Strata Title Administration Limited v Tao - [2018] NZHC 3381

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2017-404-002177

[2018] NZHC 3381

BETWEEN
STRATA TITLE ADMINISTRATION LIMITED
First Judgment Creditor

JIGAR PANDYA
Second Judgment Creditor

BODY CORPORATE 198693
Third Judgment Creditor

AND

AN LI TAO

Judgment Debtor

Hearing: 16 November 2018

Appearances:

E St John for the Judgment Creditors M Dillon for the Judgment Debtor

Judgment:

29 January 2019

JUDGMENT OF ASSOCIATE JUDGE SARGISSON

This judgment was delivered by me on 29 January 2019 at 3.30 p.m. pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date.......................................

Solicitors:

Price Baker Berridge, Auckland

STRATA TITLE ADMINISTRATION LTD v TAO [2018] NZHC 3381 [29 January 2019]

Introduction

[1]The applicants, creditors of An Li Tao, seek an order adjudicating her bankrupt.

[2] On the face of it the jurisdictional requirements for such an order are made out.1 She owes the applicants a judgment debt of a certain amount more than $1,000, which is well overdue for payment; and she committed a relevant act of bankruptcy within the period of three months before the filing of the application for adjudication. After being served with a bankruptcy notice based on the judgment debt, Ms Tao failed to satisfy the court she had grounds to set the notice aside.

[3] Ms Tao nonetheless resists the application in two ways. She first seeks the proceeding be temporarily stayed or halted pending resolution of her appeal against the dismissal of her application to set the bankruptcy notice aside.2

[4] Should Ms Tao fail in obtaining a temporary stay, she seeks an order refusing her adjudication. At the hearing, her just and equitable grounds for challenging adjudication boiled down to these. It is said her adjudication would:

(a)serve no practical purpose because she has no realisable assets; and

(b)make it impossible for her to have enduring powers of attorney or be appointed welfare guardian for her ailing parents, thus compromising their welfare.

[5] I find it remains just and equitable that a stay be refused and that the application for adjudication be granted. My reasons follow.

1 Insolvency Act 2006, s 13.
2 Section 38; and Tao v Strata Title Administration [2018] NZHC 848 per Associate Judge Matthews.

Background

Debt made

[6] The applicant creditors are the body corporate (along with its corporate secretary and chairperson) of a unit title development in New Lynn where Ms Tao’s parents own a unit. Until 25 October 2016, Ms Tao was also registered as a proprietor on the title.

[7] Disgruntled by the creditors’ actions, Ms Tao brought claims against them in two sets of proceedings. She variously alleged mismanagement, fraud and conspiracy on the part of the creditors, primarily in relation to building maintenance carried out on the New Lynn property.

[8] In a comprehensive decision issued on 27 April 2016, Justice Thomas granted defendant summary judgment in favour of the creditors, dismissing both proceedings.3 She held that the creditors were entitled to costs of $60,210 (which included a…

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: [2018] NZHC 3381
Decision Date: 29 January 2019

CaseChat Overview and Summary

The applicants, creditors of An Li Tao, sought an order adjudicating her bankrupt. The creditors sought the order because Tao had a judgment debt of over $1,000 that was overdue for payment, and she committed a relevant act of bankruptcy within the period of three months before the filing of the application for adjudication. Tao failed to satisfy the court she had grounds to set the bankruptcy notice aside. Tao resisted the application in two ways. First, she sought the proceeding be temporarily stayed or halted pending resolution of her appeal against the dismissal of her application to set the bankruptcy notice aside. Second, she sought an order refusing her adjudication. Tao argued that her adjudication would serve no practical purpose because she has no realisable assets and that her adjudication would make it impossible for her to have enduring powers of attorney or be appointed welfare guardian for her ailing parents, thus compromising their welfare. The court found it remained just and equitable that a stay be refused and that the application for adjudication be granted. The court found that there were no compelling reasons why Tao should be released now from the consequences of a validly made adjudication application. The court accordingly made an order adjudicating Tao bankrupt.

Orders