LEE v ALHARDAN [2023] NZCA 195
Because the High Court adjudication of bankruptcy was founded on a District Court default judgment that was set aside, the appeal must be allowed and the adjudication set aside; ancillary relief including release of security for costs and directions for determination of costs follow.
Source-derived case information.
- Citation
- [2023] NZCA 195
- Parties
- Appellant: Jingmin Lee; Respondent: Mahmoud Alhardan
- Court
- Court of Appeal
- Jurisdiction
- New Zealand
- Judgment Date
- 29 May 2023
- Procedural Posture
- Appeal From High Court Bankruptcy Adjudication / Court of Appeal Judgment on the Papers
- Outcome
- Appeal allowed; High Court order adjudicating appellant bankrupt set aside; costs reserved; security for costs released to appellant's solicitor trust account; directions made for costs submissions.
- Legal Topics
- Adjudication of Bankruptcy, Setting Aside Default Judgment, Security for Costs, Costs Determination
Source-derived case record
Summary, issues, holding and outcome
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Parties
Jingmin Lee
Appellant
Mahmoud Alhardan
Respondent
Procedural Posture
Appeal From High Court Bankruptcy Adjudication / Court of Appeal Judgment on the Papers
Legal Issues
- 1 Whether a bankruptcy adjudication founded on a default judgment should be set aside when the underlying default judgment is set aside
- 2 Whether the appeal could be allowed on the papers by consent without a hearing
- 3 Whether security for costs paid in respect of the appeal should be released
Ratio Decidendi
Because the High Court adjudication of bankruptcy was founded on a District Court default judgment that was set aside, the appeal must be allowed and the adjudication set aside; ancillary relief including release of security for costs and directions for determination of costs follow.
Court Disposition
Appeal allowed; High Court order adjudicating appellant bankrupt set aside; costs reserved; security for costs released to appellant's solicitor trust account; directions made for costs submissions.
Orders
- Appeal allowed
- Order of the High Court of 16 February 2023 adjudicating Mr Lee bankrupt is set aside
Full Case Text
Judgment text and source record
1 paragraphs
LEE v ALHARDAN [2023] NZCA 195 [29 May 2023]IN THE COURT OF APPEAL OF NEW ZEALANDI TE KŌTI PĪRA O AOTEAROACA138/2023[2023] NZCA 195BETWEEN JINGMIN LEEAppellantAND MAHMOUD ALHARDANRespondentCourt: Miller, Goddard and Katz JJCounsel: D W Grove for AppellantC T Patterson for RespondentJudgment:(On the papers)29 May 2023 at 10.00 amJUDGMENT OF THE COURTA The appeal is allowed.B The order made by the High Court on 16 February 2023 adjudicatingMr Lee bankrupt is set aside.C Costs are reserved.D Directions as set out in paragraph [10].E The Registrar is directed to release the security for costs paid in respect ofthis appeal to Mr Lee by payment to his solicitor's trust account.____________________________________________________________________REASONS OF THE COURT(Given by Goddard J)The appeal[1] Mr Lee appeals to this Court from an order made by the High Court on16 February 2023 adjudicating him bankrupt. That adjudication was based on adefault judgment entered against Mr Lee, his wife Ms Gao and an associated company,Oriental Works Ltd, on 27 June 2022 in the District Court (District Court defaultjudgment).The parties agree that the appeal should be allowed[2] The District Court default judgment was set aside by the District Court on15 May 2023 as against all three defendants.1[3] In light of the decision setting aside the District Court default judgment,counsel for Mr Lee and for Mr Alhardan have filed a joint memorandum seeking anorder allowing the appeal and quashing the bankruptcy order without a hearing or theneed to take any further steps. The Official Assignee abides the Court's decision inrelation to Mr Lee's bankruptcy, and has halted administration of his estate pendingthat outcome.[4] In these circumstances it is clearly appropriate for the appeal to be allowed andthe adjudication set aside.[5] Mr Lee seeks costs. He proposes directions for the determination of his claimfor costs, which are reflected in the directions set out at [10] below.[6] The parties agree that an order should be made that the security for costs paidin respect of this appeal be released to Mr Lee by payment to his solicitor's trustaccount.1 Alhardan v Gao [2023] NZDC 9204.Result[7] The appeal is allowed.[8] The order made by the High Court on 16 February 2023 adjudicating Mr Leebankrupt is set aside.[9] Costs are reserved.[10] We make directions as follows:(a) Mr Lee may file submissions on costs (not exceeding five pages) byFriday 9 June 2023.(b) Mr Alhardan may file submissions on costs (not exceeding five pages)by Friday 23 June 2023.(c) Mr Lee may file any submissions strictly in reply by Friday 30 June2023.(d) Costs will then be determined on the papers.[11] The Registrar is directed to release the security for costs paid in respect of thisappeal to Mr Lee by payment to his solicitor's trust account.Solicitors:Julia Xu Lawyers, Auckland for AppellantOctagon Law, Auckland for Respondent