Jellie v Tannenberg Limited - [2016] NZHC 2187

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2016-404-000937 [2016] NZHC 2187

IN THE MATTER
of section 294(1) of the Companies Act

1993

BETWEEN

CHRISTOPHER WAYNE JELLIE Plaintiff

AND

TANNENBERG LIMITED Defendant

Hearing: 12 September 2016

Appearances:

Plaintiff on own behalf
R B Hucker for the Defendant

Judgment:

15 September 2016

JUDGMENT OF FITZGERALD J

This judgment was delivered by me on Thursday, 15 September 2016 at 2.30 pm pursuant to r 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Solicitors: Hucker & Associates, Auckland
Copy to: Plaintiff

JELLIE v TANNENBERG LTD [2016] NZHC 2187 [15 September 2016]

Introduction

[1] On 10 April 2016, the plaintiff, Mr Christopher Jellie, issued a statutory demand to Tannenberg Limited (“Tannenberg”), demanding payment of $26,000. That amount is said to be owed as a result of the alleged sale by Mr Jellie of a 1999
Mustang Cobra car to Tannenberg. Mr Jellie (who appeared on his own behalf at the hearing) says the statutory demand was served on the registered office of Tannenberg, a residential address in Northcote, on the morning of 11 April 2016.

[2] On 6 May 2016, Mr Jellie filed a statement of claim seeking an order that Tannenberg be put into liquidation. Mr Jellie submits that the liquidation proceedings were served on Tannenberg at the same Northcote address on 2 June
2016.

[3] There are two affidavits of service on the file, both sworn by Mr Ian Wentford. Mr Wentford is not a professional process server; rather, Mr Jellie confirmed at the hearing that he is an associate of an ex-neighbour of Mr Jellie. Mr Wentford deposes in his affidavits that in the case of service of each of the statutory demand and the liquidation proceedings, no one answered the door when he attended, so he sellotaped the documents to the door of the house.

[4] Tannenberg, through its director Mr Gerald Sharrock, says that the first Tannenberg knew of these liquidation proceedings was when Mr Sharrock was telephoned by an accounting firm on Friday 17 June 2016, advising that the matter had been advertised that day in the New Zealand Herald. On the following Wednesday, 23 June 2016, Tannenberg filed a statement of defence to the statement of claim, together with an application (and supporting affidavit) for an order staying the proceedings pursuant to r 31.11 of the High Court Rules.

[5] As well as the issue in respect of service, Tannenberg disputes the underlying debt on which the statutory demand is based. In particular, it says that there was no agreement that Tannenberg would purchase the Mustang Cobra car from Mr Jellie. Rather, Tannenberg says that legal title to the Mustang Cobra was transferred to Tannenberg as security for advances made by Tannenberg to Mr Jellie from time to time. The vehicle was later sold (with Mr Jellie’s knowledge), but despite the

proceeds of sale being available to Tannenberg, Tannenberg says that Mr Jellie still owes Tannenberg some $7400.

[6] The issue for my consideration is whether…

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: [2016] NZHC 2187
Decision Date: 15 September 2016

CaseChat Overview and Summary

The case of Jellie v Tannenberg Limited involves a statutory demand issued by Mr. Christopher Jellie against Tannenberg Limited, demanding payment of $26,000 for the alleged sale of a 1999 Mustang Cobra. Tannenberg disputes the debt, claiming that the vehicle was transferred as security for advances made to Mr. Jellie, rather than being sold outright. The case before the High Court was an application by Tannenberg to stay the liquidation proceedings initiated by Mr. Jellie. The central issue was whether the liquidation proceedings should be permanently stayed or temporarily stayed pending resolution of the underlying dispute. The Court found that there was a genuine and substantial dispute regarding the debt, and there were issues concerning the service of the statutory demand and liquidation proceedings. The Court also noted that Tannenberg was solvent and that the proceedings had already caused commercial stigma. The Court granted a permanent stay of the liquidation proceedings, ordering costs against Mr. Jellie on a category 2B basis together with disbursements.

Orders