Harrison v Roberts

[2025] NZHC 1327

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2025-404-935 [2025] NZHC 1327

UNDER  the Insolvency (Cross-border) Act 2006

IN THE MATTER             of request for the High Court’s assistance in

aid of the Federal Court of Australia, in bankruptcy under s 8

BETWEENBRETT RICHARD GEOFFREY HARRISON

Plaintiff

AND  MEI LAN ROBERTS

Defendant

Hearing:                   30 April 2025 Appearances:       J R F Cochrane for Plaintiff

Defendant in Person

Judgment:                26 May 2025

JUDGMENT OF WILKINSON-SMITH J

[Reasons]

This judgment was delivered by me on 26 May 2025 at 3 pm.

Pursuant to Rule 11.5 of the High Court Rules.

………………………… Registrar/Deputy Registrar

Solicitors/Counsel:

Lane Neave, Auckland Copy to Defendant.

HARRISON v ROBERTS [2025] NZHC 1327 [26 May 2025]

Introduction

[1]                 The applicant, Brett Harrison, was appointed by certificate issued by the Australian Financial Security Authority as trustee of the bankrupt estate of the respondent, Mei Lan Roberts, on 23 May 2024.

[2]                 Mr Harrison seeks the assistance of the New Zealand High Court to obtain possession and control of the assets of Ms Roberts in New Zealand, pursuant to a letter of request issued by the Federal Court of Australia.

[3]                 By way of a statement of claim dated 17 April 2025 commencing the substantive proceedings, Mr Harrison seeks:

(a)an order recognising in New Zealand Mr Harrison’s appointment in Australia as the trustee of the bankrupt estate of Ms Roberts;

(b)an order permitting Mr Harrison (or by counsel) to examine Ms Roberts and her ex-husband as to Ms Roberts’ financial and asset position before the Court;

(c)an order that ahead of any examinations in (b) above, the examinees provide disclosure of all documents pertaining to Ms Roberts’ financial and asset position within 20 working days of the making of such order;

(d)an order vesting in Mr Harrison the real and personal property of     Ms Roberts in New Zealand, and the possession and control thereof, with liberty to sell and lease the same and receive the proceeds of such sale or leasing and with authority to take such steps and do such acts and things as may be necessary for those purposes;

(e)such orders as may be necessary and proper for the purpose of implementing the order above;

(f)such other powers in respect of Ms Roberts as the Official Assignee has under the Insolvency Act 2006;

(g)any other relief the Court deems appropriate; and

(h)costs, which are to be an expense in the bankruptcy of Ms Roberts.

[4]                 Pending the outcome of the substantive application, Mr Harrison seeks interim relief, including pursuant to the Insolvency (Cross-border) Act 2006 (ICBA), to prevent the dissipation of the New Zealand assets.

[5]                 Ms Roberts does not consent to the granting of interim relief, but is prepared to give an  undertaking  that  she  will  not  dispose  of  a  property  she  owns  in New Zealand,  described  in  Certificate  of  Title   NA3A/178   and   situated   at  170 Bleakhouse Road, Mellons Bay, Auckland (Property). She is also willing to agree to a caveat being registered over 50 per cent of her interest in the Property.

Preliminary issue

[6]                 Ms Roberts applied to appear by way of audio-visual link (AVL) from Australia. She advised that she had been  unable  to  obtain  the  assistance  of  a New Zealand lawyer at short notice.

[7]                 When the matter was called, Ms Roberts’ Australian lawyer, Ms Chan, appeared. Ms Chan is not admitted as a barrister and solicitor of the High Court of New Zealand and has no right of audience in  the High Court of New Zealand.         I initially proceeded on the basis that Ms Roberts could appear as she had standing to appear on her own behalf; however, Ms Roberts does not speak English and would have required an interpreter.

[8]                 In the circumstances I agreed to hear from Ms Chan, and I am grateful for the assistance she provided.

Background

[9]                 On 23 May 2024, Ms Roberts became bankrupt upon the making of a sequestration order by a judicial registrar in the Federal Circuit and Family Court of

Australia (Division 2) at Hobart. On the same day, Mr Harrison was appointed as  Ms Roberts’ trustee in bankruptcy.

[10]              The petitioning creditor was The Owners — Strata Plan No 4393, who initiated the bankruptcy proceedings on the basis of a judgment for unpaid strata levies in the Local Court of New South Wales. The date of the act of bankruptcy was 21 March 2024.

[11] On 6 June 2024, as required by the Bankruptcy Act 1966 (Cth), Ms Roberts provided the Australian Financial Security Authority with a completed statement of affairs which indicated that she co-owned the Property in New Zealand with her ex- husband, Ashley Roberts.

[12]Ms Roberts is the sole registered owner of the Property.

[13]              The Property is subject to consent orders made in the Federal Circuit and Family Court of Australia (Division 2).

[14]By way of those consent orders, Ms Roberts and her ex-husband agreed to:

(a)do all things and sign all documents to effect the sale of the Property, including:

(i)appointing a real estate agent;

(ii)instructing a solicitor or conveyancer; and

(iii)paying all out-of-pocket costs required to prepare the Property for sale (such as cleaning and staging costs);

(b)distribute the proceeds of the sale of the Property in the following manner and priority:

(i)all costs and agreed expenses of the sale including legal costs and disbursements, real estate agent’s commission, advertising and auction expenses;

(ii)discharge of the mortgage over the Property;

(iii)50 per cent of the balance to Ms Roberts’ ex-husband; and

(iv)50 per cent of the balance to Ms Roberts.

[15]              Mr Harrison is considering making an application to the Federal Circuit and Family Court of Australia to have the consent orders set aside. He says that in the event he does  make  such  an  application,  he  will  provide  an  undertaking  that  50 per cent of any proceeds received after the sale of the Property will be held on trust by him on behalf of Ms Roberts’ ex-husband pending the outcome of that application. In the event that he does not make such an application, the proceeds of any sale of the Property will need to be distributed in accordance with the consent orders.

[16]              Mr Harrison attempted to lodge a caveat over the Property to prevent its sale or disposal. He says he was unable to do so because Land Information New Zealand (LINZ) did not accept that he had a caveatable interest in the Property as the Australian trustee in bankruptcy of Ms Roberts’ estate.

[17]              Ms Roberts initially indicated to Mr Harrison that she would sign documentation sufficient to satisfy LINZ that Mr Harrison had a caveatable interest. That did not occur, Ms Roberts says, because it would be contrary to the consent orders she has signed in respect of the Property.

[18]              Ms Roberts does not accept her bankruptcy. On 7 June 2024 she filed an application for review of  the  sequestration  order,  but  the  order  was  upheld  on 23 October 2024.

[19]              Mr Harrison says that Ms Roberts has now appealed a technical aspect of the decision made in the bankruptcy proceedings and seeks revocation of the bankruptcy

order. On 18 November 2024, the Australian Court accepted Ms Roberts’ appeal of her bankruptcy for filing.

[20]              Ms   Roberts   sought   a   stay   of   the   bankruptcy   pending   appeal   on    5 December 2024, but the stay application was declined by the Australian Court on 16 December 2024.

[21]              For Mr Harrison, it is submitted that Ms Roberts’ prospects of success on her appeal are poor. Pending determination of the substantive proceedings, Mr Harrison brings the present application for interim relief to prevent dissipation of Ms Roberts’ New Zealand assets.

[22]              The   Federal   Court   of   Australia   issued   a   letter   of   request   dated   19 November 2024. It requests the assistance of the High Court of New Zealand in the realising of the Property for the benefit of the creditors of Ms Roberts.

[23]              The letter of request states that under Australian law, if a person becomes bankrupt in Australia, their real and personal property vests in their trustee who is authorised to sell that property and distribute the proceeds of sale amongst the bankrupt’s creditors. The letter of request also states that Mr Harrison has provided evidence that the debts owing to the creditors of the bankrupt estate of Ms Roberts total approximately AUD 4,046,575.

[24]The request is set out as follows:

This Court requests, for the reasons given above and for the assistance of this Court in the matter of the estate of Ms Roberts, that the High Court of     New Zealand:

(a)vest in the Trustee the property real and personal of Ms Roberts in New Zealand and the possession and control thereof, with liberty to sell and lease the same and receive the proceeds of such sale or leasing and with authority to take such steps and do such acts and things as may be necessary for those purposes; and

(b)grant such orders on application by the Trustee as may be necessary and proper for the purpose of implementing the request in paragraph

(a)  above and ancillary thereto.

Legal principles

[25]              Requests for assistance in cases of cross-border insolvency fall to be considered under the ICBA. Schedule 1 of the ICBA  substantially  adopts  the Model Law  on  Cross-Border  Insolvency  (Model  Law)  developed  by  the   United Nations Commission on International Trade Law (UNCITRAL) to provide a framework for cooperation between jurisdictions on cross-border insolvency issues.1 Schedule 1 applies when assistance is sought in New Zealand by a foreign court or foreign representative in connection with a foreign proceeding.2

[26]A “foreign proceeding” is defined in sch 1, art 2(a) to mean:

… a collective judicial or administrative proceeding in a foreign State, including an interim proceeding, pursuant to a law relating to insolvency in which proceeding the assets and affairs of the debtor are subject to control or supervision by a foreign court, for the purpose of reorganisation or liquidation.

[27]              The Australian bankruptcy proceeding against Ms Roberts appears to meet this definition although it is not yet formally recognised as such.

[28]A “foreign representative” is defined in art 2(d) of sch 1 to mean:

… a person or body, including one appointed on an interim basis, authorised in a foreign proceeding to administer the reorganisation or the liquidation of the debtor’s assets or affairs or to act as a representative of the foreign proceeding.

[29]              A trustee in bankruptcy appointed in a foreign proceeding would also appear to meet  this  definition.  The  current  application  as  filed  seeks  recognition  of  Mr Harrison’s appointment as the trustee of the bankrupt estate of the defendant.

[30]              In order for sch 1 and the Model Law to apply, the Australian proceeding in respect  of Ms Roberts  must  be recognised  as  a foreign  proceeding.  Pursuant  to  r 24.56(1) of the High Court Rules 2016, an application for recognition of a foreign proceeding under sch 1, art 15 of the ICBA must be made by originating application under pt 19 of the High Court Rules.

1      See Lynne Taylor and Grant Slevin The Law of Insolvency in New Zealand (2nd ed, Thomson Reuters, Wellington, 2021) at [50.1] and [50.3].

2      Insolvency (Cross-border) Act 2006, sch 1, art 1(1).

[31]                  The application for recognition must comply with the requirements specified in art 15 and the High Court Rules.

[32]Article 15(2) requires an application for recognition to be accompanied by:

(a)a certified copy of the decision commencing the foreign proceeding and appointing the foreign representative; or

(b)a certificate from the foreign court affirming the existence of the foreign proceeding and of the appointment of the foreign representative; or

(c)in the absence of the evidence referred to in (a) and (b), any other evidence acceptable to the Court of the existence of the foreign proceeding and of the appointment of the foreign representative.

[33]              Article 15(3) requires that an application for recognition be accompanied by a statement identifying all foreign proceedings in respect of the debtor that are known to the foreign representative. Rule 24.56 of the High Court Rules requires that an application be supported by an affidavit verifying that statement, or by other sworn evidence acceptable to the Court.

[34]              Under r 24.56(2)(b), an application for recognition must also be served, in accordance with pt 6 of the High Court Rules, on the debtor or a New Zealand agent or representative of the debtor unless a Judge directs that the application may in all the circumstances proceed without that service.

[35]              A foreign proceeding may be recognised as either a foreign main proceeding or a foreign non-main proceeding.3

[36]              From the time of filing an application for recognition until the time the application is decided, a foreign representative has standing to apply to this Court for

3      Insolvency (Cross-border) Act, sch 1, art 17.

interim relief under art 19 of sch 1 of the ICBA. Such relief may be granted where it is urgently needed to protect the assets of the debtor or the interests of the creditors.

[37]Article 19 provides for the following provisional relief:

(a)    staying execution against the debtor’s assets;

(b)entrusting the administration or realisation of all or part of the debtor’s assets located in New Zealand to the foreign representative or another person designated by the Court, in order to protect and preserve the value of assets that, by their nature or because of other circumstances, are perishable, susceptible to devaluation or otherwise in jeopardy; and

(c)any relief mentioned in para (1)(c) and (d) of art 21.

[38]              Paragraph (1)(c) of art 21 provides for relief suspending the right to transfer, encumber, or otherwise dispose of any assets of the debtor to the extent this right has not been suspended under paragraph (1)(c) of art 20.

[39]              Where the provisions within sch 1 are not engaged, s 8 of the ICBA provides a general discretion to the Court to assist in cases of cross-border insolvency. Section 8 was enacted because:4

Parliament foresaw the possibility that the Model Law may not be wide enough to cover all circumstances in which a representative of a collective regime in another country might wish to seek assistance from New Zealand [c]ourts. For that reason, s 8 of the [ICBA] re- enacts a provision that enables this Court to act on any request for aid made by a Court of another country; thereby providing a general discretion to the Court to assist in cases where Schedule 1 is not engaged.

[40]Section 8 provides:

8        High Court to act in aid of overseas courts

4      Williams v Simpson (No 5) [2010] NZHC 1786, [2011] 2 NZLR 380 at [7] (footnotes omitted).

(1)This section applies to a person referred to in article 1(1) of Schedule 1.

(2)If a court of a country other than New Zealand has jurisdiction in an insolvency proceeding and makes an order requesting the aid of the High Court in relation to the insolvency proceeding of a person to whom this section applies, the High Court may, if it thinks fit, act in aid of and be auxiliary to that court in relation to that insolvency proceeding.

(3)In acting in aid of and being auxiliary to a court in accordance with subsection (2), the High Court may exercise the powers that it could exercise in respect of the matter if it had arisen within its own jurisdiction.

[41]              Mr Harrison, in his capacity as the trustee in bankruptcy of Ms Roberts, would qualify as a “foreign representative” and is therefore a person referred to in art 1(1). As I have said, the proceeding itself appears to meet the definition of a foreign proceeding but has not been formally recognised as such and there is no application currently filed for recognition.

Proceedings

[42]              Mr Harrison initially sought interim relief in the form of a declaratory judgment, namely an order declaring that he has an interest as the trustee of the bankrupt estate of Ms Roberts that creates a caveatable interest in the Property.

[43]                The application for interim  relief  was  served  on  a  Pickwick  basis  on  Ms Roberts, who is resident in Australia.

[44]              On the date of the hearing, Mr Harrison filed an amended without notice interlocutory application seeking, in addition, or in the alternative to the original orders sought, relief under the ICBA:

(a)staying execution against Ms Roberts’ assets;

(b)entrusting the administration or realisation of all or part of Ms Roberts’ assets located in New Zealand to Mr Harrison or another person designated by the Court, in order to protect and preserve the value of

assets that, by their nature or because of other circumstances, are perishable, susceptible to devaluation or otherwise in jeopardy; and

(c)suspending the right to transfer, encumber, or otherwise dispose of any assets of Ms Roberts to the extent this right has not been suspended under para (1)(c) of sch 1, art 20.

Discussion

[45]              The principle of comity requires this Court to treat applications for assistance from foreign courts with sympathy and respect, and such requests should be positively accommodated where possible.5

[46]              In Williams v Simpson (No 5), Heath J expressed the view that there must be some compelling reason why a universalist approach should not be applied on such a request,6 and observed that in countries with similar provisions to s 8 of the ICBA, the courts will generally exercise their discretion in favour of giving assistance unless there is a compelling reason not to do so.7

[47]                In that case, the trustee of an English bankruptcy applied for aid in securing bullion and other assets in New Zealand of an English bankrupt who was resident in New Zealand, for the benefit of the bankrupt’s creditors. The Court granted aid, including by entrusting the Official Assignee with the administration or realisation of all of those assets located in New Zealand and authorising the Official Assignee to exercise certain powers under the Insolvency Act 2006, including the power to require a person to produce and surrender any document in his or her possession or control relating to the bankrupt’s property, conduct or dealings in New Zealand.

[48]              Recently in Stanley v Fielding-Link, Campbell J considered that, at least in relation to countries with similar provisions to s 8, the following principles govern the exercise of the s 8 discretion:8

5      Fairbank v Hagaman HC Christchurch CIV-2010-409-2070, 5 October 2010 at [23].

6      Williams v Simpson (No 5), above n 4, at [83].

7 At [74].

8      Stanley v Fielding-Link [2023] NZHC 2259, [2023] 3 NZLR 393 at [32].

(a)The discretion should be exercised in light of the ICBA’s purpose to provide a framework for “facilitating” insolvency proceedings in defined situations.

(b)The discretion should be exercised in favour of granting assistance, unless there is some compelling reason not to. This reflects the modified universalism principle. It follows that a compelling reason not to grant assistance can include the assistance being inconsistent with New Zealand public policy.

[49]              Mr Harrison has not filed an originating application for recognition of a foreign proceeding. That is required for relief under art 19 of sch 1 to be granted and would appear to be an available procedure. While the fact that a proceeding is commenced by statement of claim rather than originating application might not be fatal, there are other requirements set out in art 15 which are not currently met.

[50]              In the absence of an originating application for recognition pursuant to art 15, art 19 of sch 1 is not engaged. Any relief available must be granted pursuant to the residual power in s 8 of the ICBA, and/or the High Court’s inherent jurisdiction.9 The ICBA does not appear to prohibit resort to s 8 even though the sch 1 process is likely available but has not been followed.10

[51]              The statement of claim as filed seeks an order recognising in New Zealand Mr Harrison’s appointment in Australia as the  trustee  of  the  bankrupt  estate  of Ms Roberts rather than an order recognising a foreign proceeding. Mr Harrison also seeks such other powers in respect of Ms Roberts as the Official Assignee would have in New Zealand pursuant to the Insolvency Act. In the interim, he seeks orders to prevent the dissipation of the Property.

[52]              Ms Chan  submitted  that  interim  relief  should  not  be  granted  because  Ms Roberts is willing to provide an undertaking not to dispose of the Property.      Ms Roberts is, however, resident in Australia, and is outside the jurisdiction of this Court.  An  undertaking  has  less  utility  in  those  circumstances.  The  fact  that  Ms Roberts is prepared to provide such an undertaking demonstrates the lack of

9      See Senior Courts Act 2016, s 12.

10     See Stanley v Feilding-Link, above n 8, where Campbell J granted relief under s 8 without determining whether sch 1 was engaged.

prejudice in making the interim orders sought. That is because the interim relief is designed only to ensure Ms Roberts cannot do the thing that she says she will not do

— which is to dispose of the Property.

[53]                It is also said that there are issues as to the bankruptcy itself, and that the interim relief is contrary to the consent orders made by the Federal Circuit and Family Court of Australia (Division 2) providing that the Property is to be sold and Ms Roberts’ interest separated from that of her ex-husband.

[54]              Ms Roberts is seeking four weeks to instruct New Zealand counsel and file a statement of defence, if one is to be filed. In the meantime, the Property remains in her possession and, absent some order by this Court, she is able to dispose of it as she wishes. The application for interim relief is sought only to preserve the position until the substantive proceeding can be heard.

[55]              Ms Roberts does not raise any specific prejudice in relation to the interim relief sought. She does raise the issue of her ex-husband’s interest in the Property and says that the relief sought is contrary to the consent orders made in the Federal Circuit and Family Court of Australia (Division 2); however, that is a matter more properly dealt with at the hearing of the substantive application.

[56]              There is no compelling reason in principle why the interim relief should not be granted, and the principle of comity means that this Court should give assistance as requested. Ms Roberts needs and is entitled to time to instruct counsel in New Zealand and to consider her position. Equally, Mr Harrison is entitled to the assistance of this Court as requested by the Federal Court of Australia in accordance with the letter of request.

[57]              The only issue is the ability of this Court to grant the relief sought in the absence of an originating application for recognition of the foreign proceeding with the required accompanying documents.

[58]              Mr Harrison seeks two forms of relief, namely declaratory relief and relief of the sort available under sch 1, arts 19 and 21 of the ICBA.

[59]              Schedule 1 does not currently apply for purely procedural reasons. The applicant has not made the application for recognition of a foreign proceeding which would trigger the application of sch 1. The residual discretion in s 8 of the ICBA is potentially available. Although section 8 is said to apply to persons described in sch 1 art 1, that does not mean that s 8 applies in tandem with sch 1. Section 8 is intended to provide a residual discretion where sch 1 is not engaged. It applies where assistance is sought by a person who meets the definition of a foreign representative acting in connection with a matter that meets the definition of a foreign proceeding (including a proceeding not formally recognised as such).

[60]              Section 8(3) confines the assistance that this Court may provide to an overseas court that has requested its aid in relation to an insolvency proceeding to the exercise of powers that would have been available had the matter arisen in New Zealand. There is a question as to how narrowly that provision should be interpreted.

[61]              Had Ms Roberts been adjudicated bankrupt in New Zealand, all property belonging to her would automatically vest in the Assignee pursuant to s 101(1)(a) of the Insolvency Act. Accordingly, this Court would not be asked to grant relief suspending the right to transfer, encumber, or otherwise dispose of assets, as the need for such relief would never arise in the New Zealand context following a bankruptcy adjudication. I do not read s 8 (3) to mean that only orders that this Court would make against a bankrupt in New Zealand insolvency proceedings can be made pursuant to s 8. Rather I think s 8 is available in cases where sch 1 is not engaged to prevent the dissipation of New Zealand assets by making the sorts of orders that can otherwise be made under sch 1. The orders sought do no more than prevent dissipation of the estate which is within the powers granted to the Official Assignee in insolvency proceedings in New Zealand.

[62]              If I am incorrect about that, the orders can be made by an exercise of this Court’s inherent jurisdiction. The application for relief is made in reliance on both the inherent jurisdiction of the Court and the ICBA.

[63]              This Court’s inherent jurisdiction refers to its originating authority at common law to hear and determine matters at first instance.11 The inherent jurisdiction is broad but necessarily grounded in determining existing disputes between litigants.12 It empowers the High Court to entertain common law actions, grant remedies in equity, construe and apply statutes and declare the rights and liabilities of individuals.13 It also empowers the High Court to make any order to enable it or inferior courts to function effectively, subject only to legislation and rules of court.14 The consequence of this broad jurisdiction is that only matters expressly removed by statute are beyond the jurisdiction of the High Court.15

[64]              I am satisfied that this Court has the power to grant the interim relief sought and should do so to give effect to the letter of request.

[65]              Relief of the sort available under para (1)(c) of art 21 of the ICBA is similar to, if not wider than, the declaratory relief sought in respect of the caveating of the property. An order granting relief of the sort available under para (1)(c) of art 21 would achieve the outcome sought and prevent Ms Roberts from disposing of the Property before the substantive application can be heard.

Result

[66]I make the following orders:

(1) Suspending the right to transfer, encumber, or otherwise dispose of the Property described in Certificate of Title NA3A/178 and situated at 170 Bleakhouse Road, Mellons Bay, Auckland.

(b)Leave is reserved to the plaintiff to apply for any further urgent orders as required.

11 Philip A Joseph Constitutional and Administrative Law in New Zealand (5th ed, Thomson Reuters, Wellington, 2021) at 897. The inherent jurisdiction stands in contrast to the inherent powers that a court possesses to determine its own procedures. The former is unique to the High Court whilst the latter is common to all courts, including those created by statute: Siemer v Solicitor-General [2013] NZSC 68, [2013] 3 NZLR 441 at [113].

12     At 892.

13     At 899.

14     At 899.

15     At 900.

(c)Leave is reserved to the defendant to apply to rescind this order upon three days’ notice to the plaintiff.

(d)Any statement of defence to the substantive application is to be filed by

28 May 2025.16

(e)This matter is to be called in the Duty Judge List on 4 June 2025.

Wilkinson-Smith J

16     The minute issued on 30 April 2025 in which I made these orders mistakenly refers to a notice of opposition to the substantive application instead of a statement of defence.