Burns and Agnew as Liquidators of City Golf (North Shore) Limited v It Consulting & Investments Limited HC Auckland CIV-2011-404-3178

[2011] NZHC 720

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2011-404-3178

UNDER  Companies Act 1993

IN THE MATTER OF     of City Golf (North Shore) Limited (in

Liquidation)

BETWEEN  GRANT EDWARD BURNS AND RICHARD DALE AGNEW AS LIQUIDATORS OF CITY GOLF (NORTH SHORE) LIMITED

Applicants

ANDIT CONSULTING & INVESTMENTS LIMITED

Respondent

Hearing:         15 July 2011

Appearances: Ms A Bowater for applicants

No appearance for respondent

Judgment:      15 July 2011

ORAL JUDGMENT OF ASSOCIATE JUDGE J P DOOGUE

Solicitors

Simpson Grierson, Auckland – by email:  [email protected]

Mr W McCartney, Auckland – by email: [email protected]

BURNS AND Anor AS LIQUIDATORS OF CITY GOLF (NORTH SHORE) LIMITED V IT CONSULTING & INVESTMENTS LIMITED HC AK CIV-2011-404-3178 15 July 2011

[1]      The liquidators of the company to which they were appointed formed the view that that company City Golf (North Shore) Limited (in Liquidation) had made payments to the respondent company which were voidable transactions within the meaning of s 292 of the Act.  A notice was given pursuant to s 294 stating that the liquidators wished to set aside the transactions.   The respondent did not file the required objection under s 294(3) and accordingly the transactions were “automatically set aside as against the person on whom the liquidator has served the liquidator’s notice”.

[2]      The liquidators now seek further orders under s 295 of the Companies Act

1993.  That section gives the Court power in circumstances where a transaction has been set aside under s 294 to make for one or more orders under s 295.   Those include an order under s 295(a) which provides as follows:

If a transaction or charge is set aside under section 294, the Court may make

1 or more of the following orders:

(a)       an order that a person pay to the company an amount equal to some or all of the money that the company has paid under the transaction:

[3]      One of the liquidators Mr Burns in his affidavit sworn 19 May 2011 gave evidence that payments which were made by the company to the respondent in the period 9 August 2008 to May 2009 totalling $43,875 were voidable transactions. Transactions to that value were the subject of the notice that the liquidators’ gave under s 294.  While the Court has a discretion as to whether it should make an order directing repayment of the payments that were voidable transactions, it would accord with the objectives of the Act if, once a transaction has been set aside, an order under s 295 should be made, unless there are circumstances which would make it unjust for the Court to make such an order.

[4]      In this case no opposition has been filed and no evidence has been put before the Court by the respondent which would suggest that there is any reason for not making an order under s 295.  The result is that the Act gives rise to a presumption

that the respondent has acquired property of the company which was in excess of its legal entitlement.

[5]      Accordingly I make the following orders:

(a)       The respondent is to pay to the company the sum of $43,875;

(b)The respondent is to pay interest in the sum of $8,046.64 pursuant to the Judicature Act 1908;

(c)       The applicants are also to have costs on a 2B basis and disbursements as fixed by the Registrar.

J P Doogue

Associate Judge