Bax v Poros - [2021] NZHC 741

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2017-404-0839

[2021] NZHC 741

IN THE MATTER

AND
of the Insolvency Act 2006

IN THE MATTER

of the Bankruptcy of SPYRIDON POROS

BETWEEN

KYLIE BRIDGET BAX

Judgment Creditor/Applicant

AND

SPYRIDON POROS

Judgment Debtor/Respondent

Hearing: 9 December 2020

Counsel:

JD Noble for Judgment Debtor/Applicant

CFL Godinet for Judgment Creditor/Respondent

Judgment:

1 April 2021

JUDGMENT OF ASSOCIATE JUDGE SUSSOCK

This judgment was delivered by me on 1 April 2021 at 4pm pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar

Solicitors:
Duggan & Murphy, Auckland Boyle Mathieson, Auckland

BAX v POROS [2021] NZHC 741 [1 April 2021]

Introduction

[1] This is an application by Mr Spyridon Poros to set aside a bankruptcy notice on the basis that he has a cross claim against Ms Kylie Bax.

[2] The cross claim relied upon is the relationship property claim filed by Mr Poros in the Family Court in December 2015. Those proceedings were not successful in the Family Court, or in the High Court on appeal. Mr Poros’ application to the High Court for leave to appeal to the Court of Appeal has been declined and he has now filed an application to the Court of Appeal for leave, as he is entitled to do.

[3] The issue is whether the relationship property claim is still a “genuine triable claim”, as is required for it to be considered a cross claim in terms of s 17 of the Insolvency Act 2006 (“Insolvency Act”), or whether, until (and unless) leave is granted, there is no longer such a claim.

Background

[4] The judgment debt that is the subject of the bankruptcy notice arises from a costs award made following an application for pre-commencement discovery by Mr Poros in 2015, prior to bringing proceedings under the Property (Relationships) Act 1976. He was unsuccessful in the discovery application and costs of $8,426.50 were awarded against him.1 Mr Poros sought a review of the Associate Judge’s decision and again was unsuccessful with a further costs award of $6,132.50 being made by Wylie J on 5 November 2015.2

[5] Mr Poros commenced relationship property proceedings in the Family Court on 18 December 2015 with amended pleadings filed on 26 October 2016.

[6] In May 2017, a bankruptcy notice was served on Mr Poros based on the two costs awards arising out of the pre-commencement discovery application, totalling
$14,559.

1 Poros v Bax [2015] NZHC 1579.
2 Poros v Bax [2015] NZHC 2772.

[7] Mr Poros applied within the 10 working day time limit to set aside the bankruptcy notice on the grounds that he had a cross claim, the relationship property claim before the Family Court at that time.

[8] When the application to set aside the notice was first heard on 12 September 2017, Associate Judge Christiansen adjourned the application, initially for two months, so that progress in the Family Court proceedings could be reviewed.3

[9]…

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.

Continue reading Bax v Poros

Details

AGLC: Bax v Poros [2021] NZHC 741
Case: [2021] NZHC 741
Decision Date: 1 April 2021

CaseChat Overview and Summary

In this matter, Mr Spyridon Poros applied to set aside a bankruptcy notice served on him by Ms Kylie Bax, the judgment creditor. The bankruptcy notice was based on costs awarded to Ms Bax in proceedings relating to a pre-commencement discovery application, and a subsequent review of that decision. The issue before the Court was whether Mr Poros had a genuine triable cross claim against Ms Bax, as required by s 17 of the Insolvency Act 2006. The cross claim in question was Mr Poros’ relationship property claim against Ms Bax, which had been determined by both the Family Court and the High Court on appeal. Although Mr Poros had applied for leave to appeal to the Court of Appeal, leave had not yet been granted.

The Court found that a cross claim must be a genuine triable claim, as defined by the Court of Appeal in Sharma v ANZ Banking Group. The debtor must demonstrate a claim of true substance which he genuinely proposes to pursue. The claim must be equal to or greater than the judgment debt, and it must be a claim that could not have been raised as a defence in the action or proceeding in which the judgment was obtained. The Court held that a debtor does not have to prove a watertight case but must demonstrate a genuine triable claim. The Court also held that the threshold for leave to appeal to the Court of Appeal is relatively high, and that leave will only be granted if the proposed appeal raises a question of law or fact capable of bona fide and serious argument.

The Court found that Mr Poros’ relationship property claim had been determined by two Courts, which found that he did not have a claim equal to or of greater value than the judgment debt. The Court held that Mr Poros could not say that he had “a claim of true substance” that was equal to or greater than the judgment debt. The Court held that Mr Poros’ application to set aside the bankruptcy notice must be dismissed.

The Court dismissed the application to set aside the bankruptcy notice and declined to make an order for substituted service. The Court invited the parties to agree on costs, and if they were unable to agree, to file memoranda of no more than 5 pages within the specified time frames.

Orders