Bax v Poros

[2017] NZHC 2211

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2017-404-839 [2017] NZHC 2211

IN THE MATTER	of the Insolvency Act 2006
AND IN THE MATTER	of the bankruptcy of Spyridon Poros of Auckland, Judgment Debtor
BETWEEN	KYLIE BRIDGET BAX Plaintiff
AND	SPYRIDON POROS Judgment Debtor

Hearing:	12 September 2017
Appearances:	Mr Noble for Judgment Debtor/Applicant Mr Godinet for Judgment Creditor/Respondent
Judgment:	12 September 2017

ORAL JUDGMENT OF ASSOCIATE JUDGE CHRISTIANSEN

K B BAX v S POROS [2017] NZHC 2211 [12 September 2017]

Application to set aside bankruptcy notice

[1]      Mr Poros’ debt to Ms Bax relates to unpaid costs awards of $8,426.50 made on

7 July 2015, and $6,132.50 made on 5 November 2015.

[2]      Those costs awards remain unpaid and Ms Bax has served a bankruptcy notice on Mr Poros.

Background

[3]      On  18  December  2015  Mr  Poros  filed  his  Property  Relationship  Act proceeding against Ms Bax in the Hamilton Family Court.   He filed an amended application in that proceeding on 26 October 2016.  The former application alleged Ms Bax fraudulently disposed of relationship property, namely the former family home of the parties, to a trust.

[4]      By his amended application he claims an interest in three properties registered in the name of the trust and seeks payment to him of a half share value of each.

[5]      Mr Poros has provided a copy of his affidavits sworn in support of his claims. He and Ms Bax were married in August 2004 and have three children. They separated in May 2014. He provides his account of how the properties in question were acquired during the course of their marriage.

[6]      Mr Poros has also provided the Court with a copy of the second affidavit dated

26 October 2016, filed in the Hamilton Family Court.  By that affidavit he responded to an affidavit filed on behalf of Ms Bax. Also provided to this Court is a copy of Mr Poros’ affidavit dated 17 March 2017 and filed in the Hamilton Family Court.   It comments on Police charges being brought against him upon a complaint by Ms Bax and another.

[7]      The clear purpose of these documents is to support Mr Poros’ claims of a bona fide commitment to resolve relationship issues with Ms Bax.   These issues, it is submitted, could not have been used as a defence in the action or the proceeding from which the costs orders arose.

[8]      Mr Noble advises the Family Court proceedings were set down for hearing in

Hamilton this week but were adjourned due to counsel’s unavailability.

[9]      Mr Poros must satisfy the Court of the sufficiency of a cross claim if the Court is to set the bankruptcy notice aside.

Considerations

[10]     It is the case for Mr Poros that he has a genuine triable claim against Ms Bax.

[11]     As Mr Godinet for Ms Bax submits at the conclusion of Mr Poros’ pre- commencement application heard before Associate Judge Osborne, he did not seek for costs to be dealt with in any other way than they have been; and he did not seek reservation of costs pending the filing of the determination of his substantial claim.

[12]     In the ordinary course costs upon an opposed interlocutory application are to be paid unless there are special reasons otherwise.  The costs orders in question have not been stayed.

[13]     It would appear from the wording of s 17(1)(d)(2) that if the Court is satisfied that Mr Poros has a counter claim that could not have been used as a defence in that proceeding when costs were ordered, then the bankruptcy notice ought to be set aside.

[14]     In this case the costs were ordered upon an application brought by Mr Poros and which was directly related to his purpose of pursuing relationship proceeding claims.

[15]     Arguably he had the opportunity therefore at the conclusion of the hearing and when costs were addressed, to submit those should be reserved for determination in the outcome of his relationship proceedings, but he did not.

[16]     It seems to the Court as much should have been contemplated and then addressed.

[17]     It is the Court’s decision that payment of those costs needs to be addressed. On the one hand it is clear Mr Poros has insufficient means to pay those presently.  An order for adjudication may affect his ability to pursue his relationship proceedings.

[18]     The Court considers this application should be adjourned in the hope and expectation that the Hamilton Family Court will be able to assist by scheduling a three

– four day hearing now needed to deal with the parties’ outstanding issues.

[19]     The Court directs this matter to be adjourned for call in the chambers list on 10

November 2017 at 2.15pm to review progress with the Family Court proceedings.

[20]     Costs upon the current setting aside application are reserved.  Presently the Court is of the view that even if Mr Poros’ application was to be granted, there would be no order for costs in his favour to follow.

[21]     In essence this case is about Mr Poros’ failure to pay costs awarded against him and concerning his own applications filed in connection with relationship property issues. It is unlikely s 17(7) of the Insolvency Act 2006 was intended to assist a party from avoiding the consequences of costs orders made against them.

Associate Judge Christiansen