BETWEEN HG METAL MANUFACTURING LIMITED Judgment Creditor AND SHERINE SANGEETHA NAVARATNAM Judgment Debtor
[2023] NZHC 3722
•15 December 2023
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2022-404-000044
[2023] NZHC 3722
BETWEEN HG METAL MANUFACTURING LIMITED
Judgment Creditor
AND
SHERINE SANGEETHA NAVARATNAM
Judgment Debtor
Hearing: 21 November 2023 Appearances:
T B Fitzgerald for the Judgment Creditor S S Navaratnam in Person
Judgment:
15 December 2023
INTERIM JUDGMENT OF ASSOCIATE JUDGE GARDINER
This judgment was delivered by me on 15 December 2023 at 4.00 p.m. pursuant to Rule 11.5 of the High Court Rules.
Registrar/Deputy Registrar Date.......................................
Solicitors:
Bell Gully, Auckland
HG METAL MANUFACTURING LTD v SHERINE NAVARATNAM [2023] NZHC 3722 [15 December 2023]
Introduction
[1] HG Metal Manufacturing Limited (HG Metal) applies for an order adjudicating Sherine Navaratnam bankrupt. The application is based on an unmet bankruptcy notice, which is in turn based on an order entering an award as judgment against Mrs Navaratnam in October 2020 for SGD 404,736.10 and USD 1,230,187.73, together with interest, fees, and costs.
[2]The issues are:
(a)Are the statutory criteria for bankruptcy in s 13 of the Insolvency Act 2006 met?
(b)Despite that, should the Court exercise its discretion to refuse to adjudicate Mrs Navaratnam?
Background
[3]The history to this application is summarised by the Court of Appeal:1
Introduction
[1] In September 2014 Mr and Mrs Navaratnam guaranteed the payment of money owed by Gayathri Steels Pte Ltd to HG Metal Manufacturing Ltd (HG Metal). They failed to pay the outstanding amounts. A Singaporean arbitrator issued an award (Award) dated 23 April 2020 finding that Mr and Mrs Navaratnam were jointly and severally liable to HG Metal for SGD 404,736.10 and USD 1,230,187.73, together with interest and the fees and expenses of the arbitration.
[2] Mr and Mrs Navaratnam did not meet the Award. By October 2020 they were living in New Zealand. HG Metal applied pursuant to art 35 of sch 1 of the Arbitration Act 1996 for recognition and enforcement of the Award. That application triggered a lengthy procedural battle between HG Metal and Mr and Mrs Navaratnam that has culminated in the present applications by HG Metal to strike out two appeals brought by Mr and Mrs Navaratnam.
[3] In October 2020, Woolford J entered judgment against Mrs Navaratnam by default.2 Mr and Mrs Navaratnam both appealed that judgment (Mr Navaratnam on the ground that the sealed judgment created a
1 Navaratnam v HG Metal Manufacturing Ltd [2022] NZCA 425 [The Strike-Out Judgment].
2 HG Metal Manufacturing Ltd v Navaratnam HC Auckland CIV-2020-404-001955, 22 October 2020 per Woolford J. [The Orders of Woolford J].
liability for him as well). HG Metal applies to strike out the appeal on the ground that Mr and Mrs Navaratnam have failed to comply with court directions.3
[4] In July 2021, following a defended hearing, Katz J entered judgment against Mr Navaratnam.4 Having been refused an extension of time to appeal,5 Mr Navaratnam applied for judicial review of Katz J’s decision. Jagose J struck out the judicial review proceeding in March 2022.6 Mr Navaratnam has appealed Jagose J’s decision. HG Metal applies to strike out the appeal on the ground that it is an abuse of process.7
[4] On 8 September 2022, the Court of Appeal struck out both Mr and Mrs Navaratnam’s appeals against Woolford J’s minute entering the award as judgment against Mrs Navaratnam (the Orders of Woolford J), and Mr Navaratnam’s appeal of Jagose J’s decision (the Strike-Out Judgment).8 More about this judgment later.
[5] In the meantime, on 30 August 2022, this Court adjudicated Mr Navaratnam bankrupt.9
[6] HG Metal issued Mrs Navaratnam with a bankruptcy notice on 24 January 2022. Mrs Navaratnam applied to set it aside. Associate Judge Taylor dismissed that application on 28 March 2023 (the Set Aside Judgment).10 Mrs Navaratnam appealed that decision to the Court of Appeal. I return to this appeal later.
[7] At the second call of this application, Associate Judge Brittain set it down for a hearing on 21 November 2023.11 He directed Mrs Navaratnam to file and serve any notice of opposition and further affidavits by 29 September 2023, and to file any written submissions 10 working days before the hearing.
3 Court of Appeal (Civil) Rules 2005, r 44A(1)(a).
4 HG Metal Manufacturing Ltd v Navaratnam [2021] NZHC 1920 [Judgment of Katz J].
5 Navaratnam v HG Metal Manufacturing Ltd [2021] NZCA 704 [Court of Appeal Extension of Time Judgment].
6 Navaratnam v High Court of Auckland [2022] NZHC 371.
7 Court of Appeal (Civil) Rules, r 44A(1)(c).
8 The Strike-Out Judgment, above n 1, at [49]–[50].
9 HG Metal Manufacturing Ltd v Navaratnam [2022] NZHC 2183.
10 HG Metal Manufacturing Ltd v Navaratnam [2023] NZHC 637 at [31] [The Set Aside Judgment].
11 HG Metal Manufacturing Ltd v Navaratnam HC Auckland CIV-2022-404-44, 17 August 2023 per Associate Judge Brittain.
[8] Mrs Navaratnam did not file any notice of opposition or affidavit in support. Instead, with Mr Navaratnam, she filed two interlocutory applications:
(a)An interlocutory application in proceeding CIV-2020-404-1955 — HG Metal’s application for recognition and enforcement of the Singaporean arbitration award (the Recognition and Enforcement Proceeding). The interlocutory application is entitled “Application seeking a refusal of enforcement of an Arbitration Award entered as judgment”. This application was struck out as an abuse of process by Fitzgerald J on 6 October 2023.12
(b)An interlocutory application in this proceeding entitled, “Application seeking a strike-out claim and proceedings, or set-aside order”. Fitzgerald J declined to strike-out this application and held that it ought to be accepted for filing “to the extent that any of the matters raised in the strike-out application are in substance arguments which Mrs Navaratnam wishes to make in opposition to the judgment creditor’s application being heard in November 2023”.13
[9] On 20 October 2023, following a further call of this application, Associate Judge Taylor directed that the “Application seeking a Strike out claim and proceedings or set aside order” be treated as Mrs Navaratnam’s notice of opposition to the application for an adjudication order.14
[10] On 6 November 2023, Mr and Mrs Navaratnam filed a notice of appeal against Fitzgerald J’s decisions of 6 October 2023 on their interlocutory applications.
[11] On 20 November 2023, Mr and Mrs Navaratnam filed a memorandum in this proceeding and the Recognition and Enforcement Proceeding. I have treated this memorandum as their written submissions for the hearing.
12 Navaratnam v HG Metal Manufacturing Ltd HC Auckland CIV-2022-404-44, 6 October 2023 per Fitzgerald J. [Minute of Fitzgerald J].
13 At [15].
14 HG Metal Manufacturing Ltd v Navaratnam HC Auckland CIV-2022-404-44, 20 October 2023 per Associate Judge Taylor.
[12] In this memorandum, Mr and Mrs Navaratnam refer to an interlocutory application filed in the Court of Appeal in the Recognition and Enforcement Proceeding to “stay the enforcement of the judgments and or orders issued as a consequence of the decisions made under CIV-2020-404-1955”. A copy of the interlocutory application is attached to the memorandum.
The law
[13] The Court may, in its discretion, make an order adjudicating a debtor bankrupt if the criteria in s 13 of the Insolvency Act 2006 are met.15
[14]The criteria are:
13 When creditor may apply for debtor's adjudication
A creditor may apply for a debtor to be adjudicated bankrupt if—
(a)the debtor owes the creditor $1,000 or more or, if 2 or more creditors join in the application, the debtor owes a total of $1,000 or more to those creditors between them; and
(b)the debtor has committed an act of bankruptcy within the period of 3 months before the filing of the application; and
(c)the debt is a certain amount; and
(d)the debt is payable either immediately or at a date in the future that is certain.
[15] Once the s 13 requirements are made out, the judgment creditor is prima facie entitled to an adjudication order.16 The onus is on the debtor to persuade the Court that an order should not be made.17
[16]The Court may, in its discretion, refuse to adjudicate the debtor bankrupt if:18
(a)the applicant creditor has not established the requirements set out in s 13; or
15 Insolvency Act 2006, s 36.
16 See Baker v Westpac Banking Corp CA212/92, 13 July 1993 at 5 and 6; and Re Epirosa, Ex Parte Diners Club (NZ) Ltd HC Wellington, B498/91, 6 March 1992 at 5 and 8.
17 Kiwibank Ltd v Hutchin [2015] NZHC 1518 at [26].
18 Insolvency Act 2006, s 37.
(b)the debtor is able to pay his or her debts; or
(c)it is just and equitable that the court does not make an order of adjudication; or
(d)for any other reason an order of adjudication should not be made.
[17] The Court of Appeal has observed that s 37 confers a “wide discretion” informed by various factors.19 These include: whether the debtor is able to pay their debts over time, bearing in mind that bringing finality within a reasonable period is the essence of bankruptcy proceedings; the circumstances in which the debt was incurred and whether the creditor has acted unreasonably in petitioning bankruptcy; whether adjudication is conducive or detrimental to the wider public interest; and whether adjudication would be pointless because the creditors are unlikely to receive any payment.20
Are the s 13 criteria met?
[18] Under s 17, a debtor commits an act of bankruptcy if a creditor has obtained a final judgment or order against the debtor for any amount, the execution of which has not been halted by a court, and the debtor, having been served with a bankruptcy notice, has not complied with the requirements of the notice or otherwise satisfied the Court that they have a cross-claim against the creditor.21
[19] The award for HG Metal was entered as a judgment against Mrs Navaratnam on 22 October 2020, in this Court.22 Execution of the judgment has not been stayed. HG Metal served Mrs Navaratnam with a bankruptcy notice based on the judgment on 22 July 2022. As noted, Mrs Navaratnam applied to set it aside. This Court dismissed that application on 28 March 2023.23 Because she did not comply with the notice by
19 Body Corporate 68792 v Memelink [2018] NZCA 509, [2019] NZAR 127 at [15].
20 At [15].
21 Insolvency Act 2006, s 17.
22 The Orders of Woolford J, above n 2.
23 The Set Aside Judgment, above n 10.
the expiry of 28 March 2023, Mrs Navaratnam committed an act of bankruptcy on that date.24
[20] HG Metal’s application for adjudication was filed on 12 April 2023, within three months of the act of bankruptcy. Therefore, the criteria in s 13(b) of the Act is met.
[21] The judgment against Mrs Navaratnam on which the bankruptcy notice is based includes the sums of SGD 404,736.10, and USD 1,230,187.73 plus interest, fees, and expenses. It is not disputed that she has not paid any of the judgment sum. Mrs Navaratnam also has unpaid costs orders of amounts exceeding NZD 100,000.25 The criteria in s 13(a) of the Act is also met.
[22] The debt relied on is a money judgment of this Court. It is for fixed amounts, which are specified in sealed orders and the application for adjudication, satisfying the criteria in s 13(c) of the Act.
[23] The debt is immediately payable. Enforcement of the debts has not been stayed. Accordingly, the criteria in s 13(d) of the Act is met.
Should the Court exercise its discretion to refuse to adjudicate Mrs Navaratnam bankrupt?
[24] Mrs Navaratnam has not pleaded or provided any evidence to persuade the Court that she is able to pay her debts.26
[25] She raises several matters in her application to “strike out claim and proceedings or set aside order”, the memorandum she filed on 20 November 2023 for this hearing and in oral submissions. I consider these matters now, in the context of the Court’s discretion.
24 Rule 24.10 of the High Court Rules 2016 states that the time for compliance is extended to “until the application [to set aside the bankruptcy notice] has been determined.”
25 HG Metal Manufacturing Ltd v Navaratnam HC Auckland CIV-2022-404-44, 19 June 2023 per Associate Judge Taylor [Costs Minute of Associate Judge Taylor]; HG Manufacturing Ltd v Navaratnam [2021] NZHC 2498 [Costs Judgment of Katz J]; and Navaratnam v HG Metal Manufacturing Ltd [2023] NZCA 11 [Costs Judgment of the Court of Appeal].
26 Insolvency Act 2006, s 37(b).
[26] Before doing so, I record a complaint that Mr and Mrs Navaratnam have raised repeatedly in the Recognition and Enforcement Proceeding that has been decided by the courts and cannot be relitigated now. The complaint is that HG Metal did not satisfy the statutory requirements for recognition and enforcement of the Singaporean arbitration award under the Arbitration Act 1996 because it did not provide a properly authenticated copy of the award.
[27] Mr and Mrs Navaratnam raised this issue in their appeals against the Orders of Woolford J and the judgment of Jagose J, as the Court of Appeal records:27
[5] In both appeals Mr and Mrs Navaratnam raise the same substantive complaint. They say that HG Metal has not satisfied the statutory requirements for recognition and enforcement of the Award under the Arbitration Act because it has not provided a properly authenticated copy of the Award itself. They say that, as a result, no obligation has arisen for them to take any steps in the proceeding.
[28]The Court of Appeal explained further:
[12] Mr Navaratnam raised a number of grounds in opposition to HG Metal’s application for recognition and enforcement. The first of these was a group of procedural complaints, including that HG Metal was not the party that filed the affidavit that proved the matters required by art 35(2) and that the Award had not been properly authenticated or certified. Katz J found that none of these complaints had any substance.
[13] The affidavit filed in support of HG Metal’s application was sworn by its Singaporean solicitor, Mr Chow Jie Ying. This complied with art 35(2)
— there is no requirement that the supporting affidavit be sworn by a director or employee of HG Metal. Mr Chow annexed to his affidavit a duly certified copy of the Award. Katz J was satisfied that the Award had been properly certified:
[24] The Award has clearly been properly certified. It is sealed on the first page where it says, “Registered in SIAC Registry of Awards as: Award No. 059 of 2020 on 24 April 2020”. Mr Chow has provided expert evidence that this is all that is required as a matter of Singaporean law.
(footnotes omitted)
[29] On Mr Navaratnam’s appeal against the decision of Jagose J, the Court of Appeal held:
27 The Strike-Out Judgment, above n 1.
[26] Mr Navaratnam’s efforts to circumvent the principle of finality through the judicial review process and, in doing so, to relitigate an issue already determined in the High Court is an abuse of process. The appeal ought not to be permitted to proceed further. We accept HG Metal’s submission that it should be struck out.
[30] On Mr and Mrs Navaratnam’s appeal against the Orders of Woolford J, the Court of Appeal described their position as follows:
[42] Mr and Mrs Navaratnam take the position that HG Metal failed to comply with the requirement in art 35(2) to supply an authenticated or duly certified award and arbitration agreement and they are under no obligation to respond to its application for recognition and enforcement until after it has established the validity of the Award. In the memorandum of 11 June 2022, under the heading “The time tabling orders and cost award issued on [2022] NZCA 185”, Mr Navaratnam stated that:
…
(b) Hg Metal has not proven the presumptive validity of the award as required under Article 35(2) and according to the relief the Navaratnam’s (sic) sought, it was a prerequisite to have [Mrs Navaratnam’s] grounds challenge to be heard under Article 36 and that requirement has not been met.
(c) The non-compliance is also dispositive of the issue of service on [Mrs Navaratnam] because in order for service to be effective, there ought to be a valid award and arbitration agreement filed which proves matters under Article 35(2). There is no such filing and any argument otherwise is displaced by the evidence.
(d) Accordingly neither Navaratnam’s (sic) have an obligation to respond under 26.27 of the [High Court Rules] requesting review of the award under article 36(1)(a).
…
(f) [Mr Navaratnam] will not allow [Mrs Navaratnam] to respond as Hg Metal has not satisfied the requirements under Article 35(2) and by way of that requirement the terms of the Arbitration Agreement they used to obtain the Award. Satisfying the requirements in Article 35(2) is a prerequisite and a right that is afforded to her and if and when Hg Metal decides to submit the relevant documents and [Mrs Navaratnam] is validly served [in] accordance to the laws applicable to her, a response from her will be rightfully forthcoming. Until such time that happens [Mr Navaratnam] is doing what the Judiciary ought to do – protect her rights under the Arbitration Act 1996 and therefore he should not be penalised for his actions.
(g) For the above reasons, the Navaratnam’s (sic) have not complied with the time tabling directions and the directions ought to be deferred until determination is made under CA152/2022.
…
[43] Mrs Navaratnam did not wish to make any submissions beyond the contents of her memorandum dated 18 July 2022. In that memorandum she stated:
… [Mrs Navaratnam’s] position is that she is of the view that she has no obligation to respond to an award and arbitration agreement that does not comply to Article 35(2) requirements …
[44] We infer that Mrs Navaratnam’s position is the same as that taken by Mr Navaratnam — that HG Metal has not satisfied the requirements of art 35(2) and, as a result, she has no obligation to respond to its application.
[31] The Court of Appeal held that this argument was not tenable and furthermore had been the subject of a specific finding of Katz J in this Court:
[47] Mrs Navaratnam chose not to take any steps in opposition to HG Metal’s application. She and Mr Navaratnam now advance an argument that is not tenable. On its face, HG Metal’s application satisfied art 35(2) and that issue has been the subject of a specific finding by Katz J which (as we have explained) is not able to be challenged. Nor can Mr Navaratnam’s complaint regarding the terms of the sealed order, while valid, assist him in the question of whether the appeal should be struck out. It could only have had a practical effect if HG Metal had attempted to enforce that judgment against Mr Navaratnam, in which case he would have a defence to such action. But HG Metal did not, and will not, take that course because it has the judgment entered against Mr Navaratnam by Katz J, which it has been attempting to enforce.
[48] Mr and Mrs Navaratnam have deliberately attempted to delay progress of this appeal. They have failed to comply with numerous directions of the Court, even in the face of express warnings from the Court about the need to comply. There is no discernible merit in the appeal that would justify further latitude. The point has been reached where HG Metal’s rights should be recognised. We are satisfied that this is an appropriate case in which the power to strike out the appeal for continuing default in compliance with court rules and directions is appropriate.
[32] Mrs Navaratnam raised the complaint about authentication of the arbitration award again as a reason for the bankruptcy notice to be set aside. In the Set Aside Judgment, Associate Judge Taylor rejected this argument, recording that the Court of Appeal had found that it was untenable, and it had been the subject of a specific finding by Katz J.28
28 The Set Aside Judgment, above n 10, at [31].
[33] I now turn to the reasons Mrs Navaratnam gives for why the Court should not adjudicate her bankrupt.
Appeal of Fitzgerald J decisions
[34] The first matter Mrs Navaratnam identifies in her memorandum is the appeal she and Mr Navaratnam have filed against the decisions on 6 October 2023.
[35] Fitzgerald J described the application filed in the Recognition and Enforcement Proceeding for refusal of enforcement in this way:29
[8] The crux of the application for refusal of enforcement of an award appears to be that HG Metal had no valid award to enforce through the New Zealand courts, that the courts in the early stages of this proceeding committed various errors in enforcing the award, and the enforcement of the award by way of entry of judgment in this jurisdiction involves a failure by the courts to observe principles of natural justice. Particular issues raised on the application appear to be that various matters “remain undetermined”, including HG Metal’s obligation to prove matters under art 35(2) of the first schedule to the Arbitration Act 2006 (namely whether HG Metal complied with the procedural requirements for enforcing an arbitral award in New Zealand, and in particular, whether it presented to the court a duly authenticated copy of the award), and the implications on the award of an earlier decision of the Singapore High Court, by which the Navaratnams say that the issues determined in the arbitral award were res judicata.
[36]The judge’s reasons for striking out the application were:
[9] Whether a duly authenticated copy of the award was presented to the Court by HG Metals has already been the subject of determination in the enforcement judgment. So too has the nature of the earlier Singapore High Court judgment and its implications for the Singapore arbitral award. As to the other matters which are suggested as not having been determined, plainly Mr Navaratnam has had the opportunity to oppose enforcement of the award on whatever grounds he wished to advance at the time, and to appeal against Katz J’s resulting enforcement judgment. Mr Navaratnam did seek to appeal against the enforcement judgment, but did so out of time, with the Court of Appeal declining to grant an extension of time including on the basis the proposed appeal lacking merit.
[10] The application also alleges a number of errors made on the part of Katz J in reaching her decision in the enforcement judgment, and in the Navaratnams’ accompanying memorandum, they also take issue with various Court of Appeal judgments.
[11] It is plain in my view that, in accordance with the approach to r 5.35B recently adopted by the Court of Appeal in Te Wakaminenga O Na Hapu Ki
29 Minute of Fitzgerald J, above n 12.
Waitangi v Waitangi National Trust Board,30 the current application is an abuse of process and must be struck out. In short, it is an abuse of process to now apply for refusal of recognition of enforcement of an arbitral award being entered as a judgment, when that matter has already been heard and determined by this Court some years ago, and leave declined to file an appeal against that determination out of time. And plainly this Court cannot entertain challenges to Court of Appeal decisions.
[12] The application is clearly a collateral challenge to decisions of this Court and the Court of Appeal by which the Singapore arbitral award was recognised and enforced in this jurisdiction. It is accordingly struck out pursuant to r 5.35B.
[37] It is clear from the description of the application that it concerns the very same complaint Mr and Mrs Navaratnam made in the Recognition and Enforcement Proceeding, which I outlined above. For the reasons given by the Court of Appeal in the Strike-Out Judgment, Mr and Mrs Navaratnam’s appeal of Fitzgerald J’s decision to strike out the application is without merit.
[38] Accordingly, this appeal does not provide any reason for the Court to refuse to adjudicate Mrs Navaratnam bankrupt.
[39] Nor does the appeal of Fitzgerald J’s decision on the application to “strike out claim and proceedings or set-aside order”. That is because Fitzgerald J decided not to strike out this application and directed that it be treated as Mrs Navaratnam’s notice of opposition to the adjudication application. If Mrs Navaratnam’s appeal is successful, it would mean that the adjudication application is unopposed.
[40] I also note that after the hearing of this application, on 24 November 2023, the Court of Appeal determined that the appeal relating to the application seeking to “strike out claim and proceedings or set aside order” could not be accepted for filing since leave was not sought in the High Court.31
[41]I turn now to the substance of that application.
30 Te Wakaminenga O Na Hapu Ki Waitangi v Waitangi National Trust Board [2023] NZCA 63.
31 Navaratnam v HG Metal Manufacturing Ltd CA662/2023, 24 November 2023 at [4] [Court of Appeal Minute]. In the same minute the Court of Appeal confirmed that Mrs Navaratnam remains entitled to pursue the appeal against the order made by Fitzgerald J under r 5.35B of the High Court Rules in the ordinary way.
Application to strike out the claim and proceedings or set aside the order
[42] It is not straightforward to identify the key arguments in the application and accompanying memorandum. There seem to be two main arguments, repeated in various forms.
[43] The first is that the arbitrator in Singapore was wrong to make the award against Mr and Mrs Navaratnam. The essence of the argument seems to be that the arbitral tribunal did not have jurisdiction to hear the dispute, because it had already been determined in Mr and Mrs Navaratnam’s favour by the High Court in Singapore.
[44] This argument is not available to Mrs Navaratnam in the context of this application, when she did not oppose the application to have the award entered as a judgment against her.
[45] Furthermore, the Court of Appeal has confirmed that this argument is wrong. Mr Navaratnam made this argument in opposition to the award being entered as a judgment against him. Katz J addressed this argument at paras [34]–[40], and concluded that there was “no merit in the ground of opposition to recognition and enforcement of the Award”.32
[46] Mr Navaratnam then sought the leave of the Court of Appeal to appeal this decision, out of time. Although the application was made only five working days after the date for filing the appeal, the Court of Appeal denied him leave, based on his unsatisfactory conduct of the litigation to date and the lack of any apparent merit in the appeal.33 The Court’s conclusion on this issue was:
[30] The Judge found that HG Metal’s proceeding in the Singapore High Court did not amount to a repudiation and, even if it had, Mr Navaratnam clearly had not accepted it. On the issue of res judicata, the Judge considered that the arbitration clause in the September Guarantee meant that the High Court of Singapore had no jurisdiction to resolve issues under that guarantee. In any event, the High Court of Singapore had made clear that it was not making a determination relating to the September Guarantee.
[31] The Judge’s reasoning is plainly right. As the Judge noted, the regime of the Arbitration Act is intended to facilitate commercial arbitration by
32 Judgment of Katz J, above n 4.
33 Court of Appeal extension of Time Judgment, above n 5, at [32].
enhancing predictability and expeditiousness. One means of achieving this end is the limited recourse against award and their enforcement. Mr Navaratnam seeks to attack the substance of the arbitral award but that is not generally permitted, and we are satisfied that there is no tenable argument that the grounds provided for in art 36(1)(a)(iii), (iv) or (2)(b)(ii) are engaged so as to justify refusal to recognise or enforce the award.
[47] Accordingly, this argument has been determined to have no substance. It does not provide a justification for the Court to exercise its discretion not to adjudicate Mrs Navaratnam bankrupt.
[48] The second theme of the application is the argument described earlier that the Court was wrong to enter the award as a judgment against Mrs Navaratnam because HG Metal did not file the material required by art 35(2) of sch 1 of the Arbitration Act 1996.
[49] For reasons already given, this argument is without merit and has been the subject of a final decision of this Court,34 and confirmed by the Court of Appeal.35
[50]I turn now to the second matter identified in Mrs Navaratnam’s memorandum.
Interlocutory application in Court of Appeal
[51] Mrs Navaratnam attaches to her memorandum a document she says she has filed in the Court of Appeal entitled “Interlocutory Application to stay enforcement of the judgments and or orders issued as a consequence of the decisions made under CIV-2020-404-1955.” She seeks a stay of execution of various orders and judgments, pending determination of her appeal of Fitzgerald J’s decisions. These orders and judgments include:
(a)the Orders of Woolford J in the Recognition and Enforcement Proceeding;
34 Judgment of Katz J, above n 4, at [22]–[26].
35 The Strike-Out Judgment, above n 1, at [47].
(b)the Judgment of Katz J granting HG’s enforcement application of the arbitral award;
(c)the judgment of Katz J where costs were awarded against Mr Navaratnam;
(d)the judgment of the Court of Appeal where costs were jointly and severally awarded against Mr and Mrs Navaratnam; and
(e)the Set Aside Judgment dismissing Mrs Navaratnam’s application to set aside the bankruptcy notice against her.36
[52] In a minute issued on 24 November 2023, Goddard J dismissed this application for a stay because it was wholly misconceived.37 Therefore, this application does not provide any basis for this Court to refuse to adjudicate Mrs Navaratnam bankrupt.
Mrs Navaratnam’s oral submissions
[53] At the hearing Mrs Navaratnam submitted she and Mr Navaratnam simply want answers to the questions they have been asking throughout. These are the questions described at para 4(f)(i) to (x) of her memorandum. They all concern the Recognition and Enforcement Proceeding. Mrs Navaratnam emphasised one question especially. This is whether she was required to respond to HG Metal’s originating application to enforce the arbitration award when the application did not comply with rr 26.22 and 26.23 of the High Court Rules, and she was not served with the application and supporting affidavit according to r 26.24.
[54] The questions identified in the memorandum have been raised by Mr and Mrs Navaratnam many times before and answered by the courts. With regards to the specific question Mrs Navaratnam highlights, r 26.22 sets out the requirements for an application for entry of an arbitration award as judgment; and r 26.23 requires a supporting affidavit proving the matters set out in art 35(2) of sch 1 of the Arbitration
36 The Orders of Woolford J, above n 2; Judgment of Katz J, above n 4; Costs Judgment of Katz J, above n 25; Costs Judgment of the Court of Appeal, above n 25; and The Set Aside Judgment, above n 10.
37 Court of Appeal Minute, above n 31, at [8].
Act. It seems that Mrs Navaratnam is again raising the complaint that HG Metal did not satisfy the statutory requirements for recognition and enforcement of the award under the Arbitration Act because it did not provide a properly authenticated copy of the award.
[55] As to the second part of her question, concerning service of the application for recognition and enforcement of the award on her, the Henderson v Henderson principle applies. Parties to litigation are required to bring forward their whole case and are generally prevented from later attempting to relitigate the same subject on a different basis.38 The principle promotes finality in litigation, ensures that defendants are not oppressed by successive suits and prevents proceedings that are an abuse of process.39
[56] Woolford J made the order entering judgment against Mrs Navaratnam based on an affidavit of service that said that HG Metal (by its solicitors) served Mrs Navaratnam by way of email to her solicitor at the time, Mr LaHatte.40 The affidavit of service annexed copies of email exchanges with Mr LaHatte in which he confirmed that he was instructed to accept service by email for Mrs Navaratnam and acknowledging service. Mr Navaratnam appeared at the hearing before Woolford J, whilst Mrs Navaratnam took no steps within the specified time and judgment was entered against her.
[57] In a subsequent call of HG Metal’s application against Mr Navaratnam in the Duty Judge list, Mr Navaratnam raised the issue that Mr LaHatte was not authorised to accept service of the application for Mrs Navaratnam.41 Palmer J rejected the purported evidence put forward by Mr Navaratnam for this proposition and said that if Mrs Navaratnam wished to contest the Orders of Woolford J, she should appeal that decision.42
38 Craig v Stringer [2020] NZCA 260 at [17]–[18] discussing Henderson v Henderson (1843) 3 Hare 100, 67 ER 313 (Ch).
39 Craig v Stringer [2020] NZCA 260 at [16]–[20].
40 The Orders of Woolford J, above n 2, at [1]; and Affidavit of Catherine Rong Fu in support of opposition to judgment debtors application affirmed 17 August 2022.
41 HG Metal Manufacturing Ltd v Navaratnam HC Auckland CIV-2020-404-1955, 5 November 2020, per Palmer J at [2].
42 At [5].
[58] Katz J recorded that Mr Navaratnam advanced the argument that Mrs Navaratnam had not been served with the application in his opposition to the application.43 Katz J did not make a finding on this as it was irrelevant to the proceeding concerning Mr Navaratnam, and issues concerning enforcement of the award against Mrs Navaratnam were before the Court of Appeal.
[59]In relation to Mrs Navaratnam’s appeal, the Court of Appeal recorded that:44
[43] Mrs Navaratnam did not wish to make any submissions beyond the contents of her memorandum dated 18 July 2022. In that memorandum she stated:
… [Mrs Navaratnam’s] position is that she is of the view that she has no obligation to respond to an award and arbitration agreement that does not comply to Article 35(2) requirements …
[44] We infer that Mrs Navaratnam’s position is the same as that taken by Mr Navaratnam — that HG Metal has not satisfied the requirements of art 35(2) and, as a result, she has no obligation to respond to its application.
[60] Thus, Mrs Navaratnam had the opportunity to raise any issues with service of the enforcement application on her, in her appeal. If she did not raise this issue about service in her appeal about the application, she is unable to raise it now.
Appeal of set aside judgment
[61] Mrs Navaratnam filed a notice of appeal against the Set Aside Judgment. The appeal was accepted for filing on 1 May 2023. However, she has not paid security for costs for the appeal. She sought dispensation from paying security for costs which the Registrar refused on 10 July 2023. Mrs Navaratnam applied to review that decision on 31 July 2023. The Court of Appeal dismissed that application and ordered that Mrs Navaratnam pay security for costs by 23 November 2023. The appeal was set to be deemed abandoned under r 43 of the Court of Appeal (Civil) Rules 2005 on 5 December 2023, as Mrs Navaratnam had not undertaken any steps to further the appeal. However, on the last day Mr Navaratnam filed an application for an extension of time. That application has not been determined yet.
43 Judgment of Katz J, above n 4, at [21(d)].
44 The Strike-Out Judgment, above n 1.
[62] It is apparent from the Set Aside Judgment that the issues raised by Mrs Navaratnam as grounds for setting aside the bankruptcy notice are the same matters she and Mr Navaratnam have raised before, concerning the Recognition and Enforcement Proceeding and the form of the bankruptcy notice served on her. These issues have all been determined before. For that reason, the prospect of the Court of Appeal overturning the Set Aside Judgment is remote.
[63] Despite that, I consider that an order adjudicating Mrs Navaratnam should not be made while her appeal is outstanding. If she pursues the appeal and the Court of Appeal overturns the Set Aside Judgment, she will not have committed an act of bankruptcy. In these circumstances, I consider it prudent to halt the proceeding until her appeal is deemed abandoned or is determined.
Result
[64] I find that the statutory criteria for bankruptcy in s 13 of the Insolvency Act 2006 are met.
[65] I find that none of the issues raised by Mrs Navaratnam in opposition to the application for adjudication provide a reason for the Court to refuse to adjudicate her bankrupt.
[66] However, the proceeding is halted under s 38 of the Act until Mrs Navaratnam’s appeal against the Set Aside Judgment is deemed abandoned or is determined by the Court of Appeal, or until further order of the Court.
[67] HG Metal is directed to update the Court when the outcome of Mrs Navaratnam’s appeal is known. If the appeal is deemed abandoned, or is dismissed, the application will be recalled in a bankruptcy list so that an order can be made adjudicating Mrs Navaratnam bankrupt. It will be necessary for HG Metal to file a current proof of debt.
Associate Judge Gardiner
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13
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