Carters, a Division of Carter Holt Harvey Limited v Huang
[2018] NZHC 1027
•11 May 2018
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2017-404-1754 [2018] NZHC 1027
BETWEEN CARTERS, A DIVISION OF CARTER HOLT HARVEY LIMITED
Judgment Creditor
AND
KANG HUANG
Judgment Debtor
Hearing: 10 May 2018 Appearances:
P J Morris for the Judgment Creditor M G Keall for the Judgment Debtor
A J Steele, for Marcourt Trustee Limited, a supporting creditor
Judgment:
11 May 2018
RESERVED JUDGMENT OF ASSOCIATE JUDGE SMITH
[1] The judgment creditor (Carter Holt) applies for an order adjudicating the judgment debtor (Mr Huang) bankrupt.
[2] Carter Holt obtained a judgment against Mr Huang on 12 July 2017, in the total sum of $451,888.87. When Mr Huang did not pay the amount of the judgment debt, it issued a bankruptcy notice demanding payment of the judgment debt and Carter Holt’s costs of issuing the bankruptcy notice.
[3] The bankruptcy notice was served on 9 November 2017, but Mr Huang did not pay the amount demanded or apply to the Court to set aside the bankruptcy notice. On 5 December 2017, Carter Holt filed its application for an order adjudicating Mr Huang bankrupt.
CARTERS, A DIVISION OF CARTER HOLT HARVEY LIMITED v HUANG [2018] NZHC 1027 [11 May 2018]
[4] Mr Huang filed a notice of opposition to the adjudication application, and on 20 February 2018 Marcourt Trustee Limited filed a notice supporting the adjudication application. It says that it is a creditor of Mr Huang in the sum of $129,448.19.
Mr Huang’s notice of opposition
[5] Mr Huang does not dispute the judgment debt. The only ground advanced in his notice of opposition was that he has sufficient assets to pay the judgment debt if he is given time to do so.
[6] Mr Huang filed two affidavits in support of his opposition. The first affidavit was that of his wife, Yan Zhang, and the other was his own affidavit.
Mr Huang’s current financial position
[7] In his submissions for Mr Huang, Mr Keall summarised Mr Huang’s assets and liabilities as follows:
(a)Assets as follows:
(i)A claim for damages against his former solicitors:1 (up to):
$475,000,000.
(ii)Surplus from sale of 23 and 34 Hart Road (at least):
$140,000.00
(iii)Total (up to): $615,000.00
(b)Known liabilities as follows:
(i)The [Carter Holt] Judgment in this proceeding: $451,888.00
(ii)Marcourt’s judgment (supporting creditor) $129,448.00
(iii) ANZ: $382,000.00
(iv)Lu Hsuen Liang (investor) $1,460,000.00
(v)Hao Zhang (lender and brother-in-law) $600,000.00
(vi)Peter Davey: $4,370.00
$3,027,706.00
1 Filed in this Court under No CIV2017 404 2811.
[8] In addition to the liabilities listed above, the Commissioner of Inland Revenue and the law firm Wilson Harle also have claims against Mr Huang. Mr Keall advises that the extent of the debts owed to those parties is unclear.
[9] Mr Huang acknowledges that he is insolvent but he says that he wishes to put a compromise proposal to his creditors, and he needs time to complete the claim against the former solicitors before that proposal can be prepared.
[10] Mr Huang’s principal asset is the claim he has brought in this Court against his former solicitors. The claim relates to the purchase of a property in Cromwell, Central Otago, in early 2017. The property had a resource consent for the construction of a hotel, and Mr Huang agreed to buy it for the sum of $525,000. Mr Huang says that, although the contract became unconditional by the date stipulated in the agreement for sale and purchase, his solicitors negligently failed to communicate that fact to the solicitors acting for the vendor within the time required by the contract.2 It appears that the vendor had a back-up agreement, and it cancelled the agreement for sale to Mr Huang. Mr Huang lodged a caveat on the title to the property, but an application made by him to sustain the caveat was dismissed in a judgment given by Associate Judge Osborne on 27 June 2017.3
[11] Mr Huang’s contention is that the solicitors’ mistake caused him to lose the opportunity to purchase what he says was a unique property. In his statement of claim in his proceeding against his former solicitors, he contends that it would cost no less than $1 million for him to acquire a similar property in the locality, with a resource consent to build a hotel, and that the solicitors’ mistake has accordingly caused him loss in the difference between that sum and the $525,000 for which he could have acquired the property from the vendor.
[12] The solicitors have filed a statement of defence, and they have also joined a Mr Chen as a third party, apparently on the basis that Mr Chen also provided advice
2 It appears that the solicitors then acting for Mr Huang made a simple error in the calculation of the number of days available for them to communicate to the vendor’s solicitors that the contract had become unconditional. They did not purport to communicate that advice until the day after the last day of the stipulated period.
3 Huang v Dawson Builders Ltd [2017] NZHC 1444.
to Mr Huang as to the last day for communicating to the vendor that the contract had become unconditional. Mr Keall advised me that Mr Chen has filed a statement of defence denying any liability, and stating that, while he had been practising as a solicitor, he was no longer in practice when he is alleged to have given the advice to Mr Huang in early 2017.
The assignment of the claim against the former solicitors
[13] On 8 May 2018, Mr Huang entered into a deed, in which he assigned his claims against the former solicitors to his wife. The deed of assignment recited the agreement for sale and purchase of the Cromwell property, the alleged negligence of Mr Huang’s former solicitors, and the commencement by Mr Huang of the legal proceeding against those solicitors in this Court.
[14] The introductory part of the deed of assignment recorded that Ms Zhang has paid all or most of the legal fees in relation to the proceeding against the solicitors, and that she was willing to pay all further legal costs associated with the proceeding on the basis that she would share equally the net proceeds of the proceeding with Mr Huang (or with the Official Assignee in the event of Mr Huang being adjudicated bankrupt).
[15] The deed of assignment also recorded that Mr Huang lacked the resources to carry on the proceeding in his own name, and that he faced the imminent prospect of bankruptcy. The deed went on to record the belief of Mr Huang and Ms Zhang that there was little prospect of the proceeding against the former solicitors being continued by the Official Assignee if Mr Huang were adjudicated bankrupt, and that the assignment at least offered a reasonable possibility of a partial recovery for the benefit of Mr Huang’s creditors.
[16] The consideration for the assignment was $100, payable by Ms Zhang to Mr Huang. In consideration for that payment, Mr Huang assigned to Ms Zhang absolutely the benefit of his claims against the former solicitors, including any damages, compensation, interest, and legal costs that might be awarded against the defendants in the proceedings. Ms Zhang was to be under no obligation to pursue the claims, causes of action, or proceeding, or any other proceeding she might institute in relation
to the claims or causes of action. She was permitted to discontinue or settle any such proceedings, on such terms as she might see fit, in her sole and absolute discretion.
Mr Huang’s convictions and imprisonment
[17] After he issued the proceeding against his former solicitors in December 2017, Mr Huang was sentenced to a term of imprisonment as a result of mortgage fraud offences committed by him over a period of approximately three years and 10 months between 2011 and 2015. The mortgage fraud involved 57 separate loans, and the total amount involved was $52,000,000. On 9 February 2018 Mr Huang was sentenced to four years and seven months’ imprisonment on each of the charges that had been laid under the Crimes Act 1961. He is currently serving that sentence, and it appears that he may not be eligible for parole until late 2019 or into 2020.
[18] Mr Huang pleaded guilty to the charges laid against him, following a sentencing indication earlier given by the sentencing Judge. In his sentencing remarks, Lang J noted that Mr Huang was the instigator of the offending. While others played important roles, Mr Huang was the person who provided the impetus for the offending, and he ensured that it was ongoing. His Honour also noted that the offending was on a significant scale, not only because of the sums that had been borrowed on false information, but because of the length of time over which it occurred. Most of the offending occurred within a two-year period between 2011 and 2015.4
[19] Mr Keall drew to my attention a number of mitigating factors associated with the offending. Mr Huang had no previous convictions, and had a good reputation in the Chinese community. Also, all of the amounts fraudulently taken appear now to have been repaid, with the exception of one individual to whom Mr Huang accepts that he has a liability of approximately $382,000.
[20] However, Mr Keall properly acknowledged that, while all but one of those who were defrauded now appear to have recovered their money, the fact that they have been repaid appears to have been somewhat fortuitous. As Mr Keall put it in his
4 Sentencing remarks of Lang J, [2018] NZHC 86 at [14].
submissions, the investors were fortunate in that the property market was rising, and “the market caught up with the fraud”.
[21] Other mitigating factors referred to by Mr Keall were that Mr Huang co-operated with the investigation and expressed remorse, and he pleaded guilty after a sentencing indication was given on 12 December 2017. A pre-sentencing report was largely positive, and included an assessment that there was a low risk of Mr Huang re- offending or causing harm to others.
Submissions for Mr Huang
[22] In his written submissions filed in advance of the hearing, Mr Keall confirmed that the only remaining ground of opposition to the adjudication application was that Mr Huang wanted time to attempt to secure a compromise with his creditors, including Carter Holt. He submitted that the Court should exercise its discretion under s 37(c) or (d) of the Insolvency Act 2006 (the Act) to refuse to adjudicate Mr Huang bankrupt. Alternatively, the Court should order a halt to the adjudication proceeding under s 38 of the Act, to allow time for Mr Huang to pursue the claim against his former solicitors and put a proposal to his creditors.
[23] Mr Keall pointed to the apparent strength of the claim against the former solicitors on the merits, submitting that the former solicitors appear to have little or no defence on liability, as the mistake over the last day for notifying the vendor’s solicitors that the agreement was unconditional is clear. However, there is little prospect of Mr Huang advancing a meaningful creditor’s proposal unless sufficient time is allowed to resolve the claim against the former solicitors.
[24] The proceeding against the former solicitors is scheduled for a case management conference on 1 August 2018, and Mr Keall told me that a fixture for a four-day trial is likely to be allocated at that conference. However, there may be a possibility of private mediation; while no agreement has yet been reached to go to mediation, there is at least some prospect that a mediation may be arranged before the 1 August 2018 case management conference.
[25] In his written submissions, Mr Keall indicated that Mr Huang had in mind a proposal to his creditors that would involve him agreeing to pay 20 cents in the dollar towards his known debts. The 20 percent represents his total assets ($615,000) as a proportion of his total known liabilities (approximately $3,027,000). Mr Keall submitted in his written submissions that it would be to the mutual advantage of both Mr Huang and his creditors if the creditors were able to receive up to 20 cents in the dollar under a creditor’s proposal. Mr Huang would avoid bankruptcy, and the creditors would do much better than they would if Mr Huang were bankrupted. In that event, the likelihood is that the creditors would receive little or nothing.
[26] Mr Keall properly acknowledged at the hearing that the assignment of the claims against the former solicitors to Ms Zhang does affect the basis on which the Court is asked to refuse or halt the adjudication application. First, there is a clear possibility that the deed of assignment will be challenged, particularly given the fact that it was executed only two days before the hearing of a defended bankruptcy adjudication application in which Mr Huang acknowledges his insolvency.5 Secondly, the assignment (assuming it survives any challenge) must affect any proposal Mr Huang could put to his creditors. His share of any net recovery from the solicitors would be only 50 percent under the deed of assignment, and the assets available for distribution to creditors (assuming the assignment is not successfully challenged) would be reduced accordingly.
[27] In response to Mr Morris’ contention that considerations of public morality point to adjudication as the appropriate outcome, Mr Morris submitted that the matters for which Mr Huang has been imprisoned have no connection with the judgment debt, the judgment held by the supporting creditor, or the proceeding against the former solicitors. Nor were the matters which resulted in his convictions a substantial cause of his total indebtedness.
[28] Mr Keall also noted that the Commissioner of Police has recently seized the net proceeds (about $349,000) of a property in Geranium Avenue, Flatbush, Auckland.
5 Although Mr Keall pointed to the fact that the assignment was an assignment between husband and wife, and that Ms Zhang presumably already has some interest in her husband’s claims against the former solicitors under the Property (Relationships) Act 1976 (specifically, to a half-share in the value of the claim). Also, she has assumed responsibility for funding the litigation.
Mr Huang says that the Geranium Avenue property was owned by his wife, but it appears that the Commissioner of Police asserts that Mr Huang had some interest in the property. Mr Keall noted that it is not yet clear whether or not that is so, but if Mr Huang did have some interest in the property, it would appear there would be further funds available to partially reimburse the remaining investor who was defrauded in the course of Mr Huang’s criminal offending.
Submissions for Carter Holt
[29] Mr Morris submitted that there is no basis for Mr Huang to be given further time to pay, or to put a proposal to his creditors. Mr Huang is clearly insolvent, and he has not followed through on a statement made in an affidavit sworn by him on 27 March 2018 that he intended to make a proposal to his creditors.
[30] Mr Morris submitted that, in the exercise of its discretion under s 37 of the Act, the Court should consider the interests of the judgment creditor, other creditors, the judgment debtor, and the wider public interest. The wider public interest encompasses questions such as whether adjudication would be conducive or detrimental to commercial morality and the interests of the general public. The absence of assets will not necessarily preclude an order of adjudication, as the circumstances may be such that the debtor ought in the public interest to be faced with the restrictions of bankruptcy. The potential for further investigation is relevant, as a bankruptcy makes available to creditors (through the Official Assignee) an array of procedures for investigating the debtor’s financial circumstances.6
[31] In this case, Mr Morris submits that the public interest will be served by the making of an adjudication order. Mr Huang pleaded guilty to mortgage fraud involving very substantial sums of money, and he will not be eligible for parole until 2020. His convictions on the mortgage fraud clearly come within the commercial morality aspect of the public interest, and an order for adjudication will protect the public from the risk of Mr Huang entering business on his release from prison; on
6 Eide v Colonial Mutual Life Assurance Society Ltd [1998] 3 NZLR 632 (HC), upheld on appeal in Eide v Colonial Mutual Life Assurance Society Ltd (1998) 3 NZLR 631 (CA).
release, his activities will continue to be subject to the oversight of the Official Assignee.
[32] The onus is on Mr Huang to show why an order for adjudication should not be made, and he has failed to discharge that onus.
Legal principles
[33]Sections 13 and 17 of the Act materially provide:
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.
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.
…
(4)The time limit referred to in subsection (1)(d) is,—
(a)if the debtor is served with the bankruptcy notice in New Zealand, 10 working days after service; or
(b)if the debtor is served outside New Zealand, the time specified in the order of the court permitting service outside New Zealand.
…
[34] In this case, it is accepted that all of the elements of s 13 of the Act are satisfied. Mr Keall relies on s 37(c) and (b), and s 38 of the Act. Those sections materially provide:
37Court may refuse adjudication
The court may, at its discretion, refuse to adjudicate the debtor bankrupt if—
…
(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.
38Court may halt application
(1)The court may at any time halt the creditor’s application for adjudication.
(2)The court may halt the application on the terms and conditions (if any), and for the period, that the court thinks appropriate.
[35] Once the formal requirements for adjudication have been satisfied, the position is that an applicant creditor is prima facie entitled to an order of adjudication. The order may not be refused on the grounds of expedience or convenience.7 Each case must be considered on its own terms.
[36] In Baker v Westpac Banking Corporation, the Court of Appeal discussed the principles applicable to the Court’s exercise of its discretion to make an adjudication order. In delivering the judgment of the Court, Richardson J said:8
7 Re Epirosa ex parte Diner’s Club NZ Ltd (HC) Wellington B 498/91, 6 March 1992, and In re Twidle [1916] NZLR 748 at 749; and Re Fidow [1989] 2 NZLR 431 (HC) at 439.
8 Baker v Westpac Banking Corporation CA 2012/92, 13 July 1993 at 4.
… A creditor who establishes the jurisdictional facts … is not automatically entitled to an order. On the other hand, it is for an opposing creditor to show why an order should not be made. The court will give proper weight to the commercial judgment of the petitioner but the oppressive use of the bankruptcy process may be a ground for refusing an order. Another ground may be the undoubted absence of assets but that will not necessarily preclude an order given the range of interests involved including the public interest in the continuing oversight of a bankrupt’s affairs and the disqualifications that go with the bankruptcy. In the end the court must balance the various considerations relevant to the case and determine whether the debtor has succeeded in showing that an order ought not to be made.
[37] In Re Epirosa, Master Williams QC noted that the following factors may be relevant to the exercise of the Court’s discretion:9
(a)What are the wishes of all affected parties, including the applying creditor, other creditors, and the debtor?
(b)Does the debtor have the ability to meet his or her debts over time and, if so, does that meet the requirement of achieving finality within a reasonable period?
(c)What were the circumstances in which the debt was incurred, and do those circumstances suggest that the creditor is acting unreasonably in pursuing an adjudication?
(d)Will adjudication be pointless?
(e)Will the debtor, if adjudicated, be rendered unable to support himself or herself?
(f)Does the debtor have such a standing in the community that significant issues of stigma or embarrassment will result?
[38] While those are factors which will frequently arise, the Court’s task in the end is to consider all of the facts of the case before it, and balance the relevant factors in
9 Re Epirosa, ex parte Diner’s Club NZ Ltd, above note 5.
deciding whether it is just and equitable to decline to make an order, or whether there is some other sufficient reason to follow that course.10
Discussion and conclusions
[39] I am not satisfied that Mr Huang has provided sufficient in his evidence and submissions to displace Carter Holt’s prima facie entitlement to an adjudication order.
[40] I accept Mr Morris’ submission that Mr Huang has not produced sufficient to show that there would be no public interest in making an order adjudicating him bankrupt. First, he has been guilty of very substantial fraud over a lengthy period, and while there may have been some mitigating factors it appears that he was the impetus for the fraud. I do not consider that it assists Mr Huang that only approximately
$382,000 of the total $52,000,000 involved in the fraud remains outstanding.
$382,000 is in itself a substantial sum, but the main point is that the existence of fraud on a scale as large as this must go to the public interest in protecting the community from those who have shown themselves to be fraudsters on a large scale. I have not overlooked the pre-sentence report, which suggested that Mr Huang was seen as being unlikely to reoffend, but in my view that is not enough to counter the magnitude of the fraud, the period of time for which it continued, and the fact that the frauds were still being perpetrated within the past two to three years. The overall onus is on Mr Huang to displace Carter Holt’s prima facie entitlement to the adjudication order, and on this part of Carter Holt’s case I am not satisfied that he has done so.
[41] I am also of the view that the deed of assignment, under which Mr Huang has transferred half of the value of his claims against his former solicitors to his wife, is a transaction which should be the subject of some scrutiny of the Official Assignee. There is no dispute that Mr Huang was insolvent when he entered into the deed of assignment, and the transaction is accordingly an obvious candidate for investigation (for example, to inquire whether the claims may have been assigned to Ms Zhang at an undervalue). At this stage I do no more than identify that as a matter for obvious inquiry: it will be for the Official Assignee to consider the propriety of the transaction in its full context, where Ms Zhang may already have had some rights in respect of the
10 Re Rabobank Australia Limited ex parte Tootell [2013] NZHC 2975, at [9].
asset assigned, and she will be assuming the burden of the ongoing funding of the litigation. For present purposes it is enough to note the existence of a matter calling for some further inquiry by the Official Assignee, and the corollary that there would be some utility in an adjudication order: it would not be pointless.
[42] The next point is that it does not appear that an order for adjudication would interfere with the prosecution of the claim against Mr Huang’s former solicitors. If there is no challenge to the deed of assignment, or if the deed of assignment survives any challenge, the proceeding will be pursued by Ms Zhang. And even if the deed of assignment is successfully challenged, and the conduct of the claim against the former solicitors is in the hands of the Official Assignee, it appears that there is a fund of money available ($140,000 held in a solicitor’s trust account from the sale of 23 and 34 Hart Road) which counsel accept would not be subject to any known security, and should be available to the Official Assignee. It would be for the Official Assignee to consider the application of those funds, and whether they can and should be made available to assist in the ongoing funding of the claim against the former solicitors.
[43] I note also the possibility that one or more of Mr Huang’s creditors might offer to guarantee the funding of a claim by the Official Assignee against the former solicitors.11 While that might not be an often-used provision, the evidence in this case does appear to suggest that the claim against the former solicitors may have reasonable prospects of success.
[44] Mr Keall submitted that the most substantial issue in the claim against the former solicitors will be over quantum, and I can appreciate that that may well be so. It may not be an easy matter for Mr Huang to establish that the Cromwell property was unique, and that it would cost approximately $1,000,000 to acquire a similarly- located property, with a resource consent to construct a hotel. There may also be arguments over causation and/or contributory negligence (the latter has been specifically pleaded by the former solicitors), and at this stage at least it appears that the third party, Mr Chen, is opposing the third party claims against him. If the case
11 A possibility under the Insolvency (Personal Insolvency) Regulations 2007, regulation 17(2).
does not settle it seems unlikely that a four day trial would be available until sometime in the second quarter of 2019, with the possibility of appeals after that.
[45] If the claim against the former solicitors for breach of their contract of retainer proves to be as strong as Mr Keall submitted, then I accept that it is likely that the plaintiff could be expected to receive an award of costs, regardless of the strength of the claim on the quantum issues. It appears that there would at very least be an entitlement to nominal damages for any proved breach by the former solicitors of their contract of retainer, and nominal damages would provide a “peg” for some award of costs.
[46] In Kroon v Westpac Bank Corporation, Associate Judge Doogue expressed the view that the starting point should be that it will rarely be the case that the Court will be deflected from adjudicating a debtor bankrupt on the basis that the debtor has a claim against a third party. It will be for the debtor to show that there is some proper ground to suppose that the claim is a viable one, and that the result of the litigation will not be long delayed.12 In this case, I think it can probably be said that the claim against the former solicitors is a “viable one”, but it is not clear whether a final resolution of the claim will or will not be “long delayed”. But the main point is that it appears that the claim against the former solicitors can be continued anyway, whether by Ms Zhang under the assignment or by the Official Assignee if her entitlement to pursue the claim under the assignment is successfully challenged.
[47] I can appreciate Mr Huang’s desire to put a proposal to his creditors, but any proposal now will presumably be at a significantly lower level than the 20 cents in the dollar contemplated when Mr Keall filed his written submissions. As Mr Keall properly acknowledged, that is the inevitable result of Mr Huang assigning to his wife one-half of the most substantial asset that would have been available to fund the dividend to his creditors. Another factor is that the amount available from the litigation against the former solicitors will inevitably be reduced by the ongoing cost of funding the litigation, whoever pays for it. Even if Mr Huang (or the party running the litigation) succeeds at the trial, any costs award could only be expected to defray
12 Kroon v Westpac Bank Corporation HC Auckland CIV-2006-404-4720, 24 April 2007, at [84].
somewhere in the order of one-half to two-thirds of the actual costs incurred in running the case, and the amount available for Mr Huang’s creditors would be further reduced accordingly. If the difficulties of proving quantum turned out to be such that Mr Huang (or Ms Zhang) were able to recover only a modest part of the $475,000 claimed (a possibility on which I need not express any view), it is not difficult to see that the amount that might eventually be available to Mr Huang’s creditors if no adjudication order is made (and the deed of assignment stands) would be far below the 20 cents in the dollar Mr Huang has been contemplating.
[48] Weighing all of those considerations, I am satisfied that the proper course is to make an order for adjudication. None of the Re Epirosa factors suggest any contrary result. The only creditor to have filed an appearance supports the application for adjudication, and it is quite clear that Mr Huang has no prospects of meeting all of his debts within a reasonable period. No issues of stigma or embarrassment point against adjudication in this case, and there is nothing to suggest that Mr Huang will be unable to support himself when he is eventually released from prison. As for the circumstances in which the debt was incurred, there is nothing to suggest that Carter Holt is acting unreasonably in pursuing adjudication. Mr Huang has not suggested to the contrary.
[49] Finally, I do not consider this is a situation for the making of a halt order under s 38. A halt order or an adjournment might have been appropriate if it appeared that a substantial settlement might be available within a fairly reasonable period of time on the claim against the former solicitors, and that an adjudication order would jeopardise that favourable outcome. In this case, it appears on the evidence that the case against the former solicitors can and will be continued in any event, whether or not an adjudication order is made. In those circumstances there is no purpose to be served in delaying the matter.
[50] Accordingly, I make an order adjudicating Mr Huang bankrupt. Carter Holt is entitled to costs, which I fix on a 2B basis, with disbursements to be fixed by the registrar.
[51]The foregoing orders are timed at 12.00 midday on 11 May 2018.
Associate Judge Smith
Solicitors:
Stace Hammond, Hamilton for the Judgment Creditor Martelli McKegg, Auckland for the Supporting Creditor
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