Tao v Official Assignee - [2020] NZHC 1260

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2017-404-002177

[2020] NZHC 1260

UNDER the Insolvency Act 2006

IN THE MATTER OF

an application for a discharge from bankruptcy

BETWEEN

AN LI TAO

Applicant

AND

OFFICIAL ASSIGNEE

First Respondent

STRATA TITLE ADMINISTRATION LIMITED

Second Respondent

BODY CORPORATE 198693
Third Respondent

JIGAR PANDYA
Fourth Respondent

XIAOMEI JANG
Fifth Respondent

INLAND REVENUE DEPARTMENT

Sixth Respondent

Hearing: 8 June 2020

Appearances:

Applicant in Person

C Baker for Third Respondent

Judgment:

8 June 2020

ORAL JUDGMENT OF ASSOCIATE JUDGE P J ANDREW

TAO v OFFICIAL ASSIGNEE & ORS [2020] NZHC 1260 [8 June 2020]

Introduction

[1] The judgment debtor, Ms Tao, was adjudicated bankrupt on 29 January 2019. She now makes application for early discharge from her bankruptcy pursuant to ss 294 and 298 of the Insolvency Act 2006. The principal ground of the application is that the applicant has been previously appointed as the attorney of her parents to deal with their financial affairs.1 They are said to be elderly, disabled in the case of her mother (cognitively impaired), who suffers from a chronic illness. Both parents are Chinese and non-English speakers. The applicant wishes to be discharged so that she can care properly for her parents. She has mentioned particular difficulties with banking, with obtaining changes in relation to the parents’ mortgage and the like. Ms Tao tells me she is the only person who can carry out these necessary functions. She is an only child and the only other surviving family member, a sister of the father, lives in Beijing.

[2] The application is opposed by the original judgment creditor, the Body Corporate 198693. I note that Ms Tao’s parents still reside in one of the units within the Body Corporate apartment block.

[3] The Official Assignee, who has filed a report under the legislation, will abide the Court’s decision.

Factual background

[4] The circumstances leading to the applicant’s bankruptcy are set out in the decision of Sargisson AJ in her judgment of 29 Jan 2019.

[5] Prior to the adjudication orders being made there was an attempt by Ms Tao to set aside the bankruptcy notice but that was unsuccessful.

[6] Sargisson AJ also noted that the creditors of Ms Tao were the Body Corporate, together with its corporate secretary and chairperson of the unit title development in

1 On 27 January 2017, the applicant was granted enduring powers of attorney for each parent, over both their property and their personal care and welfare.

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] Sargisson AJ further noted that in a comprehensive decision…

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: [2020] NZHC 1260
Decision Date: 8 June 2020

CaseChat Overview and Summary

In the High Court of New Zealand, Ms An Li Tao applied for a discharge from her bankruptcy. She was adjudicated bankrupt on 29 January 2019 and sought an early discharge under sections 294 and 298 of the Insolvency Act 2006. The primary reason for her application was her role as attorney for her elderly and disabled parents, who are non-English speakers and have chronic health issues. She argued that being discharged from bankruptcy would enable her to better care for her parents, particularly in managing their financial affairs. The application was opposed by the Body Corporate 198693, one of Ms Tao's creditors. The Official Assignee filed a report and indicated they would abide by the Court's decision.

The legal issues before the court were whether there were good reasons to discharge Ms Tao from bankruptcy early, considering the interests of the bankrupt, the creditors, and the public interest. The court considered the ASB v Hogg case, which established that the applicant has the onus of adducing evidence to show good cause for early discharge, and the court has a broad discretion in such matters. The relevant factors include the interests of the bankrupt, the creditors, the public interest, and the conduct of the bankrupt.

The court acknowledged Ms Tao's difficult position as the sole carer for her parents but found that her concerns were already addressed in the adjudication decision. The court also noted unresolved litigation between Ms Tao’s parents and the Body Corporate, which could potentially involve Ms Tao further if her bankruptcy were discharged early. The court concluded that there were no good reasons to grant the application for an early discharge, as it was not in the interests of the creditors or the public. The court dismissed the application and awarded costs to the Body Corporate on a 1A basis, plus disbursements.

Orders