Carter Holt Harvey Limited t/a Carters v Supreme Constructions Civil & Drainage Works Limited

[2015] NZHC 1040

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV 2015-404-000272 [2015] NZHC 1040

BETWEEN

CARTER HOLT HARVEY LIMITED

TRADING AS CARTERS Plaintiff

AND

SUPREME CONSTRUCTIONS CIVIL & DRAINAGE WORKS LIMITED Defendant

Hearing:	18 May 2015
Appearances:	J McBride for the Plaintiff S Sharma for the Defendant
Judgment:	19 May 2015

JUDGMENT OF ASSOCIATE JUDGE CHRISTIANSEN

This judgment was delivered by me on

19.05.15 at 11:30am, pursuant to

Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date……………

CARTER HOLT HARVEY LIMITED TRADING AS CARTERS v SUPREME CONSTRUCTIONS CIVIL & DRAINAGE WORKS LIMITED [2015] NZHC 1040 [19 May 2015]

[1]      The plaintiff applies to liquidate the defendant company.  There is no dispute that a debt is due.   The dispute is about the extent of the debt.   Issues about the amount due have been heard previously by the Court.

[2]      On 21 October 2014 the plaintiff served a statutory demand on the defendant requiring payment of the sum of $104,874.79.  The defendant applied to set aside the statutory demand claiming there was a dispute as to the total amount owing.

[3]      On 17 December 2014 Associate Judge Bell dismissed the application to set aside the statutory demand except to reduce the amount claimed by $4,632.25, and ordered the defendant to pay the sum of $100,242.54 by 30 January 2015.  At that time  the  learned  Judge  noted  the  defendant  had  an  opportunity  to  place  other evidence before the Court, but had not done so.

[4]      The defendant failed to pay that sum and is now presumed to be unable to pay its debts.

[5]      In its defence the defendant claims that at that time it sought to set aside the statutory demand it “did not have all the relevant calculations to ascertain the total amount”.  It has filed an affidavit claiming further credits totalling $27,402.26.  The admitted debt of $72,839.98 has been paid into Court.

[6]      The primary evidence now offered in support of claims of further credits due has  been  provided  by  the  affidavit  of  Mr  Naseeb,  a  director  of  the  defendant company.  He has provided a three page schedule which he says was prepared by his accountant Ms Ali.   It suggests a review of all invoices from the beginning of the parties’ trade relationship in October 2012.  In a column headed ‘Credit Expected’ there is a review of nearly two years of invoices containing Ms Ali’s calculation of credits overlooked by the plaintiff.

[7]      Attached to that exhibit are copies of invoices on which there are handwritten notations of figures indicating amounts for credits which the defendant says ought to be given.

[8]      In its defence the defendant claims that at the time it sought to set aside the statutory demand it “did not have all the relevant calculations to ascertain the total amount”.

[9]      It is clear from what has been provided by Mr Naseeb are calculations handwritten on invoices the defendant company has retained throughout.  What is not  available,  upon  the  Schedule  prepared  by  Ms  Ali,  are  those  documents identifying any entitlement to the credits claimed.   There are no such documents provided which confirms the handwritten notations of credits due.

Considerations

[10]     The defendant company had an opportunity to claim credits when it applied to  set  aside  the  statutory  demand,  and  it  did  so.    Associate  Judge  Bell  then determined the amount that should be paid. That judgment was not appealed.

[11]     The  defence  to  the  liquidation  application  appears  to  be  an  attempt  to relitigate issues already decided upon.

[12]     The plaintiff ’s alternative position is that even if the defendant could claim for additional credits it should have done so within three months of the date of the invoices in question.   The plaintiff’s standard terms and conditions required any disputes or credit requests to have been received in writing within three months of the date of the invoices.  The invoices in question are all more than three months old and indeed some are dated more than 18 months previously.

[13]     Mr McBride refers the Court to the decision of DHL International (NZ) Limited v Richmond Ltd1 wherein the Court considered a 30 day period for making a claim against the courier company.  In that case the Court held a 30 day time limit was entirely consistent with the needs of those concerned in courier transactions.

[14]     In  the  circumstances  of  this  case  the  Court  considers  the  three  month provision  for  challenging  claims  of  adjustment  is  appropriate  and  operates  to

1 [1993] 3 NZLR 10 (CA).

preclude the challenge now advanced in defence of the liquidation application.  It is only with the threat of this proceeding that the defendant has now addressed what it considers to be incorrect invoice amounts from the plaintiff, even though the defendant had receipt of those invoices for up to a year and a half.

Conclusions

[15]     There is nothing in the defendant’s evidence to support its defence which provides reasons for the Court to refuse the liquidation application.

[16]     There was plenty of time and opportunity in the eight weeks between service of  the  statutory  demand  and  the  hearing  before  Associate  Judge  Bell  of  the application to set aside that statutory demand, to provide sufficient evidence of a defence.

[17]     When  dismissing  the  defendant’s  application  to  set  aside  the  statutory demand Associate Judge Bell ordered the defendant to pay the sum of $100,242.54 by 30 January 2015.  There has been no appeal of that decision and as Mr McBride submits the matter is res judicata because by its defence the defendant is attempting to relitigate issues by reference to material which ought to have been the subject of the hearing before Associate Judge Bell at that time.

[18]     Also,  there  is  the  evidence  of  contractual  terms  between  the  parties preventing claims of adjustment after three months of the invoice date. The evidence is that the defendant has taken far too long and done far too little until the threat of this proceeding was upon it.  Trade relationships in contractual terms are entitled to protection from challenges in these circumstances.

Result

[19]     The  defence  fails.    The  plaintiff  is  entitled  to  its  order  for  liquidation. However, and in the circumstances the Court is prepared to provide further time to the defendant to pay the balance owing over and above that amount which has already been paid into Court.

[20]     Accordingly the Court directs:

(a)      There is an order that the funds paid by the defendant into Court shall, upon request of the plaintiff’s solicitors, be paid out by the Court to those solicitors.

(b)      This matter will be called in the liquidation list on 29 May 2015 at

10:456am and if by then the defendant has not paid the amount of

$27,402.46 in cleared funds to the plaintiff’s solicitor, the plaintiff shall be entitled to an order for liquidation.

(c)      The defendant will also pay the plaintiff’s costs on the liquidation application on a 2B basis together with disbursements in the amount of $4,302.00.

Other

[21]     The  Court  notes  the  defendant  has  not  yet  paid  the  costs  amounting  to

$5,433.50 to the plaintiff in the outcome of the Court’s dismissal of the defendant’s

setting aside application.

Associate Judge Christiansen