Lin v An - [2025] NZHC 2891

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2024-404-3320

[2025] NZHC 2891

UNDER the insolvency Act 2006

IN THE MATTER

of the bankruptcy of Chao An

BETWEEN

JIANGHENG LIN

Judgment Creditor

AND

CHAO AN

Judgment Debtor

Hearing: 30 September 2025 (by AVL)

Appearances:

M Orange for Judgment Creditor C An – in-person Judgment Debtor

Judgment:

2 October 2025

JUDGMENT OF ASSOCIATE JUDGE LESTER

This judgment was delivered by me on 2 October 2025 at 2.30 pm pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar

LIN v AN [2025] NZHC 2891 [2 October 2025]

[1] Mr An, the judgment debtor, applies to set aside a bankruptcy notice served on behalf of the judgment creditor, Mr Lin, on 15 March 2025.

[2] The bankruptcy notice relies on a judgment obtained by Mr Lin in an unopposed summary judgment application brought in the Auckland High Court.1

[3] Mr An was one of a number of defendants in that proceeding, the first defendant being a company called F Season Limited. Mr An was the third defendant.

[4] That proceeding related to a loan Mr Lin had made to F Season Ltd pursuant to a written loan agreement dated 9 May 2022, guaranteed by Mr An and another party who was the second defendant in the summary judgment proceeding.

[5] The summary judgment application being unopposed, Associate Judge Brittain entered judgment against F Season Ltd, Mr An, and the other guarantor—the judgment being recorded in a minute that his Honour issued on 26 June 2024.

[6] F Season Ltd did not meet its obligations under the loan agreement which resulted in a compromise deed being entered in August 2023 (the Deed). Under the Deed, F Season Ltd to Mr Lin a property at Beach Haven Auckland, with its price being off-set against the amount due under the loan from F Season Ltd to Mr Lin. In addition, Mr An and the other guarantor each agreed to pay $300,000 plus interest to Mr Lin, but they defaulted on those obligations.

[7] The Judge, having reviewed the affidavits and the material filed in support by the plaintiff, entered judgment (inter alia) against Mr An for the principal sum of the
$300,000 loan, unpaid interest and ongoing interest. By the time the bankruptcy notice was issued, the amount due under the judgment was $372,754.75. Interest continues to run under Associate Judge Brittain’s judgment. In addition, 2B costs were awarded in favour of Mr Lin.

1 Lin v F Season Ltd HC Auckland CIV-2024-404-899, 26 June 2024.

[8] Mr An applied within time to set aside the bankruptcy notice. The application was essentially pro forma asserting that he had a set-off, counterclaim and/or cross-claim equivalent to, or exceeding the amount claimed in, the bankruptcy notice. The application then referred to the grounds as set out in Mr An’s affidavit.

[9] Mr An explains in his affidavit that the debt claimed in the bankruptcy notice…

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.

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Details

Case: [2025] NZHC 2891
Decision Date: 2 October 2025

CaseChat Overview and Summary

The case of Lin v An was heard in the High Court of New Zealand, Auckland Registry, involving the bankruptcy of Chao An, the judgment debtor, and Jiangheng Lin, the judgment creditor. The primary issue before the court was whether the bankruptcy notice served on An by Lin could be set aside. The bankruptcy notice was based on a judgment obtained by Lin in a summary judgment proceeding against An and others, related to a loan agreement and a subsequent compromise deed. An sought to set aside the bankruptcy notice, arguing that he had a cross-claim or set-off equivalent to or exceeding the amount claimed, based on claims of economic duress, undue influence, and unconscionability in the execution of the compromise deed.

The court examined whether An's claims could be considered a "cross-claim" under the Insolvency Act 2006, which requires that the cross-claim be a monetary claim that the debtor could not have used as a defence in the original judgment proceeding. The court held that An's claims were not valid cross-claims because they were essentially defences that could have been raised in the original judgment proceeding but were not. By challenging the enforceability of the compromise deed, An was, in effect, attacking the judgment itself, rather than presenting a separate monetary claim. Therefore, the court concluded that An had not established a genuine cross-claim equal to or exceeding the judgment debt.

Based on this finding, the court dismissed An's application to set aside the bankruptcy notice. The judgment creditor, Lin, was awarded costs on a 2B basis, plus disbursements as fixed by the Registrar. The court's decision underscores the importance of timely raising appropriate defences in original proceedings and the narrow scope of what constitutes a valid cross-claim under the Insolvency Act.

Orders