Extension Capital Limited v Wake Up Commercial Limited
[2025] NZHC 3121
•20 October 2025
IN THE HIGH COURT OF NEW ZEALAND NAPIER REGISTRY
I TE KŌTI MATUA O AOTEAROA AHURIRI ROHE
CIV-2025-441-32
[2025] NZHC 3121
UNDER the Companies Act 1993 BETWEEN
EXTENSION CAPITAL LIMITED
Plaintiff
AND
WAKE UP COMMERCIAL LIMITED
First Defendant
MICHELLE JOY O’BYRNE
Second Defendant
Hearing: 20 August 2025 Appearances:
B J Burt for Plaintiff
No appearance by or for First Defendant Second Defendant in Person
Judgment:
20 October 2025
JUDGMENT OF ASSOCIATE JUDGE SKELTON
Introduction
[1] This is an application by Extension Capital Ltd (Extension Capital) to put the first defendant company, Wake Up Commercial Ltd (Wake Up) into liquidation under the Companies Act 1993. The application is opposed by Ms O’Byrne in her capacity as a shareholder of Wake Up.
EXTENSION CAPITAL LIMITED v WAKE UP COMMERCIAL LIMITED [2025] NZHC 3121
[20 October 2025]
Background and procedural history
[2] A detailed background is set out in the judgment of Robinson J in Wake Up Commercial Ltd v Extension Capital Ltd.1 For present purposes I summarise the background below.
[3] Wake Up was incorporated in September 2019. Extension Capital, as lender, and Ms O’Byrne, as borrower, agreed to a term facility agreement dated 4 November 2021 (the Agreement). The KRM Family Trust (the Trust), of which Ms O’Byrne and Richard Goodall are trustees, was named as guarantor, although initially it was anticipated that the Trust would be the borrower. The Agreement provided that Wake Up would borrow $2,350,000 for a short term, for the purposes of purchasing a property at Leybourne Circle, Glenn Innes, Auckland.2 The default interest rate payable was 25 per cent per annum.
[4] The agreement for sale and purchase of the property (the ASP), provided for a settlement date of 10 January 2022, and was agreed prior to any arrangement of finance. Accordingly, on 4 November 2021, Extension Capital advanced $117,500 of the loan, being the deposit payable under the ASP, despite the Agreement not yet having been executed. On 10 November 2021, Ms O’Byrne signed a certificate as the sole director of Wake Up, authorising Wake Up to enter the Agreement. The Agreement, dated 4 November 2021, was subsequently executed by Wake Up and the Trust and returned to Extension Capital on 11 November 2021, and then executed by Extension Capital.
[5] A subsequent delay in the settlement of the ASP led to Extension Capital and Wake Up agreeing to an extension of the loan for a further month to 10 March 2022. Ms O’Byrne again signed a certificate as director of Wake Up, authorising its entry into the extension. On 1 February 2022, Extension Capital paid $2,232,500, to Wake Up’s solicitors. The purchase of the property then settled on 2 February 2022. Title was transferred to Wake Up, and a mortgage registered in Extension Capital’s favour, as well as a mortgage over a property owned by the Trust in Whangamata.
1 Wake Up Commercial Ltd v Extension Capital Ltd [2023] NZHC 6 at [18]–[39].
2 At [1].
[6] On 10 March 2022, Wake Up failed to repay the loan. It sold the Leybourne property, and settlement occurred on 11 July 2022. The net proceeds were used as partial repayment of the loan. In respect of the Whangamata property, an application by Wake Up and the Trust for an injunction preventing Extension Capital from exercising its power of sale was dismissed by Robinson J, on 16 December 2022.3 Accordingly, the Whangamata property was sold on 28 February 2023, and the net sale proceeds were applied as partial repayment of the balance.
[7] On 12 March 2025, the plaintiff served a statutory demand under s 289 of the Companies Act on Wake Up for the outstanding balance due under the Agreement. The statutory demand, dated 26 February 2025, was in respect of amounts totalling
$933,260.68, payable by Wake Up to Extension Capital under the Agreement. Extension Capital’s position is that the amount continues to increase with default interest and costs. Wake Up did not apply to set aside the statutory demand. Ms O’Byrne says that her lawyers should have challenged the statutory demand.
[8] On 3 April 2025, Extension Capital filed this proceeding to put Wake Up into liquidation, on the basis that Wake Up had failed to comply with the statutory demand. Ms Byrne subsequently filed a document entitled “Statement of Objection”, alongside a supplementary memorandum. On 5 June 2025, Allen Street filed a notice of opposition and affidavit, in his capacity as director of Wake Up.
[9] On 12 June 2025, I explained to Ms O’Byrne and Mr Street that they could not oppose the liquidation on behalf of Wake Up, unless the company was represented by counsel.4 Ms O’Byrne confirmed that the company was not and would not be represented by counsel. She sought to oppose the liquidation in her capacity as shareholder. I explained to Ms O’Byrne that, if she continued to oppose the liquidation in her capacity as shareholder and was unsuccessful, she would be exposed to a costs order against her in her personal capacity.5 I explained that if any such costs order went unpaid, the plaintiff may seek to bankrupt her. She confirmed her understanding of the potential cost consequences and that she wished to continue opposing the
3 Wake Up Commercial Ltd v Extension Capital Ltd [2022] NZHC 3485 at [1].
4 Extension Capital Ltd v Wake Up Commercial Ltd HC Napier CIV-2025-441-32, 12 June 2025 at [4]–[5].
5 At [5].
liquidation. Accordingly, I ordered that she was to file and serve a statement of defence by 20 June 2025, and she would become a party to the proceeding.6 On 19 June 2025, Ms O’Byrne filed a statement of defence.
[10] The statement of claim in the 2022 proceedings by Ms Byrne and the Trust against Extension Capital (CIV-2022-404-1946) initially pleaded two causes of action: oppressive credit contract under the Credit Contracts and Consumer Finance Act 2003; and misleading and deceptive conduct, which Robinson J considered was based on estoppel principles alleging a representation by Extension Capital that it would provide development finance. In determining the application for an interim injunction, Robinson J found that there was no serious question to be tried in respect of these causes of action.7 Justice Robinson found that no representation was made on behalf of Extension Capital that it would provide development finance to Wake Up beyond the short-term bridging loan.8 He also noted Ms O’Byrne’s evidence that she relied throughout on professional advice from Mr Goodall (her financial adviser and co-trustee) and from her and Wake Up’s former solicitors.9 He found:10
…I do not consider the evidence before me reveals any reason why the defendant was not entitled to proceed on the basis that the plaintiffs were properly advised and fully informed.
[11] An amended statement of claim was filed on 20 December 2024 which contained one cause of action against Extension: unconscionable conduct. On 7 April 2025, a second amended statement of claim removed Wake Up as a named plaintiff and pleaded a single cause of action by the Trust against Extension for unconscionable conduct, and two causes of action against Mr Goodall for negligence and breach of trustee duties. Ms O’Byrne has subsequently claimed that Wake Up was removed as a plaintiff without her consent. In a minute dated 25 June 2025 in CIV-2022-404- 1946, Associate Judge Cogswell noted that because no order has been made by the Court, Wake Up remained a plaintiff in the proceeding, albeit the continued participation of Wake Up would depend on the outcome of these liquidation
6 At [6].
7 Wake Up Commercial Ltd v Extension Capital Ltd, above n 1,at [45] and [54].
8 At [41]-[45].
9 At [51].
10 At [51] (footnotes omitted).
proceedings.11 However, in terms of the material before me, no amended statement of claim has been filed which alleges a cause of action by Wake Up against Extension.
Preliminary issue — affidavits filed in CIV-2022-404-1946
[12] Extension Capital seeks to rely on the affidavits of the director of Extension Capital, Timothy Zonneveld, dated 22 July and 15 August 2022, that were previously filed in CIV-2022-404-1946. Extension Capital also seeks to rely on an affidavit sworn by the director and shareholder of ASAP Finance Ltd, Darpan Patel, dated 15 August 2022 in the same proceeding. Mr Patel reviewed the Agreement and concluded, in that affidavit, that he “[did not] believe that the borrower could have obtained materially better terms” at the time.
[13] In respect of Mr Zonneveld’s two affidavits and Mr Patel’s affidavit, the plaintiff relies on the Supreme Court decision in Sandman v McKay.12 In that case, the Court allowed affidavits previously filed by the plaintiff in other proceedings, in the following terms:13
The affidavits were filed in other proceedings and there was nothing to suggest they did not represent the genuine views of the deponents. Requiring the deponents to swear similar affidavits in opposition to these applications would have caused Mr Sandman unnecessary expense and inconvenience.
[14] As the plaintiff points out, the parties to CIV-2022-404-1946 were — at the time of filing — identical to the parties in the present proceeding. Further, there can be no objection to Mr Zonneveld’s affidavit dated 22 July 2022, as it is expressly incorporated by reference in Mr Zonneveld’s reply affidavit, filed in this proceeding. His affidavit in this proceeding confirms that the contents of the former affidavit are correct. I accept these submissions, in respect of Mr Zonneveld’s first affidavit.
[15] I am equally prepared to admit Mr Zonneveld’s affidavit dated 15 August 2022 and Mr Patel’s affidavit pursuant to the principle in Sandman v McKay;14 that requiring the deponents to swear similar affidavits would put Extension Capital to unnecessary
11 Wake Up Commercial Ltd v O’Byrne and others CIV-2022-404-001946, 25 June 2025 at [5].
12 Sandman v McKay [2019] NZSC 41, [2019] 1 NZLR 519.
13 At [70], per Glazebrook, O’Regan, Ellen France and Arnold JJ.
14 In respect of Mr Patel’s affidavit, the plaintiff also cites the Evidence Act 2006, s 18(1)(b)(ii).
expense and inconvenience. The evidence is relevant to the issues in this proceeding and there is nothing to suggest the contents of those affidavits do not represent the genuine views of the deponents. I also consider that this approach is consistent with the purpose of the High Court Rules 2016, being a just, speedy, and inexpensive determination of the proceeding.15
[16] The plaintiff also seeks to rely on an affidavit of Ms O’Byrne dated 22 July 2022, filed in CIV-2022-404-1946. Counsel for the plaintiff refers to a line of authority, dating back to Brickell v Hulse, in which Lord Denman CJ held:16
There can, I think, be no question but that a statement which a party produces on his own behalf, whether on oath or not, becomes evidence against him. There is nothing to distinguish it from a statement made by the party himself.
[17] Counsel also refers me to Crush v Radio New Zealand.17 In that case, this Court held:18
… In support of his case the Plaintiff seeks to adduce evidence as to the contents of affidavits acknowledged to have been adduced in evidence by the Defendant in proceedings between the Defendant and Television New Zealand Ltd …
Mr Carruthers relied upon one of the authorities cited in Phipson and Halsbury, Brickell v Hulse (1837) 7 Ad & El 454, 112 ER 541. Mr Tizard sought to distinguish Brickell v Hulse as it was a case where the two proceedings were clearly inter-related whereas there is no question that there is no common subject matter between the present proceedings and the Television New Zealand Ltd proceedings. However, the principle involved appears to have been accepted without demur for a very lengthy period of time (see for example British-Thomson-Houston Co Ltd v British Insulated and Helsby Cables Ltd [1924] 2 Ch 160, 164, 165, 171, 182, where although the comments are obiter dicta, the authorities are discussed in some detail).
To the extent therefore that evidence adduced by way of affidavit by Radio New Zealand Ltd in its proceedings against Television New Zealand Ltd is relevant to the mode and extent of publication, for the purposes of the present proceedings, I rule it admissible.
[18] When Ms O’Byrne’s affidavit dated 22 July 2022 was filed in CIV-2022-404- 1946, the parties were identical to the parties to this proceeding. The two proceedings are clearly related and Ms O’Byrne’s affidavit evidence is relevant to the issues in this
15 High Court Rules 2016, r 7.32.
16 Brickell v Hulse (1837) 112 ER 541 at 542.
17 Crush v Radio New Zealand Ltd HC Dunedin CP 104-86, 7 September 1990.
18 At 1–2.
proceeding. I consider it appropriate to admit Ms O’Byrne’s affidavit dated 22 July 2022 as evidence in this proceeding.
Legal principles liquidation
[19] Under s 241(4)(a) of the Companies Act, this Court may appoint a liquidator if satisfied that “the company is unable to pay its debts”.19
[20] In Cable Price (NZ) Limited v Taimoana Haulage Ltd, this Court set out the three issues in relation to a creditor’s application for liquidation under s 241(4)(a):20
(a)Is the plaintiff a creditor?
(b)Is the defendant insolvent? and
(c)How should the court’s residual discretion be exercised?
[21] In cases where the defendant company contends that the debt claimed by the plaintiff is subject to a genuine and substantial dispute, the relevant principles to be applied were set out in Yan v Mainzeal Property and Construction Ltd (in rec & in liq):21
[61] It has long been established that, as a general rule, an order to put a company into liquidation will not be made where the application is founded upon a debt that is genuinely disputed. To apply to wind up a company in such circumstances is regarded as an abuse of the court’s process: Bateman Television Ltd (in liq) v Coleridge Finance Co Ltd. In such cases, the court has an inherent jurisdiction to prevent such an abuse of process. But the court also has power to consider disputed debts in the context of an opposed application for liquidation or upon applications for orders restraining advertising and staying proceedings. The relevant principles were recently summarised by Associate Judge Faire (now Faire J) in South Waikato Precision Engineering Ltd v Ahu Developments Ltd in these terms:
(a)A winding up order will not be made where there is a genuine and substantial dispute as to the existence of a debt such that it would be an abuse of the process of the Court to order a winding up;
19 Companies Act 1993, s 241(4)(a).
20 Cable Price (NZ) Ltd v Taimona Haulage Ltd [2016] NZHC 828 at [2].
21 Yan v Mainzeal Property and Construction Ltd (in rec & in liq) [2014] NZCA 190 at [61] (footnotes omitted).
(b)In such circumstances, the dispute, if genuine and substantially disputed, should be resolved through action commenced in the ordinary way and not in the Companies Court;
(c)The assessment of whether there is a genuine and substantial dispute is made on the material before the Court at the time and not on the hypothesis that some other material, which has not been produced might, nonetheless be available;
(d)The governing consideration is whether proceeding with an application savours of unfairness or undue pressure.
[22]Referring to Grant v Lotus Gardens Ltd,22 the Court also noted that:23
… a company is not prevented from showing that indebtedness is disputed even if it has failed to apply to set aside a statutory demand under s 290. In such a case, the failure of the debtor to apply to set aside the statutory demand means that the creditor is entitled to rely on the presumption of insolvency under s 287(a) of the Act and the onus falls upon the debtor to establish that there is a genuine and substantial dispute as to its liability to pay. The mere assertion of a dispute is not sufficient to rebut the presumption. Cogent evidence, short of actual proof that the debt is not payable, is required. …
[23] As indicated by the Court of Appeal, there is no longer any requirement on a defendant company which has failed to apply to set aside a statutory demand to demonstrate an exceptional factor justifying the failure which reflects the existence of a substantial dispute.24 It follows that, even where the defendant company has failed to apply to set aside a statutory demand, a shareholder defending an application for liquidation should also be able to contend there is a genuine and substantial dispute as to the existence of the debt.25 However, the reasons for the failure (or the absence of any explanation) may be relevant in assessing whether there is a genuine and substantial dispute.26
22 Grant v Lotus Gardens Ltd [2013] NZHC 1135 at [92],
23 Yan v Mainzeal Property and Construction Ltd (in rec & in liq) above n 21, at [63] (footnotes omitted). see Cable Price (NZ) Ltd v Taimona Haulage Ltd, above n 20 at [17]; Lucas v Avetar Properties Ltd [2023] NZHC 3232 at [28]; Jason Bull (ed) Insolvency Law & Practice (online looseleaf ed, Thomson Reuters) at [CA241.04 (4)(a)].
24 See Heron’s Flight Ltd v NZ Properties International Ltd [2012] 1 NZLR 424 (HC) at [22] and [26]; Cable Price (NZ) Ltd v Taimona Haulage Ltd, above n 20 at [17]; Lucas v Avetar Properties Ltd, above n 23, at [28]; Jason Bull (ed) Insolvency Law & Practice (online looseleaf ed, Thomson Reuters) at [CA241.04 (4)(a)].
25 As noted in Bo Si Ltd (in liq) v Crusaders Building Development Ltd [2022] NZHC 788 at [22]: “Rule 31.16(2) of the High Court Rules 2016 (the Rules), permits a shareholder to defend a liquidation. It cannot have been intended that this right would be toothless”.
26 Cable Price (NZ) Ltd v Taimona Haulage Ltd, above n 20 at [17]; Lucas v Avetar Properties Ltd, above n 23at [28].
[24]In respect of the second issue, s 287 of the Companies Act provides:
287 Meaning of inability to pay debts
Unless the contrary is proved, and subject to s 288, a company is presumed to be unable to pay its debts if—
(a)the company has failed to comply with a statutory demand; or
…
[25] In assessing whether a company is insolvent, it is cash flow solvency (that is the ability of the company to meet current financial demands), not balance sheet solvency that is in issue. In Re Tweeds Garages Ltd the position was described this way:27
In such [cases where a company is unable to meet the current demands on it] it is useless to say that if its assets are realised there will be ample to pay 20s in the pound: this is not the test. The company may be at the same time insolvent and wealthy. It may have wealth locked up in investments not presently realisable; but although this may be so, yet if it had not assets available to meet its current liabilities it is commercially insolvent and may be wound up.
[26] As the Court of Appeal noted in Yan, the existence of a substantially disputed debt does not mean the inquiry into the ability of a debtor company to pay its debts is at an end:28
It simply means that the creditor will not generally be permitted to proceed on the basis of the disputed debt alone and will not be able to rely on the presumption of insolvency under s 287 of the Act. The ability of a company to pay its debts requires an overall assessment of its liabilities measured against the resources available to it in order to meet those liabilities when due.
[27] The Court of Appeal did not agree with the proposition that a creditor loses its status as such where there is a substantial dispute. Further, the debt alleged to be currently payable does not become a contingent or prospective debt. Rather, liability is postponed until resolution of the dispute.29 The Court also stated:30
We would not rule out the possibility that, in some circumstances, the court could consider the ability of the debtor to meet a disputed debt if the debtor is
27 Re Tweeds Garages Ltd [1962] Ch 406 cited in Yan v Mainzeal Property and Construction Ltd (in rec & in liq), above n 21, 0 at [58].
28 Yan v Mainzeal Property and Construction Ltd (in rec & in liq), above n 21, at [63]
29 At [73].
30 At [74].
ultimately found liable to pay. But the weight to be attached to this factor is a matter for the court in all the circumstances of the case. It must also be kept firmly in mind that the court will not generally make a liquidation order if the debts relied upon are found to be in substantial dispute and not suitable for resolution in the liquidation list. That is so whether or not the disputed debts are the subject of the statutory demand. We do not see any material distinction in this respect.
[28] In considering the third issue (the exercise of the court’s discretion), generally the party seeking a liquidation order is entitled to that order where the statutory requirements are met. However, given the permissive language under s 241(1) and (2) of the Act, the court retains a residual discretion to not put a company into liquidation. This discretion is to be exercised sparingly but does take into account public policy considerations where appropriate.31
[29] Alternatively, s 241(4)(d) of the Act provides that the court may appoint a liquidator on just and equitable grounds, enabling the court to take equitable considerations into account.32 However, in the present case, Extension has not sought an order putting Wake Up into liquidation on just and equitable grounds.
Is Extension a creditor of Wake Up?
[30] While Wake Up remains a plaintiff in CIV-2022-404-1946, as noted above, the second amended statement of claim dated 7 April 2025 (filed by Robinson Legal) only pleads a claim against Extension by Ms O’Byrne as trustee of the Trust. Ms O’Byrne says that Wake Up was removed as a named plaintiff without her consent. However, it appears from the evidence to have been a deliberate decision by the lawyers drafting the amended claim. I understand that Wake Up is no longer represented by a solicitor in the proceedings and therefore may not be able to pursue any claim against Extension, subject to the discretion of the Court.33 On the basis of the material before me, it is not clear whether Wake Up has an extant claim against Extension in CIV-2022-404-1946 or in any other proceeding.34
31 Rathmore Properties Ltd v Hawk Properties Ltd [2020] NZHC 323 at [36] as cited in Jason Bull (ed) Insolvency Law & Practice (online looseleaf ed, Thomson Reuters) at [CA241.04 (1)].
32 At [CA241.03(4)] and Kim Francis and Thomas Westway “Grounds for Court-ordered Liquidation” Paul Heath and others (eds) Heath and Whale on Insolvency (online looseleaf ed, LexisNexis) at [20.25].
33 Jessica Gorman, McGechan on Procedure (Thomson Reuters, online ed) at [HR5.36.02] and [HR5.36.02A]
34 Yan v Mainzeal Property and Construction Ltd (in rec & in liq), above n 21,at [61(c)].
[31] It is difficult to follow and understand the myriad issues raised in the various documents filed by Ms O’Byrne, and many issues raised are not supported by evidence. However, in order to assess whether there might be a genuine and substantial dispute between Wake Up and Extension as to existence of the debt, I have endeavoured to identify the main issues raised by Ms O’Byrne. I address these issues below.
Ms O’Byrne not a property developer
[32] Ms O’Byrne submits that she is not, and has never been, a property developer. She says her intent was to purchase the Leybourne Circle property “as a long-term retirement investment, not for resale or subdivision”. However, it is not clear from Ms O’Byrne’s documents how this is relevant to the issue of whether Wake Up is bound by the Agreement. Further, as submitted by Mr Burt, this is inconsistent with previous affidavit evidence given by Ms O’Byrne in CIV-2022-404-1946 where she stated:
Our discussion was around the trust (or me) purchasing one of these commercial properties so that I could complete a small commercial development. The idea was that this would make money which would be added to my retirement pool. I formed Wake Up Commercial Ltd to purchase the commercial property. …
It was in this context that I discussed the possibility of purchasing 135 Leybourne Circle, Glen Innes, Auckland….which was ideal for development.
No executed loan agreement binding Wake Up and no resolution authorising entry into the loan by Wake Up or the Trust
[33] Ms O’Byrne contends there was no executed loan agreement binding Wake Up and no resolution authorising entry into the loan by either Wake Up or the Trust.
[34] However, Wake Up is clearly referred to as the borrower in the Agreement and there is a copy of the Agreement in evidence executed by all parties. Further, as submitted by Mr Burt, the Agreement would be enforceable in any event, through acceptance by conduct and/or part performance by Extension in making the advances contemplated by the Agreement.
[35] Ms O’Byrne (as sole director of Wake Up) signed a director’s certificate dated 10 November 2021, recording that the board had passed the necessary resolutions to enter the Agreement. Ms O’Byrne and Mr Goodall also signed a trustees’ certificate dated 10 November 2021 recording that the Trust had passed the necessary resolutions to enter the Agreement. The document incorrectly refers to the Trust as borrower (as originally intended) rather than guarantor, but this has no bearing on Wake Up’s obligations under the Agreement.
[36] Ms O’Byrne appears to contend that there were no valid resolutions passed, at least by the Trust. She submits that the lender (Extension) was “expressly told by the conveyancer’s assistant that ‘resolutions would be done later’ – they never were”. However, Ms O’Byrne appears to be referring to an email from her solicitors to her and Mr Goodall dated 28 January 2022 in respect of the agreement extending the loan. The email refers to a company resolution and shareholder resolution “to follow under separate cover”. The email was not sent to Extension. Subsequently Ms O’Byrne signed a further director’s certificate dated 1 February 2022 confirming the board of Wake Up had passed all necessary resolutions for the extension agreement. Ms O’Byrne and Mr Goodall signed a further trustees’ certificate dated 1 February 2022 confirming the Trust had passed the necessary resolutions to enter the extension agreement. The certificate also confirmed that the Trust was the guarantor under the Agreement.
[37]The director’s certificates and trustees’ certificates were provided to Extension.
[38] I am satisfied that Extension was entitled to rely on the director’s certificates and trustees’ certificates as evidence that Wake Up and the Trust has complied with their internal requirements in entering into the transaction.
Extension not true lender
[39] Ms O’Byrne contends that Extension is not the true lender. For this proposition, she asserts that PPSR records indicate that “Extension is itself secured by Wallace Corporation”. She submits this “fatally undermines” Extension’s standing to pursue liquidation”. In support of this point, she notes that Mr Zonneveld (formerly a director of Extension) was recorded “on BDO New Zealand’s website as a Trustee of the
Wallace Foundation” and that, after these connections were raised, his professional profile was “sanitised once exposed”, suggesting “an intention to mislead and distance Extension from Wallace-linked funding”.
[40] However, I am satisfied on the basis of the documents before me, including the Agreement and general security deed dated 10 November 2021, that Extension was the lender and Wake Up the borrower. As submitted by Mr Burt, it is not relevant where Extension obtained its funding from and what security arrangements it had with funders.
[41] I am not satisfied that any changes to Mr Zonneveld’s profile on the BDO New Zealand website is evidence of any scheme to mislead, or relevant to the enforceability of the Agreement against Wake Up.
[42] Ms O’Byrne also raises an issue about the priority amount under the mortgages being $5 million plus interest rather than the amount of the loan. However, as submitted by Mr Burt, it is not unusual for the priority amount under a mortgage to be higher than loan amounts advanced.
Wake Up did not receive funds and derived no benefit from the loan/deposit
[43] Ms O’Byrne argues that the loan funds were paid to the Trust, “severing any enforceability” against Wake Up. She contends Wake Up derived no benefit.
[44] However, the evidence is that Extension paid the deposit ($117,500) directly to the real estate agent of the vendor of the Leybourne Circle property. The balance of the purchase rice ($2,232,500) was paid to Neilsons Lawyers on 2 February 2022; Extension understood Neilsons were acting for Wake Up. Title to the property was then transferred to Wake Up, not the Trust. I am satisfied the funds advanced were ultimately received and applied to purchase of the property by Wake Up, in accordance with the Agreement.
Extension failed to comply with its obligations under the Anti-Money Laundering and Countering Financing of Terrorism Act 2009
[45] The exact nature of this alleged non-compliance is not clear from the documents filed by Ms O’Byrne. Mr Zonneveld has provided evidence that Extension obtained the information necessary to comply with its statutory obligations. Ms O’Byrne has apparently made a complaint to the Department of Internal Affairs. The Minister of Internal Affairs has responded to Ms O’Byrne. The response letter states that the Department is “following up with the reporting entity through a compliance engagement process under the [AML Act]” and “this process cannot result in the loan transaction in question being overturned”. There is no evidence before me of any finding of non-compliance.
Ms O’Byrne did not receive “meaningful” legal advice
[46] Ms O’Byrne contends she did not receive “meaningful” legal advice and she makes several allegations in respect of the conduct of her lawyers. This issue is answered by Ms O’Byrne’s previous evidence in CIV-2022-404-1946 and the finding of Robinson J:35
…Ms O’Byrne says that she relied throughout solely on professional advice from Mr Goodall and from her and Wake Up’s former solicitors. The documentary record confirms that the plaintiffs had legal advice throughout. The plaintiffs [i.e., Wake Up] are of course free to pursue any remedies they might have against their professional advisers. But I do not consider the evidence before me reveals any reason why the defendant was not entitled to proceed on the basis that the plaintiffs were properly advised and fully informed.
[47] Further, on the basis of the material before me, it is apparent that Neilsons Lawyers reviewed the Agreement and the extension agreement and other related documents and provided Ms O’Byrne and Wake Up with advice on these documents.
[48] I am not satisfied that this issue gives rise to a genuine and substantial dispute as to the existence of the debt.
35 Wake Up Commercial Ltd v Extension Capital Ltd, above n 2, at [51] (footnotes omitted).
Complaints to various enforcement agencies and regulators
[49] Ms O’Byrne relies on complaints allegedly submitted to various enforcement agencies and regulators, including the Serious Fraud Office, the Department of Internal Affairs, and the Office of the Ombudsman. Ms O’Byrne has not provided evidence of the substance of these complaints nor any response from any such agency or regulator except the Minister of Internal Affairs (referred to above at [45]). Ms O’Byrne has stated:
…the regulatory responses to date have been limited and focussed narrowly on the commercial nature of the loan, without addressing underlying trust, ethical and procedural failings.
[50] There is no evidence before me of any adverse findings being made against any person or entity arising from these complaints. I am not satisfied that the complaints give rise to a genuine and substantial dispute as to the existence of the debt.
[51] Further, I accept Mr Burt’s submission that an order putting Wake Up into liquidation would not prevent these complaints being pursued by Ms O’Byrne nor impede any investigation or action should any regulator or enforcement agency consider that is necessary. Indeed, liquidation may assist in that any liquidator appointed will have statutory obligations to keep records and other documents of Wake Up and powers to obtain relevant documents and information.36
Change of registered office of Extension and change of directorship
[52] Ms O’Byrne raises issues around the change of registered office of Extension and a recent change in directorship and shareholding in 2025. She contends that this is relevant because it “obscures roles and responsibilities for the original transaction” and “attempts to distance prior involvement”.
[53] On the material before me, I am not satisfied that there is any basis for this contention. As submitted by Mr Burt, these steps do not affect the enforceability of the Agreement or breach any obligation owed by Extension to Wake Up or Ms O’Byrne.
36 Companies Act, ss 256 and 261.
Purpose of statutory demand was to recover under insurance policies
[54] Ms O’Byrne contends that the statutory demand was used “to simulate enforcement action and establish a false presumption of debtor default - with the ultimate goal of recovering funds from professional indemnity or management liability policies linked to Mr Richard Goodall, First Step Home Loans, or Extension Capital itself”.
[55] Again, I am not satisfied there is any basis for this contention. It is not clear how seeking to enforce the debt by serving a statutory demand would lead to recovery under a professional indemnity or management liability insurance policy.
Claims about conduct of various third parties
[56] Throughout her documentation, Ms O’Byrne makes allegations about the conduct of various people, including Mr Zonneveld, Mr Goodall, legal advisors for her, Wake Up and the Trust, counsel for Extension, and seemingly unconnected parties such as BDO and Ecovis KGA. On the basis of the material before me, I am not satisfied any of these allegations have substance, or that they give rise to a genuine and substantial dispute as to the existence of the debt.
Default interest provisions penal, and inflated legal costs wrongly included in statutory demand
[57] Ms O’Byrne submits that the debt cannot be enforced because the “default interest provisions were grossly disproportionate, penal in nature, and therefore unenforceable at law”.
[58] However, Extension has adduced evidence from Darpan Patel, a director and shareholder of ASAP Finance Ltd, with approximately 20 years’ experience in the non- bank lending market in New Zealand. Mr Patel has assessed the relevant terms of the Agreement and concludes that “the Extension Capital bridging loans are standard terms” and “the borrower could not have obtained materially better terms for a bridging loan in the market at that time and in those circumstances”. In particular, Mr Patel states that the default interest rate “sits within the expected market range” and that typically non-bank lenders set the default rate between 20 to 30 per cent “to
create a disincentive to borrowers to allow the loan to go into default”. Mr Patel notes that the funding was required urgently and in those circumstances the lender “has limited time to undertake due diligence” and “there is a higher risk for the lender.”. He states that “[t]he fact is that the whole $2,350,000 was at risk”.
[59] Although there is no direct evidence on this point, it may well have been that Extension was subject to similar or even higher default interest liability if the funds lent to Wake Up were not repaid on time.
[60] In the circumstances, I consider that the default interest provisions were proportionate to the legitimate interests of Extension in incentivising Wake Up not to default on repayment of the loan under the Agreement.37
[61] Ms O’Byrne also submits that Extension has rolled $63,853.75 worth of legal fees into the statutory demand, which have no connection to Wake Up, as they are “legal costs of recovery” which are “wrongly attributed” and cannot “lawfully be included in [the] statutory demand”. In particular, Ms O’Byrne contends that the legal costs relate to the Trust, not Wake Up.
[62] Mr Zonneveld has adduced evidence in a table format of the amount claimed in the statutory demand including full details of the principal sum, fees, default interest, legal costs, other costs and repayments that have been made. Mr Zonneveld deposes that the legal costs that were included in the statutory demand and are part of the outstanding balance of $933,260.68 include ongoing costs of recovery. Mr Burt submits that these are costs that have been invoiced to Extension in respect of the loan to Wake Up.
[63] It is not clear on the material before me that all the legal fees forming part of the outstanding balance should properly have been included in the demand against Wake Up.38 However, even if all the legal fees challenged by Ms O’Byrne should not have been included in the statutory demand, I do not consider that this would have resulted in the statutory demand being set aside, and nor does it mean that Extension
37 127 Hobson Street ltd v Honey Bees Preschool Ltd [2020] NZSC 53, [2020] 1 NZLR 179 at [91].
38 See CBC Construction (Auckland) Ltd v Auckland Concrete Company Ltd [2019] NZHC 1104 at [8].
is not a creditor of Wake Up.39 Even if the inclusion of the legal fees could arguably be a material misstatement of the amount due to Extension, there is no substantial injustice arising. Putting aside the legal fees, there is a significant amount still owing to Extension well above the $1,000 threshold for liquidation.40
Extension advanced funds on more advantageous terms to another party
[64] Ms O’Byrne also contends that Extension advanced funds on more advantageous terms to other parties at the same time. However, as submitted by Mr Burt, the terms of any loan depend on a multitude of factors including available capital, borrower history and the purpose of the loan. Further, as discussed above, the evidence is that Wake Up could not have obtained materially better terms for a bridging loan in the market at that time and in those circumstances.
Conclusion as to whether Extension is a creditor
[65] For the reasons set out above, I am not satisfied there is a genuine and substantial dispute as to the existence of the debt. I am satisfied that Extension is a creditor of Wake Up.
Is Wake Up insolvent?
[66] I have determined that there is no genuine and substantial dispute as to the existence of the debt and that Extension is a creditor of Wake Up. Accordingly, Extension is entitled to rely on the presumption of insolvency arising from the failure by Wake Up to comply with the statutory demand.41 In the circumstances cogent evidence of solvency needs to be adduced in order to rebut the presumption.42
[67] Ms O’Byrne has adduced no significant evidence that Wake Up is able to pay its debts. There is no evidence of the companies’ cash flow position, any assets held
39 Companies Act, s 290(5) and (6).
40 HSK Trading Ltd v Carter Building Supplies Ltd [2021] NZHC 1897 at [15].
41 Companies Act, s 287(a).
42 Concept Manufacturing Ltd v Concept Lighting Ltd AK HC M No.896-IM00, 6 July 2000, at [12], followed in Foundation Securities v Direct Labour Services Ltd CIV-2006-404-4391, 1 February 2007, at [24] and Duffill Watts Ltd v Mogans Homes Ltd CIV-2009-404-1483 28 May 2009, at [28]–[30]. ]
by the company, or whether it is trading. It is apparent from the evidence before me that the company was used only to purchase the Leybourne Circle property.
[68]I am satisfied that Wake Up is unable to pay its debts and insolvent.
How should I exercise my residual discretion?
[69] Ms O’Byrne submits that Extension remains free to pursue its claim against Wake Up in the extant civil proceedings. By contrast, she submits liquidation would cause irreparable prejudice to Wake Up, including loss of access to records necessary for defending both the civil case and related regulatory proceedings.
[70] However, on the material before me, I am not satisfied that Wake Up or Ms O’Byrne would suffer irreparable prejudice if Wake Up is put into liquidation. As discussed above, the liquidator has statutory obligations to keep records and other documents, and also powers to obtain further documents and information which may assist in the civil proceedings and any regulatory action or proceedings. The liquidator also has the power to investigate the cause of the company’s insolvency and may determine that it is appropriate to pursue a claim by Wake Up in CIV-2022-404-1946, or other proceedings, subject to funding.
[71] Further, there is no prejudice to Ms O’Byrne in her capacity as a trustee of the Trust. It is apparent that the Trust’s claim in CIV-2022-404-1946 may continue notwithstanding liquidation of Wake Up.
[72] Mr Burt submits that Extension would be prejudiced if Wake Up is not put into liquidation now because any subsequent liquidator appointed may be out of time to seek to overturn antecedent transactions.
[73] Wake Up is clearly insolvent and, in the circumstances, I have no doubt that it is appropriate and in the interests of all parties involved, to order that the company be put into liquidation.
Result
[74]I make the following orders:
(a)Wake Up Commercial Ltd is put into liquidation.
(b)The approved liquidator is the Official Assignee.
[75] The orders in [74] will come into force at 4.00pm on Tuesday, 28 October 2025, provided that counsel for Extension has by that time filed and served a further solicitor’s certificate in accordance with r 31.21 of the High Court Rules 2016.
[76] I have not heard from the parties fully on costs. My preliminary view is that the plaintiff has been successful and is entitled to 2B costs and reasonable disbursements in respect of this proceeding. If costs cannot be agreed, then memoranda may be filed (not exceeding three pages, excluding costs schedules) and costs will be determined on the papers.
Associate Judge Skelton
Solicitors:
Vince and Rice, Auckland for Plaintiff
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