Cunningham v European Interiors Limited

[2023] NZHC 924

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2020-409-634

[2023] NZHC 924

BETWEEN

KATE ELIZABETH SARAH CUNNINGHAM and BLAIR ROGER CUNNINGHAM

Plaintiffs

K B KITCHENS LIMITED
Second Plaintiff

AND

EUROPEAN INTERIORS LIMITED

First Defendant

RONALD FREDERICK JOHN NEALE
Second Defendant

KENDONS SCOTT MACDONALD LIMITED

Third Defendant

Counsel:

K W Clay for Plaintiffs

B Walker for First and Second Defendants J Eckford for Third Defendant

Judgment:

24 April 2023

(Determined on the papers)

JUDGMENT OF OSBORNE J

This judgment was delivered by me on 24 April 2023 at 4.45 pm pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar Date:

CUNNINGHAM v EUROPEAN INTERIORS LIMITED [2023] NZHC 924 [24 April 2023]

[1]        The plaintiffs sue the defendants in relation to losses they allege were incurred when the business known as “Palazzo Kitchens and Appliances – Canterbury Area” was purchased in 2019.

[2]        The  second  defendant,  Ronald   Neale,   was   adjudicated   bankrupt   on  15 July 2022, after the proceeding had been issued.

[3]        By s 76(1) Insolvency Act 2006 (the Act) the proceedings as against Mr Neale are halted.

[4]        By this judgment I determine the application of the plaintiffs for permission to have the proceedings continue as against Mr Neale (as well as the remaining defendants).

[5]        The Official Assignee has consented to the continuation of the proceeding as against Mr Neale.

[6]        Section 76(2) of the Act confers a wide discretion on the Court to do what is right and fair according to the circumstances of each case. Principles relevant to the exercise of the discretion were identified by this Court in Saimei v McKay.1

Discussion

[7]        The claim against the second defendant is for breach of the turnover warranty within the relevant agreement for sale and purchase. The plaintiffs have served their briefs of evidence (including the expert evidence as to turnover) and are ready to proceed to the hearing that has already been allocated.

[8]        Both counsel for the plaintiffs and for the Official Assignee view a determination by this Court (both as to liability and quantum), in the context that the proceeding against the first and third defendants will also be determined, as more suitable than having the claim against Mr Neale made the subject of proof of debt procedures provided for in subpt 9 pt 3 of the Act.

1      Saimei v McKay (1998) 6 NZBLC 102,611 (HC) at 102,614.

[9]        I accept what counsel have submitted. With the subject matter of the plaintiffs’ claims already before the Court, and to be determined at an already allocated hearing, the most just and expeditious outcome of the plaintiffs’ claim against Mr Neale will be achieved by a judgment of this Court.

Order

[10]      The plaintiffs are granted permission to continue these proceedings against the second defendant.

[11]      The costs of the application for permission are fixed in the sum of $956.00 and are to be costs in the cause.

Osborne J

Solicitors:

Young Hunter, Christchurch Parker Cowan, Queenstown CC:

K Clay, Christchurch

B Walker, Christchurch