Ascot Aluminium Limited v LS Property Developments Limited HC Auckland CIV 2010-404-4892

[2010] NZHC 1746

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV 2010-404-004892

IN THE MATTER OF     the Companies Act 1993

BETWEEN  ASCOT ALUMINIUM LIMITED Plaintiff

ANDLS PROPERTY DEVELOMENTS LIMITED

Defendant

(On the papers) Appearances: TE Futter for plaintiff

D Singh for defendant

Judgment:      28 September 2010 at 12:00pm

JUDGMENT OF ASSOCIATE JUDGE FAIRE [on costs]

This judgment was delivered by me on 28 September 2010 at 12:00pm pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date……………

Solicitors:           Snedden & Associates, PO Box 105 195, Auckland 1143

Shean Singh, PO Box 10 018, Auckland 1446

ASCOT ALUMINIUM LIMITED V LS PROPERTY DEVELOMENTS LIMITED HC AK CIV 2010-404-

004892  28 September 2010

[1]      The plaintiff filed a statement of defence and notice of proceeding seeking an order putting the defendant into liquidation on 29 July 2010.

[2]      The application pleads non-compliance with a statutory demand served on the defendant on 29 June 2010.

[3]      The Companies Act 1993, s 241 gives the court a discretion to appoint a liquidator  if  it  is  satisfied  that  the  company  is  unable  to  pay  its  debts.    The Companies Act 1993, s 287 provides that:

287     Meaning of “inability to pay debts”

Unless the contrary is proved and subject to s288 of this Act, a company is presumed to be unable to pay its debts if –

(a)       the company has failed to comply with a statutory demand …

[4]      The defendant did not make application pursuant to the Companies Act 1993, s 290 to set aside the statutory demand.

[5]      The  defendant  made  application  for  an  order  for  stay  and  restraining advertising on 11 August 2010.   That application came before me on 13 August

2010.  As a result I issued the following minute:

2.The defendant filed, on 11 August 2010, an application for an order restraining advertising and staying this proceeding.   In addition, a statement of defence has been filed.  Counsel have confirmed to me that the real issues between the parties concern the defendant’s liability to pay interest on the contract sum and costs in relation to this proceeding.

3.Mr Singh, counsel for the defendant, confirms to me and undertakes to the court, that a payment of the principal sum outstanding, namely

$24,045, will be made by bank check by 5pm on Monday, 16 August
2010.

4.It is appropriate that I make orders and give directions to cover the interim position. This I now do.

[6]      The matter came before me on 10 September 2010.  At that time I issued the following minute:

The principal amount in issue between the parties has been paid.  There is an outstanding  issue  as  to  contract  interest  and  contract  costs.  In  the

circumstances, it would not be appropriate for me to make an order placing the company into liquidation and appointing a liquidator.  However, at the time the proceedings were issued, the plaintiff was entitled to seek relief in that form.  In these circumstances, I conclude that the proper course is to:

a.         Dismiss the proceeding; and

b.award costs on a 2b basis in favour of the plaintiff for the steps taken by the plaintiff in this proceeding.

In making this order I make it clear that this court has not ruled on the question of contract interest and contract costs.   If those mattes are to be pursued they should be pursued in the appropriate jurisdiction.

[7]       The plaintiff has quantified the costs sought as follows:

For steps taken

a.	Preparing statutory demand	$376.00
b.	Preparing statement of claim	$1,128.00
c.	Appearance at hearing on 13 August 2010	$752.00
d.	Appearance at hearing on 10 September 2010	$752.00
e.	Preparing and filing affidavits in opposition to
application for stay and restraint of advertising	$564.00
f.	Sealing order	$376.00

For disbursements

a.	Fee for service of statutory demand	$70.00
b.	Fee for service of liquidation proceedings	$140.00
c.	Fee for filing liquidation proceeding	$400.00

These sums total $4,558.00

[8]      What is in issue in this case is the claim for appearances on 10 September

2010 and for the preparation of affidavits in opposition and the sealing of the order, a total of $1,692.

[9]      The order I made on 10 September 2010 intended that the plaintiff recover for all steps taken in respect of this proceeding on the plaintiff’s behalf.  That was because, in my view, the defendant must take responsibility for the position that it found itself in by failing to comply with the statutory demand and then failing to unconditionally pay, at an earlier time, the core debt.

[10]     The allowance claimed for the appearance on 10 September 2010 is that which is allowed for under Item 23 of Schedule 3 of the High Court Rules.   The allowance for the preparing and filing of affidavits in opposition has been prepared based on Item 4.12 and Band A, or .3 of a day.   It is entirely reasonable in the circumstances and below what I contemplated.  The only other matter that requires comment is whether it is necessary to seal an order.   An allowance for sealing an order is covered in the Third Schedule by Item 4.18.  What has been claimed has been claimed based on the allowance under Item 4.18.   It will only be necessary, however, to seal the order if payment of the costs is not made.  I propose to give the defendant the benefit of that position.

[11]     Accordingly,   I  rule  that  the  defendant  is  liable  for  total  costs  and disbursements in the sum of $4,558.00.  I further order that if the sum of $4,182 is paid within five working days of the release of this judgment there will be no allowance for the costs of sealing the order that flows from this judgment.  In short, the sum due is $4,182.00 if payment is made before sealing.

[12]     I order accordingly.

JA Faire

Associate Judge