ANZ National Bank Limited v Chen
[2012] NZHC 2270
•4 September 2012
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
CIV-2012-404-3943 [2012] NZHC 2270
IN THE MATTER OF the Insolvency Act 2006
AND
IN THE MATTER OF the bankruptcy of Z Chen
BETWEEN ANZ NATIONAL BANK LIMITED Judgment Creditor
ANDZUNHUI CHEN Judgment Debtor
Hearing: 4 September 2012
Counsel: SJ Telford for judgment creditor Appearance: Mr A Lau, given leave to appear today Judgment: 4 September 2012
Reasons: 4 September 2012
REASONS FOR JUDGMENT OF ASSOCIATE JUDGE FAIRE [dealing with representation on an application to set aside a bankruptcy notice]
Solicitors: Morgan Coakle, PO Box 114, Auckland 1140
And To: Z Chen, PO Box 276 138, Manukau
EK Lau, 2 Carousel Crescent, East Tamaki, Auckland 2016
ANZ NATIONAL BANK LIMITED V CHEN HC AK CIV-2012-404-3943 [4 September 2012]
[1] An application to set aside a bankruptcy notice was filed by the judgment debtor. In that document the judgment debtor gave as his address for service PO Box 276 138, Manukau; email – [email protected].
[2] The application was called before me on 14 August 2012. The judgment debtor did not appear. Mr EK Lau appeared. He claimed to hold a power of attorney and said he had instructions to act for Mr Chen, the judgment debtor. He was not able to produce the power of attorney at that time.
[3] The judgment creditor, through counsel, objected to Mr Lau appearing. I adjourned the application until 27 August 2012 so that Mr Lau could produce the power of attorney.
[4] On 27 August 2012 Mr Lau produced a power of attorney. At first sight, the power of attorney did not appear to give Mr Lau an unconditional right to appear for the judgment debtor. Counsel for the judgment creditor requested time to consider the document further. I adjourned the application until 9am today, 4 September
2012. In the minute which I read to the persons present I recorded the court’s
direction namely:
Adjourned to 9am on 4/9/12 to allow counsel to examine the power of attorney and advise if there is objection to Mr Lau appearing for the judgment debtor. Counsel shall file and serve submissions in opposition to Mr Lau appearing plus copies of authorities by 12 noon on 3/9/12 if counsel opposes Mr Lau appearing. Service shall be effected at [email protected] and [email protected].
[5] Counsel filed helpful and very full submissions which were served on Mr Lau. The matter was called before me on 4 September 2012. Mr Lau was given the opportunity to address in opposition to the submissions. I advised Mr Lau that I had carefully considered the position and reached the conclusion that the power of attorney did not authorise him to appear for the judgment debtor. I advised Mr Lau that I would issue my reasons later today for that decision. In the meantime, if Mr Chen wished to take further steps I would grant a short adjournment provided
that Mr Chen either appeared in person or by counsel. The following minute was then issued and handed to Mr Lau and to counsel. The minute provided as follows:
[1] I have received the submissions of the judgment creditor in relation to Mr Lau’s application for leave to appear on behalf of the judgment debtor.
[2] I will issue shortly my reasons for my decision that the power of attorney relied upon by Mr Lau does not authorise his appearance on behalf of the judgment debtor in this application.
[3] Mr Lau advised me the judgment debtor in this circumstance wished to instruct a lawyer. Ms Telford, despite a number of appearances that this case has already had, graciously accepted that a further opportunity should be given to the judgment debtor.
[4] I adjourn the application to set aside the bankruptcy notice to 9:45am on 11 September 2012. In the event that the judgment debtor wishes to file and serve an amended application and supporting affidavit it shall be filed and served no later than 4pm on Friday, 7 September
2012.
[5] My judgment, which will give the reasons why Mr Lau cannot appear, will also explain that the judgment debtor must, if the judgment debtor wishes to set aside the bankruptcy notice, instruct a solicitor to file any documents and must also be represented by counsel at the hearing on Tuesday.
[6] At the hearing on Tuesday I will consider any further documents filed.
If the matter justifies argument an adjournment for a fixture will be granted. If it does not justify further argument then I anticipate dealing with it on Tuesday.
[7] I reserve costs in relation to the application.
[6] Before leaving the minute, I record that the authority for the proposition that the judgment debtor may only file papers himself or by a solicitor is Time Ticket International Ltd v Broughton.1 At the hearing the judgment debtor may represent
himself in person or by a lawyer who is on the Roll of Barristers & Solicitors.2
[7] In her submissions counsel drew attention to the fact that Mr Lau is no stranger to the Court and has, on a number of occasions, appeared for litigants in
reliance on a power of attorney.
1 Time Ticket International Ltd v Broughton 9 PRNZ 305.
2 re GJ Mannix [1984] 1 NZLR 309.
[8] Associate Judge Bell recorded in Westpac New Zealand Ltd v Law:3
When I saw that Mr Lau was involved in this case, I arranged for a case management conference on 8 May 2012 because I wanted the matter of the respondent’s representation cleared up. My concern is that Mr Lau is not a lawyer. While he is entitled to appear in court on his own behalf where he is a party to a proceeding, he does not have the right of audience before this court to appear on behalf of other people.
It appears that in other cases he has been able to appear in court on behalf of other people, saying that he is entitled to do so under a power of attorney that he holds. I am presently case-managing a proceeding brought against him by his former wife who is suing him for his mismanagement of proceedings in which he represented her. He has appeared before Associate Judge Christiansen in a similar proceeding to this: Westpac New Zealand Ltd v Set Kien Law.4 Associate Judge Christiansen allowed him to represent Ms Law in that proceeding.
Today, counsel for Westpac has referred me to another decision of Associate Judge Christiansen: Westpac New Zealand Ltd v Set Kien Law.5 In all of those proceedings Mr Lau has appeared on behalf of caveators and registered proprietors of property and has been given a right of audience – apparently because he possesses a power of attorney. I have seen Mr Lau appear in other proceedings as well. He is Chinese. He has qualifications as an engineer. He does not have legal qualifications. In my view it is inappropriate that he should appear to represent other people. The decision of Associate Judge Christiansen given on 3 May 2012 in the [2012] NZHC
890 decision simply bears out the misgivings I have about Mr Lau.
While I directed on 8 May 2012 that Mr Lau could not appear on behalf of Ms Law, I have left it open to Ms Law to instruct counsel to appear today. Mr Sandelin advised that in the intervening days he had had contact with the lawyer through whose office the caveats were initially lodged. However, that lawyer did not appear today. Enquiries were made whether he was going to appear. That lawyer advised this court that he did not have instructions to appear today.
This matter has, accordingly, proceeded without any appearance for the respondent to oppose the application by Westpac but I record that an opportunity has been given to the respondent to arrange for representation if she intended to oppose the bank’s application.
[9] The documents which have been placed before me in support of the application to set aside the bankruptcy notice are flawed.
3 Westpac New Zealand Ltd v Law HC Auckland CIV-2012-404-991; [2012] NZHC 1065 at [2]–
[6].
4 Westpac New Zealand Ltd v Set Kien Law HC Auckland CIV-2011-404-7989, 19 December
2011.
5 Westpac New Zealand Ltd v Set Kien Law [2012] NZHC 890.
[10] An application to set aside a bankruptcy notice requires a consideration of s 17 of the Insolvency Act 2006. Section 17 requires that the judgment debtor satisfy the Court that he has a cross claim against the creditor. The relevant parts of s 17 provide:
17 Failure to comply with bankruptcy notice
(1) A debtor commits an act of bankruptcy if—
(a) a creditor has obtained a final judgment or a final order against the debtor for any amount; and
(b) execution of the judgment or order has not been halted by a court; and
(c) the debtor has been served with a bankruptcy notice; and
(d) the debtor has not, within the time limit specified in subsection (4),—
(i) complied with the requirements of the notice; or
(ii) satisfied the Court that he or she has a cross claim against the creditor.
…
(7) In subsection (1)(d)(ii), cross claim means a counterclaim, set-off, or cross demand that—
(a) is equal to, or greater than, the judgment debt or the amount that the debtor has been ordered to pay; and
(b) the debtor could not use as a defence in the action or proceedings in which the judgment or the order, as the case may be, was obtained.
[11] In Clark v UDC Finance Ltd Casey J held that the judgment debtor must show:6
a) That he has a genuine triable counterclaim, set-off or cross-demand;
and
b)That it is such that he could not have set it up in the action in which the relevant judgment was obtained.
6 Clark v UDC Finance Ltd [1985] 2 NZLR 636 (HC) at 637.
[12] That formulation was approved by the Court of Appeal in Sharma v ANZ Banking Group (New Zealand) Ltd.7 The inability referred to here is primarily a legal inability: Hardie v Booth.8
[13] What is required is an analysis of the material placed before the Court to see if there is a proper foundation for the allegations of cross-claim which are made. The type of inquiry called for was referred to by Casey J in Clark v UDC Finance Ltd and was expressed in the following ways:9
The debtor must show a prima facie case.
The debtor should have a fair chance of success. There must be a genuine triable demand.
[14] The judgment on which the bankruptcy notice in this case is based is a judgment for costs awarded against the judgment debtor following the judgment debtor’s unsuccessful application that his caveat not lapse. There is no specific challenge to that judgment. The time for any such challenge is well past.
[15] The next question that arises is whether the judgment debtor has put forward any proper basis to show that he has a genuinely triable counterclaim. The material placed before the Court so far does not disclose any proper foundation to support such a proposition. There is a reference to a sale of a mortgaged property at an undervalue. This judgment debtor does not appear to be a party who is entitled to bring such a claim pursuant to s 176 of the Property Law Act 1952.
[16] The above analysis simply serves to show why Mr Lau’s intervention here has been of no assistance to this judgment debtor and has led to a waste of everyone’s time. However, and despite that conclusion, I turn to examine specifically the question of whether the power of attorney authorised Mr Lau to
appear on behalf of the judgment debtor on that is application.
7 Sharma v ANZ Banking Group (New Zealand) Ltd (1992) 6 PRNZ 386 (CA) at 389.
8 Hardie v Booth [1992] 1 NZLR 356 (HC) at 362.
9 Above n6, at 637.
[17] The power of attorney produced is on the standard Auckland District Law Society form, dated 22 December 2002. It contains no specific wording granting Mr Lau powers to appear in court for the judgment debtor.
[18] In Chisholm v Westpac New Zealand Ltd the court declined to allow Mr Nottingham to appear for a party.10 He relied on an enduring power of attorney granted to him by Mr Chisholm, who is resident in Australia.
[19] There have been other cases where Mr Lau has been refused the right of audience based on the power of attorney.11
[20] There have been instances where Mr Lau has been granted leave to appear. In each case no objection to that course has been recorded. The position is different, however, when a party opposes the grant of a right of audience.
[21] I have already recorded that the power of attorney does not, of itself, authorise Mr Lau’s appearance in this case. I have also recorded the concern about the documents that have been filed on behalf of the judgment debtor. In short, in their present form they cannot hope to achieve an order setting aside the bankruptcy notice.
[22] Out of an abundance of caution and in response to Mr Lau’s request for time for Mr Chen to instruct a lawyer, I adjourned the case until next Tuesday, as is indicated in the minute recorded in this judgment. If appropriate documents are filed, the merits of the position can then be reviewed.
[23] This judgment, however, will signal to Mr Lau that the power of attorney that he seeks to rely upon will not now, or in the future, justify his appearance on behalf
of parties in court proceedings where objection is taken to him so appearing.
10 Chisholm v Westpac New Zealand Ltd HC Auckland CIV-2007-404-4878, 11 October 2007.
11 Westpac New Zealand Ltd v Law HC Auckland CIV-2012-404-665 and HC Auckland CIV-2012-
404-670, 31 May 2012, and a further case involving the same parties, Westpac New Zealand Ltd v Law HC Auckland CIV-2012-404-991, 10 May 2012.
[24] I reserve costs in relation to the matter, which can be attended to on
completion of the application to set aside the bankruptcy notice.
JA Faire
Associate Judge
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