Bailey v Earth Crest Limited - [2013] NZHC 1265

IN THE HIGH COURT OF NEW ZEALAND TAURANGA REGISTRY

CIV-2012-470-1033 [2013] NZHC 1265

BETWEEN SAMUEL L BAILEY Plaintiff

ANDEARTH CREST LIMITED Defendant

Hearing: 21 MAY 2013

Appearances: Mr Bailey in person
Mr N Elsmore for defendant

Judgment: 31 May 2013

JUDGMENT OF ASSOCIATE JUDGE J P DOOGUE

This judgment was delivered by me on
31.05.13 at 5 pm, pursuant to

Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date……………

BAILEY v EARTH CREST LIMITED [2013] NZHC 1265 [31 May 2013]

Background

[1] The plaintiff filed a statement of claim on 11 December 2012 in which he sought an order placing the defendant into liquidation. The grounds were that the company was insolvent and also it was just and equitable that the company should be wound up. The plaintiff alleged in the statement of claim that in July 2012 the debtor “agreed to hire the creditor as business manager for Earth Crest Limited”. Further that he was to be paid $25/hour, travel costs, provided on-site accommodation, moving expenses and other reimbursements.

[2] It was further alleged that invoices which the creditor had rendered for the period 13 to19 August 2012, 27 August to 2 September 2012 and 10 September to
16 September 2012 were unpaid. It is also pleaded in the statement of claim that the plaintiff expended $221.31 of his own money on behalf of the defendant which the defendant has not reimbursed.

[3] The statement of claim alleges that on Monday 17 September 2012 the debtor terminated the contract without “the proper procedure”. It is further alleged that a statutory demand was served on the defendant 5 October 2012 demanding payment of $8,873.37. However the amount in the statement of claim is actually $15,615.41. It is not apparent why the amount in the statement of claim should be more than the invoices in the statutory demand. However, I accept that the evidence of the plaintiff is that six invoices spanning the period 6 August 2012 to 17 September 2012 were rendered to the defendant. I shall make further comment on the format of the invoices at the appropriate point further on in this judgment.

[4] The statement of defence says that it is unclear that the plaintiff or the plaintiff’s company Civil or Criminal Limited is the correct party to the proceedings. It says the amount claimed is unclear. It further says it has never received an invoice for the cement purchased on its behalf. It admits that “the plaintiff’s arrangements ended on 17 September 2012” and says that such a termination was justified for failure on the part of the plaintiff persistently to follow instructions and because of breaches of confidence. It makes reference to the fact that the parties attended a Disputes Tribunal Hearing on 23 January 2013 in Whangarei where the Tribunal

struck out the plaintiff’s claim saying that the dispute was appropriately to be dealt with in the Employment Tribunal because the question involved was whether the plaintiff was employed as a contractor…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Keep reading for free

Create a free CaseChat account to read Bailey v Earth Crest Limited and more:

Read every judgment in full
Ask AI and get answers linked to paragraphs
See how each paragraph was cited in later cases
Download judgments as PDF or Word

Continue with Google

One click creates your free account or signs you in.

By continuing you agree to the Terms and Privacy Policy.

Details

Case: [2013] NZHC 1265
Decision Date: 31 May 2013

CaseChat Overview and Summary

The High Court of New Zealand heard the case of Bailey v Earth Crest Limited, where Samuel L Bailey sought to place Earth Crest Limited into liquidation on the grounds of insolvency and it being just and equitable to do so. Bailey alleged that he was hired as a business manager for Earth Crest Limited, but was not paid for his services and that the company had failed to reimburse him for expenses he incurred on their behalf. Earth Crest Limited disputed these claims and argued that Bailey was not the correct party to bring the proceeding, that the amount claimed was unclear, and that there were genuine and substantial disputes regarding the debt. The defendant also raised a counterclaim alleging that Bailey had caused damage to a lion enclosure without authority.

The court examined whether there was a genuine and substantial dispute as to the existence of the debt, which would make winding up proceedings inappropriate. The court noted that Bailey had provided evidence in the form of an affidavit with annexures that were not sworn by the deponent, which is inadmissible. The court also found that Bailey had not established on the balance of probabilities that he was a creditor of Earth Crest Limited. The invoices issued by Bailey included GST, which is inconsistent with a contract of service or employment. Additionally, the court found that Earth Crest Limited's alleged counterclaim was not arguable as it had not been particularised and there was doubt about how the defendant could bring a claim for $10,000 when it did not presently own the enclosure in question.

The court concluded that the application for an order under s 241 of the Companies Act was declined due to the substantial disputes and uncertainty regarding the debt and the plaintiff's standing. The parties were directed to file memoranda on the issue of costs within 15 working days of the date of this judgment.

Orders