Dilworth Trust Board v Chen - [2014] NZHC 610

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2013-404-004948 [2014] NZHC 610

UNDER the Insolvency Act 2006

IN THE MATTER OF

the bankruptcy of Kun Wei Chen, Judgment Debtor

BETWEEN

DILWORTH TRUST BOARD Judgment Creditor

AND

KUN WEI CHEN Judgment Debtor

Hearing: 10 March 2014

Appearances:

S J Davies-Colley for Judgment Creditor
Judgment Debtor in person, with Mr Augustine Lau as
McKenzie friend

Judgment:

28 March 2014

JUDGMENT OF ASSOCIATE JUDGE SMITH

DILWORTH TRUST BOARD v KUN WEI CHEN [2014] NZHC 610 [28 March 2014]

[1] The judgment debtor (the Applicant) seeks to set aside a bankruptcy notice (the Notice) issued by the judgment creditor (Dilworth) on 22 November 2013. He also applies for a “stay”.

[2] The basis for the issue of the Notice was a judgment of this Court entered at Auckland on 7 June 2012, under which the Applicant was ordered to pay Dilworth a total of $430,125.59, including costs and interest to the date of judgment.1

[3] The judgment entered on 7 June 2012 followed an earlier judgment of the Court dated 20 March 20122, in which Associate Judge Sargisson entered summary judgment, on liability issues only, in favour of Dilworth against the Applicant and six other defendants.

[4] The proceeding in which summary judgment was entered arose out of a lease of certain commercial premises owned by Dilworth at 480 Broadway, Newmarket, Auckland. The lease was entered into in January 2009 between Dilworth as lessor, and a company called Jack’s Ventures Limited, as lessee. The premises were to be used for the operation of a greengrocer’s business.

[5] The Applicant, together with three other individuals, were guarantors under the Deed of Lease, and they were jointly and severally liable to pay the rent and observe the other obligations of Jack’s Ventures under the lease. Jack’s Ventures was the first defendant in the summary judgment proceeding mentioned above; the Applicant and the three other guarantors were named as defendants two to five, and the sixth and seventh defendants were assignees of the lease.

Background

[6] The background of the dispute is conveniently summarised in the judgment of Sargisson AJ on liability issues dated 20 March 2012, as follows:

[8] In February 2009 the rent was reviewed in accordance with the provisions of the lease. An annual rental of $110,467 plus GST per annum was claimed and was not objected to.

1 Dilworth Trust Board v Jack’s Venture’s Ltd HC Auckland CIV-2011-404-8312, 1 June 2012.
2 Dilworth Trust Board v Jack’s Venture’s Ltd HC Auckland CIV-2011-404-3312, 20 March 2012.

[9] Following the rent review Jack’s Ventures paid the new rate for a period of 16 months until it sold its greengrocer business to the sixth defendant, Maharaj & Associates Limited. On 15 July 2010 Dilworth consented to Jack’s Ventures assignment of the lease to Maharaj and the parties executed a deed of assignment and covenant. The seventh defendant, a principal of Maharaj, guaranteed the assignee’s obligations.

[10] In August 2010 Maharaj fell into arrears in respect…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Dilworth Trust Board v Chen

Details

AGLC: Dilworth Trust Board v Chen [2014] NZHC 610
Case: [2014] NZHC 610
Decision Date: 28 March 2014

CaseChat Overview and Summary

Kun Wei Chen, the judgment debtor, sought to set aside a bankruptcy notice issued by the judgment creditor, Dilworth Trust Board, on 22 November 2013, and to stay the proceedings. The basis for the issue of the notice was a judgment of the Court entered on 7 June 2012, under which the debtor was ordered to pay Dilworth a total of $430,125.59, including costs and interest to the date of judgment. The debtor applied for an extension of time to appeal the 7 June 2012 judgment on 31 January 2014. The debtor argued that new evidence could be captured on camera and that the completion of the motorway extension project enabled a better comparison between the position as it stood when the works were being carried out and the position as it was before the works had commenced. The debtor also argued that the recent completion of the motorway extension project had resulted in new evidence becoming available. Associate Judge Smith held that the debtor had produced no evidence that he had any cross claim (of an amount equal to or greater than Dilworth’s judgment debt) which he could not have used as a defence in the summary judgment proceeding. The debtor’s contention that the recent completion of the motorway extension project had resulted in new evidence becoming available could not assist the debtor. If there was indeed new evidence, it would only be additional evidence which might or might not have had relevance to the very same cross claims which were argued unsuccessfully on the summary judgment application. As for the stay application, the court found it was defective in a number of respects. It was filed in the bankruptcy proceeding, whereas it should have been filed in the summary judgment proceeding. The application did not comply with r 7.19 of the High Court Rules, which required the applicant to set out the grounds justifying the relief sought, and to refer to any particular enactments or principles of law or judicial decisions on which the applicant relied. The circumstances set forth by the debtor did not justify the granting of an order for a stay of execution on the summary judgment. The debtor’s long delay in filing an appeal and the fact that, at this stage, the debtor had only made an application for extension of time to appeal, with no leave having yet been granted, were factors which told against the granting of a stay. The court also held that declining a “stay” on the present application would not render nugatory any rights the debtor may have to appeal the summary judgment. Dilworth was entitled to an order for costs.

Orders