Ebert Construction Limited v Sanson - [2016] NZHC 472

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2015-404-2628 [2016] NZHC 472

BETWEEN
EBERT CONSTRUCTION LIMITED

Plaintiff

AND

CRAIG ALEXANDER SANSON AND DAVID JOHN BRIDGMAN

Defendants

Hearing: On the papers

Appearances:

R J Gordon for plaintiff
M J Tingey for defendants

Judgment:

18 March 2016

JUDGMENT OF LANG J [on costs]

This judgment was delivered by me on 18 March 2016 at 2.30 pm, pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date……………

EBERT CONSTRUCTION LTD v SANSON & BRIDGMAN [2016] NZHC 472 [18 March 2016]

[1] On 20 November 2015, Associate Judge Sargisson made an order by consent setting aside a statutory demand issued by the defendants on 23 October 2015 and served on the plaintiff on 28 October 2015.

[2] I am now required to determine the issue of costs. The plaintiff seeks an order of increased costs in its favour because it contends the defendants acted improperly in issuing the statutory demand. The defendants resist that claim, and seek an order for costs in their favour on a category 2B basis.

Background

[3] The defendants (the liquidators) are the liquidators of Takapuna Procurement Limited (In Liquidation). In October 2014, they issued proceedings in this Court against the plaintiff, Ebert Construction Limited (Ebert), seeking to set aside three voidable transactions. In a reserved judgment delivered on 6 October 2015,
Associate Judge Doogue upheld the liquidators’ claim and set the transactions aside.1

[4] Ebert had until 4 November 2015 to file an appeal to the Court of Appeal against the judgment. On 23 October 2015, Ebert’s solicitors advised the liquidators that they intended to appeal against the Associate Judge’s decision. They asked the liquidators to “hold off any thoughts of hasty enforcement action, at least until Ebert’s notice of appeal is to hand”.

[5] The liquidators declined this request. In a letter sent on the same day, their solicitors advised Ebert that, in the absence of an order staying execution of the judgment, Elbert was liable to pay the judgment sum. They suggested that the judgment sum be held in the liquidators’ solicitor’s trust account pending determination of the appeal. They also advised Ebert that, if payment was not received by 3 pm on 27 October 2015, the liquidators would take enforcement action without further notice.

[6] On 27 October 2015, the liquidator’s solicitors advised Ebert’s solicitors that the liquidators were pressing for payment because they held concerns about Ebert’s

1 Sanson & Anor v Ebert Construction Ltd [2015] NZHC 2402.

ability to pay the judgment sum. When Ebert did not provide a substantive response to the suggestion that the judgment sum be held in the liquidators’ solicitors trust account, the liquidators issued a statutory demand. This was served on Ebert on
28 October 2015 at 3.27 pm. Just over one hour later, at 4.38 pm, Ebert’s solicitors advised the liquidators’ solicitors that Ebert had paid the judgment sum into a separate bank account.

[7] The liquidators then carried out a search of the…

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 Ebert Construction Limited v Sanson

Details

AGLC: Ebert Construction Limited v Sanson [2016] NZHC 472
Case: [2016] NZHC 472
Decision Date: 18 March 2016

CaseChat Overview and Summary

The High Court of New Zealand was tasked with determining the issue of costs in a dispute between Ebert Construction Limited (Ebert) and Craig Alexander Sanson and David John Bridgman (the defendants), who are the liquidators of Takapuna Procurement Limited (In Liquidation). The dispute arose after the defendants issued a statutory demand on Ebert, which Ebert sought to have set aside. Ebert claimed that the defendants acted improperly in issuing the statutory demand and sought an order for increased costs in its favour. The defendants, in turn, sought an order for costs in their favour on a category 2B basis. The primary legal issue was whether the liquidators used the statutory demand procedure improperly and, if so, whether Ebert was entitled to an award of costs in its favour, including increased costs.

The court found that the liquidators were not acting improperly in issuing the statutory demand. The liquidators had a legitimate concern regarding Ebert's ability to pay the judgment sum, and they were entitled to seek payment of the sum in the absence of an application for stay of execution. Ebert's failure to respond to the liquidators' concerns, particularly regarding the placement of funds in a separate bank account subject to a General Security Agreement, contributed to its own misfortune. The outcome of the proceeding mirrored the liquidators' earlier suggestion, and the liquidators were thus deemed the successful party in the proceeding. As such, they were entitled to an award of costs on a category 2B basis.

In conclusion, the court awarded the liquidators costs on a category 2B basis, together with disbursements as fixed by the Registrar. This decision reflects the court's determination that the liquidators were not acting improperly in issuing the statutory demand and that they were the successful party in the proceeding.

Orders