Atorvia Farms Limited v Mason Dairies Limited

[2019] NZHC 3052

IN THE HIGH COURT OF NEW ZEALAND DUNEDIN REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTEPOTI ROHE

CIV-2019-412-88

[2019] NZHC 3052

IN THE MATTER

of the Companies Act 1993

BETWEEN

ATORVIA FARMS LIMITED

Plaintiff

AND

MASON DAIRIES LIMITED

Defendant

Hearing:	21 November 2019
Appearances:	L Laming for Plaintiff
Judgment:	21 November 2019

JUDGMENT OF ASSOCIATE JUDGE LESTER

[1]                 On 21 November 2019, there was a second call of the plaintiff’s proceedings aimed at seeking the liquidation of Mason Dairies Ltd.

[2]                 At the first call of the proceedings, Associate Judge Paulsen adjourned the proceedings to 21 November 2019 as a certificate confirming that the debt remained unpaid had not been filed and because the plaintiff did not seek to prove insolvency through the usual means, that is by proving non-compliance with a statutory demand.

[3]                 Section 288(2) of the Companies Act 1993 permits a plaintiff to establish insolvency through other means. In short, the plaintiff says that the circumstances speak for themselves and that the defendant does not dispute its indebtedness to the plaintiff and has taken no steps to pay.

ATORVIA FARMS LIMITED v MASON DAIRIES LIMITED [2019] NZHC 3052 [21 November 2019]

[4]                 A statutory demand was in fact issued by the plaintiff and went unanswered. Proceedings were not issued within 30 working days after the last date for compliance with the statutory demand because there was some attempt to reach a compromise.

[5]                 The very fact that the defendant had to seek some accommodation with the plaintiff shows that it was not able to pay its debt as it fell due.

[6]Morrisons Company Law at para 53.23 provides:

Where a debt owed by a defendant company is due and undisputed, and no substantial reason for its non-payment is given, the defendant company’s failure to pay is itself evidence of an inability to pay.

[7]That proposition sums up the plaintiff’s approach to this proceeding.

[8]The plaintiff relies on the following:

(a)the judgment debt upon which this proceeding is based was an unopposed summary judgment confirming that the defendant accepted it had no defence;

(b)a statutory demand was issued and not satisfied, and no application was made to set the demand aside, indeed as I have said, the defendant sought to try and settle the debt through some form of deferred payment;

(c)the defendant has taken no steps in relation to these proceedings and counsel has confirmed that the company was informed of today’s adjourned date and did not appear.

[9]                 The only available inference is that the defendant is insolvent. In short, it cannot pay its debts as they have fallen due and it is appropriate that there be an order for liquidation.

[10]              Accordingly, there was an order placing Mason Dairies Ltd in liquidation. The Official Assignee Southern Region is appointed.

[11]              There are costs to the plaintiff on a 2B basis together with disbursements as fixed by the Registrar.

[12]The liquidation order is timed at 10:20am on Thursday 21 November 2019.

Associate Judge Lester

Solicitors:
Berry & Co, Oamaru