Allied Work Force Limited t/a Quin Workforce v Challenger Design & Build Limited HC Wellington CIV-2011-485-2141

[2011] NZHC 1980

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

CIV-2011-485-2141

BETWEEN  ALLIED WORK FORCE LIMITED TRADING AS QUIN WORKFORCE Plaintiff

ANDCHALLENGER DESIGN & BUILD LIMITED

Defendant

Hearing:         12 December 2011 (Heard at Wellington)

Counsel:         Ms Brown - Counsel for Plaintiff

N. Gopal - Director of Defendant Company

Judgment:      12 December 2011

ORAL JUDGMENT OF ASSOCIATE JUDGE D.I. GENDALL

Solicitors:           Rennie Cox, Solicitors, PO Box 6647, Auckland 1141

ALLIED WORK FORCE LIMITED TRADING AS QUIN WORKFORCE V CHALLENGER DESIGN & BUILD LIMITED HC WN CIV-2011-485-2141 12 December 2011

[1]      This is an application by the plaintiff to place the defendant company into liquidation.

[2]      The application has been opposed by the defendant.

[3]      Mr Gopal a director of the defendant company appeared before me on behalf of the company.

[4]      Ms Brown for the plaintiff initially raised an objection to Mr Gopal appearing on the basis that he is not a barrister and solicitor of this Court and is therefore unable to represent the company in these proceedings as was held in  Re:   G J Mannix Limited [1984] NZLR 309.

[5]      Notwithstanding that decision, and in the interests of this matter proceeding in an expeditious fashion, I am prepared to grant leave here to enable Mr Gopal to represent the defendant company in its opposition to the present application.  Leave is granted accordingly.

[6]      Turning to the substantive application before me, the debt claimed from the defendant company was originally some $17,264.56.  It represented an amount due for labour supplied by the plaintiff from March 2011 to June 2011.

[7]      A statutory demand claiming that sum was served on the defendant company on 13 September 2011.

[8]      There was no response to that demand.  Similarly, no application to set-aside that statutory demand was filed by the defendant.

[9]      The current liquidation proceedings were then filed on 18 October 2011 and served on the defendant company on 25 October 2011.

[10]     Advertising of these proceedings took place on 8 November 2011 and 17

November 2011.

[11]     Mr Gopal on behalf of the defendant then filed a statement of defence to the present application on 2 December 2011.

[12]     As best I can tell from the statement of defence and submissions made to me today by Mr Gopal, the defence advanced by the defendant here focuses solely on a dispute over whether various invoices which were rendered by the plaintiff for the amounts in question were proper and accurate.

[13]     On this question of quantum of the debt owing to the plaintiff, Mr Gopal on behalf of the company confirmed in a letter dated 9 December 2011  under his signature that the total amount the defendant accepts is outstanding to the plaintiff is some $9,000.00.  In that 9 December 2011 letter Mr Gopal indicated that this sum could be “paid off at the rate of $500.00 per month first payment starting on 28

January 2012.”

[14]     Before me, Mr Gopal again confirmed that this sum of $9,000.00 claimed by the plaintiff as part of the total $17,264.56 debt was undisputed.  Further Mr Gopal also confirmed that the company was not in a position to make payment of this sum today, but he said it was hoped it would be able to pay this off at a later date at the rate of $500.00 per month as earlier indicated.

[15]     Given all these matters I am satisfied that there can be no dispute whatever as to that portion of the debt claimed by the plaintiff here being the $9,000.00 which has been acknowledged by Mr Gopal as due to the plaintiff.

[16]     This is not one of those cases therefore where the Court is called upon to decide whether there is a genuine dispute as to a debt, so that it would be an abuse of process to order that the company be wound up.

[17]     In the present case I note also that there is no evidence of any kind before the

Court as to the financial position of the company.

[18]     As it has failed to comply with the statutory demand and taken no steps to set that aside, the Court cannot avoid the presumption that the defendant is unable to pay its debts as they fall due – s 287 Companies Act 1993.

[19]     I am satisfied for all these reasons that the jurisdiction for making of an order for liquidation is present in the present case.

[20]     I am also satisfied that this is not an appropriate case where in terms of s 241

Companies Act 1993 the Court should exercise its discretion to refuse appointment of a liquidator.

[21]     If Mr Gopal as a director of the company is able to make arrangements without delay to clear all the company’s debts in a proper manner then of course an application to have the company removed from liquidation can be made.

[22]     It is clear that a liquidation commences on the day on which a liquidator is appointed  by  the  operation  of  s  241(5)  Companies Act  1993.    The  avoidance provisions contained in the Companies Act have a trigger or start date for the period that can be reviewed based essentially around the time a liquidator is appointed.  It is clear therefore that any delay in the disposal of an application for the appointment of a liquidator pursuant to the Court’s powers under the Companies Act  1993 has potential prejudice to a liquidator’s ability to make a recovery.

[23]     The Courts have long expressed the view that it is not appropriate for lengthy adjournments of insolvency proceedings whether they be personal or corporate because of the prejudicial effect on creditors.

[24]     The  present  proceeding  was  effectively  commenced  when  the  statutory demand was served on 13 September 2011 which is nearly three months ago.  Before me today Mr Gopal requested yet another adjournment of this matter but I see no reason for this and am  firmly of the view that any further time granted to the defendant would not change the present position.

[25]     Accordingly, for all the above reasons the liquidation application before the

Court succeeds.

[26]     The following orders are now made:

(a)       An order is made placing the defendant company Challenger Design

& Build Limited into liquidation.

(b)       Christopher Robert Ross Horton is appointed liquidator.

(c)      Costs are awarded to the plaintiff on this application on a 2B basis together with disbursements as fixed by the Registrar.

(d)      An order is made approving the liquidator’s rates of remuneration in accordance  with  the  Consent  to  Act  of  Christopher  Robert  Ross Horton filed herein dated 30 November 2011 subject to s 284 of the Companies Act 1993.

(e)       These orders are timed at 11.58 am.

‘Associate Judge D.I. Gendall’