Grant v Chevin - [2015] NZHC 3135

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2013-404-4975 [2015] NZHC 3135

UNDER the Companies Act 1993

IN THE MATTER

of the liquidation of Blake Street Trustee
Ltd (in liquidation)

BETWEEN

DAMIEN GRANT AND STEVEN KHOV AS LIQUIDATORS OF BLAKE STREET TRUSTEE LTD (IN LIQUIDATION) Plaintiffs

AND

PETER LOUIS CHEVIN First Defendant

ANNE-MARIE CHEVIN Second Defendant

PETER ROSS HILL Third Defendant

Hearing: 9 December 2015

Counsel:

B J Norling and A Cherkashina for Plaintiffs
E Grove for First and Second Defendants

Judgment:

9 December 2015

JUDGMENT OF BREWER J

Solicitors: Waterstone Insolvency (Auckland) for Plaintiffs
Carson Fox Bradley Ltd (Auckland) for First and Second Defendants

GRANT AND KHOV AS LIQUIDATORS OF BLAKE STREET TRUSTEE LTD (IN LIQUIDATION) v
CHEVIN [2015] NZHC 3135 [9 December 2015]

[1] Civil litigation is very often a contest between two parties over which party should pay the other money. The underlying proceeding is one of those. It is complicated to an extent by the fact that the plaintiffs are the liquidators of a company and so there is a mass of law, both statutory and common law, which sets out their rights and obligations. Of significance to the matter before me is the position that the liquidators are not bringing their action on their own behalf but on behalf of the creditors of the company in liquidation.

[2] It sometimes happens, and in my experience more often in situations involving insolvency, that the defendants from whom money is sought have no interest whatsoever in taking part in the Court process. Quite frequently they obfuscate, delay and do their best to frustrate the processes of the Court. In this case, the first and second defendants, Mr and Mrs Chevin, have acted in such a way.

[3] Matters got to the point where the plaintiff liquidators applied to the Associate Judge who had the management of the case for an “unless” order. The application was expressed in terms of seeking orders that unless an amended statement of defence and answers to interrogatories were filed by a specified date, the defence would be struck out and Mr and Mrs Chevin would be debarred from further defending the claims against them. Instead, the liquidators would be able to prove the quantum of their claim by way of formal proof.

[4] That application came before Associate Judge RM Bell on 24 July 2015. At the outset of the hearing, the solicitors acting for Mr and Mrs Chevin sought and were granted leave to withdraw on the basis that they were without instructions. Associate Judge Bell recorded:

[6] This proceeding has not progressed as other proceedings would, because of delays by the first and second defendants. They delayed in filing their first statement of defence. They were ordered to file and serve a more explicit statement of defence but delayed in doing so. They have been difficult to serve. The plaintiffs have had to apply for substituted service. Mrs Chevin did not file a sworn affidavit of documents. Now that…

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 Grant v Chevin

Details

AGLC: Grant v Chevin [2015] NZHC 3135
Case: [2015] NZHC 3135
Decision Date: 9 December 2015

CaseChat Overview and Summary

The High Court of New Zealand was presented with a case involving the liquidators of a company, Blake Street Trustee Ltd (in liquidation), who sought to recover money from the Chevin couple. The dispute centred on whether the Chevins should be permitted to continue defending the claims against them despite their history of non-compliance with court orders and delays in filing necessary documents. The plaintiffs, the liquidators, argued that the Chevins should be barred from defending the claims due to their ongoing failure to adhere to court directions and to the potential costs and delays this caused.

The primary legal issue before the court was whether the Associate Judge had exercised his discretion appropriately in allowing the Chevins to continue defending the claims despite their history of non-compliance. The liquidators argued that the Associate Judge should have barred the Chevins from defending due to their repeated defaults, which they contended had caused unnecessary delays and costs. They further argued that the minor nature of the latest defaults did not excuse the cumulative effect of their previous conduct.

The court found that the Associate Judge had exercised his discretion correctly. The Chevins had substantially complied with the order by filing an amended statement of defence and responses to interrogatories within the stipulated time frame, albeit with a minor procedural error that was promptly rectified. The court noted that the Associate Judge had considered the relevant legal principles, including the public interest in avoiding unnecessary delays and costs, the interests of the injured party, and the potential injustice to the Chevins if they were barred from defending. The court held that the Associate Judge appropriately balanced these considerations and concluded that it would be unjust to bar the Chevins from addressing the merits of the case, particularly given that the liquidators had been awarded costs to compensate for the delays.

The court dismissed the liquidators' application for review, affirming the Associate Judge's decision. It awarded costs against the liquidators on a 2B basis, meaning that the Chevins were not required to pay any costs beyond what they had already been ordered to pay.

Orders