Lin v An
[2025] NZHC 2891
•2 October 2025
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 arises from the Deed dated August 2023. He says:
My cross-demand is that this Deed is voidable and should be set aside on the grounds of economic duress, undue influence, and that it constitutes an unconscionable bargain.
[10] Mr An asserts the above cross-demand is a separate cause of action from Mr Lin’s claim against him that resulted in Associate Judge Brittain’s June judgment and he could not have raised his cross-demand in the summary judgment proceedings against him.
[11] Mr An asserts that he signed the Deed as a result of economic duress and that the Deed should be set aside on the grounds that it was an unconscionable bargain and grossly unfair. He asserts that Mr Lin, through pressure exerted by Mr Lin’s father, exploited Mr An who was in a position of disadvantage, that is, he was financially vulnerable and did not have legal advice.
[12] Mr An is critical of Mr Lin’s solicitors documenting the settlement agreement on the basis that they knew Mr An’s interests differed from those of F Season Ltd and that the solicitors should have made sure that he received independent advice. I note the Deed contains an acknowledgement that Mr An was advised to take independent advice and that he had time to do so. Mr An says the solicitor’s actions (or rather, inactions) contributed to an environment where he was under duress and left without any protection for his personal legal rights.
[13]As noted at [9] above, there is also a claim of undue influence.
[14] Mr An asserts he is entitled to an order that the Deed is void and should be set aside which would, he says in his reply submissions:
2.3 If successful, … extinguish the $300,000 liability relied upon in the bankruptcy notice, thereby creating a genuine cross-demand of equivalent value.
[15] It will be recalled that Associate Judge Brittain’s judgment against Mr An related to a cause of action Mr Lin brought relying on the Deed. Mr Orange, counsel for the judgment creditor, submits that the matters raised by Mr An are not a cross-claim at all, but rather, matters that could and should have been raised as a defence in the summary judgment proceedings. I agree.
[16] Mr An’s submission that he has an arguable basis for having the Deed set aside is not a cross-claim for a dollar sum that he wishes to raise against Mr Lin. The Court of Appeal in Robertson v ASB Bank Ltd considered:2
[23] The composition nature of the expression “cross claim” is illustrated by the approach taken by the High Court of Australia in Vogwell v Vogwell. Latham CJ (with whom Starke and McTiernan JJ agreed) said:
The words of the section are that the debtor must satisfy the court that he has “a counter-claim, set-off or cross demand which equals or exceeds the amount of the judgment debt.” In the first place it is accordingly clear that the counter-claim, set-off or cross demand must be something sounding in money. What the section contemplates is a claim to the enforcement of a right sounding in money.
[17] What Mr An is arguing is that the Deed, was to paraphrase, “improperly obtained” and should be set aside. If that argument was correct, Mr Lin would never have obtained his judgment in the first place. It was an argument that was available to Mr An at the time of the summary judgment. The factual matters Mr An relies on to support his challenge to the Deed were all known to him at the time of the summary judgment application.
[18] Mr An says that the cross-demand he raises is a separate cause of action based on the coerced and unconscionable Deed and is not a challenge to the original loan judgment. However, that submission misses the point. Mr An is raising issues that
2 Robertson v ASB Bank Ltd [2014] NZCA 597.
aim to have the August 2023 Deed set aside. Mr An submits that his cross-demand “Seeks to set aside the $300,000 Deed debt”. However, he seeks to do that by arguing that the Deed upon which the debt is based, should be set aside. As I have said, that is an argument that was open to Mr An to run in reply in the summary judgment application, but he did not do so. Mr An has not applied to set aside the judgment, now made well over a year ago—on 26 June 2024.
[19] Section 17 of the Insolvency Act 2006 (the Act) states that a debtor commits an act of bankruptcy if a creditor has obtained a final judgment or final order upon which execution has not been stayed, the debtor has been served with the bankruptcy notice and the debtor has not within 10 working days satisfied the Court that they have a cross-claim against the creditor have satisfied the demand.
[20]Section 17(7) of the Act defines a cross-claim as follows:
(7)In subsection (1)(d)(ii), cross claim means a counterclaim, set-off, or cross demand that—
(a)is equal to, or greater than, the judgment debt or the amount that the debtor has been ordered to pay; and
(b)the debtor could not use as a defence in the action or proceedings in which the judgment or the order, as the case may be, was obtained.
[21] At the risk of labouring the point, the matters Mr An wants to raise, even if they were a cross-claim, could have been raised by him in the summary judgment proceeding.
[22] As Mr Orange submits, Mr An’s argument that the Deed is unenforceable on grounds of unconscionability is an attack on that Deed, and is therefore an attack on the judgment itself, entered on the basis of that Deed.
[23] I am satisfied Mr An has not established a genuine cross-claim equal to or exceeding the judgment debt. The matters he raises are defences that could have been advanced in the original proceeding but were not. They are not a cross-claim as the matters he relies on could not result in a sum of money being awarded to him.
[24]Accordingly, Mr An’s application to set aside the bankruptcy notice is
dismissed.
Costs
[25] Mr Lin is entitled to costs on a 2B basis plus disbursements as fixed by the Registrar and I so order.
Associate Judge Lester
Solicitors:
Fortune Manning, Auckland (for Judgment Creditor) C An (self-represented Judgment Debtor)
0