Jindal v Orange Capital Ltd (in liq)

[2021] NZHC 3449

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2021-404-1096

[2021] NZHC 3449

BETWEEN

GAUTAM JINDAL

Applicant

AND

ORANGE CAPITAL LIMITED (IN LIQUIDATION)

Respondent

Hearing:

9 December 2021

Appearances:

Applicant in person

J Mahuta-Coyle and A Peden for Respondent

Judgment:

16 December 2021

JUDGMENT OF WHATA J

Re leave to appeal

This judgment was delivered by me on 16 December 2021 at 4.00 pm, pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar Date: ………………………….

Solicitors:           Langford Law, Wellington

GAUTAM JINDAL v ORANGE CAPITAL LTD [2021] NZHC 3449 [16 December 2021]

[1]    Mr Jindal applies under s 60(2) of the Senior Courts Act 2016 for leave to appeal my substantive decision dated 29 October 2021 (the substantive decision). He also seeks a stay of the substantive decision.1 In the substantive decision, I:2

(a)held Mr Jindal established a credible defence to the Liquidator’s claim to the extent of liability incurred in respect of the car, the liability assumed in respect of the ASB account and the expenses incurred in respect of the Dell Laptop and the liquidation fee; and

(b)upheld the summary judgment of Judge Hinton in the sum of

$50,696.49 ($68,860.03 (original amount in summary judgment) less

$18,033.54).

(c)otherwise dismissed the appeal.

[2]Mr Jindal also seeks costs for the leave to appeal and stay applications.

[3]The Respondent opposes both applications.

Background

[4]    Mr Jindal was the sole director and shareholder of Orange Capital Limited (Orange Capital). Orange Capital was incorporated on 24 May 2013. Mr Jindal said in his submissions that the company provided software and consulting services. Orange Capital did not incur any third party debt until it settled a claim with Adon Holdings Ltd on 12 June 2017. On 27 June 2017, Mr Jindal then placed Orange Capital into voluntary liquidation.

[5]    Mr Imran Kamal and Liquidation Management Limited undertook the liquidation of Orange Capital. The full amount outstanding on the current account was $82,277.00. Mr Jindal did not pay the outstanding amount, which resulted in the Liquidator commencing proceedings against Mr Jindal of $82,277.00 by way of summary judgment.

1      High Court Rules 2016, r 17.29.

2      Jindal v Orange Capital Ltd [2021] NZHC 2917 at [73] and [74].

[6]    On 31 May 2021, Judge Hinton issued a summary judgment decision against Mr Jindal for the amount of $68,680.03.3

[7]    Mr Jindal appealed Judge Hinton’s decision to the High Court. He also sought leave to file evidence comprising five affidavits. The evidence relating to liability assumed, expenses claimed and salary forgone was not fresh and some of it was not cogent. But as summary judgment precludes substantive consideration of the merits of a defence, I considered it necessary to admit the evidence even if only to dismiss it. I did not admit evidence about a Mr Kamal as it was irrelevant to my determination.

[8]    I heard the appeal on 8 September 2021 and reserved my decision. Two key matters were in issue:

(a)The Liquidator’s claim engages various aspects of the Companies Act 1993 and, therefore, only the High Court had the jurisdiction to adjudicate on those matters; and

(b)Mr Jindal has a credible defence based on liability assumed, expenses incurred and salary forgone.

[9]    On 29 October 2021, I released the substantive decision. In that decision I dismissed the challenge to jurisdiction and the claim to salary forgone, but I reduced the amount of summary judgment to $50,696.49.

Grounds of appeal

[10]Mr Jindal seeks leave to appeal on the following matters:

(a)When dismissing the first ground of appeal, I erred in law at paras [45],

[47] and [49] of the substantive decision regarding jurisdiction. The powers Judge Hinton exercised in issuing the decision on 30 May 2021 were beyond the jurisdiction of the District Court because they are powers exclusively allowed to the High Court under s 301 of the

3      Orange Capital v Jindal DC Auckland CIV-2017-004-2856, 31 May 2021 at [63].

Companies Act 1993. Section 2 and 301 of the Act explicitly exclude the jurisdiction of the District Court. Mr Jindal submits that the 2012 law reform and subsequent enactment of the District Court Act 2016 allowed expansion to the jurisdiction of the District Court to adjudicate on matters related to the Trustee Act 1956. However, the jurisdiction in the Act remains unaltered and rightfully with the High Court. I failed to realise that the DC decision was, on careful consideration, a nullity;

(b)I erred in law at para [62], where I assessed the reasonability criteria for wages and salary under s 161(5) of the Act. I wrongly applied the legal test under s 161(5). Salary and wages are subject to minimum wage set by the Government and hence cannot be limited, as wrongly attempted at para [62] of the substantive decision;

(c)I wrongly failed to consider the case from an “equitable justice” approach in terms of 296(3) of the Act. After the Court had acknowledged, at para [59], that the intended appellant had provided evidence for a “modest 70 hours of work-done for the company”, the Court was bound to allow the amount on an equitable basis. Common law should not have been allowed to trump over the equitable nature of relief prescribed in s 296(3) of the Act;

(d)I did not hear the appeal by way of a rehearing. The approach adopted by me was wrong. I failed to come to my own conclusion and deferred to the decision of the District Court. In doing so, the High Court delivered neither substantive nor procedural justice. The Court failed to independently consider matters put before the Court on appeal as stated at para [58] and [71]. The Court refused to assess and consider relevant matters advanced on appeal, because the Court felt that fairly and fully considering them may cause the claim to be caught in the High Court’s jurisdiction and deem the DC decision ultra vires;

(e)I failed to reasonably consider the facts in evidence in light of “commercial” and “factual” realities. These shortcomings were

reflected in the Court’s decision and reasoning at [54], [64], [65] and [66]; and

(f)There was always a serious question to be tried, which I ignored.

Issues

[11]   It appears from these grounds that the main issues for which leave is sought are:

(a)Whether I was wrong to find that the District Court had jurisdiction to hear the plaintiff’s claim;

(b)Whether I failed to consider Mr Jindal’s defence in equity afforded by s 296(3);

(c)Whether I wrongly deferred to the District Court; and

(d)Whether I erred by failing to properly account for Mr Jindal’s wages claim.

Stay application

[12]   In regard to the stay application, Mr Jindal seeks a stay of the execution of the substantive decision until the matter has been heard and decided on appeal. He also seeks that his stay application is heard on priority and at a short notice. He submits the stay application may be done on the papers in the interests of efficiency.

[13]   The grounds Mr Jindal submits in favour of a stay of my substantive decision are:

(a)Mr Jindal has simultaneously filed and served an application for leave to appeal the substantive decision to the Court of Appeal. There are

good grounds for appealing the decision and there are question(s) of law which need serious argument; and

(b)The appeal will be rendered nugatory and Mr Jindal will suffer a substantial miscarriage of justice and irreparable harm if the substantive judgment is not stayed. More specifically, Mr Jindal will risk being adjudicated bankrupt and will lose his practising certificate from the Law Society. If Mr Jindal is bankrupt, the leave to appeal application will need to be consented to by the Official Assignee, which is highly unlikely.

[14]   Mr Jindal refers to Taimoori v Anmol Residential Ltd as an example of where the court decided to deal with a similar application on the papers.4 Mr Jindal submits that an approach on the papers is prudent.

Law

Leave to appeal

[15]   Section 60 of the of the Senior Courts Act governs appeals from a decision of the High Court on appeal from the District Court. It provides:

60Appeals against decisions of High Court on appeal from District Court, Family Court, or Youth Court

(1)The decision of the High Court on appeal from the District Court, the Family Court, or the Youth Court is final unless a party, on application, obtains leave to appeal against the decision to the Court of Appeal.

(2)An application under subsection (1) for leave to appeal to the Court of Appeal must be made to the High Court or, if the High Court refuses leave, to the Court of Appeal.

[16]   McGechan on Procedure sets out the threshold for second appeals to the Court of Appeal:5

4      Taimoori v Anmol Residential Ltd [2021] NZHC 1344.

5      Andrew Beck and others McGechan on Procedure (looseleaf ed, Thomson Reuters) at [SC60.02]. See also Waller v Hider [1998] 1 NZLR 412 (CA) at 413, affirmed in Downer Construction (New Zealand) Ltd v Silverfield Developments Ltd [2007] NZCA 355, [2008] 2 NZLR 591 at [30]–[31]; and Butch Pet Foods Ltd v Mac Motors Ltd [2018] NZCA 276, (2018) 24 PRNZ 500 at [4].

The appeal must raise some question of law or fact capable of bona fide and serious argument, in a case involving some interest, public or private, of sufficient importance to outweigh the cost and delay of the further appeal. Not every alleged error of law is of such importance, either generally or to the parties, as to justify further pursuit of litigation already twice considered and ruled upon by a Court, so the test is a restricted one.

[17]   The threshold is high. The reason for such a high test is to ensure the valuable resources of the Court of Appeal are not unnecessarily wasted, and additional expense is not incurred by the parties unless there is some “realistic hope of benefit”.6 Mr Jindal bears an onus of satisfying the appeal court that it should differ from the decision under appeal.7

Stay application

[18]   Rule 17.29 of the High Court Rules 2016 (HCR) provides that a liable party may apply to the court for a stay of enforcement or other relief against the judgment upon the ground that a substantial miscarriage of justice would be likely to result if the judgment were enforced, and the court may give relief on just terms.

[19]   This rule is concerned with the risk of substantial injustice resulting from enforcement of the judgment, not from the judgment itself.8 The relevant legal principles of a stay application are well-settled. Dymocks Franchise Systems (NSW) Pty Ltd v Bilgola Enterprises Ltd outlines the relevant factors a Court should take into account:9

(a)Whether the appeal may be rendered nugatory by lack of a stay;

(b)The effect on third parties;

(c)The injury or detriment to the respondent/successful party if a stay is granted;

6      Ireland v Grant [2014] NZHC 2496 at [9].

7      Austin, Nichols & Co Inc v Stichting Lodestar [2007] NZSC 103, [2008] 2 NZLR 141 at [4]–[5].

8      Palmerston North City Council v Birch [2012] NZHC 3248 at [17].

9      Dymocks Franchise Systems (NSW) Pty Ltd v Bilgola Enterprises Ltd (1999) 13 PRNZ 48 (CA) at [9].

(d)The bona fides of the applicant as to prosecution of the appeal;

(e)The novelty and importance of the question involved;

(f)The public interest in the proceeding;

(g)The strength of the case on appeal; and

(h)The overall balance of convenience.

Submissions

Mr Jindal

[20]   Mr Jindal submits that the District Court is a creation of statute under the District Court Act 1947, which is now the District Courts Act 2016. He submits the District Court only derives its jurisdiction from the District Courts Act or other statutes that grant it jurisdiction.

[21]   As a result of this claim, Mr Jindal submits that the District Court does not have jurisdiction in relation to the Companies Act 1993 (the Act), unless that Act gives it jurisdiction. Mr Jindal submits the Act outlines where the District Court has jurisdiction under it, which includes dealing with pre-incorporation contracts under s 185A of the Act.

[22]   In addition, Mr Jindal submits clear and express words in the Act exclude the District Court from hearing matters under the Act. He refers to Zaoui v Attorney- General as authority for that principle.10 He also refers to AG v Christchurch District Court as stating the powers of a Court are ancillary to jurisdiction and relate only to process.11 Another case he describes as analogous to this case is Morris v Templeton.12 In that case, the District Court made orders under s 73 of the Trustee Act 1956. Under that (now repealed) Act, the District Court did not have jurisdiction to hear the matter.

10     Zaoui v Attorney-General [2005] 1 NZLR 577 (CA); and Zaoui v Attorney-General [2005] 1 NZLR 577 (SC).

11     Attorney-General v Christchurch District Court [2017] NZHC 1873 at [27].

12     Morris v Templeton [2000] BCL 730 (CA).

The High Court did not address the error and therefore, the Court of Appeal overturned the High Court’s decision, relying on s 34(2) of the District Court Act 1947 (now s 34(2) of the District Court Act 2016).

[23]   Mr Jindal acknowledges that the scope of the District Court’s jurisdiction expanded in the District Court Act 2016 as the Court can now hear matters up to

$350,000 and trustees are within the ambit.13  However, Mr Jindal submits no changes

have been made to the District Court’s jurisdiction in relation to the Act. He submits it is Parliament’s decision to confer jurisdiction on the District Court in regard to the Act, and it did not. Therefore, the District Court did not have jurisdiction to make the orders on 31 May 2021.

[24]   Further, Mr Jindal submits the District Court made a decision under s 301 of the Act. He submits it was not a factual enquiry, nor a simple debt claim. Rather, he submits it was an exercise of a power under s 301. He states I referred to the decision on appeal as a simple debt claim. He claims that was a failure on his part to draw attention to the fact the District Court decision was an order made under s 301.

[25]   In respect of the second ground of appeal, Mr Jindal submits this Court erred in limiting the amount of wages Mr Jindal can receive under s 161(5) of the Act. He submits the ruling is contrary to the minimum wage provisions of the Employment Relations Act 2000. He submits that chefs, bakers and low skilled migratory workers may suddenly find themselves being appointed as directors, which is a dangerous precedent to set.

[26]He submits this legal point may only be clarified in serious argument on appeal.

[27]   Finally, Mr Jindal submits this Court was required to consider the whole case from an “equitable justice” approach since the Court was bound by s 296(3). Mr Jindal submits there was always a serious question, which could not have been dealt with by way of summary judgment.

13     District Court Act 2016, s 97.

[28]   Mr Jindal submits this Court ignored the fact that Orange Capital operated for 4 years, earned revenue of approximately $72,000 and yet no employee wages were paid or electricity, internet or phone costs. He says this decision is a “commercially untenable proposition” and “inequitable”. He says Carlill v Carbolic Smoke Ball applies here as he suffered an inconvenience, without which Orange Capital would not have been able to operate.14 He submits this Court’s reliance on Madsen-Ries v Petera did not appreciate the fact the defendants appeared in person and never claimed a defence under s 296(3) of the Act in either decision (High Court and Supreme Court).15

[29]   In his reply submissions, Mr Jindal submits that the stay application is to safeguard his position until the leave to appeal issue is resolved. He says he is likely to face significant damages if the stay is not granted, including that he will be bankrupt, and he will lose his practicing certificate as issued by the Law Society. He says he faces an irreversible loss.

Respondent

[30]   Mr Mahuta-Coyle submits that Mr Jindal’s application fails to frame any serious question of law or fact for a second appeal and the proposed appeal does not otherwise meet the threshold required for granting leave to bring a second appeal.

[31]   In response to Mr Jindal’s first ground of appeal, Mr Mahuta-Coyle states the Court correctly set out the ordinary civil jurisdiction of the District Court to hear common law claims. He says Mr Jindal has conflated the exercise of jurisdiction under s 301 (that is within the jurisdiction of the High Court) with the District Court’s jurisdiction to determine common law claims.

[32]   Mr Mahuta-Coyle submits Mr Jindal was incorrect in claiming that the District Court made an order under s 301 of the Act. He says the respondents’ claim was in debt, a cause of action the common law recognises. He says good authority exists for the proposition that absent a valid explanation, drawings by a shareholder constitute a debt repayable on demand to the company, referring to Gee v Levin.16

14     Carlill v Carbolic Smoke Ball Company [1893] 1 QB 256.

15     Madsen-Ries v Petera [2015] NZHC 538; and Madsen-Ries v Petera [2020] NZSC 100.

16     Gee v Levin [2014] NZHC 1483.

[33]   Moreover, Mr Mahuta-Coyle submits s 301 provides an additional or concurrent jurisdiction to grant relief to a liquidated company in the event the company does not have other causes of action available to it at law. He says that if Parliament intended for s 301 to displace all possible claims by a company against a person that took party in its formation or promotion, then express wording to that effect would be necessary.

[34]   In respect of the minimum wage submission, Mr Mahuta-Coyle submits that a second appeal does not provide a locus poenitentiae for a party that has failed on the first appeal to take a point that might have been open to them. He says in any event the submission is wrong.

[35]   First, Mr Mahuta-Coyle submits that the evidence Mr Jindal submitted to the Court was insufficient to claim that he was entitled to wages. He says there is no evidence of PAYE schedules disclosing tax payable. He also says there is no employment agreement. He says the evidence Mr Jindal offered was in the form of an opinion by Mr Jindal that he should be paid. He refers to the substantive decision in that no evidence supported the proposition that Orange Capital resolved to pay a director’s salary to Mr Jindal in terms of s 161.

[36]   Second, Mr Mahuta-Coyle says that a further appeal on this point would ask the second appellate court to overturn this Court’s evaluation of the evidence before it. He submits that is not the purpose of a second appeal.

[37]   Regarding the s 296 submission, Mr Mahuta-Coyle submits the final appeal point is misconceived. He said the District Court was not asked to order the recovery of property of Orange Capital. He says s 296 has never been engaged. Mr Mahuta- Coyle submits the transfer of money to Mr Jindal was not invalid and he does not seek to undo the transfer. He says the respondents would have plead a case under the Act (in particular the voidable transaction notices), but they did not.

[38]   Turning to the stay application, Mr Mahuta-Coyle submits Mr Jindal’s submissions do not address the stay application.

[39]   In light of the well-established factors in Dymocks Franchise Systems v Bilgola, Mr Mahuta-Coyle submits Orange Capital and its creditors continue to suffer from delay in enforcing the judgment and its proceeds. He submits Mr Jindal has not made out the bona fides of the second appeal. He has also failed to pay the disputed judgment sum into the trust. Mr Mahuta-Coyle submits the proposed appeal grounds raise no novel or important questions of law (on a second appeal) and there is no public interest in the proceeding.

[40]   Overall, Mr Mahuta-Coyle submits the balance of convenience favours Orange Capital who he says should be entitled, after considerable delay, to the fruits of the judgment debt.

Assessment

Whether I was wrong to find that the District Court had jurisdiction to hear the respondent’s claim

[41]   I am satisfied that this first ground of appeal should be considered by the Court of Appeal.

[42]   As the Court of Appeal said in Morris v Templeton, where the alleged error of law is that the Court which originally decided the matter did not have jurisdiction to do so, and that decision is therefore a nullity, then the error will be of sufficient general importance to warrant leave to appeal being granted.17

[43]   Plainly the District Court has jurisdiction to hear a common law debt claim and unexplained debt in a shareholder’s account is repayable on demand.18 However, as noted in my judgment, Mr Jindal’s defence seeks to engage various statutory provisions of the Act and this required the District Court to make findings of fact against relevant statutory criteria. I found that the District Court was able to make findings of fact of this kind provided that this did not extend to engagement of the voidable transaction provisions or the remedial powers of the High Court. I was,

17 Morris v Templeton (2000) 14 PRNZ 397 (CA) at 399.

18 Gee v Levin, above n 16, at [48] and [68]; National Trade Manuals Ltd (in liq) v Watson HC Auckland CIV-2005-404-7335, 20 September 2006 at [37]; and Madsen-Ries as liquidators of Petranz Ltd (in liq) v Petera, above n 15,at [19].

therefore, satisfied that the District Court was possessed of jurisdiction to hear and determine a liquidator’s common law debt claim for unexplained shareholder drawings.

[44]    It does not appear that the issue of the jurisdiction of the District Court to assess a common law debt claim by a liquidator in respect of an overdrawn shareholder’s account has previously come before this Court or the Court of Appeal. None of the cases cited by Mr Jindal on the leave application are apposite – those cases deal with the issue of inherent jurisdiction to adjudicate where no statutory jurisdiction exists at all,19 or where exclusive jurisdiction has been expressly conferred on a particular Court.20 But what those cases illustrate is that issues of jurisdiction are invariably matters of complex statutory interpretation.

[45]   While it appears to me Mr Jindal is trying for shoehorn the respondent’s simple common law debt claim into the remedial provisions of the Act, I cannot discount the reasonable possibility that the Court of Appeal may take a different view of the jurisdiction of the District Court to hear a common law debt claim by a liquidator against a director in respect of an overdrawn shareholder’s account.

[46]   On that basis, I am satisfied that leave to appeal on the following issue should be granted:

Does the District Court have jurisdiction to hear a liquidator’s common law debt claim against a director in respect of an overdrawn shareholder’s account?

Whether I failed to consider Mr Jindal’s equitable defence in terms of s 296(3)?

[47]    I accept it is arguable that s 296(3) of the Act may apply to a common law debt claim by a liquidator.21 I also accept that I did not make findings in relation to each of the elements of s 296(3). However, nothing of substance arises from this point that might justify a second appeal. I addressed each of Mr Jindal’s claims that his drawings

19     Attorney General v District Court at Christchurch [2017] NZHC 1873; and Zaoui v Attorney- General, above n 10).

20     FMV v TZB [2021] NZSC 102.

21     Allied Concrete Ltd v Meltzer [2015] NZSC 7 at [25]. I note that s 296(3) envisages claims by Liquidators outside of the jurisdiction of the Companies Act 1993.

were payment for liability assumed, expenses paid and salary forgone. I found, like the District Court that, save as specified, the evidence supporting those claims was woefully inadequate and/or that his claims could not meet the threshold test at s 161(5), which is in all material respects the same as the s 296(3)(c) test – namely that the payments to Mr Jindal were fair to the company at the time they was made, provided or given.22 To the extent that Mr Jindal now seeks to advance an defence based in equity on payments that were not fair to the company, I consider that argument to be untenable.

Whether I wrongly deferred to the District Court

[48]This ground is simply wrong. The merits were fully reconsidered by me.

Whether I erred by failing to properly account for Mr Jindal’s wages claim

[49]   Mr Jindal’s claim to wages based on minimum wage provisions is new, not having been raised in either the District Court or this Court. It is inherently unsuitable for consideration on a second appeal, given also that the claim to a director’s salary was only raised for the first time in this Court. Furthermore, Mr Jindal conceded in argument that there is no contemporaneous documentary evidence to support the assertion that the drawings were treated or accounted for as salary or wages by the company at any time. It, therefore, has no prospect of success.

[50]    Mr Jindal also proposes to advance this appeal ground on the basis that his wages claim exceeds the remaining shareholder debt. That is not a tenable proposition for the reason just mentioned together with the fact that Mr Jindal’s claim to all the company earnings cannot possibly satisfy the statutory requirement for fairness to the company. In contrast, a claim to a modest sum might be capable of reasonable argument, but Mr Jindal refuses to quantify what that sum might be. The latent potential for some undocumented and unquantified salary or wage is not enough to justify the cost and delay of a further appeal.

22     Companies Act 1993, s 161(5) and see Jindal v Orange Capital Ltd, above n 2, at [58]–[62], [64]– [66].

[51]   Finally, stepping back from the individual grounds, Mr Jindal’s central complaint is that he has not had a proper opportunity to vindicate his position. But Mr Jindal has had ample opportunity to set out his defence and there are concurrent findings of the District Court and the High Court that there was an insufficient evidential basis, even to the reasonably arguable standard, to substantiate that defence (beyond the adjustments made). A third go at the merits per se is not a proper basis for a second appeal.

[52]   Therefore, I decline Mr Jindal’s leave to appeal application save in relation to the issue of jurisdiction.

Stay

[53]   Granting leave to appeal is a necessary but not sufficient condition for the grant of a stay. I am conscious that Mr Jindal is concerned about the potential impact that enforcement and then bankruptcy might have on his status as a solicitor. I have not explored whether that will be so, but it does not seem to me that this is inevitable and certainly not in short order. The Liquidator has not signalled that this will happen and it is not a forgone conclusion that Mr Jindal will be struck off if it does.

[54]   In addition, there is at least one creditor who has gone without money clearly owed to it for some considerable time.23 The consequences on them if I grant a stay and the ongoing significant delay of that stay could be very significant. The creditor’s interests must also be weighed. The issue of jurisdiction is I accept novel and potentially of some importance to liquidations generally. But while the issue is arguable, I consider the case for Mr Jindal on this point to be weak. And, as noted above, Mr Jindal has already had the benefit of consideration of his claims by two Courts. There is, however, a residual risk to Mr Jindal that if he pays the sum owing to the liquidator as it might be distributed without prospect of recovery. That could render his appeal nugatory.

23 Shortly before voluntary liquidation, Adon Holdings Ltd and Orange Capital Ltd executed a Deed of Understanding under which the latter agreed to pay Adon Holdings $80,000 in settlement of a dispute.

[55]   Overall, the balance of convenience does not, at present, favour an unconditional stay. However, I am prepared to give Mr Jindal until 1 March 2022 to place the sum owing in Court to be held pending the resolution of the Appeal. This would achieve two things. Certainty of recovery if the Respondent succeeds while maintaining the efficacy of Mr Jindal’s appeal.

[56]   As a result, my judgment is stayed until 1 March 2022 by which time Mr Jindal must pay into the Court the sum owing. If that sum is paid, it will be placed on interest bearing account pending the resolution of the appeal and the stay will continue pending that resolution. If the sum is not paid, the stay will lapse.

Outcome

[57]I grant leave to appeal on the following question only:

Does the District Court have jurisdiction to hear a liquidator’s common law debt claim against a director in respect of an overdrawn shareholder’s account?

[58]   If Mr Jindal is successful on this ground it will be for the Court of Appeal to determine the consequential relief.

[59]   My judgment is stayed until 1 March 2022, by which time Mr Jindal must pay into the Court the sum owing. If that sum is paid in time, the stay will continue pending the resolution of the appeal. If the sum is not paid by that date, the stay will lapse.

Costs

[60]Given the mixed results, costs are to lie where they fall.