Singh v Official Assignee

[2020] NZHC 2001

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2020-404-000491

CIV-2018-404-000116 [2020] NZHC 2001

UNDER

The Insolvency Act 2006

BETWEEN

CHERYL SITARA SINGH

Applicant

AND

OFFICIAL ASSIGNEE

Respondent

Hearing:

23 July 2020

Appearances:

Applicant in Person

Gareth Neil and Linda Hui for the Respondent

Judgment:

10 August 2020

Reissued:

11 August 2020

JUDGMENT OF MOORE J

RECALLED AND REISSUED ON 11 AUGUST 2020 AT 4:00 PM

This judgment was delivered by me on 10 August 2020 at 4:00 pm pursuant to Rule 11.5 of the High Court Rules.

Registrar/ Deputy Registrar Date:

SINGH v OFFICIAL ASSIGNEE [2020] NZHC 2001 [10 August 2020]

Introduction

[1]    The applicant, Cheryl Sitara Singh, applies for five orders which are the most recent in a lengthy procession of litigation which has its origins in a dispute she has had with Body Corporate 207650 (“the Body Corporate”). These relate to the non- payment of special levies. The levies are to cover the cost of remediation work undertaken to repair and maintain an apartment building.

[2]    The owners of a 30-apartment complex known as Richmond Terraces situated on Chapel Road, East Tamaki, were levied substantial amounts to cover work to correct weathertightness problems. Ms Singh owned Unit 16 (“the Chapel Road property”).

[3]    In about 2009 the defects connected to water ingress issues were discovered. The unit owners, through the Body Corporate, sued those they regarded as responsible. That litigation was settled in 2013. The owners resolved to make the repairs from the settlement funds.

[4]    In previous proceedings, Ms Singh has challenged the validity of the levies and her liability for them. She has made allegations of wrongdoing against the Body Corporate and its committee. She has made allegations of wrongdoing against the Body Corporate’s manager, Boutique Body Corporates Ltd (“Boutique”).

[5]    To date all Ms Singh’s attempts to challenge the levies and her liability to pay them have been unsuccessful. Judgments were obtained by the Body Corporate against her.

[6]    On 4 July 2019 Ms Singh was adjudicated bankrupt on the application of the Body Corporate. As a consequence, her assets vested in the Official Assignee (“Assignee”). Attempts by the Assignee to market and sell the property have been complicated and frustrated by Ms Singh’s conduct.

[7]    The five applications which are the subject of this judgment seek various orders designed to stay the adjudication and halt the sale of assets by the Assignee.

Background and procedural history

[8]    In order to properly appreciate the context of Ms Singh’s applications, it is necessary to traverse the convoluted factual and procedural background. A convenient starting point is the Body Corporate’s application for an order settling the scheme for the repair of Richmond Terraces.

[9]Originally, the cost of the remedial works was estimated at approximately

$5 million. On 18 February 2015, at a general meeting of the Body Corporate, those present or voting by proxy, unanimously approved a proposal to apply to this Court to sanction a scheme which would allocate the costs of the remedial works according to the cost of repairing each unit.1 In his decision of 8 August 2016 Gilbert J was satisfied the scheme was necessary and met the other requirements of the Unit Titles Act 2010. He made an order sanctioning the scheme in terms of the Body Corporate’s application.2

[10]   Following Gilbert J’s orders it quickly became apparent that the final repair bill would be considerably greater than the earlier $5 million estimate. The indications were that the total cost could exceed $13 million. To meet the repair costs, the Body Corporate first applied the settlement monies raised through litigation before applying funds raised through a levy on the unit owners.

[11]   Then, the committee appointed by the Body Corporate to oversee the repair work purported to impose a further levy on all unit owners to meet the additional costs. It transpired that the committee did not have the power to do so. That power vested in the Body Corporate itself. Body Corporate resolved to issue a second levy which  it anticipated would raise a further $5 million or so.

[12]   Ms Singh and the owners of another unit did not accept the Body Corporate had the power to raise a second levy. They applied to this Court seeking an order declaring the Body Corporate had no such power. This was opposed.

1      Unit Titles Act 2010, s 74.

2      Body Corporate 207650 v Speck [2016] NZHC 1826.

[13]   On 12 May 2017 Lang J determined that the Body Corporate had lawfully raised the second levy.3

[14]   Despite this ruling, Ms Singh refused to pay the second levy. And so the Body Corporate issued summary judgment proceedings against her in the Auckland District Court.

[15]   On 20 December 2017 Judge Harrison granted the application. He ordered Ms Singh to pay $181,561.03, costs totalling $22,633.83 and post-judgment interest calculated at 10 per cent per annum.4

[16]   Ms Singh’s response was to file an application in the District Court to stay the judgment, issue a third party notice and counterclaim. She also appealed the judgment to this Court.

[17]   On 31 July 2018 Hinton J dismissed Ms Singh’s appeal.5 She was ordered to pay costs. The District Court also dismissed Ms Singh’s various applications in that Court. She was ordered to pay costs on the failed applications.

[18]   Ms Singh then applied in this Court for leave to appeal the decision to the Court of Appeal Hinton J’s judgment as well as a stay pending the hearing of that appeal if leave was granted. She also applied to set aside a bankruptcy notice issued against her on 19 March 2020. That aspect of the application was withdrawn at the outset of the hearing. On 6 November 2018 Hinton J refused the applications on the grounds that Ms Singh had failed to satisfy her that there was a question of law or fact involving some interest, either public or private, capable of bona fide and serious argument or of sufficient importance to outweigh the cost and delay of further appeal. As a consequence, the stay application necessarily fell away. Hinton J awarded indemnity costs.6 These were subsequently quantified as payable in the sum of $26,000.7

3      Body Corporate 207650 v Speck [2017] NZHC 966.

4      Body Corporate 207650 v Singh [2017] NZDC 29041.

5      Singh v Body Corporate 207650 [2018] NZHC 1932.

6      Singh v Body Corporate 207650 [2018] NZHC 2872.

7      Singh v Body Corporate 207650 [2019] NZHC 168.

[19]   On or about 19 November 2018 the Body Corporate filed a creditor’s application seeking the adjudication of Ms Singh bankrupt. Ms Singh’s response was to apply to this Court to dismiss or halt the Body Corporate’s application.

[20]   On 3 July 2019 Hinton J dismissed the application and adjudicated Ms Singh bankrupt. The judgment was re-issued on 4 July 2019.8 In a further, separate judgment, Hinton J determined the Body Corporate was entitled to costs totalling

$53,249.30 on its adjudication application.9 In the last paragraph of the judgment she commented:10

“Finally, I observe that it gives no one any satisfaction to see the amount of money, in particular of Ms Singh’s equity in her unit, that has been eaten up in costs in this proceeding.”

[21]   However, matters did not end there. In December 2017 Ms Singh had commenced proceedings against Boutique, the entity which provides secretarial and management services to the Body Corporate and members of the Body Corporate’s committee. These were separate proceedings (the “Boutique proceedings”).

[22]   Boutique applied to strike out the claim and, alternatively, applied for security for costs. On 10 December 2018 Courtney J adjourned the strike out application to enable Ms Singh to amend her statement of claim. She refused to order security for costs.11

[23]   Ms Singh filed an amended statement of claim. Boutique re-applied for strike out. That application came before Associate Judge Bell. On 19 July 2019 the Judge struck out all of Ms Singh’s claims against Boutique but maintained part of her claim against the committee members.12 The surviving part of the proceedings alleged a failure to provide adequate reports. The Judge noted that the Body Corporate was responsible for providing reports and suggested that the parties consider whether the Body Corporate should be substituted for the committee members as defendant. The Judge noted that Ms Singh’s remaining claim vested in the Assignee by reason of her

8      Body Corporate 207650 v Singh [2019] NZHC 1547.

9      Body Corporate 207650 v Singh [2019] NZHC 2818.

10 At [16].

11     Singh v Boutique Body Corporates Limited [2018] NZHC 3233.

12     Singh v Boutique Body Corporates Limited [2019] NZHC 1707.

bankruptcy. He indicated that the parties and the Assignee should consider the effects of the bankruptcy on the proceeding and, in particular, in the event there was a prospect of the bankruptcy being annulled, whether the remaining parts of Ms Singh’s claim should be put on hold pending the outcome.

[24]   On 8 August 2019 the Assignee informed Ms Singh that he would be taking no steps in respect of the Boutique proceedings. After the Assignee advised the Court of this decision, a Minute was issued on 26 August 2019 preserving the remaining part of the Boutique proceedings in the event of any annulment of Ms Singh’s bankruptcy. Then, on 28 February 2020, Associate Judge Bell issued a further Minute observing that because annulment did not appear to be imminent, the preferable procedural step was to stay the Boutique proceedings rather than invite an inevitable chain of successive adjournments.

[25]   Following Ms Singh’s adjudication the Assignee examined the value of her bankrupt estate. Of significance and relevance to the current proceedings, other than the Chapel Road property, it was discovered Ms Singh had an interest in another unit situated at 10 Avenue Road, Otahuhu (“the Avenue Road property”).

[26]   The present position is that the Assignee has admitted claims in Ms Singh’s bankruptcy totalling $373,987.50, being the combined total of claims and costs of the Body Corporate and Boutique.

The present applications - chronology

[27]   The present applications, although filed in their original form on 17 March 2020, have been characterised by a similarly convoluted procedural history.

[28]   On 26 February 2020 the Assignee notified Ms Singh that he had determined the claims of the Body Corporate and Boutique could be admitted in full.

[29]   On 17 March 2020 Ms Singh applied to this Court to appeal the Assignee’s decision.

[30]   On 30 April 2020 Ms Singh applied for a stay of execution of her bankruptcy and to halt the sale of assets.

[31]    On 15 May 2020 this was followed by an application seeking an order for emergency oral relief.

[32]   The Assignee gave notice he opposed all applications because they were out of time and, in any event, there could be no good reason to explain any delay and there was prima facie no merit in any of the grounds to support them.

[33]   Timetabling orders were made and the applications were set down for hearing on 23 July 2020.

[34]   On 3 June 2020, Ms Singh filed a memorandum withdrawing her emergency oral relief application and then, the following day, she advised that the “appeal on costs application” was withdrawn as were all applications in CIV-2020-404-491, that is in this proceeding.

[35]   On 4 June 2020, by Minute, Lang J asked Ms Singh to confirm that she was withdrawing all extant applications. Ms Singh replied by memorandum confirming that was the position. Lang J thus vacated the 23 July 2020 fixture.

[36]   This was immediately followed by Ms Singh advising that she had not abandoned the stay application. She requested it be reinstated. On 10 June 2020  Lang J reinstated the 23 July 2020 fixture.

[37]   On 17 June 2020, Ms Singh sought to amend the stay application in the bankruptcy proceeding. She sought leave to file an amended application.

[38]   On 23 June 2020, Lang J recorded that it would be for the presiding Judge to determine whether Ms Singh should be granted leave to file the amended application. It is that application which this judgment determines.

The present applications

[39]   The amended applications dated 17 June 2020 are reproduced below, albeit absent footnotes and references:

“1.1 The applicant, Cheryl Sitara Singh, will  … apply to the court for  orders that further execution of adjudication judgement is halted, pending determination of the Appeal Out of Time to Court of Appeal and Counterclaim and/or application to lift stay on [bankruptcy proceedings];

1.          That the court allows payment of solicitor fees for legal advice, filing and representation of Appeal Out of Time to Court of Appeal and Counterclaim and/or application to lift stay on [bankruptcy proceedings];

2.          That any further execution of 3 July 2029 adjudgment judgement of HCJ Hinton and earlier judgements is stayed; and

3.          The sale of assets is halted pending the determination of Appeal of the adjudication judgement to the Court of Appeal and Counterclaim and/or application to stay on [bankruptcy proceedings];

4.          That any further execution of 19 July 2019 judgement of Bell J on Strike out judgement to admit cost awards in the Estate of Cheryl Sitara Singh for Boutique Body Corporate Limited and Body Committee, is stayed;

5.          If the stay of bankruptcy is denied, I am ok to sign the unit to BC with the bank debt for the BC to sell as a settlement option if Court insists paying the judgement debt. Reserved sale price to be set at

$660,000;

6.          The Body Corporate 207650 pays the costs of this application and solicitor/client costs for the of the Official Assignee.”

[40]   On the question of whether Ms Singh should be granted leave, Mr Neil, for the Assignee, neither objected nor consented to the filing of the documents. The Assignee has filed a notice of opposition to the amended application and has also filed extensive written submissions for the purposes of the hearing. Ms Singh has filed extensive written submissions and many pages of evidence. On 30 July, Ms Singh also filed written submissions in response to the issues raised in Court. I directed at the hearing that these must only be submissions in reply, responding to statements of Mr Neil and Ms Hui.

[41]   Given that all parties were ready and willing to argue their respective positions, I granted leave at the beginning of the hearing.

[42]   As the amended application reveals, Ms Singh seeks to revisit the same, or substantially similar, arguments she has unsuccessfully advanced on previous occasions either in full or in part. Despite this, I shall deal with what appear to be the substantive issues which emerge from the present applications as Ms Singh has framed them. These appear to boil down to four questions:

(a)Should a stay of execution of the bankruptcy judgment be granted?

(b)Should the sale of assets be halted pending determination of the appeal against the Assignee’s decision on costs?

(c)Should Associate Judge Bell’s judgment of 19 July 2019 in respect of the Boutique proceedings be stayed?

(d)Should an order be made that the Assignee funds Ms Singh’s legal costs out of her estate?

[43]   However, before I turn to consider each of these questions, it is necessary to briefly summarise what I understood to be the essence of Ms Singh’s position in respect of these issues and to make some preliminary findings on them.

Ms Singh’s submissions; some preliminary findings

[44]   First, Ms Singh submits that her bankruptcy was used as a “weapon of oppression” and was oppressive.

[45]   Secondly, and more specifically, she submits that the Assignee has not complied with the directions  of Hinton J  when she made the  adjudication order on 4 July 2019.13

13     Body Corporate 207650 v Singh, above n 9, at [35].

[46]   Her Honour considered various factors relevant to the issue of whether further time should be permitted for Ms Singh to pursue her claim against third parties. In that context she considered several factors. In respect of the last, she observed:

“[35] Fourth, the third-party proceedings can continue with the consent of the Official Assignee, if they consider there is merit. It would need to be funded out of Ms Singh’s income, which presumably is the only source of funding now, regardless of a bankruptcy.”

[47]   Ms Singh claims that this was a direction by Hinton J of which the Assignee is in breach because he did not sell the Chapel Road property within three months to clear the judgment debt and did not allow payment of legal fees out of Ms Singh’s income. He also disallowed her third party claim against Boutique to be progressed.

[48]   The difficulty with this submission is that to the extent that Hinton J’s comments touch on these issues, they are taken out of the context in which they were made. The third party proceedings could continue only with the consent of the Assignee if he considered they had merit and, presumably, if successful would add to the estate available for distribution to creditors. This was not a judicial direction. It was simply a factor the Judge considered relevant to her decision in not  granting  Ms Singh further time and, instead, proceeding to adjudication. However, the Judge’s comment that the proceedings would needed to be funded out of Ms Singh’s income is, with respect, incorrect, although of little moment for present purposes. This is because a bankrupt’s income is classified as post-adjudication property. It vests absolutely in the Assignee subject to the common law principle that a bankrupt is permitted to retain such of their income as is sufficient to cover the costs of living. The Insolvency Act 2006 (“the Act”) does not contemplate the payment of a bankrupt’s legal costs out of the bankrupt’s post-adjudication income. However, as noted, nothing turns on this.

[49]   Thirdly, Ms Singh submits that the Assignee has not administered or managed her estate efficiently and has increased its debt by nearly $150,000. This included the various costs awarded against Ms Singh which the Assignee has not permitted her to dispute or appeal nor has the Assignee disputed other related costs such as the Boutique borrowings and the legality of the Body Corporate’s contract with Boutique and the Body Corporate’s solicitors. She submits that her estate should not be

responsible for costs incurred post-adjudication which were not incurred by her and were a result of “wilful misconduct” by Boutique when it filed false claims. Instead of holding the Body Corporate and Boutique accountable for this misconduct, the Assignee has passed the costs onto her estate.

[50]   The difficulty with these criticisms is that they are either the same as those previously made and rejected by the Courts or they are fundamentally and effectively the same. As Hinton J noted:14

“[38] The Body Corporate have had to meet very significant legal costs and carry a significant burden in this case. I do not consider they should be put in a position where that is stretched out any further. It has to be remembered that at the end of the day the Body Corporate is really no more than a number of individuals who are in no different position to Ms Singh herself.”

[51]   Fourthly, Ms Singh is highly critical of the way in which the Assignee has undertaken the sale process of her properties. She claims it was not an appropriate time to auction the property when, by reason of the heightened COVID-19 alert levels, it was illegal for there to be large gatherings. She also says that the Assignee did not notify her of the reserve price and auctioned the property “in the closed market”. Another complaint is that the Assignee’s agent commenced the bidding at $275,000 rather than the valuation price. She claims that she had buyers offering above

$415,000 but the Assignee’s “… rush to complete the sale agreement during the lockdown” led to a buyer offering only $372,000. She claims a buyer had made her an unconditional offer of $415,000 but this had been refused by the Assignee.

[52]   The Assignee has responded to these complaints in affidavit evidence. According to the Assignee, on 13 February 2020 Ms Singh advised him that she had entered into an agreement for sale and purchase of the Avenue Road property. The Assignee told her that she had no right to deal with the property herself and asked that the purchaser contact the Assignee. According to the Assignee attempts were made to contact Ms Singh’s potential buyer during the course of the marketing campaign. Communications were directed to the prospective buyer and to his solicitor. They were advised of the auction date. However, the property was passed in at the auction

14     Body Corporate 207650 v Singh, above n 8, at [38].

on 20 March 2020. The reserve had been set at $417,000. The highest bid obtained was $370,000. Ms Singh’s prospective purchaser did not attend the auction.

[53]   Following the auction the Assignee entered into negotiations with the highest bidder. In the course of these negotiations, contact was made with Ms Singh’s prospective purchaser who informed the Assignee’s agent he was no longer interested.

[54]   On 27 March 2020 the Assignee concluded an agreement with the highest bidder. The sale price was $372,500. There is a deferral of settlement date clause in the event of a challenge to the Assignee’s decision to sell the property. It is expected that the sale will settle on 12 August 2020. The net proceeds of sale are expected to be of the order of $362,000 which is insufficient to discharge the admitted creditor claims, let alone the administration costs. No allowance for post-adjudication interest has been factored in.

[55]   The Chapel Road property was valued at having a market value of $600,000 in August 2019. It is subject to a mortgage of approximately $335,000, leaving $265,000 in equity. Post-adjudication levies issued by the Body Corporate have gone unpaid and remain enforceable against the property. The Assignee observes it is difficult to predict how much will be realised from the sale of the Chapel Road property but if it was to sell for $600,000, the equity of $265,000 will further be reduced by the deduction of sale commission, marketing costs, legal costs and post-adjudication Body Corporate levies.

[56]   According to the Assignee there is a real risk that the bankrupt estate is or will be insolvent.

[57]I turn now to the four questions posed by Ms Singh’s applications.

Should Hinton J’s judgment, and earlier judgments, be stayed?

[58]   Ms Singh seeks a stay of Hinton J’s judgment and earlier judgments pending the determination of her application to the Court of Appeal to appeal out of time.

[59]   The application purports to rely on r 20.10 of the High Court Rules 2016 (“the Rules”). I agree with Ms Hui, who carried this part of the Assignee’s argument, that reliance on the Rules in this context is misconceived. This is because the Rules are subject to any statute prescribing the practice and procedure of the Court in a proceeding or an appeal or application for leave to appeal under that statute.15

[60]   The present proceedings are regulated by the Act. Thus the appropriate provision is s 416 of the Act, which provides for the suspension of adjudication pending appeal. The section states:

“(1) If an appeal has been filed against an order of  adjudication, the bankrupt or any other interested person may apply to the court or the Court of Appeal for an order suspending the adjudication until the appeal is decided.”

[61]   Section 416 provides the only mechanism by which the Court may suspend an adjudication. An application for annulment provides another route.16 As I advised the parties at the hearing, I am prepared to treat Ms Singh’s application as being made under the Act rather than the Rules.

[62]   However, as is evident from the wording of s 416, it is a pre-requisite for the making of any order under the section that an appeal has been filed. The difficulty for Ms Singh is that she has not filed an effective or valid appeal against the adjudication judgment nor has she applied for an extension of time in which to file an appeal.17 An indication that an appeal is intended is insufficient for the purposes of s 416.18 No explanation has been proffered by Ms Singh to account for why she has not taken steps to appeal Hinton J’s 4 July 2019 adjudication or how the delay of more than 12 months to date may be justified.

[63]   Although Ms Singh did not attempt to persuade me to invoke this Court’s inherent jurisdiction to grant a stay, I agree with Ms Hui’s submission that the specific jurisdiction conferred by s 416 of the Act makes it most doubtful that there is room to invoke the Court’s inherent jurisdiction and, even if such a jurisdiction did exist, it

15     High Court Rules 2016, r 1.4(3)(c).

16     Commissioner of Inland Revenue v Neal HC Auckland B1719/97, 2 October 1998; Cuthbert v ASAP Finance Limited HC Auckland CIV-2006-404-7863, 25 July 2007.

17     High Court Rules 2006, r 29A; Court of Appeal (Civil) Rules 2005.

18     Mathiesen v Mathiesen [2013] NZHC 1925 at [8].

would be very limited and in my view insufficient to permit the making of the orders Ms Singh seeks.19

[64]   I also agree with Ms Hui that even if there is a jurisdictional basis for suspending the adjudication, it would not be in the interests of justice to grant such an order for the following reasons:

(a)Ms Singh’s application for suspension of the adjudication is, in effect, an attempt to re-litigate Hinton J’s orders of 3 and 4 July 2019;

(b)since Ms Singh’s adjudication on 3 July 2019 the Assignee has made significant progress in the administration of the estate. He has investigated Ms Singh’s affairs, he has vetted the creditor’s claims, in recent months he has entered into an unconditional agreement for sale and purchase of the Avenue Road property and listed the Chapel Road property for sale;

(c)the Assignee has a statutory duty to continue with the administration of the bankrupt estate and distribute the proceeds of the realisation of assets to creditors;

(d)the creditors have borne the use of money costs while the sums owing to them have remained unpaid;

(e)the sale of both properties is required to discharge the indebtedness of the estate. Delays to this process will further prejudice Ms Singh’s creditors and have an impact of third parties; and

(f)the present persistent and repetitive attempts by Ms Singh to frustrate the Assignee’s statutory duties continues to erode the value of the bankrupt estate to the point that there is a real risk of it becoming insolvent to the detriment of creditors, particularly the other owners of units in Richmond Terraces.

19     Cuthbert v ASAP Finance Limited above n 8, at [28].

[65]   Also of significance is that Ms Singh did not attempt to persuade me that Hinton J’s decision to adjudicate her bankrupt was wrong. That may be because there is no answer to the conventional and legally correct approach adopted by the Judge. The order was made in reliance on the sealed judgments of the Court, including the District Court’s judgment which was upheld by this Court on appeal.

[66]   The jurisdiction to order adjudication is found in s 13 of the Act. That provision permits a creditor to apply for a debtor to be adjudicated if four conditions are met; first, the debtor owes the creditor more than $1,000, secondly, the debtor has committed an act of bankruptcy within three months of the filing of the application, thirdly, the debt is certain and finally, the debt is payable.

[67]   Plainly the debt exceeds the modest threshold. The act of bankruptcy relied on is Ms Singh’s unchallenged failure to comply with the creditors’ bankruptcy notice committed within the prescribed time. The debt is certain. Hinton J’s order was made in reliance upon the sealed judgments of this Court, and the District Court’s judgment which was upheld by this Court on appeal. Leave to appeal to the Court of Appeal was refused. Thus, the basis for the creditors’ application has been well and truly tested in Court. The debt remains payable.

[68]   These were all matters expressly considered by Hinton J. She correctly applied the statutory tests before moving on to consider whether she should exercise her discretion to make the order sought.20 For the reasons given she rejected Ms Singh’s arguments to the contrary and made the order. I also regard it as relevant that Ms Singh was represented by senior and experienced counsel on the application for leave to appeal to the Court of Appeal and at the application to halt the adjudication.

[69]   For these reasons I am satisfied there should be no stay of execution of the bankruptcy judgment. This aspect of Ms Singh’s application necessarily fails.

20     Insolvency Act 2006, s 36.

Should the sale of assets be halted pending determination of the appeal against the Assignee’s decision on costs?

[70]   Ms Singh seeks an order that the sale of assets, except for the sale of the Chapel Road property, is halted pending the determination of her notice of appeal on the Assignee’s decision on costs. It is unclear what jurisdictional basis Ms Singh relies upon. Section 416 is not apposite. In any event, Ms Singh’s assets are now vested in the Assignee.21

[71]   What Ms Singh is effectively seeking is an interim injunction restraining the Assignee from realising the assets which are now vested in him. There is no such jurisdiction.

[72]   The only way the assets could re-vest in Ms Singh would be a successful appeal of the adjudication order and an annulment of her bankruptcy. She has not filed a valid appeal against the adjudication order and thus s 46 of the Act does not apply. She has not applied for annulment and neither could she satisfy the test for obtaining one.

[73]It follows this aspect of her application must also fail.

Should Associate Judge Bell’s judgment of 19 July 2019 in respect of Boutique be stayed?

[74]   Ms Singh seeks a stay of Associate Judge Bell’s 19 July 2019 judgment in respect of the Boutique proceedings.

[75]   As already noted, any rights Ms Singh formerly enjoyed in respect of those proceedings, including the right to appeal it, to stay or otherwise apply to set it aside, vested in the Assignee when Ms Singh was adjudicated bankrupt. She thus has no standing in respect of those proceedings.22 Only the Assignee has standing. Mr Neil advises that the Assignee seeks no orders of the sort Ms Singh seeks.

21     Insolvency Act 2006, s 101.

22     Heath v Tang [1993] 1 WLR 1421, [1983] 4 All ER 694 (CA) and De Alwis v Lovit Foods International Limited HC Auckland CIV-2002-404-1944, 24 March 2010.

[76]   In any event, the orders sought by Ms Singh relate to the Boutique proceedings and not the present proceedings.

Should an order be made requiring the Assignee to fund Ms Singh’s legal costs out of her estate?

[77]   Ms Singh does not identify the jurisdictional basis for the Court to make an order requiring the Assignee to fund Ms Singh’s legal costs out of her estate.

[78]   In some detail, Mr Neil took the Court through the relevant legislative scheme and in particular, what assets and monies a bankrupt may retain. These are set out in ss 158 to 164 of the Act.

[79]   Without descending into the detail, the Act provides for the bankrupt to retain certain limited assets and permits the Assignee to make an allowance out of the property of the bankrupt to the bankrupt for support. Unsurprisingly, there is no provision in the Act for the Assignee or a creditor to fund the bankrupt’s legal costs in respect of a challenge to aspects of the bankrupt’s adjudication.

[80]   Furthermore, for the reasons developed by Mr Neil in argument, I accept there is no inherent jurisdiction pursuant to which the High Court may make the order    Ms Singh seeks.23 In any event, any monies payable to Ms Singh, including any costs awards made against the Body Corporate in her favour, vest in the Assignee and cannot vest in Ms Singh personally.

[81]    I agree with Mr Neil that the allowance of legal fees and costs to Ms Singh from vested property would contravene the express and implied provisions of the Act.24

23     Guy v Preliminary Proceedings Committee of the Medical Council of New Zealand (1994) 8 PRNZ 109 (HC) at 111. See also Shafick v Makary [2015] NZHC 2194.

24     Insolvency Act 2006, s 273(1), (2) and (3).

[82]   In any event, even if there was jurisdiction I would not be inclined to exercise any powers under it to make the orders sought. My reasons follow:

(a)first, the proposed appeal against the adjudication order is unmeritorious and the remaining claim in the Boutique proceedings has been preserved by Associate Judge Bell for Ms Singh to advance if she obtains an annulment of the bankruptcy. The advancement of the claim in the Boutique proceedings has no conceivable benefit to the bankruptcy;

(b)secondly, the payment of legal costs would further erode the realised funds of Ms Singh’s estate. It will likely erode them to the extent there are insufficient funds available to meet the obligations of the bankrupt estate which would leave the creditors wanting;

(c)thirdly, the failure to direct the payment of legal costs to Ms Singh does not abrogate her ability to pursue her proposed appeal by applying, as a first step, to the Court of Appeal for an extension of time in which to appeal. She is entitled to make such an application as a lay litigant. She has advanced many applications herself as a lay litigant. She has a proven ability to do so. It will not impede her access to justice.

Result

[83]The amended application is dismissed.

Costs

[84]   The Assignee, as the successful party, is entitled to an award of costs. They are payable as a first charge.25 At the present time it is expected there will be sufficient realisations to pay the administrative costs and the creditor claims, together with post- adjudication interest although there is as noted by Mr Neil, a real prospect that the bankruptcy will become insolvent. Costs are ordered to cover that eventuality.

25     Insolvency Act 2006, ss 273 and 274.

[85]   I direct the parties to file their memoranda of costs, neither of which is to exceed five pages in length. I make the following timetabling orders:

(a)the Assignee is to file and serve his submissions as to costs no later than

5:00 pm on Monday, 17 August 2020; and

(b)Ms Singh is to file and serve her submissions as to costs no later than

5:00 pm on Monday, 24 August 2020.

[86]I will then deal with the issue of costs on the papers.

Moore J

Solicitors:

Meredith Connell, Auckland

Copy to:

The Applicant