Chen v Dilworth Trust Board
[2015] NZCA 117
•16 April 2015 at 2.30 pm
| IN THE COURT OF APPEAL OF NEW ZEALAND |
| CA723/2014 [2015] NZCA 117 |
| BETWEEN | KUN WEI CHEN |
| AND | DILWORTH TRUST BOARD |
| Hearing: | 13 April 2015 |
Court: | Stevens, Wild and Miller JJ |
Counsel: | Applicant in person with R Qiu (interpreter) and A Lau (McKenzie friend) |
Judgment: | 16 April 2015 at 2.30 pm |
JUDGMENT OF THE COURT
AThe application for an extension of time to appeal is dismissed.
BThe applicant is to pay the respondent’s costs for a standard application on a band A basis with usual disbursements.
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REASONS OF THE COURT
(Given by Wild J)
Introduction
Mr Chen applies under r 29A of the Court of Appeal (Civil) Rules 2005 for an extension of time to appeal. He filed his application on 11 December 2014. It is opposed by the respondent, the Dilworth Trust Board.
Mr Chen wants to appeal against an order made by Associate Judge Sargisson at the High Court at Auckland on 23 October 2014 adjudicating him bankrupt.[1] He was adjudicated bankrupt because he had committed an available act of bankruptcy in not complying with a bankruptcy notice requiring him to pay a judgment for $430,125.59 entered against him in the High Court at Auckland on 20 March 2012.[2] Mr Chen took no part in the bankruptcy proceeding.
Considerations
Length of delay and reasons for it
[1]Dilworth Trust Board v Chen HC Auckland CIV-20014-404-2039, 23 October 2014.
[2]Dilworth Trust Board v Jack’s Ventures Ltd HC Auckland CIV-2011-404-3312, 20 March 2012.
This application must be decided by applying well established considerations.[3] The first is the length of Mr Chen’s delay in seeking leave to appeal and the reasons for it.
[3]Those set out in My Noodle Ltd v Queenstown Lakes District Council [2009] NZCA 224, (2009) 19 PRNZ 518 at [19] and Barber v Cottle [2010] NZCA 31 at [7].
In the absence of a time limit in the Insolvency Act 2006 for appealing the adjudication order, r 29A applies. Mr Chen had 20 working days after the adjudication order on 23 October 2014 to appeal. That 20 working days period expired on 21 November 2014. Mr Chen had attempted to file an appeal on 28 November 2014, but the notice was rejected by this Court’s Registry which advised Mr Chen he required an extension of time. Mr Chen says he received this advice on 3 December.
Mr Chen mistakenly submits the 20 working days period runs from the date of service on him of the bankruptcy adjudication order. He claims he was served on 7 November (the respondent’s solicitors say he was served on 6 November), so the 20 working days appeal period expired on 7 December 2014, and he attempted to file his notice of appeal within that period.
Even when the appeal period is correctly computed, Mr Chen was only some five working days out of time. That comparatively short period should not stand in Mr Chen’s way if his delay is adequately explained. But it is not. Neither Mr Chen nor Mr Lau, who is Mr Chen’s McKenzie friend and swore an affidavit on 28 November 2014 in support of Mr Chen’s application, explain the delay between Mr Chen’s receipt of the bankruptcy order, on 6 (or 7) November, and 28 November, when Mr Chen sought to file an appeal. This unexplained delay counts against Mr Chen.
The parties’ conduct
The second consideration is the parties’ conduct. There is nothing in the conduct of either party (beyond Mr Chen’s unexplained delay with which we have already dealt) which might count for or against extending time to appeal.
Prejudice
The third consideration is any prejudice resulting to the respondent from Mr Chen’s delay. For the respondent, Ms Harris complains the Dilworth Trust has been put to significant expense and delay as a result of Mr Chen’s misconceived and unsuccessful attempts to challenge the 20 March 2012 judgment upon which the adjudication order was based. We will come to those attempts next, in dealing with the merits of the proposed appeal. In terms of prejudice, what is relevant is any prejudice to the respondent resulting from Mr Chen’s comparatively short delay in seeking to appeal.[4] Any such prejudice would be comparatively minor and is not the prejudice of which Ms Harris complains. Accordingly, this consideration similarly does not count for or against granting an extension of time.
The prospective merits
[4]Schmidt v EBADA Property Investments [2012] NZCA 452 at [13].
We consider the prospective merits, or rather the lack of them, are the decisive consideration on this application.
It emerges from the affidavit Mr Lau swore in support of this application, that the grounds for this second proposed appeal are:
(a)On or about 29 October 2014 Mr Chen filed in the High Court at Auckland a proceeding against a solicitor, Mr Ben Bong. He alleges Mr Bong breached both a fiduciary duty and a duty of care when acting for Mr Chen in relation to a guarantee he gave the ASB Bank supporting a loan of $400,000 it made to various parties, a loan Mr Chen alleges was later transferred to Jack’s Venture Ltd. In his statement of claim Mr Chen seeks judgment of $400,000 plus interest, costs and aggravated damages of $50,000 from Mr Bong. He also seeks “a declaratory judgment declaring [Mr Bong] is full liable for Dilworth Trust board”.
(b)In an email to the respondent’s solicitor and to Ms Ball of the Official Assignee’s Office on 7 November 2014, Mr Lau referred to service of the order for adjudication on 7 November 2014 and advised:
… the application to sue the lawyer Ben Bong served and notified you before this date. You should notified us before lodging the bankruptcy proceeding to High court …
It means this order can be reverse by appeal.
If no reply from any party by 330pm 10.11.2014, the appeal application will be lodged to court of appeal.
(c)Earlier, in an email to the respondent’s solicitor on 29 October 2014, after advising Mr Chen had filed his statement of claim against Mr Bong that day, Mr Lau added:
Mr Chen will lodge another claim against Dilworth Trust shortly with the lack of duty of care where your client failed to notified the guarantor before agreed to assign to third party.
Neither the claim Mr Chen has filed against Mr Bong nor the claim he has indicated he intends making against the respondent provides any basis for Mr Chen to challenge the order adjudicating him bankrupt. Assuming Mr Chen could have joined Mr Bong as a third party to the respondent’s proceeding which resulted in the judgment against Mr Chen of 20 March 2012, Mr Chen did not do that. Subject to the points we make in [12] and [13] below, Mr Chen can sue Mr Bong now, but such a proceeding provides no basis for challenging either the 20 March 2012 judgment or the order adjudicating Mr Chen bankrupt.
There are two difficulties, actual or potential, with the proceeding Mr Chen brought against Mr Bong on 29 October 2014. First, Ms Harris advised us the proceeding has been stayed, by order of Associate Judge Doogue made on 11 November 2014. Ms Harris understands the basis for the stay was Mr Lau’s lack of authority to commence the proceeding on behalf of Mr Chen.
Secondly, and quite apart from the stay, there is a potential difficulty with the proceeding Mr Lau brought on Mr Chen’s behalf against Mr Bong on 29 October 2014. Mr Chen had been adjudicated bankrupt six days earlier, on 23 October. Sections 101(1) and 102(1) of the Insolvency Act prevent bankrupts commencing or pursuing legal proceedings without the prior written approval of the Official Assignee.[5] There is nothing before us to indicate Mr Chen obtained that. Rather, it appears he was not aware he needed it.
[5]Those sections provide any powers a bankrupt person could exercise in respect of their property vest in the Assignee. “Property” has been held to include the right to litigate: see Brownie v Fuster [2010] NZEmpC 127 at [11]; De Alwis v Luvit Foods International HC Auckland CIV-2002-404-1944, 24 March 2010; Gollan v Official Assignee [2012] NZHC 1869 (in that case, Associate Judge Faire considered a claim under the Family Protection Act or Testamentary Promises Act was proprietary, so it vested in the Official Assignee pursuant to s 101).
Mr Chen faces the same obstacle in relation to the claim he proposes to make against the respondent. But, even if he was able to bring that claim, we reiterate that it would provide no basis for challenging either the 20 March 2012 judgment or the order adjudicating Mr Chen bankrupt.
To summarise, the appeal Mr Chen wishes to bring is meritless and has no prospect of succeeding. There is no point in granting an extension of time to allow a meritless appeal to be brought.
Result
The application for an extension of time to appeal is dismissed.
The applicant is to pay the respondent’s costs for a standard application on a band A basis with usual disbursements.
Solicitors:
Jackson Russell, Auckland for Respondent
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