Central Housemovers Limited v Forestry for Life Limited HC Palmerston North CIV-2010-454-384

[2010] NZHC 2352

IN THE HIGH COURT OF NEW ZEALAND PALMERSTON NORTH REGISTRY

CIV-2010-454-384

BETWEEN  CENTRAL HOUSEMOVERS LIMITED Plaintiff

ANDFORESTRY FOR LIFE LIMITED Defendant

Hearing:         4 November 2010

Appearances: P. Broczek - Counsel for Plaintiff

P. Gilbert - Counsel for Defendant

Judgment:      8 November 2010 at 3.30 pm

JUDGMENT OF ASSOCIATE JUDGE D.I. GENDALL

This judgment was delivered by Associate Judge Gendall on 4 November 2010 at

3.30 pm under r 11.5 of the High Court Rules.

Solicitors:           Buddle Findlay, Solicitors, PO Box 2694, Wellington

Peter Gilbert, Solicitors, PO Box 10070, Wellington

CENTRAL HOUSEMOVERS LIMITED V FORESTRY FOR LIFE LIMITED HC PMN CIV-2010-454-384  8

November 2010

Introduction

[1]      Before the Court is an application by the plaintiff to place the defendant company into liquidation.

[2]      The application is based upon a debt totalling $36,930.48 which the plaintiff claims has been outstanding from the defendant as the balance of an unpaid invoice dated 7 July 2008.   The invoice was issued for work carried out by the plaintiff including the supply, removal and siting of a transported house.

[3]      On 1 April 2010 the defendant company was served with a statutory demand requiring payment of the $36,930.48 sum within 15 working days of service.

[4]      The amount was not paid nor was any application brought by the defendant to set aside the statutory demand.

[5]      The current proceedings were then filed by the plaintiff on 8 June 2010.

[6]      Nowhere on the file of this matter in the High Court however have I been able to find an affidavit from the plaintiff confirming service of these proceedings on the defendant.   Nor is there any confirmation  on the file of advertising of this liquidation application.

[7]      Notwithstanding this, a rather belated statement of defence and notice of opposition to the liquidation application from the defendant was filed on 7 October

2010.    This  was  supported  by  an  affidavit  of  Mr  Glen  Leonard  Haddon  (“Mr

Haddon”).

[8]      Earlier, this matter had been the subject of a first call in the List on 12 August

2010.  Counsel who appeared as agent for the plaintiff indicated that a late settlement offer had just been received from the defendant and requested an adjournment of this matter to 6 October 2010.  That adjournment was granted.

[9]      When the matter was  called again on 6 October 2010 it was noted that

$1,250.00 in part payments of the outstanding debt had been made by the defendant

at  that  point.    The  defendant  nevertheless  sought  an  adjournment  for  further payments to be made and the matter was adjourned for 1 day to 7 October 2010.

[10]     When it was called on 7 October 2010, a statement of defence and notice of opposition which were then just filed by the defendant, alleged that a Settlement Agreement between the parties concerning the debt had been reached on 10 August

2010.

[11]     On that basis, this matter was adjourned for further consideration to a call at

10.00 am on 4 November 2010.

[12]     When the matter was called before me on 4 November 2010 Mr Broczek appeared as counsel for the plaintiff and Mr Gilbert as counsel for the defendant. The matter effectively proceeded to a hearing at that time and extensive submissions were made to me by counsel.    This was notwithstanding that no confirmation of advertising or service of the proceeding was before the Court at that time.

[13]     Nevertheless,  the  essential  defence  advanced  by  the  defendant  in  this proceeding is that the parties entered into an agreement on 10 August 2010 (“the claimed agreement”) to compromise and settle this proceeding (which agreement included a personal guarantee of the debt by Mr Haddon and a time payment arrangement) and the plaintiff in issuing the present application now is wrongly failing to honour the terms of the claimed agreement.

[14]     In response, the plaintiff contends that either no such agreement was reached or that if the claimed agreement was entered into, then the terms of it were breached by the defendant and the claimed agreement terminated some time ago.

[15]     Annexed to the affidavit of Mr Michael John O’Byrne sworn 28 October

2010 on behalf of the plaintiff in this matter is a copy of the claimed agreement as Exhibit “L”.  This document signed on behalf of the defendant and by Mr Haddon as guarantor states:

In  consideration  of  Central  House  Movers  agreeing  to  adjourn  the  liquidation proceedings on 12 August 2010, Forestry for Life Limited agrees to pay the amount

claimed.    Glen  Haddon  also  agrees  to  personally  guarantee  the  obligations of Forestry For Life Limited to Central House Movers.   Payment is to be made as follows:

(a)       $250.00 per week to be paid by automatic bank payment commencing immediately.

(b)       $5,000.00 to be paid every 3 months.

(c)       Forestry for Life Limited and Glen Haddon will continue to use their best endeavours to arrange payment of the outstanding balance in additional lump sum payments.

This agreement is made on 10 August 2010.

[16]     Although  the  claimed  agreement  was  not  signed  by or  on  behalf  of  the plaintiff, after 10 August 2010 there was correspondence between counsel for the plaintiff and counsel for the defendant regarding this matter and indeed as I have noted at para [9] above some $1,250.00 representing 5 weekly payments of $250.00 were made by the defendant and banked by the plaintiff.   It does appear that two further $250.00 payments were tendered by the defendant but these were not banked by the plaintiff.

[17]     The plaintiff’s position, as I understand it, is that no settlement agreement was reached, the claimed agreement is of no effect but, in any event, the defendant defaulted in making weekly payments under this agreement and thus it has no longer survived.

[18]     What appeared clear before me was that the defendant through counsel stated clearly that it was immediately able to bring up to date the $250.00 weekly payments which were outstanding and that the $5,000.00 payment due after 3 months on 10

November 2010 could be made.

[19]     In my view the appropriate way forward in this matter, given particularly that no confirmation of service or advertising is on the file, is for the liquidation application before the Court to be adjourned.   This is also to enable the weekly payments  under  the  claimed  agreement  to  be  brought  up-to-date  including  the

$5,000.00  payment  due  on  10  November  2010.    If  that  is  to  occur  and  future payments under the claimed agreement are made, then by my calculation the total

debt due to the plaintiff of some $37,000.00 would be settled in a little over 12 months from August 2010.  Under all the circumstances here, as I see it that would be a desirable outcome.

[20]     That said, this matter is now adjourned to a call in the List on 2 December

2010 at 10.00 am.  This is for the purpose of bringing up-to-date all payments under the claimed agreement.  If this occurs, then further adjournments of this proceeding are likely to ensure the debt repayments are promptly made.  If this does not occur, however, then a liquidation order is likely to be made at that time.

[21]     In the meantime costs are reserved.

‘Associate Judge D.I. Gendall’