Body Corporate 81340 v Yee Good Fortune Investments Limited
[2018] NZHC 1472
•19 June 2018
IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY
I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-Ā-TARA ROHE
CIV-2018-485-314
[2018] NZHC 1472
UNDER the Companies Act 1993 and High Court Rules 2016 IN THE MATTER
of an application for putting a company into liquidation
BETWEEN
BODY CORPORATE 81340
Plaintiff
AND
YEE GOOD FORTUNE INVESTMENTS LIMITED
Defendant
Hearing: 19 June 2018 Appearances:
Mr D W Hunt for plaintiff
Mr N B Dunning for defendant
Judgment:
19 June 2018
JUDGMENT OF ASSOCIATE JUDGE JOHNSTON
[1] This proceeding was called in the Commercial List earlier today. It is a liquidation proceeding commenced by Body Corporate 81340 against one of the owners of a unit in the building in Lower Hutt in which Body Corporate 81340 is the corporate entity under the Unit Titles Act.
[2] For Body Corporate 81340 Mr Hunt indicated that his instructions were to proceed. Mr Dunning for Yee Good Fortune sought a stay of the proceeding.
[3] Having heard from both Mr Dunning and Mr Hunt, I declined Yee Good Fortune’s application. I made an order putting Yee Good Fortune into liquidation. I
BODY CORPORATE 81340 v YEE GOOD FORTUNE INVESTMENTS LIMITED [2018] NZHC 1472 [19 June 2018]
approved John Howard Ross Fisk and Marcus James McMillan as the liquidators on the terms set out in their consent to act as such dated 14 June 2018 and I awarded costs in favour of Body Corporate 81340 against Yee Good Fortune on a 2B basis together with disbursements as fixed by the Registrar to be paid out of the assets of Yee Good Fortune. My order was timed at 11.39 am on 19 June 2018.
[4] I informed counsel that I would let the parties have a short judgment setting out my reasons for declining Yee Good Fortune’s application for a stay. I now do so.
[5] The basis upon which Mr Dunning advanced Yee Good Fortune’s application was expressed in more than one way during the course of the hearing. Indeed, Mr Dunning used strong language to describe it. He said that the original underlying judgment of the Tenancy Tribunal in favour of Body Corporate 81340 against Yee Good Fortune was obtained fraudulently. A slightly less inflammatory way of putting the same point might be to say that the Tenancy Tribunal’s judgment was wrong in law.
[6] Mr Dunning went on to submit that, if the underlying judgment was open to question, then this Court should exercise its discretion and refuse to make an order putting Yee Good Fortune into liquidation on the strength of it. He mentioned also the fact that in the past Body Corporate 81340 had commenced other types of enforcement proceedings in an attempt to enforce the same judgment but had abandoned these. The contention was that this illustrated that Body Corporate 81340’s motivation in this proceeding was simply the enforcement of the debt and that that was an abuse of process.
[7] The Tenancy Tribunal’s decision has now been the subject of a substantive appeal to the District Court and an application to this Court for an order setting it aside. The appeal to the District Court was unsuccessful. So too was the application to set aside the judgment in this Court.
[8] In her Honour Justice Mallon’s decision in this Court dated 30 March 2017, she said:1
1 Yee Good Fortune Investments Ltd v Body Corporate 81340 [2017] NZHC 611.
[29]The applicant has not persuaded me that it would be a miscarriage of justice to allow the Body Corporate to enforce the judgment against it. To the extent the applicant contends the work was not needed or was carried out to a poor standard, the applicant had its opportunity to advance this in the District Court. Even now its claims are more in the nature of assertions than based on any admissible, substantial and reliable evidence before this Court. To the extent the applicant contends the later District Court decision has vindicated its position about the unlawful nature of the levies, I am not convinced. The later District Court decision turns on the validity of levies for long-term maintenance funds, which are not how the levies were described in the documents, the Tribunal decisions or the District Court judgment in the applicant’s case. To the extent the applicant relies on the Body Corporate making a s 74 application as vindicating its position, I am not convinced. The applicant has not provided me with a copy of that application and explained why, if it pays the levies which are the subject of the District Court judgment against it, the applicant will be prejudiced if approval is given to this scheme. Presumably any fair scheme will take into account payments already made by unit holders and potentially allow for re-allocation of respective shares of the total costs if appropriate.
[30]The applicant is one of a small number of unit holders who have not paid their share of the costs. Repairs have been completed to its unit but repairs to other units have not been completed because more funds are needed. The applicant did not bring this application for some years after the District Court judgment against it, some years after that judgment was entered in the High Court, some months after the later District Court judgment, and some months after the s 74 application was made.
[31]In these circumstances I see no substantial miscarriage of justice to warrant the exercise of the Court’s powers in the manner sought.
[9] Thus, Yee Good Fortune has now had two opportunities to raise the very issues which Mr Dunning submits should prevent Body Corporate 81340 proceeding. Both the District Court and the High Court have considered the argument and rejected it.
[10] I cannot see that the fact that Body Corporate 81340 has in the past sought to enforce the Tenancy Tribunal’s decision by other means available to it should detract from its right to pursue bankruptcy proceedings. Certainly, I do not accept Mr Dunning’s submission that that illustrates that this proceeding is an abuse of process.
[11] There is no evidence before the Court suggesting that Yee Good Fortune is able to pay its debts as they fall due. The only evidence is the inferential evidence that it
is unable to do so because it has not complied with Body Corporate 81340’s statutory demand.
[12] It was on those bases that I declined to stay this proceeding and made the order I did winding Yee Good Fortune up.
Associate Judge Johnston
Solicitors:
Rainey Collins, Wellington for plaintiff
Nat Dunning Law, Wellington for defendant
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