Mu v Body Corporate 312431 - [2014] NZHC 2987

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2014-404-2393 [2014] NZHC 2987

IN THE MATTER of the Insolvency Act 2006

BETWEEN

DANNI MU Applicant

AND

BODY CORPORATE 312431

Respondent

Hearing: 21 November 2014

Appearances:

Ms Mu in person
Mr Singh for Respondent

Judgment:

27 November 2014

JUDGMENT OF ASSOCIATE JUDGE J P DOOGUE

This judgment was delivered by me on
27.11.14 at 4 pm, pursuant to

Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date……………

MU v BODY CORPORATE 312431 [2014] NZHC 2987 [27 November 2014]

Introduction

[1] The applicant, Ms Mu, has applied to set aside a bankruptcy notice which was served on her dated 12 September 2014. On 19 November 2014 her counsel, Ms Woodroffe, made an application for an order declaring that she had ceased to be the solicitor on the record pursuant to r 5.41 of the High Court Rules and to withdraw as counsel. I made orders accordingly. There was no application made to adjourn the opposed hearing of the originating application to set aside the bankruptcy notice which was due to be heard on 21 November 2014. Accordingly that application was heard on that date.

[2] The hearing was made more difficult because of the highly stressed state that the applicant appeared to be in and her limited facility in the English language. However, because of the history of the matter and the fact that full submissions concerning her underlying case had been formulated on her behalf by her former counsel, I considered that it was possible to give her a fair hearing and properly decide the application which was before the Court.

Background

[3] The applicant is the owner of Unit 3 Normanby Mews, 22 Normanby Road in Mt Eden. Her apartment and others in the complex were damaged by water ingress problems. The owners of the units and the body corporate resolved to take action to recover damages in regards to the loss they had suffered as a result of the weather tightness issues. In 2009, all unit owners entered into a “Conduct and Distribution Agreement” which allowed the body corporate to represent the owners in legal action (“the CDA”). The applicant was one of the unit owners who signed that document. Further reference will be made to the terms of that agreement below in this judgment. As part of the CDA a committee was constituted to represent the unit owners and the body corporate. The committee would have oversight of all aspects of claims to be brought. This included the litigation in the High Court which by then the various parties had agreed would need to be taken.

[4] In order to fund the investigations into the claims to be brought a special levy was charged to unit owners including the applicant. On 31 March 2013 she was invoiced $9,234.80 by way of a special levy. She declined to pay that amount and declined to pay other levies which represented her contribution to the costs of the body…

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: [2014] NZHC 2987
Decision Date: 27 November 2014

CaseChat Overview and Summary

Ms Mu applied to set aside a bankruptcy notice served on her by Body Corporate 312431. The notice was issued on the basis of a judgment debt owed by Ms Mu to the body corporate in the amount of $19,994.27 plus $748 in costs. The applicant sought to set aside the bankruptcy notice on the basis that she had a set-off of "true substance which she genuinely proposes to pursue" and that she could not, by law, set up the cross-claim in the action on which the judgment was entered. The application was dismissed. The court held that the application could not succeed because the matter had already been conclusively decided against the applicant by the decision of the Tenancy Tribunal, and the application proceeded on the basis of a misinterpretation of the contractual arrangements central to the circumstances. The court also held that the contractual arrangements between the parties ruled out any set-off of the kind which the applicant claimed. The parties were bound by the decision in the Tenancy Tribunal, and the contractual arrangements between the parties compelled the result that the applicant did not have any ground for contending that she had a claim to set off against the unpaid levies. The plain language used in the Conduct and Distribution Agreement compelled such a result. The application to set aside the statutory demand should be dismissed.

Orders