Haines v Memelink - [2019] NZHC 2169

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE

CIV-2019-485-315

[2019] NZHC 2169

IN THE MATTER OF section 290 Companies Act 1993

BETWEEN

QUENTIN STOBART HAINES

First Applicant

AND

BPE TRUSTEES (NO 1) LIMITED

Second Applicant

AND

QUENTIN HAINES PROPERTIES LIMITED

Third Applicant

AND

HARRY MEMELINK and LYNX

TRUSTEES LIMITED as Trustees of the LINK TRUST NO 1

Respondents

Hearing: 30 August 2019

Counsel:

Q S Haines in person

J D Dallas for Second and Third Applicants H Memelink in person

Judgment:

30 August 2019

JUDGMENT OF CHURCHMAN J

[1] Mr Q S Haines and Mr H Memelink were once friends. Mr Haines also acted as a legal advisor to Mr Memelink and the two were involved in a number of business transactions.

[2] Their personal and business relationships have now completely disintegrated and there is considerable acrimony between them. This application to set aside five

HAINES & ORS v MEMELINK & ANOR [2019] NZHC 2169 [30 August 2019]

demands purportedly made pursuant to s 289 of the Companies Act 1993 (the Act) is yet another example of the animosity between the two.

The application

[3] This is an application to set aside five notices of statutory demand served on the applicants:

(a)a notice addressed to BTE Trustees (No 1) Limited as trustee of the QSH Family Trust, undated, demanding $421,327.05;

(b)a notice addressed to BTE Trustees (No 1) Limited as trustee of the QSH Family Trust, undated, demanding $343,692.51;

(c)a notice addressed to QSH Family Trust and Quentin Stobart Haines (as both trustee of QSH Family Trust and in his personal capacity as loan guarantor) dated 20 May 2019 in the sum of $421,327.05;

(d)a notice to QSH Family Trust and Quentin Stobart Haines (as both trustee of QSH Family Trust and in his personal capacity as loan guarantor) dated 20 May 2019 in the sum of $343,692.51; and

(e)a notice addressed to Quentin Haines Properties Limited and Quentin Stobart Haines (as both director and shareholder of Quentin Haines Properties Limited and in his personal capacity as loan guarantor) dated 20 May 2019 in the sum of $140,816.78.

[4] The first two demands were signed by Mr Roy Bassett-Burr only and he was represented as signing on behalf of Lynx Trustees Limited. The latter three notices were signed by both Mr Memelink and Mr Bassett-Burr.

[5] Although the notices purported to represent that Fintan Devine Lawyer of Devine Law Legal [sic] had some involvement in their preparation, from the content of the notices such a representation is clearly false.

[6] Evidence of the lack of legal involvement in the preparation includes the facts that the first two notices were undated and although all five of the notices purported to make a statutory demand under s 289 of the Act, the third and fourth notices were not directed to a company at all, but to “QSH Family Trust and Quentin Stobart Haines (as both trustee of QSH Family and in his…

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.

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Details

Case: [2019] NZHC 2169
Decision Date: 30 August 2019

CaseChat Overview and Summary

The case of Haines v Memelink involved a dispute between Quentin Haines and Harry Memelink, former friends and business associates, over five notices of statutory demand made under section 289 of the Companies Act 1993. These demands, purportedly seeking substantial sums of money, were issued against various entities associated with Mr Haines. The application to set aside these demands was brought by Quentin Haines, BPE Trustees (No 1) Limited, and Quentin Haines Properties Limited, against Harry Memelink and Lynx Trustees Limited. The High Court of New Zealand was tasked with deciding whether the statutory demands should be set aside and if costs should be awarded against the person who signed the demands, Roy Bassett-Burr.

The central legal issues revolved around the validity of the statutory demands and the appropriateness of setting them aside. The Court had to consider whether the demands complied with the statutory requirements, particularly whether they were correctly addressed to companies as mandated by the Act. Additionally, the Court needed to determine if the respondents had opposed the application and whether costs should be awarded against Bassett-Burr personally, given his role in issuing the demands.

The Court found that the statutory demands were improperly issued, primarily because they were not correctly addressed to companies, as required by the Act. The first two demands were undated and the latter three were directed to individuals rather than companies. Despite representations to the contrary, there was no evidence of legal involvement in their preparation. The Court also noted that Bassett-Burr had ignored opportunities to withdraw the demands, forcing the applicants to seek a court order to set them aside. Consequently, the Court granted the application to set aside the demands. Regarding costs, the Court found it appropriate to hold Bassett-Burr personally liable for costs, awarding them on a 2B basis with a 50% uplift, given the improper issuance of the demands and Bassett-Burr's concerted actions with Memelink.

The final orders of the Court included setting aside the five notices of statutory demand and awarding costs against Roy Bassett-Burr personally. The Court's decision underscored the importance of adhering to statutory requirements when issuing demands and highlighted the consequences of misuse of the statutory demand process.

Orders