Tao v Strata Title Administration Ltd - [2018] NZHC 848

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2017-404-002177

[2018] NZHC 848

IN THE MATTER
of the Insolvency Act 2006

AND

IN THE MATTER

of the bankruptcy of AN LI TAO

BETWEEN

AN LI TAO

Applicant

AND

STRATA TITLE ADMINISTRATION LTD

First Respondent

JIGAR PANDYA
Second Respondent

BODY CORPORATE 198693

Third Respondent

Hearing: 18 April 2018

Appearances:

Applicant in person

C Baker for Respondents

Judgment:

30 April 2018

JUDGMENT OF ASSOCIATE JUDGE MATTHEWS

This judgment was delivered by me at 10.30 am on 30 April 2018 pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar

Solicitors:
Price Baker Berridge, Auckland for Respondents

TAO v STRATA TITLE ADMINISTRATION LTD & ORS [2018] NZHC 848 [30 April 2018]

[1] On 27 April 2016 the High Court entered summary judgment against the applicant, Ms Tao, on two proceedings she had brought against the respondents. On 8 August 2016 the Court issued a further judgment awarding costs to the respondents against Ms Tao in the sum of $60,210. Ms Tao has not paid any part of this sum. The respondents have issued a bankruptcy notice against her. Ms Tao applies to set that notice aside.

[2] Section 17 of the Insolvency Act 2006 provides that a debtor commits an act of bankruptcy in certain circumstances. A creditor must have obtained a final judgment or order against the debtor for a sum of money, execution must not have been halted by a court and the debtor must have been served with a bankruptcy notice. Further, and of relevance to the present case, it must be shown that the debtor has not, within 10 working days of service of the notice, complied with it or satisfied the Court that he or she has a cross claim against the creditor.1 A cross claim means a counterclaim set-off or cross demand that is equal to or greater than the judgment debt or the amount that the debtor has been ordered to pay, and which the debtor could not use as a defence in the action or proceedings in which the judgment or the order was obtained.2

[3] The judgment arose from proceedings filed by Ms Tao in relation to issues arising in the operation of the Body Corporate of an apartment complex in New Lynn, Auckland. The respondents are, respectively, the Body Corporate secretary, the Body Corporate chairperson, and the Body Corporate itself, constituted under the Unit Titles Act 2010.

[4] In her application Ms Tao raises a number of grounds on which she says the Court should set the bankruptcy notice aside. First, Ms Tao says that as her action in bringing the original proceeding was directed at assisting with overall Body Corporate management issues, she is entitled to an indemnity from the Body Corporate in relation to her costs.

1 Section 17(1)(d)(ii).
2 Section 17(7).

[5] Secondly, Ms Tao says that she has filed claims in the District Court and a complaint against the…

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 848
Decision Date: 30 April 2018

CaseChat Overview and Summary

The High Court of New Zealand considered an application by An Li Tao to set aside a bankruptcy notice issued against her by Strata Title Administration Ltd, Jigar Pandya, and Body Corporate 198693. The notice was issued after the Court awarded the respondents costs against Ms Tao in proceedings related to the management of an apartment complex in New Lynn, Auckland. Ms Tao argued that she was not liable to pay the costs as she believed she had a cross-claim against the respondents. The court had to determine whether the respondents had correctly issued the bankruptcy notice and if Ms Tao had a valid cross-claim that could prevent her adjudication as bankrupt.

The court found that the definition of a cross-claim, as set out in the Insolvency Act 2006, required the claim to be equal to or greater than the amount of the judgment debt. Ms Tao's claim against the respondents, which was filed with the Human Rights Review Tribunal, was for $30,000 per plaintiff, which was less than half of the judgment debt. Therefore, it did not qualify as a cross-claim. The court also considered other arguments raised by Ms Tao, such as her role as an attorney for her parents and the possibility of an appeal against the previous judgments, but found that these did not affect the validity of the bankruptcy notice.

The court dismissed Ms Tao's application to set aside the bankruptcy notice, finding that all criteria for issuing the notice had been met. The court extended the time for Ms Tao to comply with the notice and ordered her to pay the respondents' costs on a 2B basis, along with disbursements fixed by the Registrar.

Orders