HerdBuilder Export Services Limited v AsureQuality Limited

[2023] NZHC 851

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2022-404-1921

[2023] NZHC 851

BETWEEN

HERDBULDER EXPORT SERVICES LIMITED
Plaintiff

AND

ASUREQUALITY LIMITED

Defendant

Hearing:

1 March 2023

Appearances:

Zane Mora for the Plaintiff

Timothy B Fitzgerald for the Defendant

Judgment:

27 April 2023

JUDGMENT OF ASSOCIATE JUDGE C G TAYLOR

[Application to set aside a statutory demand]

This judgment was delivered by me on 27 April 2023 at 3:00pm

pursuant to Rule 11.5 of the High Court Rules

…………………………. Registrar/Deputy Registrar

Solicitors:

McCaw Lewis (D Shore/A Hong), Hamilton, for the Applicant/Plaintiff

Bell Gully (T B Fitzgerald/B J Dominikovich),Auckland, for the Defendant

Copy for:

Z T Mora

HERDBULDER EXPORT SERVICES LIMITED v ASUREQUALITY LIMITED [2023] NZHC 851 [27 April 2023]

TABLE OF CONTENTS

Paragraph

Introduction  [1]

Background  [2]

HerdBuilder’s application to set aside statutory demand  [6]

Affidavit of David Leslie Hayman dated 6 October 2022  [8] AsureQuality’s opposition  [11]

Affidavit of Kirsty Mary Gray dated 20 October 2022  [12] Reply affidavit of David Leslie Hayman dated 18 November 2022  [22] Affidavits following the hearing  [27]

HerdBuilder’s submissions  [32]

Substantial dispute over entity  [34]

Obligation to follow dispute resolution process  [36]

Conclusion and alternatives  [38]

AsureQuality’s submissions  [40]

No substantial dispute over entity  [43]

No obligation to follow dispute resolution process  [50]

Conclusion  [51]

Legal principles  [52]

Analysis  [56]

Whether, pursuant to s 290(4)(a) of the Act, there is a substantial dispute as to whether the outstanding invoice is owed by HerdBuilder or by the

Limited Partnership?  [58]

Conclusion on whether there is a substantial dispute as to by which entity the
outstanding debt is owed  [73]

Whether, the parties are contractually obliged to follow the dispute resolution process in the agreement and the statutory demand should be set aside

under s 290(4)(c)of the Act?  [76]

Conclusion in respect of the dispute resolution process argument  [80] Result  [81]

Orders  [83]

Introduction

[1]    HerdBuilder Export Services Limited (HerdBuilder) applies to set aside a statutory demand that AsureQuality Limited (AsureQuality) has made on it.

Background

[2]    HerdBuilder, formerly known as Genetic Development (NZ) Limited, provides service to support exporters of breeding livestock and genetics. The legal and health status compliance for exporting livestock is overseen by the Ministry for Primary Industries (MPI). Since 2014, HerdBuilder has contracted with AsureQuality as an MPI recognised agency to perform the relevant controls and tests necessary to export livestock.

[3]    On 1 November 2019, HerdBuilder and AsureQuality entered into the Service Level Agreement (the agreement) and completed a number of export shipments pursuant to this agreement. Due to increased export demand, Genetic Development (NZ) Exports Limited Partnership (the Limited Partnership) was formed in October 2020 and became operational for shipments in November 2020.

[4]    Eleven shipments were then completed until May 2022 for which AsureQuality invoiced a total of $9,363,240. One invoice remains outstanding for $350,058.85 issued on 30 May 2022 (the outstanding invoice), which is the subject of…