlement against B where A has represented to B that they will not do so and B has relied reasonably on that representation and altered its position to its material detriment. Being an equitable remedy, the facts, and the quality of the evidence relating to the facts, are central to whether or not an estoppel arises and, if it does, the terms of any relief which may be granted. As this Court said in Wilson Parking New Zealand Ltd v Fanshawe 136 Ltd, 'the clearer and more explicit the assurance is, the more likely it is that a court will be willing to grant ... relief'.
 As we noted above, no claim of estoppel was made by the liquidators in their originating application. No evidence relating to any such estoppel, nor indeed to the deed of waiver or the circumstances in which it was signed, was given in the affidavits on which the High Court relied. Not surprisingly, therefore, there is no discussion of the issue of estoppel in the High Court decision under challenge.
 Rather, the topic is mentioned for the first time in the liquidators’ revised notice of appeal where they assert, as their first ground of appeal, that:
The [Assignee] is estopped from rejecting the proof of debt because, by deed of waiver dated 28 July 2014, the [Assignee] agreed that all creditors of the [b]ankrupt would be paid and the [c]ompany was a creditor of the [b]ankrupt.
 Understandably, there is no allegation of any error by the High Court in not reaching that conclusion. Thus, in the absence of any evidence directly relevant to the claimed estoppel, the liquidators on appeal could only rely on the terms of the deed of waiver, which had been put into evidence for the Assignee by Mr Parsons as an annexure to his affidavit.
 Mr Branch argued, in effect, that the deed of waiver spoke for itself. That is, its terms, and recital G in particular, evidenced the Assignee’s agreement that he would accept the company’s proof of debt and that all Mr Hitchcock’s creditors – including the company – would then be paid, thus facilitating an annulment of Mr Hitchcock’s bankruptcy. When measured against that proposition, the terms of recital G are, at their best, opaque. The Judge read the reference in recital G 'in order that all creditors can be paid', as a reference to all creditors of the company. Given that the waiver was of claims Mr Hitchcock and the partnership might otherwise have had against the company, that is perhaps understandable. For his part, Mr Branch argued that the conjunction between the reference to all creditors being paid, and the annulment being granted, meant that necessarily the reference was to all of Mr Hitchcock’s creditors being paid.
 We are inclined to agree with Mr Branch that the reference in recital G is to Mr Hitchcock’s creditors and not those of the company. That appears the more likely interpretation of the words in the deed and the limited extent that it is reasonable to infer context from them. However, we accept that it is difficult for the Assignee to contest that interpretation in the absence of any evidence on the circumstances surrounding the completion of the deed of waiver, so if it were decisive, the point is hardly free from doubt.
 Assuming that Mr Branch is correct that the reference in recital G is to Mr Hitchcock’s creditors, we are not persuaded that, without more, the Assignee’s completion of the deed can found an estoppel against him. There is no evidence that the Assignee participated in the deed of waiver on the premise that the liquidators’ proof of debt had been accepted. That would have involved acceptance, without any apparent dialogue or research, of a claim for a liquidated sum that depended on alleged breaches of director’s duties.
 Particularly given the nature of the liquidators’ claim, the terms of the deed of waiver are clearly inadequate on their own to commit the Assignee to what could well be a compromising of his statutory obligations and the rights of other creditors.
 We accept that the Assignee may compromise his scope of action by contractual commitments that bear upon the estate in bankruptcy. Such commitments would need to be justified by the Assignee as entered into, in the exercise of his discretion, because they were in the best interests of the administration of the bankrupt’s estate. However, such positive commitments deliberately made on defined terms are a very different matter from creating what we consider would be an unintended fetter on the Assignee’s ability to act in administering Mr Hitchcock’s estate consistently with the law and in what he considered to be the best interests of all creditors. It follows that the liquidators cannot advance their claim in Mr Hitchcock’s bankruptcy by reliance on the deed of waiver.
The liquidators’ proof of debt
Standard of proof
 Turning to the approach of the Associate Judge in assessing the liquidators’ proof of debt claim, a first criticism raised was that the Associate Judge had applied the wrong standard of proof. The standard adopted was that the liquidators had to establish their claim on the balance of probabilities.
 Mr Branch submitted that a lesser standard applied as if in a formal proof hearing, and that the Assignee and, on appeal, the High Court, ought to admit the claim on finding that it had a reasonable likelihood of success. Arguably, it should be relevant to the standard of proof that the bankrupt whose actions were being attacked had an opportunity to rebut the allegations but chose not to. In those circumstances, the liquidators submitted that unrebutted allegations should be accepted unless they were demonstrably unjustified.
 Mr Branch characterised the process for lodging proof of debt claims and having them assessed by the Assignee as one that was designed to be less robust, expensive, and time consuming than a court process. He observed that decisions on proof of debt claims are often made by people who are not legally trained and it was inappropriate for the assessment to be as refined as if the matter was before the Court.
 Mr Branch invited analogy with the test applied in determining an application for leave to apply to the Court for directions on matters arising in the course of a liquidation. Section 284(1) of the CA provides for such applications by the liquidator or a liquidation committee, and by other categories of potentially interested parties if they obtain the leave of the Court. In determining a review of a refusal by an Associate Judge to grant such leave, the High Court described the task under s 284 as follows:
The grant of leave must be based on whether the applicant has an arguable case with a credible factual basis and a reasonable likelihood of success. Even with leave, the Court will not interfere with a liquidator’s exercise of discretion unless it is clearly wrong or unreasonable.
 Mr Branch submitted that a similar test was sufficient for a creditor filing a proof of debt claim in a bankruptcy or liquidation.
 Mr Corneg for the Assignee disputed Mr Branch’s characterisation of the Assignee’s task. He described it as a quasijudicial one, with no suggestion in either the statutory provisions or current practice that the standard was less rigorous than would be required to make out a civil claim in court. Arguably, the fact that the defendant to a money claim is bankrupt should not lessen the standard required for the claimant to make out the claim.
 Mr Corneg submitted that the Associate Judge had adopted the correct standard of proof in requiring the claim to be established on the balance of probabilities. He submitted that it was indeed the same standard as required in formal proof hearings, which is currently the usual civil standard. He cited the High Court judgment in Ferreira v Stockinger, where Duffy J rejected an approach for a plaintiff on formal proof that, because the defendant had not filed a statement of defence, he was not required to establish the legal tests to prove his claim but was only required to establish quantum. That was treated as an outdated approach to formal proof with the Court being required to be satisfied that the plaintiff’s evidence was such as would be necessary to make it out if the proceeding had gone to trial.
 Sections 233 to 242 of the Act set out the procedure for a creditor to submit a creditor’s claim form, and the role of the Assignee in examining that form. These provisions relate to 'provable debts' that are defined as 'a debt or liability that a creditor of the bankrupt may prove in the bankruptcy'. That terminology reflects the onus that rests on a claimant creditor.
 The Assignee’s role is to examine the creditor’s claim and either admit or reject the claim, in either case in whole or in part. The Assignee may require further evidence in support of the claim and may summon and examine different categories of persons who may contribute to the evidence on the existence of the claimed debt. If the Assignee rejects a claim, the Assignee is required as soon as is practicable to give the creditor notice of the grounds for rejecting the claim. The Act also allows a creditor whose claim has been rejected to apply to the court for an order modifying or reversing the Assignee’s decision. The creditor is to bear the cost of proving the claim.
 We do not consider the approach to applications for leave under s 284 of the CA provides an appropriate analogy. An application for a grant of leave to seek directions raises a preliminary issue as to standing with no substantive consequences. If granted, it would require the party whose conduct is being challenged to respond to the applicant’s concerns. The court’s assessment of a leave application is limited to deciding whether standing should be recognised to argue issues about the manner in which a liquidation is being conducted. In contrast, the task of the Assignee in examining proof of debt claims does have a substantive impact because it determines the claimant’s entitlement to share in the bankrupt’s estate, and that decision has financial consequences for all others whose proof of debt claims are accepted by the liquidator.
 Bearing in mind the implications for proportionate recovery between all creditors who prove their debts, the Assignee must discharge these obligations fairly to all. There is nothing in these provisions or in current practice that would support the application of a standard less than the balance of probabilities. To do so would distinguish debtors who are bankrupt from those who are not. Accordingly, the balance of probabilities is the standard of proof that is to apply.
Onus of proof
 Mr Branch also argued that once a prima facie basis for a claim against the bankrupt’s estate is presented in a proof of debt claim, then the debtor has an obligation to respond with evidence that would refute the claim or inferences that the creditor’s claim relies on.
 Mr Branch suggested that the expectation of such a shifting onus could be advanced on stronger grounds in this case than in others where Mr Hitchcock remained available and was personally interested in the outcome of his bankruptcy because he was pursuing an annulment. Further, because the grounds for claims against him alleging breaches of director’s duties owed under the CA involved at least some elements of subjectivity, the best evidence denying the inferences asserted by the liquidators would come from Mr Hitchcock’s personal explanation as to how he had discharged his statutory obligations as a director.
 Mr Branch argued that, at least in circumstances of claims alleging breach of director’s duties such as were advanced here, the Assignee should seek an explanation from the impugned director and in the absence of explanation, be prepared to draw inferences adverse to the director and supporting (if necessary to the point of making out) the liquidators’ claims.
 Mr Corneg resisted the concept of any shift of the onus to the debtor or the Assignee in the process of the Assignee’s examination of proof of debt claims. He submitted that in a significant majority of bankruptcies, the bankrupt is indifferent to the manner in which his or her estate in bankruptcy is administered. Many bankrupts relocate, including leaving New Zealand. In many cases, bankrupts resist contact with the Assignee so that any change in onus that triggered an obligation on the Assignee to seek responses to claims such as the present ones would create obligations that Assignees are not equipped to deal with.
 There is no basis for inferring such a change of onus from the terms of the Act providing for this process. The concept of a debt that is provable in the bankruptcy means that claims may be accepted in circumstances going beyond those in which there is a judgment against the debtor, or the amount is for an undisputed liquidated sum. Section 236 of the Act gives the Assignee power to summon defined categories of persons for examination as an aspect of consideration of claims that have been lodged. However, there is nothing in that or other sections providing for the process that would support Mr Branch’s suggested transfer of onus. The categories of persons the Assignee is empowered to summon for examination could include the bankrupt within a generic description, but bankrupts are not specifically identified as a distinct category. We agree with Mr Corneg that it would be impractical and inconsistent with the efficient administration of bankrupt estates to create an expectation that that will occur.
 We accordingly reject the criticism that either the Assignee or the High Court on appeal were wrong in treating the onus of making out a provable claim on the proof of debt as remaining with the liquidators as claimants.
Should the Assignee have accepted the liquidators’ proof?
 Shortly after their appointment on 18 February 2014, the liquidators wrote in relatively summary terms to Mr Hitchcock care of the Assignee on 4 March 2014. In less than a page and a half, the liquidators stated that their investigation:
... [suggested] that you have breached your [duties] as a director of the [c]ompany by allowing the [c]ompany to incur obligations to creditors when, in our view, you could not have had expected, on reasonable grounds, that the [c]ompany would be able to perform these obligations when it was required to do so.
The letter advised that, as a director, Mr Hitchcock owed relevant duties including those set out in ss 131, 133, 134, 135, 136 and137 of the CA.
 The only specific conduct cited as constituting a breach of director’s duties was that the company had owed debts to IRD that had accumulated since January 2010 but despite that, Mr Hitchcock had continued in trade 'until at least 2014'. The liquidators considered that Mr Hitchcock did not have reasonable grounds to believe that the company would be able to perform its current obligation to pay its tax and other debts when the company had outstanding and increasing obligations to pay GST to IRD.
 The letter was sent with a completed version of the printed form notifying a proof of debt claim. In the part of the form requiring details of the debt the liquidators completed the 'date of supply' as '31.01.10 to 18.02.14' and the 'description of goods or services supplied' as 'a breach of director’s duties under ss 131, 133–137 of the [CA] causing creditors losses (letter dated 4 March 2014)'.
 As we have previously observed, there is no evidence of contact between the liquidators and the Assignee in the period up to completion of the deed of waiver on 28 July 2014. In early August 2014, the liquidators submitted an amended proof of debt claim form which was in the same terms as the original form, except for reduction of the amount claimed to omit the claims of the Hitchcock interests.
 Some 14 months later in October 2015 Mr Corneg wrote to the liquidators advising that he acted for the Assignee and was seeking further information. Mr Corneg treated the information thus far provided to the Assignee as insufficient to conclude that Mr Hitchcock had breached his director’s duties. The letter warned that in the event that the liquidators did not provide further information, the Assignee would reject the proof of debt claim.
 In a 3 November 2015 email, a member of the liquidators’ staff responded somewhat more fully with background information about the nature of the company’s business and the identity of the claims received in the liquidation from creditors (excluding those originally received from the Hitchcock interests). The email included summaries of the company’s financial performance for the 2010 to 2013 years, with the observation that the company had generated losses in the 2010 and 2011 years and generated only modest surpluses in the 2012 and 2013 years. The summary details indicated that the net surpluses after tax were in deficit in the 2010 and 2011 years, that there were decreasing deficits in the working capital situation from the sum of $230,000 in 2010 to $153,000 in 2013 and that the net asset position for the company had similarly shown decreasing deficits from $103,000 in 2010 to $74,000 in 2013.
 The letter cited the company’s failure to pay GST since January 2010. It relied on that for the view that the company had been unable to meet its obligations in a timely manner causing Mr Hitchcock to be in breach of the duties he owed to the company. The email also addressed concerns about the limited records that had been produced from the company’s accountant. It expressed the view that the liquidators had found no evidence that Mr Hitchcock had caused the company to prepare a business plan, budgets, cash flow projections and other such accounting records. The email concluded with reference to the liquidators’ view that Mr Hitchcock’s decision to continue operating the business amounted to 'a breach of his duties as director'.
 Mr Corneg wrote further on behalf of the Assignee on 16 December 2015 stating that the Assignee having considered the additional information provided still considered it was insufficient to conclude that Mr Hitchcock had breached his director’s duties. The letter stated that it was difficult to conclude in the absence of further information that it was improper for Mr Hitchcock to allow the company to continue trading, given that it had generated surpluses in 2012 and 2013 and that the majority of the company’s liabilities were current account debts. The letter raised the issue of whether the liquidators had examined Mr Hitchcock. It indicated that rejection of the liquidators’ claim was likely, but offered one final opportunity to provide further analysis.
 A further email from a member of the liquidators’ staff on 23 December 2015 repeated the view earlier expressed that the figures in the financial statements 'do not in any way release the director of liability for breaches of his duties causing creditor losses'. That email went on to refer to a valuation the liquidators had obtained of the company’s assets which showed that the proceeds of realisation (after meeting the costs of doing so) would not provide any return to creditors. That comment was a reference to an informal email to the liquidators dated 5 June 2014 (18 months before the communication in which it was referred to) from 'Gordon' at 'Crusher Dealer'. It does not appear that a copy of the informal assessment of realisable value of the assets was provided.
 In January 2016 Mr Corneg advised the liquidators that their proof of debt claim was formally rejected.
 Mr Branch submitted that irrespective of the correct position on the standard of proof, Mr Hitchcock’s decision to continue trading despite more than three years’ default in payment of GST provided grounds for finding a breach of the various director’s duties that had been cited in the liquidators’ original letter to him and the Assignee. If there was no onus for Mr Hitchcock to provide an alternative explanation, then at least in the absence of any evidence from him, the adverse inference the liquidators invited ought to be drawn. Namely, that the company could not meet its obligations to pay the GST and continued to trade despite the GST liability plus penalties and interest remaining unpaid.
 Mr Branch submitted that the High Court was wrong in finding that the liquidators had not made out insolvency on either of the two tests, namely cash flow solvency or balance sheet solvency. The solvency test is defined in s 4 of the CA in the following terms:
4 Meaning of solvency test
(1) For the purposes of this Act, a company satisfies the solvency test if-
(a) the company is able to pay its debts as they become due in the normal course of business; and
(b) the value of the company’s assets is greater than the value of its liabilities, including contingent liabilities.
Cash flow insolvency
 The liquidation process had been started by service of a statutory demand on behalf of IRD and non-payment of that demand evidences the company’s insolvency in 2013. The liquidators’ allegations of breach of director’s duties by Mr Hitchcock depended on establishing a state of insolvency back to 2010, or for some material period between then and the company’s failure to meet the statutory demand in 2013.
 The liquidators’ case was that the nonpayment of GST from 2010 was sufficient to establish that the company had not been able to pay its debts as they became due (the cash flow solvency test) since 2010. In 2010 and 2011 the financial statements for the company showed a loss on a cash basis, but modest surpluses were achieved in 2012 and 2013. On the relatively scant evidence before the Associate Judge, she was not prepared to treat these facts as sufficient to discharge the onus of establishing insolvency throughout. The financial results did not enable her Honour to come to only one conclusion - that the company had been unable to pay its debts as they fell due.
 Mr Branch characterised the obligation to make timely payment of GST to the IRD as a priority because GST is trust money for which the company is obliged to account. According priority to payment of GST is also the course competent directors adopt because nonpayment triggers penalties and additional interest that means delayed payment incurs proportionately more serious adverse consequences for the company than deferring payment of other company debts. Accordingly, a competent director could not do otherwise than ensure timely payment of GST.
 The Associate Judge had reservations that the evidence established an inability to pay the company’s debts, rather than a refusal to do so. There was no evidence of any dialogue between the company and the IRD in the 2010 to 2013 period until service of the statutory demand. The absence of any formal steps to pursue payment for the period of more than three years left the Associate Judge with a doubt that there may have been some accommodation reached about lessening the outstanding GST liability over time.
 We agree with the Associate Judge that nonpayment of GST over a period of years in circumstances such as the present case cannot, of itself, be sufficient to establish cash flow insolvency. Depending on the facts in a particular case, relatively little further evidence may be necessary to make it out. This case is somewhat atypical in that the evidence of the circumstances of Mr Hitchcock’s governance of the company is unusually sparse. There is, for example, no suggestion that the liquidators exercised their powers to examine Mr Hitchcock in order to obtain further evidence for their assessment of whether he had breached obligations as a director of the company.
 The statutory imperative cited by Mr Branch that ought logically to require directors to treat payment of GST in priority to other creditors also gives rise to alternative remedies open to the IRD to seek recovery of GST that are not available to the general body of creditors. IRD may, for example, deduct the GST from payment due to the director. If the actions of the director amount to evasion within s 143B of the Tax Administration Act 1994, then they may also face a term of imprisonment or an additional fine.
 We are accordingly not satisfied that a cash flow test for insolvency can be made out.
Balance sheet solvency
 The Associate Judge was also not satisfied that the liquidators had made out the company’s insolvency on a balance sheet basis through the period to which its claims related. Two aspects of the analysis leading to that finding are challenged on appeal.
 First, the balance sheet of the company included relatively significant loan advances from Hitchcock interests as liabilities. If they were included in the relevant preliquidation periods, then balance sheet insolvency would be made out.
 However, the Associate Judge accepted the analysis on behalf of the Assignee that the extent of those liabilities should be excluded. This rested primarily on the evidence, post liquidation, that the Hitchcock interests agreed to abandon their claim for repayment of the amounts advanced to the company. Further, the Associate Judge suggested there was uncertainty as to the form in which the advances were made, and was not able to discount the prospect that they were intended to be transformed into equity in the company.
 We agree with Mr Branch that the Associate Judge erred in excluding the debts owed to Hitchcock interests. The financial statements adequately identified them as loan advances with the consequence that the lending entities would have been entitled to claim repayment prior to any distributions to shareholders. The postliquidation acknowledgement by those interests that they abandoned any claim to repayment of the advances cannot retrospectively alter their status during the years in question. Indeed, the initial response of the Hitchcock interests in filing the proof of debt claims for repayment of the advances can only be consistent with their treating them as loans, up to the point in time at which that step was taken.
 The extent of that indebtedness is, on its face, sufficient to make out balance sheet insolvency for the company during the relevant periods.
 As to the appropriate book value of the company’s assets comprising property, plant and equipment, the liquidators proposed that the book value, as at the date of the financial statements for the 2013 year, should have been written down substantially from the figure of $79,666.
 In June 2014, the liquidators requested by email addressed to a partially identified individual at 'CrusherDealer.com' that that firm review the state of plant and machinery assets and provide comments on their realisable values. The same evening an email response from 'Gordon' reported on an assessment of the machinery that had been undertaken with Mr Hitchcock. The report was to the effect that the machinery was generally in poor condition and opined that 'recovery and sale costs are likely to overshadow the eventual return for them'.
 There is no evidence that the liquidators took further steps to realise the assets. The existence of the June 2014 appraisal was disclosed to the Assignee some 18 months later.
 The informal June 2014 appraisal could not provide an adequate basis for recasting the value of those assets at any given point prior to the date of the last set of financial statements. We note that the book values had dropped significantly from $161,758 in the 2010 financial statements to $110,868 and $95,498 in the 2011 and 2012 years before the final book value at $79,666. There is no evidence of the exact identity or expertise of the appraiser, nor is there any basis on which the substantially reduced values could be attributed to the machinery at any particular dates in the 2010 to 2013 years. Therefore, there is no justification to recast the values of the assets in the company’s financial statements in the years to which the liquidators’ allegations against Mr Hitchcock relate.
 Despite the rejection of the liquidators’ approach to the book value of those assets, we are satisfied that the inclusion of the liabilities owed to the Hitchcock family interests was sufficient to make out balance sheet insolvency of the company in the period to which the claims relate. Having said that, those associated party creditors had, at relevant times, provided comfort or forbearance to the company as regards the debts owed to them. An example of this is their subsequent completion of the deed of waiver. It may have been possible to challenge the conclusion of balance sheet insolvency had the issue been contested. No such evidence was, however, provided.
Breach of director’s duties
 The next issue is whether the liquidators adduced sufficient evidence to establish breach by Mr Hitchcock of one or more of the duties owed by him to the company under the CA. The liquidators did not particularise any conduct or omissions by Mr Hitchcock that they relied on as making out the breach of each of the duties that the liquidators claimed had been committed.
 Mr Branch submitted that inferences sufficient to make out a breach of director’s duties had been accepted in other cases of conduct that he likened to that of Mr Hitchcock in the present case. However, his submission did not deal with the relative extent of evidence in the other cases that he cited. Mr Corneg submitted that each of the cases cited were distinguishable because of the different factual circumstances, and the greater extent of evidence adduced in support of the liquidators’ claims.
 For instance, Mr Branch cited the decision in A & N Contractors (2009) Ltd (in liq) v Liefting as a case where the director had preferred his own interests over those of the IRD as a beneficiary of the company. In that case, the company had defaulted on every type of tax for over two and a half years, and incurred debts totalling more than $250,000 while the directors drew almost $300,000. Failure to keep proper accounting records was evidenced, as was the negligible prospect of the company being able to meet its debts.
 Similarly, Mr Branch relied on the decision in Kaikoura Freight Ltd (in liq) v Collins as making out liability for carrying on a company’s business in a manner creating a substantial risk of serious loss to creditors and incurring obligations that could not be met. That case involved evidence that the company had incurred substantial debts over almost four years of what was found to be insolvent trading, and where the director 'flouted reality' by taking salary and drawings throughout the period of insolvent trading.
 We do not treat any of these decisions cited by Mr Branch as accepting a lesser standard of evidence than we consider was reasonably required in the present case.
 Contested claims of breaches of directors’ duties under ss 131, 135, 136 and 137 of the CA generally involve a reconstruction of the choices made by a director in continuing to trade in difficult circumstances. The Court has emphasised that these are duties owed to the company rather than to any particular creditors, and that the test as to whether risks assumed in the conduct of the company were legitimate or illegitimate ones will be an objective test. It will require the Court to reconstruct the choices made by the director when the financial future of the company ought to have been appreciated as being precarious. That entails a 'sober assessment' as to the company’s likely future income and prospects.
 The evidence available in this case is inadequate to embark on any meaningful assessment of the liquidators’ claims. If informed of existing and potential sources of revenue for the company, the range of expenses and other liabilities incurred, and projections for future profitability throughout identified parts or all of the period in which it was alleged Mr Hitchcock breached these duties, the Court might well have found such a breach. But here there is no evidence to begin that task, other than as found in the company’s accounts. For instance, the alleged breach of the obligation to maintain adequate records rests on the fact that Mr Hitchcock referred the liquidators to external accountants who produced financial statements for the relevant years, but very little else. They sought to infer breach of the requisite duty from the absence of primary records such as bank statements and copies of receipts and invoices. There is no evidence of the extent of any additional inquiries or searches undertaken by the liquidators. Consistently with other aspects of their allegations they have proceeded on the basis that if such records existed, there would be an onus on Mr Hitchcock to produce them or explain the circumstances in which they were no longer available. However, that would depend on a transfer of onus that the liquidators are not entitled to rely on.
 So far as the breach of obligation to act in good faith and in the company’s best interests rather than in his own, Mr Corneg submitted that partial repayment of Mr Hitchcock’s current account debt and that of his family partnership was not sufficient to make out preferment of personal interests when the details in each year were analysed. From 2010 to 2011, Mr Hitchcock’s current account debt reduced from $131,879 to $76,906 with annual reductions thereafter of only $2,126 and $6,588. The financial statements of the company do not record any salary and wages being paid to him throughout the period so that in effect he was working for nothing and ultimately lost nearly $70,000 of his investment in the company.
 So far as the Hitchcock family partnership’s financial position was concerned, it had invested $41,941 in the year to 31 March 2012 which debt was reduced by the company in the 2013 year by $36,853. On liquidation, the partnership lost some $47,698.
 Although the last year’s repayment to the family partnership might well be challenged as an insolvent transaction (there was no evidence that the liquidators had pursued that initiative), the single instance is inadequate without any context to fix Mr Hitchcock with a breach of duty. It was a reduction, but by no means full repayment, of his family interests’ debt owed by the company where he preferred repayment of that obligation to honouring the company’s obligations to the IRD. That occurred in a year in which the cash flow outcome revealed a very modest surplus.
 Section 137 of the CA imposes a positive duty on company directors to exercise the care, diligence and skill that a reasonable director would exercise when performing their duties. The duty requires the director to take into account the nature of the company, the decision or decisions that are impugned, the director’s position and the nature of his or her responsibilities.
 The liquidators’ allegation on this duty was that a reasonable director in Mr Hitchcock’s position would have ensured that IRD was paid, or ceased trading. In the absence of evidence of the relevant circumstances in which Mr Hitchcock elected to continue trading but not pay the GST, it is not possible to measure in the context of his circumstances whether he failed to exercise a requisite extent of care, diligence and skill.
 The IRD participates as the petitioning creditor in a very significant proportion of bankruptcies and liquidations in New Zealand. The stance adopted by the liquidators in this case, substantially for the benefit of IRD, reflects a situation that is not entirely uncommon. The temptation for struggling businesses to use the GST component of amounts received in the course of its trading as working capital sometimes proves to be irresistible, despite the severity of the adverse consequences of doing so. The stance adopted by the liquidators in this case is that where that occurs, directors will trigger personal liability. It will constitute a breach of duties they owe to the company for them to continue trading whilst not accounting for GST, on the ground that
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failure to pay the GST constitutes evidence that the company is unable to pay its debts.  We do not accept the general proposition that failure by a company director to account for GST over a substantial period of time where a company subsequently passes into liquidation is, of itself, a sufficient basis for establishing breach of duties owed by the director to that company. When evidence of additional aspects of the directorship of a failed company is present, then it may well constitute an element of the evidence that makes up breach of director’s duties. The simple proposition that continued trading whilst not paying GST leads, on a subsequent liquidation, to liability for breach of director’s duties is unattractive.  We conclude that the liquidators did not adduce the evidence required to make out a breach of Mr Hitchcock’s duties as a director under any of these provisions of the CA.  That outcome means that it is unnecessary to consider two further components of the Associate Judge’s decision that were challenged on the appeal. The first of those was a finding that so far as the debt to IRD was concerned, the IRD’s apparently complete inactivity from when the company first failed to make timely payment of GST until the issue of a statutory demand in 2013 was a cause of the loss it subsequently suffered, to an extent that it broke the chain of causation between any breaches of the director’s duty that might have been made out, and the loss now claimed by the liquidators. The rationale was that had the IRD acted much earlier, the loss would either have been avoided or proportionately reduced. The Associate Judge appears to have been influenced in this reasoning by the range of options available to IRD.  We are not to be taken as endorsing any general proposition that inactivity by a petitioning creditor in a liquidation constitutes a break in the chain of causation of losses subsequently suffered by a creditor where relevant breaches of directors’ duties can be made out.  The remaining issue, had a breach of duty been made out, was an assessment of the relative level of Mr Hitchcock’s culpability. The liquidators’ claims were advanced on the premise that he would be liable for 100 per cent of the losses proved in the liquidation. It is not an issue that needs to be addressed, but we observe that such an assumption is unwarranted, without substantially more evidence than was provided in support of the liquidators’ claims.  We mention one final matter. Any debt involved in the liquidators’ claim against Mr Hitchcock was, as we have just mentioned, a contingent one. Moreover, where a director is found to have breached his duties as the liquidators alleged, the Court has a discretion: both as whether to impose liability, and as to the amount of that liability. There is well established authority that although contingent debts are provable in company liquidations and personal bankruptcies, a contingent debt which will only come into existence once a discretion has been exercised is not a provable debt. In our view, therefore, there is possibly an argument the Assignee could have rejected the liquidators’ proof on that ground. That argument was not advanced by Mr Corneg. We make these comments, therefore, to avoid any subsequent inference that our judgment might be taken as authority that the liquidators’ claim was for a provable debt. Result  We accordingly dismiss the appeal.  The appellant must pay the respondent costs for a standard appeal on a band A basis and usual disbursements. -----------------------------------------  H Investments Ltd (in liq) v Official Assignee  NZHC 996.  H Investments Ltd (in liq), above n 1, at .  At .  At .  At .  At –.  On liquidation, there was also a modest debt of some $2,800 owed to PGB Wrightson Ltd.  H Investments Ltd (in liq), above n 1, at .  At .  At .  At .  See below at .  Wilson Parking New Zealand Ltd v Fanshawe 136 Ltd  NZCA 407,  3 NZLR 567 at .  At .  H Investments Ltd (in liq), above n 1, at .  At .  Walker v Gibbston Water Services Ltd  NZHC 494 at .  Ferreira v Stockinger  NZHC 2916 at –.  At .  Insolvency Act 2006, s 231.  Section 234.  Section 236.  Section 235.  Section 239.  Section 233(5).  H Investments Ltd (in liq), above n 1, at .  See, for example, at .  At .  At .  Goods and Services Tax Act 1985, s 43.  H Investments Ltd (in liq), above n 1, at .  At .  A & N Contractors (2009) Ltd (in liq) v Liefting  NZHC 3091.  Kaikoura Freight Ltd (in liq) v Collins  NZHC 1490.  At .  Mason v Lewis  NZCA 55;  3 NZLR 225 (CA) at .  At .