Concrete Structures (NZ) Ltd v Smith - [2019] NZHC 2572

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2018-404-2074

[2019] NZHC 2572

BETWEEN CONCRETE STRUCTURES (NZ) LIMITED
Applicant

AND

KARNIE DAVID SMITH

Respondent

Hearing: 2 October 2019

Appearances:

K A Badcock for the Concrete Structures (NZ) Ltd

P F Dalkie and S Bhanabhai for K D Smith, Director

Judgment:

2 October 2019

ORAL JUDGMENT OF ASSOCIATE JUDGE R M BELL

Solicitors:
Badcock Law, Rotorua, for the Applicant
Dyer Whitechurch (S Bhanabhai), Auckland, for the Respondent
Copy for:
Paul F Dalkie, Auckland, for the Respondent

CONCRETE STRUCTURES (NZ) LIMITED v SMITH [2019] NZHC 2572 [2 October 2019]

[1] On 2 August 2019 on the application of Concrete Structures (NZ) Ltd, I ordered that NMHB Ltd be put into liquidation. I made an order for costs later in August. That was an order for costs to be paid out of the assets of NMHB Ltd to Concrete Structures (NZ) Ltd. Concrete Structures (NZ) Ltd now applies for Mr Smith, the director and shareholder of NMHB Ltd, to pay the costs.

Background

[2] NMHB Ltd, a building contractor, had a contract to erect a building in Rabone Street, Henderson, Auckland, for Rabone Estates Ltd. Concrete Structures manufactured and supplied concrete panels for NMHB Ltd for the Rabone Street job. The manufacture and supply of the concrete panels was relevant construction work under the Construction Contracts Act 2002.1 Almost all of the panels were supplied. NMHB Ltd did not pay Concrete Structures (NZ) Ltd.

[3] Concrete Structures (NZ) Ltd served two payment claims under the Construction Contracts Act on NMHB Ltd. NMHB Ltd did not provide any payment schedules in time and it did not make any payments. Concrete Structures then served a demand under s 289 of the Companies Act 1993 on NMHB Ltd for the total amount of the payment claims, $206,391.94. NMHB Ltd applied under s 290 of the Companies Act 1993 to set aside the statutory demand. Associate Judge Sargisson dismissed the application and ordered NMHB Ltd to pay the amount of the statutory demand within five working days. She also ordered NMHB Ltd to pay Concrete Structures its actual and reasonable costs on the application to set aside the statutory demand.2 She later fixed those costs at $14,095.65 plus disbursements.3 Those were not scale costs but actual costs under s 23(2)(b) of the Construction Contracts Act.

[4] NMHB Ltd appealed against the decision of Associate Judge Sargisson. At the same time, Concrete Structures began a liquidation application relying on non-

1      Construction Contracts Act 2002, s 6(1)(f)(iv).
2      NMHB Ltd v Concrete Structures (NZ) Ltd [2018] NZHC 2436.
3      NMHB Ltd v Concrete Structures (NZ) Ltd [2018] NZHC 3082.

compliance with Associate Judge Sargisson’s order to pay the amount of the statutory demand. The non-compliance with the order gave rise to a presumption of insolvency.

[5] NMHB Ltd applied for a stay of the liquidation proceeding pending the appeal. I heard the stay application. It became something…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Concrete Structures (NZ) Ltd v Smith

Details

AGLC: Concrete Structures (NZ) Ltd v Smith [2019] NZHC 2572
Case: [2019] NZHC 2572
Decision Date: 2 October 2019

CaseChat Overview and Summary

Concrete Structures (NZ) Ltd applied for an order that Mr Smith, the director and sole shareholder of NMHB Ltd, pay the costs of the liquidation of NMHB Ltd. NMHB Ltd had not paid Concrete Structures (NZ) Ltd for the supply of concrete panels for a building project. Concrete Structures (NZ) Ltd served two payment claims on NMHB Ltd under the Construction Contracts Act 2002. NMHB Ltd did not pay or respond. Concrete Structures (NZ) Ltd served a statutory demand under the Companies Act 1993. NMHB Ltd applied to set aside the statutory demand. The application was dismissed. NMHB Ltd appealed, but abandoned the appeal when it became apparent that it was without merit. Concrete Structures (NZ) Ltd then applied for NMHB Ltd to be put into liquidation. NMHB Ltd opposed the application, relying on three defences. The court found the defences were not arguable. Concrete Structures (NZ) Ltd was granted a liquidation order on 2 August 2019. The court rejected the application for costs against Mr Smith. The court found that the case was not exceptional, and that there was no "something more" to warrant an order for costs against Mr Smith. The court made an order for costs in favour of Mr Smith. The total costs were $7,997.00.

Orders