Clutha Transport Limited v Heartland Bank Limited

[2019] NZHC 745

IN THE HIGH COURT OF NEW ZEALAND DUNEDIN REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTEPOTI ROHE

CIV-2018-412-96

[2019] NZHC 745

IN THE MATTER OF

An application to set aside a statutory demand

AND IN THE MATTER OF

the Companies Act 1993

BETWEEN

CLUTHA TRANSPORT LIMITED

Applicant

AND

HEARTLAND BANK LIMITED

Respondent

Hearing:

(Determined on the Papers)

Appearances:

A W Belcher for Applicant

H D Morrison and K M Wakelin for Respondent

Judgment:

9 April 2019

JUDGMENT OF ASSOCIATE JUDGE LESTER

(in respect of costs)

[1]    In November 2018, this application to set aside a statutory demand was set down for a hearing on 5 March 2019. In late February 2019 counsel for the respondent filed a memorandum advising that the statutory demand in issue was withdrawn, resulting in the Court issuing a minute recording that the acknowledgement made the application to set aside redundant. There was an order dismissing the application for summary judgment with costs reserved.

[2]    The statutory demand in issue was dated 18 October 2018. The application to set aside, amongst other grounds, referred to related proceedings which were argued

CLUTHA TRANSPORT LTD v HEARTLAND BANK LTD [2019] NZHC 745 [9 April 2019].

on 23 October 2018 and resulted in a judgment dismissing Heartland Bank Ltd’s (“Heartland Bank”) application for summary judgment in that proceeding.

[3]    The application to set aside also raised an issue concerning the nature of the debt subject to the statutory demand, being whether the debts were for accounts receivable or not, which was relevant to whether Heartland Bank was entitled to rely on an assignment of debt.

[4]    Clearly, Heartland Bank considered the issue was not one capable of genuine dispute given that it had related summary judgment proceedings touching on the same issues. That application for summary judgment was dismissed. Costs in respect of that proceeding were reserved.

[5]    I see nothing in the circumstances of the application to set aside statutory demand as to why costs should not follow the event in the ordinary way. It is no answer for Heartland Bank to suggest that somehow its ability to advance its response to the application to set aside the demand was dependent upon the provision of information from the applicant. While in some circumstances the failure by an alleged debtor  to  provide  material to the Court in the course of an application to set  aside  a statutory demand will allow inferences to be drawn against the debtor, that is not the position Heartland Bank, as alleged creditor, asserts here. If a creditor can only meet a challenge to their demand with something akin to discovery, then the claimed debt is probably not one that is suitable for a statutory demand.

[6]    Accordingly, there will be an order of costs in favour of the applicant. I note, however, the papers filed were relatively brief and the order of costs is on a 2A basis together with disbursements as fixed by the Registrar.

Associate Judge Lester

Solicitors:

O’Malley & Co. Balclutha

Grove Darlow & Partners, Auckland

Copy to counsel: A W Belcher, Barrister, Dunedin