Khatri v Tomar
[2023] NZHC 3240
•17 November 2023
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2022-404-1383
[2023] NZHC 3240
UNDER the Insolvency Act 2006 BETWEEN
MONIKA KHATRI
Judgment Creditor
AND
VIN TOMAR
Judgment Debtor
Hearing: 6 November 2023 Appearances:
DeAnne Brabant for the Judgment Creditor Judgment Debtor is self-represented
(no appearance by the Judgment Debtor)
Judgment:
17 November 2023
JUDGMENT OF ASSOCIATE JUDGE C B TAYLOR
[Application for an adjudication order]
This judgment was delivered by me on 17 November 2023 at 3:00pm
pursuant to Rule 11.5 of the High Court Rules
…………………………. Registrar/Deputy Registrar
Solicitors:
Shieff Angland (DeAnne Brabant / Isaac Eustace-Smith), Auckland, for the Plaintiff
KHATRI v TOMAR [2023] NZHC 3240 [17 November 2023]
TABLE OF CONTENTS
PARAGRAPH
Introduction [1]
Background [2]
Ms Khatri’s application for adjudication [5] Affidavit of Monica Khatri dated 30 June 2023 [7] Further affidavit of Monika Khatri dated 26 October 2023 [11]
Mr Tomar’s opposition [17]
Mr Tomar’s various applications [19]
Legal principles [22]
Analysis [30]
Ms Khatri’s submissions [31]
Whether Mr Tomas can pay the debt over time or at all [32]
Whether it is pointless to adjudicate [34]
Commercial morality and public interest [37]
Whether adjudication is oppressive [44]
Mr Tomar’s opposition [45]
Abuse of statutory power by the Court and its staff against me by accepting defective and abuse documents from Ms Khatri
on 30 June 2023 [46]
Costs order being used to declare me bankrupt is unlawful [51]
([2022] NZFC 423)
Counterclaims related to the Court order [54] ([2022] NZFC 423).
Conclusion in respect of Mr Tomar’s opposition [57]
Result [58]
Orders [59]
Introduction
[1] Monika Khatri (Ms Khatri) seeks an order that Vin Tomar (Mr Tomar), her former husband, be adjudicated bankrupt.
Background
[2] This application arises for a debt derived from a 20 January 2022 costs judgment of Judge D A Burns in the Family Court at Auckland (the Judgment).1 The debt owed is $56,106.25 (the debt), being scale costs calculated by Ms Khatri and accepted by the Judge, with Mr Tomar providing no opposing calculation.2
[3] Ms Khatri served on Mr Tomar, in accordance with a substituted service order,3 a bankruptcy notice dated 16 August 2022, and the minute allowing substituted service, on Mr Tomar on 14 September 2022. Mr Tomar’s application to set aside the notice was declined by Associate Judge Gardiner on 30 March 2023.4 She ordered Mr Tomar comply by paying the debt by the end of 30 March 2023.5 Mr Tomar failed to do so.
[4] Ms Khatri made the present adjudication application on 30 June 2023, Mr Tomar’s act of bankruptcy, the noncompliance with the Associate Judge’s order occurring on 31 March 2023, being within three months of that date. This judgment determines that application.
1 Khatri v Tomar [2022] NZFC 423.
2 At [10].
3 Khatri v Tomar CIV-2022-404-1383, 13 September 2022 (Minute of Associate Judge Gardiner) at [3]; Affidavit on Monika Khatri as to substituted service on judgment debtor dated 30 June 2023; Affidavit of Nicholas Mayer as to substituted service on judgment debtor dated 19 July 2023.
4 Khatri v Tomar [2023] NZHC 64.
5 At [58].
Ms Khatri’s application for adjudication
[5]Ms Khatri seeks orders adjudicating Mr Tomar bankrupt and as to costs.6
[6]The grounds on which the orders are sought are:7
…
(b) the judgment debtor owes the judgment creditor $56,106.25 being the amount due on a final judgment, on which execution has not been stayed, that the judgment creditor obtained against the judgment debtor in the Family Court at Auckland on 20 January 2022 which is payable immediately to the creditor; and
(c) the judgment debtor has committed an available act of bankruptcy, as follows:
(i) The judgment creditor obtained a final judgment as described in paragraph 2(b) on which execution has not been stayed; and
(ii) The judgment debtor was, on 14 September 2022 in New Zealand, served under an order of substituted service8 with a bankruptcy notice under the Act; and
(iii) That in the judgment of [Associate Judge] Gardiner of 30 March 2023,9 the judgment debtor's application to set aside the bankruptcy notice was dismissed and the court held that if the costs order remained unpaid by end of day [being 30 March 2023], then the judgment debtor would have committed an act of bankruptcy entitling the judgment creditor to file proceedings to have the judgment debtor adjudicated bankrupt; and
(iv) The judgment debtor did not, within 10 working days after service of the notice comply with the Notice nor did he later, on or before 12:01 am on 31 March 2023 comply with the requirements of the judgment of [Associate Judge] Gardiner of 30 March 202310 or secure or enter into a new formal agreement with the creditor or obtain the High Court's approval of terms of payment or satisfy the High Court that he had a counterclaim, set-off or cross demand which [equalled] or exceeded the amount claimed by the creditor which he could not put forward in the action or proceeding in which the judgment was obtained.
(d) the judgment creditor has no security for the debt.
6 Creditor’s application for adjudication dated 30 June 2023 at [1].
7 Above n 6, at [2].
8 Khatri v Tomar HC Auckland CIV-2022-404-1383, 13 September 2022 (Minutes of Associate Judge Gardiner) at [3].
9 Khatri v Tomar [2023] NZHC 684 at [58].
10 At [58].
Affidavit of Monika Khatri dated 30 June 2023
[7] Ms Khatri has made an affidavit in support of her application for Mr Tomar’s adjudication.11 Ms Khatri says she obtained the Judgment on 20 January 2022, which was subsequently sealed by the Deputy Registrar on 21 January 2022.
[8] Ms Khatri says she is now aware of an honest error she made in the bankruptcy notice served on Mr Tomar, namely that the quantum records $56,156.25 rather than the debt of $56,106.25. She says this resulted from her combining the debt and the
$50 cost for the certificate of order.
[9] Ms Khatri confirms she brought this to Associate Judge Gardiner’s attention during the set aside hearing, at which the correct figure from the judgment and sealed order was referred to and recorded in the Associate Judge’s judgment dismissing Mr Tomar’s application.
[10] In such circumstances, Ms Khatri does not believe this small error will prejudice Mr Tomar, noting she had no legal representation when preparing the initial bankruptcy notice.
Further affidavit of Monika Khatri dated 26 October 2023
[11] Ms Khatri has made a further affidavit to update the Court.12 She says Mr Tomar failed to pay the debt in accordance with Associate Judge Gardiner’s decision,13 and so committed an act of bankruptcy at 12.01 am on 31 March 2023. She says Mr Tomar has made no payment nor offered partial or full payment, nor a payment plan.
[12] Ms Khatri says Mr Tomar has continually sought and obtained fee waivers on grounds of his impecuniosity, most recently in his unsuccessful application to seek waiver of security for costs in the Court of Appeal.14
11 Affidavit supporting creditor’s application for adjudication dated 30 June 2023.
12 Affidavit of Monika Khatri in support of creditors application for adjudication dated 26 October 2023.
13 Khatri v Tomar [2023] NZHC 684.
14 Tomar v Khatri [2023] NZCA 280.
[13] She deposes Mr Tomar’s appeal of Associate Judge Gardiner’s 30 March 2023 judgment, was deemed abandoned by the Court of Appeal on 14 August 2023 as Mr Tomar failed to pay security for costs by 11 August 2023.
[14] Mr Khatri says she understands there are no outstanding matters relating to the Judgment that is the subject of the adjudication application.
[15] She claims to be unable to advise the Court whether Mr Tomar has assets or funds sufficient to pay the debt as Mr Tomar has failed to disclose assets and income earned prior to separation, which is what the Family Court has already accepted.
[16] Overall, she reaffirms the debt of $56,106.25 remains outstanding and that such debt is a small part of the overall award owed her of $176,906.58.
Mr Tomar’s opposition
[17]Mr Tomar opposes the application on the following grounds:15
Abuse of Statutory Power by the Court and its staff against me by accepting defective and abuse documents from Ms Khatri on June 30, 2023
a) On 18 July 2023, the High Court registrar issued and emailed to me the Summons Notice dated 18 July 2023 on this matter.
b) On 30 June 2023, Ms Khatri emailed some documents to the High Court registry on this matter. In her email and documents, Ms Khatri admitted filling an unsworn affidavit in support of her documents to get a summon notice against me which has been issued and emailed by the High Court registrar on 18 July 2023. This is inconsistency and abuse of statutory power given to the Court by the Parliament. This is a systematic strategy against me to declare bankruptcy. This is biased and prejudiced practice against a normal citizen of New Zealand. That is why I have filed and served my application to STRIKE OUT the summon issued by this court on 18 July 2023. Ms Khatri has not opposed my application to strike out the summon. I have also filed and served a STAY ORDER application against the summon notice dated 18 July 2023 which has also not been opposed by Ms Khatri. Attached Exhibit A and B
c) I have not been served with the valid copy of application/documents related to summons to Debtor by or before 30 June 2023, and .
15 Notice of opposition against the summons notice dated 18 July 2023 on this matter dated 25 August 2023.
d) The decision made by the associate judge on 30 March 2023 is being reviewed by the justice WOOLFORD;
e) There are a number of applications pending on this matter which are prejudiced against me.
Cost order being used to declare me bankrupt [2022] NZFC 423 is unlawful
f) There are two judicial review matters (CIV-2021-404-985/1252) pending related to this cost order [2022] NZFC 423 under the property (Relationships) Act being used for the matter. On 18 November 2021, this Court made directions in which it has been ordered that all current or any new proceedings rated to Ms Monika Khatri would not be started, or continue. Because of I have not been allowed to start or continue any appeal against the cost order [2022] NZFC423 which is breach of my human rights where as per section 39 of the Property (Relationships) Act 1976 provides me Right of appeal to High Court
…
Counter claims related to the court order [2022] NZFC423
g) As per the cost order of Family Court [2022] NZFC 423 para [8] Ms Hoult (lawyer acted for Ms Khatri) further advises that two properties owned by the parties personally and dealt with in the judgment have been sold and the net proceeds of sale are still being held by Mr Snedden in his trust account. Accordingly she submits that there are funds available to meet the order for costs.
h) As per the Family Court judge DA BURNS para [8] of [2022] NZFC 423, the counsel acted then for Ms Khatri made submission that there were funds available to meet the order for costs. It has been discovered recently that in May 2022, Ms Khatri has displaced ALL MONEY from the trust account of Mr Snedden (court appointed lawyer) that shows that Ms Kahtri has already taken the cost order amount. I refer to the Exhibit C and D THE STATEMENT provided by Ms Snedden which prove that Ms Khatri has already taken all money from the sale of two of my properties which already meet the cost order amount as per par [8] of [2022] NZFC 423 “the Cost order”.
i) This is an ongoing abuse of the court process by Ms Khatri and the Courts as well. The courts have not been competent and independent. They have been working strategically against me where they accept incomplete and defective documents/application from Ms Khatri and on the other hand failed to serve court orders to the parties which have been made in my favious till dated. Most importantly the Family Court judge DA Burns has been biased where he has issued his decision before his own granted extension to me expired which is related to his cost order [2022] NZFC 423 and this issue was not dealt by the justice Lang under the appeal in 2021 where justice LANG has left that issue to be dealt in two pending judicial review matters related to this cost order [2022] NZFC423.
j) Justice Woolford has not also been able to justify “How does not this cost order [2022] NZFC423 relate to the proceedings pending before this high court which are under the stay order of justice DOWNS dated 18 Nov 2021.
k) This court has been delaying my applications tactically against me for just declaring my bankruptcy or accepting unlawful decisions made by the Family Courts and the High Courts against me.
l) If this High Court is acting as a public service office and if practices as an independent and without any biased against any race or gender then this court needs to use section 37 and 38 of the Insolvency Act 2006 and either refuse adjudication against me or halt Ms Khatri’s application pending the decision of my judicial reviews related to property matters before this court and also allowing me to appeal this cost order [2022] NZFC 423 which is being used by Ms Khatri for adjudication.
m)I also refer Exhibit E for further assistance to this court.
[18] Mr Tomar has made an affidavit in support of his opposition, which simply reproduces his above opposition.16
Mr Tomar’s various applications
[19] Mr Tomar filed an application dated 28 October 2023 entitled “An interlocutory application for a stay order and leave to appeal on the decision made by the High Court on 13 September 2023”. The reference to the decision of the High Court made on 13 September 2023 is a reference to Associate Judge Sussock’s minute of that date. This application was effectively a repeat of the application of 28 September 2023 discussed at [20].
[20] On 3 October 2023 Associate Judge Sussock issued a minute concerning Mr Tomar’s document dated 28 September 2023 entitled “Interlocutory application to appeal and stay order on the decision made by Associate Judge Sussock dated 13 September 2023” received from Mr Tomar by the Registry. The Associate Judge refused to accept the document for filing because “there [was] no prospect of it succeeding” and it was an abuse of the Court’s processes.
[21] On 2 November 2023, Associate Judge Sussock issued a minute declining an application by Mr Tomar made in the High Court to vacate the hearing on 6 November 2023. Also on 2 November 2023, Mallon J from the Court of Appeal issued a minute directing that Mr Tomar’s applications on appeal are not appropriate for urgent
16 Affidavit of Vin Tomar dated 25 August 2023.
determination and concluding that Mr Tomar’s applications before the Court of Appeal did not prevent the bankruptcy hearing on 6 November 2023 from proceeding.
Legal principles
[22] The principal requirements for court adjudication on a creditor’s application are in s 13 of the Insolvency Act 2006 (the Act):
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 filing 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.
[23] Briefly stated, a creditor may bring a bankruptcy proceeding against a debtor who owes that creditor at least $1,000 and who has committed an act of bankruptcy within three months before the filing of the application. The sum must be a “certain amount” and payable immediately or at a future date that is certain.
[24] There are further relevant provisions in pt 2. Section 17 provides that 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;
(b)execution of the judgment or order has not been halted by a court;
(c)the debtor has been served with a bankruptcy notice; and
(d)the debtor has not, within the relevant time limit, complied with the requirements of the notice or satisfied the court that he or she has a cross claim against the creditor.
[25] When hearing a creditor’s application, a court may, among other things, adjudicate the debtor bankrupt if the creditor has established the s 13 requirements;17 refuse to adjudicate the debtor bankrupt if those requirements are not established, or if the debtor is able to pay his or her debts, or if it is just and equitable that the court does not make an order of adjudication, or for any other reason an order for adjudication should not be made;18 or halt the application for adjudication.19
[26] The Court may also halt or refuse the creditor’s application for adjudication if the debtor has appealed against the judgment or order underlying the bankruptcy notice and that appeal is still to be decided.20
[27] Section 37 of the Act confers a discretion on the Court to decline to make an order for adjudication:
37Court may refuse adjudication
The court may, at its discretion, refuse to adjudicate the debtor bankrupt if—
(a)the applicant creditor has not established the requirements set out in section 13; or
(b)the debtor is able to pay his or her debts; or
(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.
[28] The following general principles, extracted from the caselaw, are relevant to the Court’s discretion to refuse adjudication:
17 Insolvency Act 2006, s 36.
18 Section 37.
19 Section 38.
20 Section 42.
(a)The onus is on the debtor to show why an adjudication order should not be made.21
(b)In exercising its discretion, the Court may consider, inter alia, the following factors:
(i)the views of all affected parties, including the petitioner, other creditors and the debtor;22
(ii)the wider public interest, including whether adjudication is “conducive or detrimental to commercial morality and the interests of the general public”;23
(iii)the circumstances in which the debt was incurred and whether those circumstances suggest that the creditor is acting unreasonably in pursing adjudication;24
(iv)whether adjudication would be pointless in the sense that the creditors are unlikely to receive payment;25 and
(v)whether adjudication would render the debtor unable to support him or herself.26
(c)In exercising its discretion, the Court should also remain cognisant of the broader purposes of bankruptcy which include:
(i)allowing for administration of the debtor’s estate in the interests of creditors;
(ii)holding the debtor accountable for his or her debts;
21 McHardy v Wilkins & Davies Marinas Ltd (in rec) CA 54/93, 7 April 1993 at 3.
22 Re Sturdee [1985] 2 NZLR 627 (HC) at 635.
23 Re Nisbett, ex parte Vala [1934] GLR 553 (SC) at 556.
24 Re Epirosa, ex parte Diners Club (NZ) Ltd HC Wellington B498/91, 6 March 1992 at 6.
25 Re Fidow [1989] 2 NZLR 431 (HC) at 444.
26 Re Epirosa, above n 24, at 7.
(iii)punishing or stigmatising the debtor for misconduct;
(iv)protecting the community from a debtor who runs up credit without being able to honour it; and
(v)allowing the debtor to eventually take up commercial activity once freed from his or her liabilities after the discharge of their bankruptcy.27
(d)Ultimately, the Court must balance the various considerations relevant to an application when concluding whether the debtor has succeeded in showing that the order sought should not be made.28
[29] Section 38 of the Act provides that the Court may halt a bankruptcy application:
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.
Analysis
[30] The issue to be decided in this judgment is whether there are any grounds for the Court to exercise its direction under s 37 of the Act to refuse the adjudication order sought or to halt the bankruptcy under s 38 of the Act.. While Mr Tomar’s opposition is not framed as an application under s 37 of the Act and/or s 38 of the Act, I will treat it as such an application.
27 Sheppard v Blanchett [2012] NZHC 789, (2012) 3 NZTR 22-014 at [35]–[43].
28 McHardy v Wilkins & Davies Marinas Ltd (in rec), above 21, at 4.
Ms Khatri’s submissions
[31] Ms Brabant makes the following submissions dealing with the various factors the Court can consider when determining whether to exercise its discretion to refuse an adjudication order under s 37 of the Act.
Whether Mr Tomar can pay the debt over time or at all
[32] Ms Brabant submits that Mr Tomar is currently unemployed and has consistently sought and been granted fee waivers and a waiver of security for costs on that basis when he has filed his various applications. She submits that no offer to pay the debt over time has been advanced by Mr Tomar and no attempts have been made to pay. She submits Mr Tomar failed to pay the security for costs on the appeal of Judge Gardiner’s decision dated 30 March 2023 and to file his case on appeal. As a result the proceeding was deemed abandoned.
[33] Ms Brabant submits the above matters are indicators that Mr Tomar is unable to pay not only the costs on his own claims but also the debt. She submits Mr Tomar’s opposition fails to set out any matters in relation to s 37 and, most particularly, fails to address whether he can make payments over time or he is able to satisfy the bankruptcy notice.
Whether it is pointless to adjudicate
[34] Ms Brabant submits that Ms Khatri has pursued one of the many costs orders awarded against Mr Tomar in her favour and there is nothing circumspect about the way in which the bankruptcy notice was obtained and/or the underlying costs judgment which she submits was determined on scale costs and Mr Tomar had every opportunity at the costs hearing to oppose the costs calculations, which he did not.
[35] Ms Brabant submits that the Court should give due consideration to Mr Tomar’s actions acknowledging, as has been accepted by multiple courts, that they are an abuse of Court processes and an attempt to clog-up the Court system with
meritless applications. Mr Tomar has filed more than 100 applications to re-litigate matters both at the Family Court, High Court, Court of Appeal and Supreme Court.
[36] Ms Brabant submits that overall Ms Khatri is owed $226,402.49 by Mr Tomar which includes costs orders which total $176,906.58 and the shortfall of $49,495.91 from the relationship property settlement. Ms Brabant notes that Ms Khatri will file a proof of debt if Mr Tomar is adjudicated bankrupt for the sums owed to her by Mr Tomar in addition to the costs order that is the subject of this application.
Commercial morality and public interest
[37] Ms Brabant submits that even if Mr Tomar’s assets are minimal, although he is silent on this matter, the Official Assignee’s powers upon adjudication extend beyond assets personally owned by him, citing the decision in Commissioner of Inland Revenue v Wilson.29
[38] Ms Brabant submits that scrutiny of Mr Tomar’s affairs by the Official Assignee is required. She submits that the underlying debt upon which the costs judgment was based relates to a Family Court proceeding upon which one of the reason why the award was made related to Mr Tomar’s failure to disclose the bank accounts and income earned by him prior to his separation.30 She notes that in that judgment the Court noted that Mr Tomar was warned to disclose his bank statements but did not, and that his answers in relation to ownership of shares in his business were “implausible” and further that he “endeavoured to hide the true facts from the Court”.31
[39] Ms Brabant submits that it is in the public interest to protect creditors and the public from an insolvent debtor and whether or not Mr Tomar was attempting to shield assets, creditors are entitled to have the Official Assignee examine whether Mr Tomar has beneficial interest in assets held in his name or on his behalf. She submits a key purpose of the bankruptcy process is to allow for public examination of the debtor’s affairs, and this is the most effective method of determining whether any assets can be realised.
29 Commissioner of Inland Revenue v Wilson [2018] NZHC 236 at [42].
30 Tomar v Tomar [2020] NZFC 2960 at [31]; Tomar v Tomar [2021] NZFC 4666 at [12].
31 Above n 29, at [33].
[40] Ms Brabant also submits that the exercise of the Court’s discretion under s 37 of the Act in the public interest must be considered, whether adjudication is conducive to or detrimental to commercial morality and in the interests of the public, and refers to the decisions in in the Commissioner of Inland Revenue v Price32 and the decision of Darby v The Official Assignee33. She submits there is a risk that refusal to grant a valid adjudication application, or in the alternative halt the bankruptcy, will result in further likely fruitless litigation even when multiple costs orders remain unpaid.
[41] Ms Brabant refers to the decision in Honey v Nottingham34 where the Court dealt with a recidivist litigant and she submits there is obvious public benefit in curbing Mr Tomar, who is plainly insolvent, from commencing or conducting further, unmeritorious (and abusive to Ms Khatri) litigation.
[42] Ms Brabant submits the Court should have regard to Mr Tomar’s conduct in the litigation and risk posed to Ms Khatri and the public in him remaining a current director/shareholder of at least five New Zealand companies. She submits if he were adjudicated bankrupt he would not be able to remain the director of those five companies, and further, he would need to seek approval of the Official Assignee prior to commencing or responding to litigation.
[43] Ms Brabant submits that Mr Tomar was found not to be reliable or credible by the Judges who have determined his cases. She submits his persistent attempts to circumvent the enforcement of the Court-ordered costs and appeal of every minute or direction of the Court is an abuse of the Court’s processes and this poses a serious risk of concern for the administration of justice and protection of the public, and in the light of this risk, the Official Assignee should now be in charge over Mr Tomar’s estate.
Whether adjudication is oppressive
[44] Ms Brabant submits that Ms Khatri’s application for adjudication of Mr Tomar is a last resort after years of incurring legal costs in relation to responding to a
32 The Commissioner of Inland Revenue v Price HC Auckland CIV-2008-404-4370 at 48-49 and 52.
33 Darby v The Official Assignee [2013] NZHC 22 at [14].
34 Honey v Nottingham [2013] NZHC 2382 at [43]-[44].
multitude of meritless and unnecessary applications filed without success by Mr Tomar. She submits there is no abuse, and Ms Khatri is exercising her rights as a judgment creditor.
Mr Tomar’s opposition
[45] Mr Tomar did not make any submissions in respect of the hearing. I deal with each of the grounds raised in his notice of opposition and referred to in the materials he filed in the Court on 2 November 2023.
Abuse of statutory power by the Court and its staff against me by accepting defective and abuse documents from Ms Khatri on 30 June 2023
[46]In support of his opposition, Mr Tomar appears to raise the following issues.
(a)The fact that Ms Khatri filed an unsworn affidavit.
(b)He was not served with a valid copy of the application for adjudication by 30 June 2023.
(c)Associate Judge Gardiner’s decision on 30 March 2023 is being reviewed by Woolford J.
[47] As to the first of these issues, Ms Khatri’s unsworn affidavit has been replaced by a sworn affidavit and this raises no issues of concern.
[48] As to service of the application for adjudication, Ms Brabant details at [2] of her submissions that the service was in accordance with the substituted service order made by Associate Judge Gardiner, and the affidavits of service were filed with the adjudication application.
[49] As to the proposition that Associate Judge Gardiner’s decision of 30 March 2023 is being reviewed by Woolford J, this is incorrect. Mr Tomar’s application dated 25 October 2022 to rescind part of Woolford J’s directions was dealt with by Associate Judge Gardiner in her judgment of 30 March 2023 at [32] (along with the application
for leave to appeal her directions setting down the hearing, and directions of Wylie J refusing an adjournment). These applications have all been dismissed.
[50] Consequently there are no grounds in these issues raised by Mr Tomar which would justify the Court exercising its discretion under s 37 of the Act to refuse an order for adjudication or halt the bankruptcy under s 38 of the Act.
Costs order being used to declare me bankrupt ([2022] NZFC 423) is unlawful
[51] Mr Tomar submits that the two judicial review matters (CIV-2021-404-985 and CIV-2021-404-1252) are pending, relating to the costs order underlying the bankruptcy notice. Mr Tomar submits that on 18 November 2021 the High Court (Downs J) made directions in which it has ordered that all current or any new proceedings related to Ms Khatri would not be started or continued. This relates to Mr Tomar’s mistaken belief that Ms Khatri’s bankruptcy notice breaches the orders of Downs J, and consequently he believes that the directions made concerning service of the bankruptcy notice, granting Ms Khatri an extension of time to file the notice of opposition to Mr Tomar’s application to set aside, setting down his application for a hearing and refusing an adjournment of that hearing also offend the orders of Downs J.
[52] This issue has already been dealt with by Associate Judge Gardiner in her decision of 30 March 2023 at [28] where the Associate Judge made it clear that Downs J’s orders limited Mr Tomar from commencing or continuing proceedings in the Court in respect of Ms Khatri, whereas the bankruptcy proceedings are commenced by Ms Khatri. Woolford J determined that the orders did not prevent Mr Tomar from applying to set aside the bankruptcy notice because such an application does not relate to a proceeding commenced by Mr Tomar.
[53] Consequently there are no grounds in these issues raised by Mr Tomar which would justify the Court exercising its discretion under s 37 of the Act to refuse an order for adjudication or to halt the bankruptcy under s 38 of the Act.
Counterclaims related to the Court order [2022] NZFC 423
[54] This issue relates to whether the costs order has already been paid. Mr Tomar alleges that Ms Khatri has taken all the money from the trust account of the Court- appointed solicitor, Mr Snedden, and accordingly the costs order has already been paid. This issue has already been dealt with in Associate Judge Gardiner’s judgment of 30 March 2023.35
[55] As is stated in Associate Judge Gardiner’s judgment, Mr Tomar is mistaken as to the nature of the payment to Ms Khatri from Mr Snedden’s trust account, as it represents her share of the relationship property according to orders of the Family Court upheld by this Court, not to the costs award underlying the bankruptcy application. The Family Court ordered the sale of two matrimonial homes with the proceeds to be held in the trust account of Mr Snedden. Nearly two years later, once Mr Tomar’s appeal rights were exhausted, Ms Khatri’s counsel and Mr Snedden filed a joint memorandum ordering that Mr Snedden should disburse the funds to Ms Khatri to implement the orders of the Family Court. On 2 May 2022, Judge Burns directed that the funds be disbursed to Ms Khatri accordingly.36 Consequently, the release of funds to Ms Khatri does not represent payment of the costs order and it has already been dealt with judicially.
[56] Consequently there are no grounds in these issues raised by Mr Tomar which would justify the Court exercising its discretion under s 37 of the Act to refuse an order for adjudication or halt the bankruptcy under s 38 of the Act.
Conclusion in respect of Mr Tomar’s opposition
[57] Having regard to Ms Brabant’s submissions, discussed at [31] to [43], and the conclusions I have reached at [50], [53] and [56], I am satisfied there are no grounds to justify the Court exercising its discretion under s 37 of the Act to refuse the adjudication order, or halt the bankruptcy under s 38 of the Act.
35 Above, n 13, at [53]-[54].
36 Khatri v Tomar Auckland Family Court, FAM-2018-004-000053, 2 May 2022, as per Judge DA Burns.
Result
[58] I am of the view that there are no grounds upon which the Court should exercise its discretion under s 37 of the Act to refuse an adjudication or halt the bankruptcy under s 38 of the Act, and Ms Khatri is entitled to an adjudication order against Mr Tomar.
Orders
[59]I make the following orders:
(a)Mr Tomar’s application for an order refusing an adjudication order under s 37 of the Act or to halt the bankruptcy under s 38 of the Act is dismissed and Ms Khatri is entitled to an order adjudicating Mr Tomar bankrupt;
(b)Ms Khatri’s application for an adjudication order is to be listed in the first available bankruptcy list for the order to be made in open Court.
(c)Disbursements are awarded to Ms Khatri of $2,243.25, as sought.
…………………………….. Associate Judge Taylor
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