Kim v Mao - [2022] NZHC 1959

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2019-404-1039

[2022] NZHC 1959

IN THE MATTER of the Insolvency Act 2006

IN THE MATTER

of the bankruptcy of LIANSEN MAO

BETWEEN

HYUN BIN KIM and DUK YOUNG LEE

Judgment Creditors

AND

LIANSEN MAO

Judgment Debtor

Hearing: On the papers

Appearances:

C Fourie for Judgment Creditors Judgment Debtor in person

Judgment:

9 August 2022

JUDGMENT OF LANG J

[striking out interlocutory applications]

This judgment was delivered by me on 9 August 2022 at 3.30 pm, pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar Date……………

Solicitors:
Hesketh Henry, Auckland

KIM v LIANSEN MAO [2022] NZHC 1959 [9 August 2022]

[1]The judgment debtor in this proceeding has filed three applications. They are:

(a)An application dated 28 December 2021 seeking an order staying a judgment issued by Associate Judge Sussock on 30 November 2021.

(b)An application by the judgment debtor dated 28 December 2021 seeking to set that judgment aside.

(c)An application by the judgment debtor dated 9 June 2022 seeking an order barring the law firm Hesketh Henry from continuing to act as counsel for the judgment creditors in this proceeding.

[2] Counsel for the judgment creditor asks the Court to make an order under r 5.35B of the High Court Rules 2016 striking the applications out before they can be served. The judgment creditor contends all three applications are an abuse of the Court’s process.

Background

[3] On 6 June 2019 this Court issued a bankruptcy notice requiring Mr Mao to pay to the judgment creditors the sum of $216,773.92. This sum reflected a final judgment the judgment creditors had obtained against Mr Mao in the District Court on 3 October 2018.

[4] Mr Mao applied for an order that the bankruptcy notice be set aside on the basis that he had counterclaims against the judgment creditors that equalled or exceeded the amount claimed in the bankruptcy notice. By the time the Associate Judge came to hear Mr Mao’s application the amount claimed in the bankruptcy notice had been paid in full. However, it remained necessary for the Associate Judge to determine the application so she could properly determine the question of costs payable in the proceeding. The Associate Judge ultimately determined that the application to set aside the bankruptcy notice must fail. This was because Mr Mao could have filed his counterclaims in the earlier proceeding in which the judgment creditors had obtained judgment.

[5] Mr Mao has not appealed to the Court of Appeal against the Judge’s decision as he was entitled to do. Instead, he has filed applications seeking a stay of the decision or, alternatively, setting the decision aside. Finally, he seeks an order that the law firm Hesketh Henry is disqualified from continuing to act for the judgment creditors in this proceeding.

Jurisdiction

[6]Rules 5.35A and 5.35B of the High Court Rules 2016 provide as follows:

5.35A Registrar may refer plainly abusive proceeding to Judge…

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 Kim v Mao

Details

AGLC: Kim v Mao [2022] NZHC 1959
Case: [2022] NZHC 1959
Decision Date: 9 August 2022

CaseChat Overview and Summary

In the High Court of New Zealand, Auckland Registry, the matter of Kim v Mao was heard on the papers and concerns the bankruptcy of Liansen Mao, with Hyun Bin Kim and Duk Young Lee as the judgment creditors. The judgment debtor, Mr Mao, has filed three applications: seeking to stay a judgment, setting that judgment aside, and barring the law firm Hesketh Henry from continuing to act as counsel for the judgment creditors. Counsel for the judgment creditor requested the Court to strike out these applications, arguing they constitute an abuse of the Court’s process.

The background of the case involves a bankruptcy notice issued by the Court on 6 June 2019, requiring Mr Mao to pay the judgment creditors $216,773.92. The judgment creditors had obtained a final judgment against Mr Mao in the District Court on 3 October 2018. Mr Mao applied to set aside the bankruptcy notice on the basis of counterclaims, but the Associate Judge dismissed the application. Mr Mao did not appeal this decision and instead filed the aforementioned applications.

The Court considered that rules 5.35A and 5.35B of the High Court Rules 2016, which pertain to striking out plainly abusive proceedings, do not apply to interlocutory applications. However, the Court has inherent jurisdiction to protect its procedures from abuse, including the striking out of interlocutory applications that are plainly an abuse of the Court’s process. The Court concluded that Mr Mao’s applications are an abuse of process, particularly as he did not appeal the Associate Judge's decision, and the application to disqualify Hesketh Henry is without basis as the proceeding is effectively at an end. The Court invoked its inherent jurisdiction to strike out the applications and noted that Mr Mao has the right to seek leave to appeal against this decision.

Orders