Active Trucking Limited v Intercivil Limited
[2018] NZHC 1012
•19 April 2018
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2018-404-93 [2018] NZHC 1012
BETWEEN ACTIVE TRUCKING LIMITED
Plaintiff
AND
INTERCIVIL LIMITED
Defendant
Hearing: 19 April 2018 Appearances:
K Lee for the Plaintiff
N Kuypers for Radich Civil Ltd, a supporting creditor R B Hucker and J E Tomlinson for the Defendant
Judgment:
19 April 2018
ORAL JUDGMENT OF ASSOCIATE JUDGE R M BELL
Application for leave to appeal to the Court of Appeal
ACTIVE TRUCKING LIMITED v INTERCIVIL LIMITED [2018] NZHC 1012 [19 April 2018]
[1] On 12 April 2018 in the liquidation list I heard argument whether this proceeding had come to an end because of a failure of the substituted plaintiff, Active Trucking Limited, to serve its proceeding on the defendant within 5 working days of a substitution order made by Associate Judge Johnston on 2 March 2018. Service took place on the next working day after the required date of 9 March 2018, that is, on 12 March 2018. Intercivil Ltd submitted that because of the non-compliance the proceeding had come to an end automatically and could not be resurrected. I extended time under r 1.19 High Court Rules. In giving that extension, I made a decision on an oral interlocutory application by Active Trucking Limited. Intercivil Limited wishes to appeal to the Court of Appeal against my decision. For that it requires leave under s 56(3) of the Senior Courts Act 2016. Active Trucking Limited and Radich Civil Limited oppose leave being granted.
[2] Mr Hucker for Intercivil Limited has made enquiries with the Court of Appeal whether hearing time is available. The substantive liquidation application is to be heard on 28 June 2018. Mr Hucker advises that according to the Registry staff in the Court of Appeal, a divisional Court will be sitting on 4 and 18 June 2018. The Registry staff however can give no assurance that any appeal will be fast-tracked. Any fast- tracking decision will be a decision by the judges of the Court of Appeal. It is uncertain whether this appeal will be fast-tracked and a decision on the appeal will be given before 28 June 2018.
[3] The parties’ written submissions referred to the Court of Appeal’s decision in Waller v Hider.1 That decision was in the context of applications for leave for a second appeal after a first right of appeal had been exercised. The Court of Appeal said there that there must be a question of law capable of serious argument which is of sufficient importance to outweigh the costs of an appeal. Leave under s 56(3) raises slightly different considerations because the question is whether there should be an appeal at all, not whether there should be a second appeal. There is guidance from earlier decisions under the Districts Court Act 1947. The former s 71A provided that leave
1 Waller v Hider [1998] 1 NZLR 412 (CA).
was required for an appeal from the District Court to this Court from an interlocutory decision. Two decisions give guidance. In Sandle v Stewart, Somers J said: 2
The other feature concerns leave. The purpose of this is to limit the cases which may go on appeal in the interests of finality of litigation and the work load of the High Court while preserving the integrity of the law and the interests of justice. That is shown by the principles upon which leave is given—where an issue of principle is concerned, where really greater sums are involved, where on the face of it an appeal is likely to succeed.
[4]In Cummings v Vallant, District Court Judge Hubble said:3
The Court must consider whether the interests of justice require the granting of leave in all of the circumstances of the case, including:
a) the history of the matter;
b) the conduct of the parties;
c) the nature of litigation;
d) the needs of the applicants and the effect that granting of leave would have on other persons;
e) any prejudice that may have been incurred;
f) subsequent events and merits.
[5] Mr Hucker submits that there are matters capable of serious argument that warrant the appeal. He wishes to argue on appeal that Master Williams’ decision in Spicers Paper (NZ) Ltd v BPK & GA Buckley Ltd should be followed.4 His grounds on appeal broadly repeat the arguments he made on 12 April 2018. He contends that the Court ought to have a hard look at the application of r 31.1 and the extent to which it constitutes a code for liquidation proceedings.
[6] For my part I find it invidious to say that the appeal is doomed to fail. While I have confidence in all my decisions, in my experience the Court of Appeal does not always share that confidence. Accordingly, a first instance judge needs to show some humility when there is an application for leave to appeal.
2 Sandle v Stewart [1982] 1 NZLR 708 at 715.
3 Cummings v Vallant [1997] DCR 401.
4 Spicers Paper (NZ) Ltd v BPK & GA Buckley Ltd (1993) 6 PRNZ 16 (HC).
[7] Notwithstanding that, there are countervailing arguments to the appeal points. My decision does not stand alone, but follows decisions in Commissioner of Inland Revenue v Seafood and More Hospitality Limited and Regal Haulage Limited v Palmford Investments Limited.5
[8] I am not confident that the Court of Appeal would hear an appeal and give a decision by 28 June 2018. I bear in mind that even if the Court were to hear the case during hearing, it is unlikely to give a decision before the fixture in this Court on 28 June. There is uncertainty whether this case could be fast-tracked.
[9] I regard it as desirable that the fixture for 28 June be maintained. There is clear evidence, which the company does not dispute, that it has very substantial creditors. The creditors who appeared on 12 April 2018 are worth about $1.9 million, but the company accepted that there were other outstanding creditors as well. The company’s insolvency needs to be addressed. In saying that, I am not saying that the company ought to be put into liquidation, but there needs to be a decision about what is to happen to the company in the light of a large number of unpaid creditors.
[10] Leave is required to appeal from interlocutory decisions because they do not result in final disposal of a proceeding. They involve procedural directions for the conduct of a proceeding. Those matters are less likely to require appellate intervention.
[11] In liquidation and other insolvency proceedings interlocutory rulings are often required, which are heard at short notice but are made with a view to ensuring that the proceeding is conducted in good fashion in the interests of all creditors. Using appeals to challenge rulings stands to disrupt the orderly conduct of the proceeding. An appeal would, in my view, throw the fixture on 28 June into jeopardy. It is contrary to the orderly conduct of the proceeding that there should be delay in obtaining a final determination.
5 Commissioner of Inland Revenue v Seafood and More Hospitality Limited [2013] NZHC 339;
Regal Haulage Limited v Palmford Investments Limited HC Hamilton M48/93 1 November 1993.
[12] There is another feature. Two other creditors filed their own proceedings for the liquidation of Intercivil Limited: Waiau Pa Bulk Haulage Limited and Radich Civil Limited. They prepared their own statements of claim, notices of proceeding, verifying affidavits, and filed affidavits showing service of their own statutory demands. They filed them with a view to commencing their own independent liquidation proceedings against Intercivil Limited. The Registrar, however, did not open separate files for those proceedings, but put them on this file. Apparently, the Registrar considered that that was an appropriate step under r 31.24(2) of the High Court Rules. Mr Hucker submitted that the proceedings purportedly filed under sub- rule (2) were ineffective because the conditions for substitution had not been satisfied, and the proceedings did not qualify for substitution accordingly. With respect, that misses the point. These creditors filed their own independent proceedings which were not intended to be filed under r 31.24. While the Registrar put them on this file, they were properly independent proceedings in their own right and could stand on their own. That makes the proposed appeal somewhat academic. It is not totally academic, because there is a difference in the commencement dates of the different proceedings. This proceeding was started earlier than the proceedings by Radich Civil Limited and Waiau Pa Bulk Haulage Limited. That will make a practical difference only if the company goes into liquidation and it is necessary to calculate the specified periods and the restricted periods under ss 292 and 293 Companies Act. That will happen if any liquidator wishes to investigate voidable transactions. Today there are relatively few voidable transaction cases. That is because of the Supreme Court’s decision in Allied Concrete Ltd v Meltzer.6 Therefore that difference is unlikely to have any real practical application.
[13] Weighing matters up overall, the substantive proceeding ought to be heard promptly. The appeal, even if successful, should not result in further delay in the substantive disposal of the proceeding. The points raised on appeal are academic in the sense that there are other creditors with their own proceedings which they could require to be heard on the merits. In those circumstances I do not consider that it would be a useful use of the resources of the Court of Appeal to decide the points
6 Allied Concrete Ltd v Meltzer [2015] NZSC 7, [2016] 1 NZLR 141.
which Intercivil Limited wishes to take on appeal. Accordingly, I decline the application for leave.
[14] Active Trucking Ltd and Radich Civil Ltd are entitled to costs on the leave application. Costs are category 2. I encourage counsel to confer as to costs, but if they cannot agree I shall decide costs on the papers.
……………………………….
Associate Judge R M Bell
Solicitors:
Skinners Law (J M Skinner/K Lee), Takapuna, for the Plaintiff
Buddle Findlay (S Cook/N Kuypers), Wellington, for Radich Civil LtdLowndes Law (Michael Anderson/Jennifer Tunna), Auckland, for Forte Civil Ltd Inder Lynch (Rajiv Rao), Papakura, for Peter Robinson Paving & Concrete (2015) Ltd Rice Craig (Neville W Woods), Papakura, for Waiau Pa Bulk Haulage Ltd
McVeagh Fleming (C R Andrews/Paul S Kim), Auckland, for Gameon 2 Contractors Ltd. Kevin McDonald & Associates (K P McDonald), Takapuna, for Porter Hire Ltd
Denham Bramwell (P M Webb), Manukau, for Warwick Smith Contracting Ltd
Duncan Cotterill (Duncan McGill/Alexander Best), Auckland, for Amax Ltd (t/a Pronto Hire) Hucker & Associates (R B Hucker/K Lee), Auckland, for the Defendant, Intercivil Ltd
Copy for:
James Burt, Barrister, Auckland, for Forte Civil Ltd
Bruce Pamatatau, Barrister, Auckland, for Porter Hire Ltd
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