Calypso no.11 Limited v Fistonich
[2021] NZHC 2815
•20 October 2021
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2020-404-001315
[2021] NZHC 2815
UNDER the Insolvency Act 2006 BETWEEN
CALYPSO NO.11 LIMITED and PRAXIS LIMITED
Judgment Creditors
AND
IAN GEORGE FISTONICH
Judgment Debtor
Hearing: 15 July 2021 Appearances:
A Kalinowski and C Ranson for the Judgment Creditors Judgment Debtor in Person
Judgment:
20 October 2021
JUDGMENT OF ASSOCIATE JUDGE GARDINER
This judgment was delivered by me on 20 October 2021 at 4.00 p.m. pursuant to Rule 11.5 of the High Court Rules.
Registrar/Deputy Registrar Date.......................................
Solicitors:
Smith and Partners, Auckland
CALYPSO NO.11 LTD v FISTONICH [2021] NZHC 2815 [20 October 2021]
Introduction
[1] Mr Fistonich is a property developer. His company, Accent On Construction Ltd, leased premises from the judgment creditors. Accent fell into arrears and went into liquidation. The judgment creditors turned to Mr Fistonich as guarantor of his company’s obligations under the lease. Mr Fistonich did not pay the rental arrears.
[2] The judgment creditors obtained default judgment against Mr Fistonich in the District Court. To enforce the judgment, they registered charging orders against two properties registered in Mr Fistonich’s name. Mr Fistonich protested that he did not personally own the properties. One of the properties, at Holdens Road, is his family home. It is owned by a trust (Zlato Trust), of which Mr Fistonich is a trustee and a discretionary beneficiary. The judgment creditors removed the charging order over the property.
[3] The judgment creditors served Mr Fistonich with a bankruptcy notice, based on the default judgment. Mr Fistonich applied to have the default judgment set aside. The District Court dismissed that application.
[4] Mr Fistonich and the other trustee of Zlato Trust issued proceedings in the District Court against the judgment creditors for negligently registering the charging order over Holdens Road (the charging order claim). They claim that the presence of the order jeopardised their plan to refinance the mortgage and obtain finance for a property development project in West Auckland. The District Court is yet to hear the charging order claim.
[5] Mr Fistonich now contends that the bankruptcy notice should be set aside because his charging order claim is a “cross claim” in terms of s 17(1)(d)(ii) of the Insolvency Act 2006.
[6] The main issue to decide is whether Mr Fistonich has a genuine, triable claim against the judgment creditors for a sum equal to, or greater than, the judgment debt on which the bankruptcy notice is based. Within that issue are three issues:
(a)Might Mr Fistonich benefit personally from the charging order claim?
(b)Is the claim genuine and triable?
(c)Is the claim for an amount equal to, or greater than, the judgment debt?
[7] Before considering these issues, I will set out the procedural background and deal with a preliminary issue.
Background
[8] Calypso No 11 Ltd and Praxis Ltd (the judgment creditors) own a property in Henderson. On 26 August 2016, they entered into a commercial lease with Accent. Mr Fistonich personally guaranteed the lease. Accent fell into arrears and went into liquidation on 2 November 2018.
[9] The judgment creditors applied for summary judgment against Mr Fistonich, as guarantor of Accent’s obligations under the lease. In a judgment delivered on 21 November 2019, Judge Harrison entered judgment by default in favour of Calypso and Praxis in the sum of $179,998.03 (comprising $160,274 in outstanding debt and
$19,724.03 in legal fees).1
[10] On 13 December 2019, the judgment creditors, through their solicitors, served the sealed orders on Mr Fistonich and invited him to pay the judgment debt.
[11] On 8 January 2020, the judgment creditors had charging orders registered against two properties registered in Mr Fistonich’s name. The judgment creditors removed the charging orders on 5 February 2020 after Mr Fistonich’s solicitors advised that he was not a beneficial owner of the properties. These circumstances are discussed further below.
[12] The judgment creditors applied to the High Court for a bankruptcy notice based on the unsatisfied summary judgment. The Court issued the notice on 12 August 2020 and Mr Fistonich was served on 2 December 2020, by substituted service.
1 Calypso No 11 Ltd v Fistonich [2019] NZDC 23669.
[13] On 10 December 2020, Mr Fistonich filed an interlocutory application in the District Court for an order setting aside the summary judgment by default. The grounds for that application were twofold:
(a)that Mr Fistonich had a substantial ground of defence; and
(b)his delay in applying to set aside the judgment was reasonable and explained.
[14] On 15 December 2020, Mr Fistonich applied to this Court to set aside the bankruptcy notice, on the basis that he had applied to the District Court to set aside the judgment on which the bankruptcy notice was based.
[15] On 15 April 2021, Mr Fistonich and the other trustee of Zlato Trust filed the charging order claim against the judgment creditors and their solicitors, Smith & Partners, in the District Court, claiming damages for lost profits that would have been made but for the charging order registered over Holdens Road.
[16] When setting down the hearing of Mr Fistonich’s application to set aside the bankruptcy notice, Bell AJ noted that Mr Fistonich had applied to the District Court to set aside the judgment on which the bankruptcy notice was based.2 And that Mr Fistonich had filed a “counterclaim” against the judgment creditors in the District Court. Bell AJ set a date for the hearing in three months’ time, when he expected the District Court to have given its decision on the set aside application. He also directed that if the District Court had not given its decision on the set aside application by the date Mr Fistonich was required to file his submissions (1 July 2021), he should still file his submissions, showing why he had a valid “counterclaim”.
[17] Judge Harrison heard Mr Fistonich’s application to set aside the District Court judgment on 25 June 2021 and issued a written judgment on 8 July 2021.3 He decided that:
2 Minute of Judge Bell dated 22 April 2021.
3 Calypso No 11 Ltd v Praxis Ltd [2021] NZDC 13405.
(a)There was no reasonable excuse for Mr Fistonich’s delay in applying to set aside the summary judgment. He had not applied to set aside the default judgment of 6 December 2019 until 15 December 2020, one year later.
(b)Mr Fistonich had no defence which would justify setting aside the judgment. In reaching that decision, Judge Harrison reviewed the authorities on the enforceability of guarantees contained in an agreement to lease where a lease itself is not signed. He concluded that Mr Fistonich was bound as guarantor by his commitment in the agreement to lease, to guarantee the obligations of the lessee to the judgment creditor.
[18] In view of that judgment, Mr Fistonich has abandoned his application to set aside the bankruptcy notice on the basis that the underlying judgment is unsafe. He now relies on the charging order claim against the judgment creditors, which he submits is a “cross claim” under s 17(1)(d)(ii) of the Insolvency Act 2006. He is permitted to pursue this ground for setting aside the bankruptcy notice despite it not being the original ground stated in his application.4
[19] Before considering whether the bankruptcy notice should be set aside because of Mr Fistonich’s claim against the judgment creditors, I will address a preliminary issue. That is his request, made through submissions, that the hearing be adjourned, or the bankruptcy notice stayed.
Mr Fistonich’s request for an adjournment or stay
[20] While Mr Fistonich’s interlocutory application asked for the bankruptcy notice to be set aside, in his written submissions he also asked that the hearing be adjourned, or the bankruptcy notice stayed, until his claim against the judgment creditors is determined. At the very least, he asked the Court to wait for the judgment creditor’s application for summary judgment / strike-out of his charging order claim to be heard
4 Minute of Judge Bell dated 22 April 2021.
on 19 August 2021. He acknowledged that if the judgment creditors were successful, he had no cross claim and there would be no reason to set aside the bankruptcy notice.
[21] Counsel for the judgment creditors opposed that request, emphasising the considerable delay the judgment creditors have already endured trying to enforce the default summary judgment.
[22] I gave my decision on Mr Fistonich’s request for an adjournment or stay during the hearing. I declined to adjourn the hearing or to grant a stay to permit the District Court to hear the judgment creditor’s application for summary judgment / strike-out of the charging order claim, or for that claim to be determined (if not struck out).
[23] The Court may exercise its discretion to stay bankruptcy proceedings in three circumstances:
(a)where there were procedural defects relating to the judgment on which the bankruptcy notice is based;
(b)where there are arguable grounds of defence to the claim for which judgment was given;
(c)when it is necessary to prevent injustice.
[24] In short, the Court will intervene where “there is an issue as to the safety of the underlying judgment” so it would be an abuse to allow the bankruptcy proceeding to be pursued.5 If the Court is to invoke its inherent jurisdiction, the correct approach is to adjourn the application to set aside and to check progress of the hearing of the appeal
/ application to set aside the judgment, provided the debtor takes practical steps to prosecute those avenues diligently.6
5 Re Krukziener ex parte Hanover Finance Ltd HC Auckland, CIV-2007-404-2896, 12 August 2008 at [29].
6 Holmes Construction Ltd v Rees HC Auckland, CIV-2006-404-4219, 9 February 2007 at [34]; Re Wise, ex parte Benecke HC Auckland, B227-228/95, 21 June 1995; Department of Internal Affairs v Xiao [2018] NZHC 2599 at [11].
[25] Here, Mr Fistonich’s application to set aside the default summary judgment has been heard and determined. Therefore, there is no reason to doubt the safety of the underlying judgment. Indeed, Mr Fistonich has abandoned that line of defence. His focus now is on his charging order claim against the judgment creditors for lost profits.
[26] The existence of a cross claim may provide a basis for setting aside a bankruptcy notice, but not for a stay.
[27] Further, there are no unusual circumstances which could justify me exercising the Court’s inherent jurisdiction to stay the proceeding to prevent an abuse of process. To the contrary, a further postponement would be unjust to the judgment creditors given the time that has already elapsed since they obtained judgment. It is material that this hearing was scheduled for a date after Mr Fistonich’s application to set aside the underlying judgment was expected to be determined in the District Court. It would be unjust if there was a second delay to allow the charging order claim to be heard and determined in the District Court.
[28] Moreover, the 19 August 2021 date was simply the first call of the judgment creditors’ application for summary judgment / strike-out. The matter will then be timetabled for a hearing. If the judgment creditors are successful, that spells the end of Mr Fistonich’s charging order claim, as he acknowledged. If unsuccessful, it will still be some time before the claim is heard and determined. Indeed, after the hearing, and as I requested, counsel for the judgment creditors filed a memorandum advising that the first call of the application for summary judgment / strike-out had been adjourned to 21 October 2021 due to COVID-19 Alert Level restrictions.7
[29] For these reasons, I declined Mr Fistonich’s request for an adjournment of the hearing of his application to set aside, or a stay.
[30] I will now deal with his application to set aside the bankruptcy notice because of the charging order claim.
7 Memorandum of counsel for the judgment creditors dated 21 September 2021.
Legal principles concerning applications to set aside bankruptcy notices
[31]Section 17 of the Insolvency Act 2006 relevantly provides:
(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),—
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.
(Emphasis added).
[32] Accordingly, if Mr Fistonich satisfies this Court that he has a counterclaim, set-off or cross demand (a cross claim) that equals or exceeds the judgment debt that could not have been used in the proceeding before Judge Harrison, then there is no relevant act of bankruptcy. The Court is not endowed with any discretion to allow the bankruptcy notice to stand.8
8 Sharma v ANZ Banking Group (NZ) Ltd (1992) 6 PRNZ 386 (CA) at 389; Wikeley v Jacomb
[2014] NZCA 146 at [37]–[39]; Flow Control Ltd v Il Forno Ltd [2021] NZHC 1159.
What is Mr Fistonich’s claim against the judgment creditors?
[33] Mr Fistonich’s claim relates to the judgment creditors’ efforts to enforce Judge Harrison’s judgment through charging orders.
[34] Specifically, on 19 December 2019, counsel for the judgment creditors filed without notice charging orders against two properties registered in Mr Fistonich’s name over “Holdens Road” and “Riripeti Street”. The orders were granted on 7 January 2020 and registered by LINZ the next day.
[35] Mr Fistonich deposes that he became aware that a charging order had been placed on the Holdens Road certificate of title on 10 February 2020, while trying to refinance Holdens Road from the first mortgagee (ASB).9 He must be mistaken about that date, because by 28 January he had engaged Lowndes Ltd to have the Holdens Road charging order removed.
[36]On 28 January, Lowndes wrote to Smith & Partners, advising that:10
… Holdens Road, Henderson is owned by Ian George Fistonich and Graeme William Halse as trustees of the Zlato Trust and 30 Riripeti Street is owned by Ian George Fistonich and Graeme William Halse as trustees of the Zlato Trust as to one half share…
The judgment your clients obtained was against Mr Fistonich in his personal capacity, not in his capacity as a trustee. As such your clients had no grounds to lodge the charging order against either property.
The Trust is preparing to refinance … Holdens Road. Please therefore urgently arrange for your clients to discharge the charging order in respect of both properties and advise once this has been done.
[37] Smith & Partners requested further information about the ownership of Holdens Road.11 On 30 January, Lowndes emailed Smith & Partners, providing some of the requested information:12
Also with respect, a sale and purchase agreement is not going to prove that the Zlato Trust continues to own the property. The attached rates statement from Auckland Council yesterday clearly shows the trustees of the Zlato Trust (as
9 Further affidavit of Ian George Fistonich sworn 1 July 2021, at [24].
10 Affidavit of Xing Long Jordan Guo, affirmed 20 January 2021, annexure J.
11 Affidavit of Xing Long Jordan Guo, affirmed 20 January 2021, at [17].
12 Further affidavit of Ian George Fistonich sworn 1 July 2021, annexure C.
evidence of the trust deed we have already sent to you) continue to own the property. We reiterate the risk of legal proceedings that your client and your firm face if you do not arrange for immediate discharge of the charging order. Your position is completely untenable.
[38] On 31 January, Smith & Partners advised that they were taking steps to remove the charging order over Holdens Road.13 Lowndes emailed Smith & Partners on 5 February to say that their client had “asked us to emphasise that the charging order must be removed today”.14 Smith & Partners replied 15 minutes later to say that it had been done.
[39] Mr Fistonich’s claim against the judgment creditors arises out of these events. Mr Fistonich personally (as first plaintiff) and Mr Fistonich and Zlato Trust Holdings Ltd as the trustees of Zlato Trust (as second plaintiffs) plead, in their amended statement of claim,15 that the judgment creditors and their solicitors had a duty of care to ensure that the title of the property over which the charging order was placed was owned by the person against whom the judgment sum was entered. They allege that the judgment creditors were negligent in lodging the charging order, as well as in failing to remove it in a timely manner. This negligence is said to have caused Zlato Trust and Mr Fistonich loss because they were unable to refinance the property in February 2020, and consequently unable to finance other property development projects through which they would have made substantial profits. They plead that such profits could have been used to pay any claim by the judgment creditors in relation to the guarantee. They seek damages for this loss in a sum estimated to be more than $300,000, plus interest and costs.
Might Mr Fistonich benefit personally from the claim against the judgment creditors?
[40] A critical issue in this application is whether Mr Fistonich stands to benefit personally from the charging order claim against the judgment creditors. The judgment creditors submit that any loss (which is denied) arising from the placement of the charging order against Holdens Road is loss sustained by the owner of the
13 Affidavit of Xing Long Jordan Guo, affirmed 20 January 2021, annexure K.
14 Affidavit of Xing Long Jordan Guo, affirmed 20 January 2021, annexure L.
15 Filed in the District Court on 10 February 2021
Holdens Road – Zlato Trust – not by Mr Fistonich. As such, they submit that the charging order claim cannot be raised to offset a debt owed by Mr Fistonich personally.
[41] At the hearing, I questioned Mr Fistonich closely about the impact of the charging order on Holdens Road on his property development plans, and how that could give rise to a claim by him personally against the judgment creditors and their solicitors. I emphasised to Mr Fistonich that to be relevant to his application to set aside the bankruptcy notice, which is based upon a judgment debt owed by him personally, he must satisfy this Court that he personally has a cross claim against the judgment creditors, and that the cross claim is genuine and triable.
[42] Mr Fistonich confirmed that he became aware of the charging order when he approached First Finance Ltd, a finance broker, to arrange refinancing of the ASB loan over Holdens Road, and to secure finance to undertake a property development project he intended to undertake personally. He said that the project was a small construction project of four houses in West Auckland. He explained that had personally assessed the feasibility of the project and had some initial discussions with a builder. The next steps were to secure finance and to make an offer to the vendor to purchase the property. He said that he needed to secure the finance first to enable him to make an unconditional offer for the property, as that is what the market called for at that time.
[43] As to how the charging order prevented him from obtaining finance to undertake this property development project, Mr Fistonich said that Zlato Trust had owned Holdens Road, his family home, for 12 years. He said that he had used the property as security for personal borrowing, and for borrowing by related companies, many times over the years. He planned for First Finance to introduce him to a second tier lender who would satisfy the ASB mortgage over Holdens Road (as ASB was at that time considering a mortgagee sale) and provide him with personal finance, using Holdens Rd as security.
[44] This account is broadly consistent with his affidavit evidence, in which he deposes that he personally suffered loss from the actions of the judgment creditors and their counsel because he intended to use a private entity, which he owned personally,
to borrow funds for property development projects and for the Zlato Trust to guarantee the loan.16
[45] Mr Fistonich maintains that the presence of the charging order on Holdens Road between 8 January 2020 and 5 February 2020 prevented this refinancing from taking place; and prevented him from securing finance for his intended property development project.
[46] Mr Fistonich acknowledged that this was a short timeframe but said that there was some urgency because of the ASB’s potential mortgagee sale. Furthermore, the record of the charging order made finance more difficult to obtain even after it was removed, as alluded to in an email from First Finance.17
[47] Mr Fistonich says that by the time the charging order was removed on 5 February 2020, circumstances had changed. ASB decided not to proceed with the mortgagee sale, and to await the outcome of a claim Mr Fistonich has against his former lawyer in the High Court. In addition, he says that COVID-19 overtook and the landscape changed. So, the refinancing did not happen. Nor did the anticipated property development project in West Auckland.
[48] I accept that it might have been possible for Mr Fistonich to borrow money personally against the equity in Holdens Road. It is not unusual for individuals to borrow based on the equity in their family home, when that family home is held by a family trust. Mr Fistonich was one of the trustees of the Trust. The other is a trust which appears, by its name, to also be a related family trust of some sort. I conclude that it is conceivable that Mr Fistonich could sustain personal loss, if the presence of a charging order on Holdens Road prevented him from securing personal borrowing to fund a personal property development project, or a project conducted by a private entity which he owned. However, whether Mr Fistonich has a credible claim that the charging order had this effect is another question, which I will consider next.
16 Further affidavit of Ian George Fistonich sworn 1 July 2021, at [4].
17 Further affidavit of Ian George Fistonich sworn 1 July 2021, exhibit A.
Is the cross claim genuine and triable?
[49] Mr Fistonich must satisfy the court that his cross claim is a “genuine, triable claim” against the judgment creditors. The test concerns both liability and quantum.18 The Court of Appeal has explained that words “genuine” and “triable” require the debtor to demonstrate that they have a claim of true substance that they genuinely propose to pursue.19 It is accordingly not necessary for this Court to analyse the likely success of the claim, and the debtor need not prove they have a watertight case.20 The proper approach is to consider, objectively, whether it can be said that a genuine, triable cross claim exists on the facts as they now stand.21 The approach is akin to when affidavit evidence is considered on an application for summary judgment; the Court need not accept uncritically evidence that is lacking credibility.
[50] Counsel for the judgment creditors submits that Mr Fistonich has failed to provide any evidence demonstrating that the charging order prevented refinancing of the property; or a loss of opportunity of a potential property development or enterprise; or loss of profit.
[51] During the hearing I questioned Mr Fistonich about the status of his property development plans. As discussed, for these proceedings, the only relevant property development plans are those that he expected to benefit from personally.
[52] It is clear from Mr Fistonich’s answers that his plans were at a very early stage. He had identified the potential project and had initial discussions with the builder. He had not yet made an offer to buy the property. He had engaged a broker to identify a second tier lender to provide the finance, but he had not yet secured the finance.
[53] I am not satisfied that Mr Fistonich’s charging order claim constitutes a genuine, triable claim justifying the setting aside of the bankruptcy notice. I have three main reasons for reaching this conclusion.
18 Robertson v ASB Bank Ltd [2014] NZCA 597 at [22].
19 Sharma v ANZ Banking Group (NZ) Ltd (1992) 6 PRNZ 386 (CA) at 389; Wikeley v Jacomb [2014] NZCA 146 at [37]–[39]; Robertson v ASB Bank Ltd [2014] NZCA 597 at [19]; Flow Control Ltd v Il Forno Ltd [2021] NZHC 1159 at [22].
20 Robertson v ASB Bank Ltd [2014] NZCA 597 at [31]–[32]; applied in Bax v Poros [2021] NZHC 741 at [25].
21 Robertson v ASB Bank Ltd [2014] NZCA 597 at [27].
[54] First, the claim is presently completely unsupported by any evidence. Mr Fistonich says that he intends to file expert evidence from a quantity surveyor, a real estate agent and a builder to support his claim in the District Court. He indicates that he had not appreciated that he needed to put forward that evidence in this application.22 Mr Fistonich is not expected to provide this Court with all the evidence he would file in the District Court to advance the charging order claim. But he must do enough to satisfy this Court that the purported cross claim is genuine and arguable. Critically, there is no evidence to support his claim that he sustained a loss as a result of the charging order being in place, being the lost opportunity to generate substantial profits on a potential property development in West Auckland. All that the Court has is a bare assertion.
[55] Second, and in any case, I am confident that even if Mr Fistonich had filed expert evidence to quantify the profit that might have been made on the anticipated property development project, it would not satisfy me that his charging order claim is triable. That is because it is based on a high degree of speculation. Speculation that, but for the presence of the charging order, he would have secured finance from a second tier lender to refinance Holdens Road and provide enough additional finance for him to buy and develop the West Auckland property. Speculation that he would have successfully purchased the property. Speculation as to the profit he would have made when he completed the development and sold the resultant houses. In my view, Mr Fistonich’s charging order claim is based on a hypothetical chain of future events that is highly uncertain.
[56] Third, I have serious doubts about the credibility of the claim that Mr Fistonich was denied the opportunity to generate these profits by the presence of the charging order on the certificate of title of Holdens Road for a matter of days.
22 I did not invite Mr Fistonich to file further evidence, because he has been given a fair opportunity to do so already. He filed an affidavit with his application to set aside, which was based on his application to set aside the District Court judgment. When that application failed, he was permitted to file any affidavits in support of his purported cross claim by 13 May 2021. He then filed a further affidavit, without leave, on 1 July 2021. Against the background of delay and indulgences by the Court already described, it would be unfair on the judgment creditors to permit Mr Fistonich to file further evidence. Furthermore, I was not satisfied that the evidence he described would make any difference to my conclusion, as noted at [55].
[57] Returning briefly to the timeline, Mr Fistonich has deposed that he was not aware of the charging order until he engaged First Finance. It is unclear when this was, but there is evidence that he paid the application fee on 24 January 2020.23 An email from First Finance suggests that they discovered the charging order when they conducted a search of the title.24 That is likely to have been on Monday 27 January 2020 at the earliest. Mr Fistonich’s solicitors wrote to the judgment creditors’ solicitors on 28 January 2020, demanding that the charging orders be removed. The charging order over Holdens Road was removed on 5 February 2020. Thus, at most, the charging order was in place for around eight working days after the date Mr Fistonich began the process of trying to secure finance. There is evidence that First Finance informed Mr Fistonich at the outset (before they knew of the charging order) that it would take around two weeks for them to process his application.25
[58] It seems incredible that the presence of the charging order for this short time was responsible for Mr Fistonich not obtaining finance and therefore not making substantial profits on a property development. Especially when Mr Fistonich chose not to continue with this course of action when the charging order was removed. Seemingly, this was because ASB decided not to exercise its rights as mortgagee over Holdens Road and because of the effect of the COVID-19 pandemic. But, if the property development in question was so certain, and potentially lucrative, why not continue with the planned refinancing and property development anyway, once the charging order was removed? The earliest report of the COVID-19 virus in New Zealand was not until 28 February 2020, and we did not move to Alert Level 2 until 21 March 2020.
[59] These are issues that Mr Fistonich will need to overcome in the District Court if he is to pursue his charging order claim. For the purposes of his application in this Court to set aside the bankruptcy notice, I am not satisfied that he has a triable claim.
23 Further affidavit of Ian George Fistonich sworn 1 July 2021, exhibit B.
24 Further affidavit of Ian George Fistonich sworn 1 July 2021, exhibit A.
25 Further affidavit of Ian George Fistonich sworn 1 July 2021, exhibit A.
Is the cross claim for an amount equal to, or greater than, the judgment debt?
[60] As I have concluded that Mr Fistonich does not have a genuine, triable cross claim, I do not need to resolve this question.
Result
[61]Mr Fistonich’s application to set aside the bankruptcy notice is dismissed.
[62] The judgment creditors are the successful party and will be paid their costs. They seek solicitor / client costs based on cl 6.1 of the Deed of Lease. It is not immediately clear to me how that clause entitles them to solicitor / client costs in these bankruptcy proceedings. I invite submissions by the judgment creditors on costs, of no more than four pages, within 10 working days of this judgment. Mr Fistonich may file submissions, of no more than four pages, within 10 working days of the judgment creditors.
Associate Judge Gardiner
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