Sangkool v Santosa [2015] NZHC 2850 (16 November 2015)

Last Updated: 31 December 2018

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV 2015-404-001810 [2015] NZHC 2850

BETWEEN	RANGSANG SANGKOOL Applicant
AND	PATRICK SANTOSA Respondent

Hearing:	16 November 2015
Appearances:	W D Buckham for the Applicant A G Maclean for the Respondent
Judgment:	16 November 2015

ORAL JUDGMENT OF ASSOCIATE JUDGE CHRISTIANSEN

R SANGKOOL v P SANTOSA [2015] NZHC 2850 [16 November 2015]

[1] This hearing was scheduled upon the applicant’s application to set aside the respondent’s bankruptcy notice.

[2] On 13 November 2015 a further application was filed on behalf of the applicant
– to stay the hearing upon the bankruptcy notice setting aside application.

[3] It is upon that stay application the Court first considered matters on behalf of the applicant this morning.

[4] The stay application claimed that the default judgment obtained by the respondent had been irregularly obtained.

[5] Mr Buckham referred to the manner in which the respondent’s claim had been pleaded in the District Court. Then he compared that manner of pleading to the form of the default judgment that issued.

[6] At the core of the respondent’s claim are three loans he made to the applicant, each for $10,000. It is clear from the evidence filed upon the current applications that there is no dispute that there were three loans of $10,000. The claim for repayment of each of those loans was the subject of separate causes of action detailed in the District Court statement of claim. In that statement of claim it was pleaded the first of those loans given on 17 February 2012 has not been repaid. In the form pleaded interest of
$1,457.53 was claimed “at the rate prescribed in the Judicature Act 1908...

[7] In the second of those loans made on 16 March 2013 the plaintiff claimed interest of $897.30 “at the rate prescribed in the Judicature Act 1908...”.

[8] In the third cause of action it is claimed that $10,000 was lent on 22 November 2013 “with the defendant agreeing to pay $500 interest per month on this loan (5 per cent per month) until the $10,000 was repaid”. In the prayer for relief judgment was sought for repayment of the third loan together with $1,100 being $4,700 interest on
the [third loan] at the agreed rate of 5 per cent per month for the period 22 November 2013 to 31 January 2015 less the $3,600 interest already paid by the defendants...”.

[9] In the District Court certified copy of judgment it is noted:

Because the defendants have not filed a statement of defence in the Court, judgment is given that the plaintiff recovers $30,000.00, $3,900.00 interest as agreed with the defendants and $2,953.75 for costs and disbursements.

[10] Mr Buckham submits judgment has been irregularly obtained because the interest award must have been calculated in accordance with the Judicature Act 1908 provisions and because the defendant has no jurisdiction to award interest in terms of the Judicature Act 1908. Mr Buckham draws this conclusion because of the manner in which the respondent pleaded his claims for repayment of loans and for interest claimed to be due on those. He draws that conclusion because in the third cause of action the claim for interest was for $1,100 only being the balance outstanding after credit was given for repayments totalling $3,600.

[11] In his response on behalf of the respondent Mr Maclean notes that the prayer for payment of interest in relation to the third loan contained an error by incorrectly claiming interest of $4,700 where the claim should have been for $7,000 (as the mathematics provided clearly demonstrates). In that result the pleaded relief under stated the amount owing for interest by $2,800.

[12] Mr Maclean notes that in his memorandum filed in the District Court in support of judgment by default the correct figures were provided to prove the balance of interest claimed owing in respect of the third pleaded cause of action.

[13] Therefore although the sealed order for judgment did not provide the correct figures to show the calculation of interest due, those correct figures have been before the Court when they, correctly, sealed judgment for the stated amount of interest due.

[14] In that outcome the Court advised Mr Buckham that the application for stay would be refused.

[15] The Court then considered the application to set aside the bankruptcy notice.
[16] As earlier noted the applicant does not dispute the three loans of $10,000 each were paid to him and/or his wife. His case is that he has cross claims which come within s 17 (7) of the Insolvency Act 2006 which, when taken into account with the repayments of $5,500 he says have been made, and together with the payment of
$5,000 he says was made on his behalf by Mr Teddy Lim, that he has provided sufficient by way of set off/counterclaim to justify his having an arguable defence to claims of a debt due.

[17] The applicant’s evidence is that he paid $5,500 in repayments. The respondent acknowledges receipt of these but says those repayments comprised interest owing on the loans and provided no capital reduction of them.

[18] Regarding the payments allegedly made on the applicant’s behalf by Mr Lim, the respondent says he has never received these. An affidavit from Mr Lim confirms he never paid those to the respondent.

[19] Regarding the counterclaim for commission payable for items the applicant says he brought into New Zealand on the respondent’s behalf, the applicant’s evidence is that he made 37 trips (in his capacity as a flight steward) and in respect of each of those trips a sum of $220 was due to be credited on account of his debt owing to the respondent. In all of this he calculates an amount of $8,140 is owing to him by the respondent.

[20] The respondent’s evidence is that there was no set off arrangement relating to the importation of goods in the manner described. Regardless, it is clear to the Court that the total of the applicant’s set off/counterclaim falls far short – approximately 50 per cent only, of the amount required to satisfy the bankruptcy notice. In reality the shortfall is even greater because the $5,500 repaid was accounted for in the sum for which judgment was entered in the District Court.

[21] The applicant was represented by other counsel in the District Court proceedings. No defence or counterclaim was filed in that proceeding. The applicant says he took legal advice from the lawyer but did not agree with that advice and he
lost faith in his lawyer. Apparently the applicant took no other steps in response to the District Court claim before judgment was sealed.

[22] It is clear for present purposes the applicant will have to bear the consequences regarding any misconceptions he may have had about how the District Court proceeding was handled on his behalf.

[23] In this Court’s assessment the case advanced on behalf of the respondent does not lack credibility and nor does it appear inherently improbable.

[24] Regarding the applicant’s claims of having brought goods back into the country on the respondent’s behalf, Mr Buckham submits there is evidence that the applicant did import goods for the respondent on “numerous occasions”.

[25] The respondent agrees the applicant did bring back to him items he purchased overseas and was able to do this because he was a flight attendant, but those items the respondent says, were small and he had purchased them on EBay for his personal use. He says the applicant offered to bring them back to him without cost and they included a mobile phone and accessories, some tools and parts for motor cars and some household items including kitchen towels, a backpack and clothing.

[26] The respondent says the items purchased were not bought for resale. The only advantage he says was that he received those items quicker than he would have done by post and all but one, “the mobile phone”, cost less than the $220 the applicant claims it was agreed he would be paid on each occasion.

Conclusion

[27] The applicant claims a right of set off or counterclaim. However, recourse to those factors was not pursued in the District Court when they could have been and it matters not as the applicant claims that he did not fully understand his legal position in that regard. Also, the clear evidence is that the total of those counterclaim/set offs falls far short of satisfying s 17(7) of the Act.
[28] Also there is an issue with claims that Mr Lim paid money on behalf of the applicant. As earlier noted Mr Lim denies this. In response the applicant has provided an affidavit by a Mr Sewell a process server who says he was engaged by Mr Lim to recover the sum of $5,000 from the applicant – by implication the amount it is claimed Mr Lim paid the respondent on behalf of the applicant. The evidence of Mr Sewell appears to fall far short of proof of the claim that $5,000 of the debt due to the respondent has been paid on behalf of the applicant.

[29] Nor can any credit be provided for claims of an oral agreement to pay commission on each shipment of goods brought into the country by the applicant. Such a claim is quite independent and does not in the circumstances provide a defence to the judgment debt. It is agreed the applicant brought in a number of items into the country on behalf of the respondent. No other evidence has been provided however in support of the claim for commission. No record has been provided by the applicant of trips made or of items imported or of costs paid or payable. By contrast the respondent has provided detailed evidence of every item he says was brought into New Zealand on his behalf. That evidence indicates the items were of a personal nature and save for the mobile phone of much less value than the claim of alleged commission.

[30] The evidence provided in support of cross claims/set off is inadequate.

Result

[31] The application to set aside is dismissed. The time for compliance with the bankruptcy notice is extended to 12:00noon, Friday 20 November 2015.

[32] The applicant shall pay costs on a 2B basis for which purpose the Court certifies hearing time of a quarter of a day.

Associate Judge Christiansen