Desingano v Starfleet Innotech Limited

[2024] NZHC 3368

IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY

I TE KŌTI MATUA O AOTEAROA KIRIKIRIROA ROHE

CIV-2024-419-274

[2024] NZHC 3368

UNDER

AND

the Companies Act 1993

IN THE MATTER

of the liquidation of STARFLEET INNOTECH LIMITED

BETWEEN

BERNIE DESINGANO

Plaintiff

AND

STARFLEET INNOTECH LIMITED

Defendant

Hearing:

4 November 2024

Appearances:

B Martelli for the Plaintiff

JW Booth, Liquidator in Person
J Lacson, Director of Defendant in Person

Judgment:

12 November 2024

JUDGMENT OF ASSOCIATE JUDGE SUSSOCK

This judgment was delivered by me on 12 November 2024 at 4 pm pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar

Solicitors:

Martelli Yaqub Lawyers Limited, Auckland

DESINGANO v STARFLEET INNOTECH LTD [2024] NZHC 3368 [12 November 2024]

Introduction

[1]    On 4 November 2024, I made orders placing the defendant company, Starfleet Innotech Ltd, into liquidation and appointing Jared Booth and Tony Maginness as liquidators.

[2]    A memorandum has now been filed on behalf of the plaintiff, Mr Desingano, applying to recall the orders and for leave to withdraw the liquidation application with no issue as to costs. The memorandum is accompanied by a memorandum filed by one of the liquidators, Jared Booth, consenting to the plaintiff’s application on behalf of the liquidators, as well as a memorandum by the defendant’s director, Jeths Lacson, also consenting to the orders sought.

[3]    Counsel for the plaintiff submits that the Court has jurisdiction to recall a liquidation order under the Court's inherent jurisdiction and r 11.9 of the High Court Rules 2016 (HCR). Counsel for the plaintiff says further that a formal application under r 11.9 is not mandatory and that an applicant can apply by memorandum, citing Horizon Printing Ltd v Mustang NZ Ltd.1

[4]    The liquidation order has not yet been sealed. In addition, counsel for the plaintiff contacted the Registry shortly after the liquidation orders were made and indicated that an application for recall would be filed shortly. I am prepared to consider the application on the basis of the memorandum filed in circumstances where the liquidators and the director of the defendant consent.

[5]    I set out the background briefly below before considering whether it is appropriate to recall the liquidation orders and grant leave to discontinue as the plaintiff now seeks.

1      Horizon Printing Ltd v Mustang NZ Ltd HC Auckland CIV-2008-404-5146, 24 April 2009. Also cited: Sam's Fukuyama Food Service Ltd v RWJ Enterprises Ltd HC Auckland CIV-2011-404- 6558, 14 December 2011.

Background

[6]    The plaintiff, Mr Desingano, advanced approximately NZ$200,000 to Starfleet Innotech Inc in 2022.2 Counsel for the plaintiff records that Starfleet Innotech Ltd traded as Starfleet Innotech Inc and the companies have the same director, Jeths Lacson.

[7]    Counsel for the plaintiff advises that Mr Desingano lives in Australia and gave instructions via an agent in New Zealand. Counsel was instructed that Mr Desingano considered that Mr Lacson, on behalf of Starfleet Innotech Ltd, had promised to repay Mr Desingano the advances.

[8]    The plaintiff’s memorandum records that the director of the defendant company, Mr Lacson, has advised that he is working to repay the advances by      Mr Desingano with the expectation that payment will occur in December, but that Mr Desingano was wrong to think that Starfleet Innotech Ltd undertook to repay the advances. Mr Lacson confirms this directly in the memorandum he has filed in support of the plaintiff’s application.

[9]    Counsel for the plaintiff therefore submits that given Mr Lacson's position and promise of payment, all the parties are agreed that it would be appropriate for there to be orders made:

(a)recalling the liquidation orders under r 11.9; and

(b)granting Mr Desingano leave to withdraw the liquidation application with no issue as to costs.

Relevant legal principles

[10]   Rule 11.9 of the HCR provides that a judge may recall a judgment given orally or in writing before a formal record of it is drawn up and sealed. As McGechan on Procedure records, despite the apparently unfettered discretion, the court regards the

2      The amount is approximate as the amounts were made in NZ and US currency.

recall of a judgment as a serious step to be taken only in reasonably, well-identified situations.3

[11]   The leading authority on recall is the judgment of Wild CJ in Horowhenua County Council v Nash (No.2), in which the Court said:4

Generally speaking, a judgment once delivered must stand for better or worse subject, of course, to appeal. Were it otherwise there would be great inconvenience and uncertainty. There are, I think, three categories of cases in which a judgment not perfected may be recalled—first, where since the hearing there has been an amendment to a relevant statute or regulation or a new judicial decision of relevance and high authority; secondly, where counsel have failed to direct the Court’s attention to a legislative provision or authoritative decision of plain relevance; and thirdly, where for some other very special reason justice requires that the judgment be recalled.

[12]   The only of these categories that appears to apply in this case is the third, that there is some other very special reason that justice requires the judgment be recalled.

Discussion

[13]   Considering the process for liquidation, a statutory demand was served on Starfleet Innotech Ltd on behalf of the plaintiff on 26 July 2024 for $1,217,787.25.

[14]   Starfleet Innotech Ltd did not apply to set the demand aside nor did it defend the liquidation proceedings filed on 9 September 2024. The memorandum filed on behalf of the plaintiff records that based on the above, Mr Desingano confirmed instructions to progress the application for liquidation and confirmed that the debt remained unpaid. At the call on 4 November 2024, there was no appearance for the defendant.

[15]   Prior to that call and in accordance with the required process, the liquidation application had been advertised in the Waikato Times and the New Zealand Gazette (on 15 October 2024). No creditors appeared in support of the liquidation at the call on 4 November 2024 or filed notices of appearances.

3      Jessica Gorman and others McGechan on Procedure (online ed, Thomson Reuters) at [HR11.9.01].

4      Horowhenua County v Nash (No. 2) [1968] NZLR 632 (SC) at 633.

[16]   Given there were no creditors in support, and the judgment creditor, the liquidators and the director of the judgment debtor have all consented to the recall, I recall the orders made as sought.

[17]   I record, however, that if a defendant company disputes the debt on which a liquidation application is based, then steps ought to be taken on service of the statutory demand or the liquidation proceedings themselves. Applications for recall following liquidation orders being made essentially on the basis that the judgment debtor does not accept it owes the debt claimed are not encouraged.

[18]   As the liquidation proceeding has been advertised, the matter will need to be called in open court for the granting of leave to discontinue. I therefore make directions below for it to be called in the next liquidation list for the granting of leave but for appearances to be excused.

Result

[19]I order:

(a)the orders placing the defendant company, Starfleet Innotech Ltd, into liquidation, appointing Tony Maginness and Jared Booth as liquidators, and associated orders on 4 November 2024 are recalled;

(b)the matter is to be called in the liquidation list on Monday 25 November 2024 at 10.45 am for the granting of leave to discontinue with no issue as to costs; and

(c)appearances on behalf of the plaintiff and defendant on 25 November 2024 are excused.

Associate Judge Sussock