90 Nine Limited v Nikitin - [2020] NZHC 445

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2019-404-1326

[2020] NZHC 445

UNDER The Insolvency Act 2006 section 17 and Rule 24.10 of the High Court Rules

BETWEEN

90 NINE LIMITED

Judgment Creditors

AND

ALEXANDR NIKITIN

Judgment Debtor

Hearing: 4 March 2020

Appearances:

Xinan Zhang and Anna Cherkashina for the Judgment Creditor Yuri Lukas for the Judgment Debtor

Judgment:

10 March 2020

JUDGMENT OF ASSOCIATE JUDGE R M BELL

This judgment was delivered by me on 10 March 2020 at 12:00pm
pursuant to Rule 11.5 of the High Court Rules

………………………………………………….
Registrar/Deputy Registrar

Solicitors:
Norling Law (Brent Norling/Anna Cherkashina/Xinan Zhang), Auckland, for the Judgment Creditor Yuri Lukas, Merivale, Christchurch, for the Judgment Debtor

90 NINE LIMITED v ALEXANDR NIKITIN [2020] NZHC 445 [10 March 2020]

[1] Ms Anna Tersintseva obtained an order in the Disputes Tribunal on 9 January 2019 that Alexander Nikitin pay her $7,000. He did not pay. He applied to the Disputes Tribunal for a rehearing, because the Disputes Tribunal had given its decision in his absence. On 12 March 2019, the Disputes Tribunal dismissed his application for a rehearing. It was satisfied that he did receive notice of the original hearing. Ms Tersintseva assigned the judgment debt to 90 Nine Ltd in May 2019. She gave notice of the assignment to Mr Nikitin. 90 Nine Ltd issued a bankruptcy notice based on the Disputes Tribunal order.

[2] Mr Nikitin has applied to set aside the bankruptcy notice. He says that he has a cross-claim against Ms Tersintseva which he could not set up in the original claim against him in the Disputes Tribunal. He says that his claims against her for advances he made total $33,649:

[a]$3,850 for earrings,

[b]$1,499 for the purchase of a new cellphone

[c]$100 for a new cellphone case

[d]$18,200 borrowed between 1 November 2017 and April 2018.

[e]$10,000 for the purchase of a car.

[3] Mr Nikitin applies under s 17 of the Insolvency Act 2006. He needs to satisfy the court that he has a cross-claim that is equal to or greater than the judgment debt or the amount that he has been ordered to pay and which he could not use as a defence in the action or proceedings in which the order was obtained.1

[4] No difficulties arise over the assignment of the debt to 90 Nine Ltd. Mr Nikitin’s
alleged claims all accrued before 90 Nine Ltd gave notice of the assignment. He is

1 Insolvency Act 2006, s 17(1)(d)(ii) and s 17(7).

entitled to assert against 90 Nine Ltd counterclaims against Ms Tersintseva that had accrued before the assignment, even if they are unconnected to the claim that gave rise to her Disputes Tribunal order against him.2

[5] 90 Nine Ltd took a procedural point that Mr Nikitin had applied by originating application, whereas an application to set aside a bankruptcy notice should be by interlocutory application. There is nothing in that. The form for an…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2020] NZHC 445
Decision Date: 10 March 2020

CaseChat Overview and Summary

90 Nine Limited sought to enforce a judgment debt against Alexandr Nikitin by issuing a bankruptcy notice. Mr Nikitin applied to set aside the notice, arguing that he had cross-claims against the assignor of the debt, Anna Tersintseva, which he could not raise in the Disputes Tribunal proceeding that gave rise to the judgment. The court considered whether Mr Nikitin could satisfy the requirements of section 17 of the Insolvency Act 2006 to have the bankruptcy notice set aside.

The court first considered whether Mr Nikitin's claims against Ms Tersintseva could be considered cross-claims under section 17(1)(d)(ii) of the Act. The court found that Mr Nikitin's claim for $10,000, relating to funds he claimed he lent Ms Tersintseva for a car purchase, could have been used as a defence in the Disputes Tribunal proceeding. Therefore, it could not be considered a cross-claim. However, the court found that Mr Nikitin's other claims, relating to funds he claimed he lent Ms Tersintseva for business expenses, could not have been used as a defence in the Disputes Tribunal proceeding and were therefore cross-claims under the Act. However, the court found that Mr Nikitin had not established a genuine and triable claim for those amounts, as he had not provided sufficient evidence to support his claims. The court dismissed the application to set aside the bankruptcy notice.

The court ordered that Mr Nikitin pay 90 Nine Limited's costs on the setting aside application on a 2B basis. If counsel could not agree on the costs, memoranda could be filed and the court would decide the costs on the papers.

Orders