ABC Business Solutions Limited v Nihal Homes (NZ) Limited

[2021] NZHC 3526

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2021-404-893

[2021] NZHC 3526

UNDER

the Companies Act 1993

BETWEEN

ABC BUSINESS SOLUTIONS LIMITED

Plaintiff

AND

NIHAL HOMES (NZ) LIMITED

Defendant

Hearing:	On the papers
Appearances:	PJ Broad for the Plaintiff
Judgment:	17 December 2021

COSTS JUDGMENT OF ASSOCIATE JUDGE SUSSOCK

This judgment was delivered by me on 17 December 2021 at 3pm pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar

Solicitors:

PJ Broad, Auckland

Copy to: R Singh

ABC BUSINESS SOLUTIONS LTD v NIHAL HOMES (NZ) LTD [2021] NZHC 3526 [17 December 2021]

Introduction

[1]                 The defendant applies for an order that the plaintiff pay the defendant’s filing fees of $310.00 (consisting of $110.00 for a Notice of Opposition and $200.00 for an Application to Dismiss) following the discontinuation of this liquidation proceeding.

[2]                 Mr Singh submits on behalf of the defendant that the application by ABC Business Solutions Limited to liquidate Nihal Homes (NZ) Limited was “inappropriate” and “an over-reaction to what is in reality a relatively small oversight and error in the compiling of the invoice and therefore basically wrong given these circumstances”. Moreover, Mr Singh says the publicity surrounding the application has had adverse implications for his business and caused substantial damage to both his own personal and his company’s professional reputations. In his submission, there was never any merit in the plaintiff’s liquidation application.

[3]                 The plaintiff has filed a memorandum in response in which it refers to its earlier memorandum dated 26 August 2021 which sets out the chronology of this matter as follows:

(a)On 12 March 2021 a statutory demand for $2,990.00 was served on the defendant.

(b)On 19 May 2021 an email was sent to Mr Singh advising that the statutory demand had not been met and that counsel had instructions to file liquidation proceedings

(c)On 19 May 2021 an application to liquidate was filed.

(d)On 15 June 2021 there was a telephone conversation where Mr Singh offered to settle for a payment of $1,000.

(e)On approximately 18 June 2021 a statement of defence was filed by Mr Singh on behalf of the defendant.

(f)On 24 June 202 the matter was advertised in the New Zealand Herald and New Zealand Gazette.

(g)On 2 July 2021 there was the first call of the matter in the Liquidation List where the matter was adjourned to 30 July 2021 for settlement discussions.

(h)On 6 July 2021 the plaintiff sent an email to Mr Singh querying the basis of his alleged dispute to which Mr Singh replied that he had paid the correct amount due to the plaintiff.

(i)On 9 July 2021 the defendant made a partial payment of $1,840.00 to the plaintiff.

(j)On 29 July 2021 the plaintiff sent an email to Mr Singh attaching a timesheet for work carried out by the plaintiff and querying whether any settlement was possible.

(k)On 30 July 2021 there was a second appearance in the Liquidation List when the matter was further adjourned to 22 August 2021 for settlement discussions.

(l)On 19 August 2021 an affidavit of Mr Rajnesh Chand affirmed on 29 July 2021 was filed on behalf of the plaintiff responding to matters raised by the defendant.

(m)On 19 August 2021 the plaintiff emailed Mr Singh setting out settlement proposals.

(n)On 20 August 2021 there was a third appearance in the Liquidation List where an indication was given by the plaintiff that it was likely to discontinue and seek costs. There was no appearance by the defendant and the plaintiff was directed to advise Mr Singh of the next date and that he would need to appear if he wished to address the Court on costs. The matter was adjourned to 27 August 2021.

(o)On 26 August 2021 the plaintiff filed a memorandum on costs setting out the above chronology and seeking costs on a 2B basis of $3,824.00 plus disbursements of $1,347.04.

(p)On 10 September 2021 a Minute was issued by Associate Judge Bell setting down the opposed liquidation application down for a hearing on 3 November 2021 with directions for steps leading up to the hearing. Permission was given in the Minute for Mr Singh to appear in person to represent the company given the very small debt owed by his company.

(q)On 19 October 2021 the plaintiff filed a notice of discontinuance seeking leave to discontinue with no issue as to costs.

Discussion

[4]                 It is clear from the above chronology that the defendant only made payment to the plaintiff on 9 July 2021 of $1,840.00 in partial payment of the demanded amount, after the statutory demand was served on 12 March 2021 and after the notice to liquidate the company was filed on 19 May 2021.

[5]                 The plaintiff confirms that it attempted to reach a settlement with the defendant before bringing these proceedings. It further submits that as payment was only made by the defendant after the plaintiff had brought these proceedings, there is no basis on which the defendant can now claim the filing fee for the notice of opposition. Furthermore, it submits the application to dismiss does not comply with the High Court Rules and there was no reason to file such a document as the notice of opposition had already been filed.

[6]                 The plaintiff therefore submits that costs and disbursements should lie where they fall.

[7]                 In my view, given the timing of the partial payment and the apparent failure of the defendant to engage until after the liquidation application had been filed, it is not appropriate to make a costs award in favour of the defendant.

Result

[8]                 The defendant’s application for the plaintiff to pay its filing fees of $310.00 on the discontinuation of this matter is declined.

Associate Judge Sussock