Joint Action Funding Limited v Eichelbaum
[2016] NZHC 2919
•2 December 2016
IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY
CIV-2016-409-000651 [2016] NZHC 2919
UNDER the Companies Act 1993 IN THE MATTER
of an application to set aside a statutory demand
BETWEEN
JOINT ACTION FUNDING LIMITED Applicant
AND
JOHN REVANS EICHELBAUM Respondent
Hearing: 28 November 2016 Appearances:
O Peers for Applicant
J R Eichelbaum (Respondent) in person
P A B Mills on behalf of E M Houghton and claimant groupJudgment:
2 December 2016
JUDGMENT OF ASSOCIATE JUDGE OSBORNE
on application to set aside two statutory demands
Introduction
[1] The applicant, Joint Action Funding Ltd (JAFL), unsuccessfully defended a proceeding brought by John Eichelbaum in this Court. As a result, costs and disbursements orders were made in what I will refer to as “the first judgment”. Subsequently JAFL (which is appealing the first judgment in relation to the costs award) applied unsuccessfully for a stay of enforcement. As a result, the Court made a further costs order, in what I will call the “second judgment”.
[2] Mr Eichelbaum has issued statutory demands in relation to the first and second judgments (for $17,013.54 and $5,958 respectively). The mathematics of the
JOINT ACTION FUNDING LIMITED v EICHELBAUM [2016] NZHC 2919 [2 December 2016]
sums fixed by the Court in the first judgment and fixed by the Registrar following the second judgment are not in dispute. JAFL applies for orders setting aside each of the statutory demands. Several grounds were initially advanced. That which received the most attention in JAFL’s evidence relates to the interests of justice. That ground is best introduced by providing some context.
The context
[3] JAFL is a New Zealand litigation manager which was formed for the purpose of partly funding and of managing a substantial representative action (“the action”). The proceeding is for the most part funded by an offshore litigation funder.
[4] By the nature of the contractual arrangements between JAFL and others including the offshore funder, JAFL has financial obligations to the claimants in the action and to the professionals and other service providers. A deponent for JAFL has deposed that funds received for the litigation are held in a trust account for both the offshore funder and JAFL. Funds cannot be paid out of the account without the prior written approval of both the offshore funder and JAFL. Funds can only be applied for the agreed purpose of funding the action.
[5] In his submission, Mr Peers referred to the very substantial number of claimants represented in the proceeding. In his submission, he noted from the Bar that JAFL is in the process of negotiating terms with its creditors (including counsel and solicitors). Mr Peers, in his submissions, observed that there is concern on the part of JAFL that any payment it makes to Mr Eichelbaum could “undermine the ability of [JAFL] to discharge its duty to the [claimants in the action]”.
The jurisdiction to set aside a statutory demand – the principles
[6] The Court’s jurisdiction to set aside a statutory demand is contained in s 290
Companies Act 1993, and I refer specifically to the basis upon which the Court may grant an application as contained in s 290(4) which reads:
290 Court may set aside statutory demand
…
(4) The court may grant an application to set aside a statutory demand if it is satisfied that—
(a) there is a substantial dispute whether or not the debt is owing or is due; or
(b) the company appears to have a counterclaim, set-off, or cross-demand and the amount specified in the demand less the amount of the counterclaim, set-off, or cross-demand is less than the prescribed amount; or
(c) the demand ought to be set aside on other grounds.
[7] JAFL in its application relies on ss 290(4)(a) (substantial dispute) and s
290(4)(c). For the purposes of this hearing, I adopt as a general approach to the exercise of this jurisdiction the following principles relevant to each subsection. As to s 290(4)(a):
·The applicant must show that there is arguably a genuine and substantial dispute as to the existence of the debt. Put another way, the applicant must show that there is a real and not a fanciful or insubstantial dispute.1
·The mere assertion that the dispute exists is not sufficient. Material short of proof is required to support the claim that the debt is disputed.
· If such material is available, the dispute should normally be resolved other
than by means of proceedings in the Court’s Companies Act jurisdiction.
·It is not usually possible to resolve disputed questions of fact on affidavit evidence alone, particularly when issues of credibility arise.2
1 Re A Company [1991] BCLC 737 (Ch) at 740 per Harman J, adopted in AAI Ltd v 92 Lichfield
Street Ltd (in rec and in liq) [2015] NZCA 559 at [22].
2 For this formulation of the applicable principles, I acknowledge the editors of Company and
Securities Law (looseleaf ed, Brookers) at [CA290.02(1)].
As to s 290(4)(c):
·A significant example of the “other grounds” jurisdiction under s 290(4)(c) arises when parties have by contract or other binding arrangement submitted their disputes or other situations to arbitration, with the consequence that art
8 of sch 1 to the Arbitration Act 1996 would require a stay of proceedings before a Court in relation to the subject-matter.3
· There exists a residual discretion under the “other grounds” jurisdiction of
290(4)(c) which enables the Court to do justice between the parties.
Preliminary matters
Late evidence
[8] JAFL’s application for an order setting aside the statutory demand was filed
on 5 August 2016. Mr Eichelbaum’s opposition (including evidence) was filed on 18
August 2016. By memorandum dated 13 September 2016, counsel sought by consent (and obtained) a hearing date for the application and a timetable for submissions. No leave was requested or granted in relation to the filing of additional evidence.
[9] On the last working day before the hearing before me, Mr Peers emailed to the Case Officer “for filing” a “final but unsworn affidavit of Logan Granger” (in support of the application). On the morning of the hearing, Mr Peers sought to hand up a scanned copy of the affidavit now sworn (on the day of the hearing) by Mr Granger. The affidavit included further information relating to the litigation funding, JAFL’s role in it and the extent of the main amounts owing to creditors, with the indication that Mr Eichelbaum’s interest as creditor is a mere fraction of the total
liabilities. Mr Peers explained the delay in producing Mr Granger’s evidence by
3 In Zurich Australian Insurance Ltd v Cognition Education Ltd [2014] NZSC 188, [2015] 1
NZLR 383 at [52], the Supreme Court held, in relation to a summary judgment application, that a stay application based on the existence of an arbitration agreement should be determined first. See also Salford Estates (No 2) Ltd v Altomart Ltd (No 2) [2014] EWCA Civ 1575, [2015] Ch
589, staying a winding up petition based on an unpaid debt which arose out of a contract containing an arbitration agreement.
reference to heavy commitments his litigation team had had in relation to Supreme
Court (and other) proceedings.
[10] I declined leave to file the affidavit. The delay was inexcusable. Furthermore, Mr Granger’s affidavit was not truly an affidavit in reply. Admitting the affidavit would have inevitably led to a need for adjournment of the hearing as Mr Eichelbaum would have been entitled to have time to consider it and if appropriate, respond.
Intended appearance in support of application
[11] At 3.31 pm on the last working day before the hearing, Ms Mills’s instructing solicitors purported to file by email a memorandum of Mr E M Houghton (as representative plaintiff in the action) in support of JAFL’s application to set aside the statutory demand.
[12] There was something of a disjunct between the heading of the memorandum and its content. Although it was signed by Mr R D Cann as “solicitor for E M Houghton”, in the body of the document Mr Cann recorded that his firm will oppose any application to liquidate JAFL. I therefore viewed the memorandum as expressing the positions of both Mr Houghton and Wilson McKay as a firm.
[13] Any such appearance in support should have been filed long before the eve of hearing. If (as was clearly the case) those involved with the memorandum intended that it have an influence on the outcome of the application, Mr Eichelbaum was entitled to earlier receipt of such a memorandum and to consider whether any further evidence might be appropriate by way of response.
[14] The only explanation for delay provided by Ms Mills was in relation to the same litigation commitments in the Supreme Court and otherwise as referred to by Mr Peers. I accordingly declined leave for the memorandum to be read.
The first demand
[15] JAFL’s grounds of application were ultimately contained in an amended originating application (covering both statutory demands) dated 6 September 2016. Grounds of application affecting the first demand may be grouped under three heads:
(a) appeal from the first judgment; (b) the solvency of a debtor; and (c) “other grounds”.
Appeal from the first judgment
[16] JAFL makes a series of connected points, which are relevant to both the first and second judgments. It has appealed the first judgment as to the costs and disbursements order. The appeal is being pursued expeditiously and will determine the correctness or otherwise of the conclusion of Thomas J that Mr Eichelbaum is entitled to costs and disbursements notwithstanding that he appears in person (albeit having legal qualifications). JAFL points to authority from Australia (Cachia v
Haynes) inconsistent with the conclusion in the first judgment.4 JAFL points to the
decision in related High Court proceedings in which the presiding Judge declined, by reason of the fact that Mr Eichelbaum is a litigant in person, to award costs to Mr Eichelbaum.
[17] This case is one of the less usual cases in the company’s winding up jurisdiction in which the creditor relies upon a judgment debt.5 Notwithstanding the fact that Mr Eichelbaum has two costs judgments in his favour, Mr Peers submitted that there is (in terms of s 290(4)(a) Companies Act) “a substantial dispute whether
or not the debts are owing or due”.
4 Cachia v Haynes (1994) 179 CLR 403 (HC) at 412.
5 Under s 289 Companies Act 1993 a statutory demand may be issued in relation to a debt which is due (and not less than $1,000). The creditor need not have obtained a judgment in respect of the debt. The position may be contrasted with the need in relation to a bankruptcy notice under the Insolvency Act 2006, s 29(1) where the creditor must under s 29(3)(a) be entitled to enforce a final judgment or final order.
[18] Mr Peers’ written submissions did not cite any authority for the proposition that a judgment debtor’s arguments against the validity of sealed costs judgments of a Court may amount to a “substantial dispute whether or not the debt is owing”. In the course of his oral submissions, Mr Peers fulfilled his responsibility as counsel to draw my attention to two decisions of this Court which he accepted might be taken to weaken his argument.
[19] In Birchfield Developments Ltd v Kent Prier Real Estate Ltd, a judgment debtor failed on its application to have a statutory demand set aside.6 The judgment debtor, following the issuing of a statutory demand, had lodged an appeal against the High Court’s summary judgment. Master Venning swiftly disposed of the s 290(4)(a) ground:7
It is accepted in this case there is no substantial dispute whether the debt is owing. Apparently no application for stay of the High Court judgment has been made. It is clear enough that an appeal does not operate as an automatic stay. If any further authority is required, in Hoare Bros Pty Ltd v DFC of T… it was held that the possibility that a presently existing and enforceable debt might be set aside in the future under a subsisting appeal does not give rise to a genuine dispute about the existence of the debt. Nor is there any issue about any counterclaim or set-off in the present case.
[20] In Bristol Forestry Venture Ltd v Commissioner of Inland Revenue, Associate Judge Faire refused to set aside a statutory demand which the Commissioner had issued in reliance upon taxation challenge proceeding judgments.8 His Honour considered authority in relation to the status of challenge proceeding judgments,9 and referred to Australian authority and to Master Venning’s judgment in Birchfield
Developments:
[41] Unless a judgment is stayed, there cannot be a substantial dispute over the debt it establishes.10 The possibility that a present existing and enforceable debt might be set aside in the future under a subsequent appeal does not give rise to a general dispute about the existence of the debt.11
6 Birchfield Developments Ltd v Kent Prier Real Estate Ltd (1999) 8 NZCLC 261,889 (HC).
7 At 261,891, citing Hoare Bros Pty Ltd v Deputy Commissioner of Taxation (1996) 62 FCR 302 (FCA).
8 Bristol Forestry Venture Ltd v Commissioner of Inland Revenue [2013] NZHC 2384, (2013) 26
NZTC 22-031.
9 At [37] – [39].
10 Remote Camps Australia Pty Ltd v Hazeldine Pty Ltd [2012] FCA 130.
11 Birchfield Developments Ltd v Kent Prier Real Estate Ltd, above n 6.
[21] The fact that there is a position commonly recognised in New Zealand (under the Companies Act) and in the Australian Commonwealth (under the Corporations Act 2001) stems from the similar jurisdiction of the Australian Courts to set aside a statutory demand where there is a “genuine dispute … about the existence or amount of a debt to which the demand relates”.12 The consistent application of the same approach in Australia is reflected by the breadth of citation in the judgment of the Federal Court of Australia in the decision footnoted by Associate Judge Faire, Remote Camps Australia Pty Ltd v Hazeldean Pty Ltd, in which Barker J stated:13
So far as s 459H(1)(a) is concerned, the law is crystal clear that a company cannot establish a “genuine dispute” about the existence of the amount of a debt to which the demand relates where there is a judgment debt which, while it may be the subject of an appeal to a higher court, has not been stayed so far as the operation of that judgment is concerned: Barclays Australia (Finance) Ltd v Mike Gaffikin Marine Pty Ltd (1996) 21 ACSR
235 (Barclays Australia (Finance)) at 238; Eumina Investments Pty Ltd v
Westpac Banking Corporation [1998] FCA 824; (1998) 84 FCR 454 (Eumina) at 457-458; Midas Management Pty Ltd v Equator Communications Pty Ltd [2007] NSWSC 759 at [12]; Food Channel Network Pty Ltd v Television Food Network, GP [2010] FCA 403 (Food Channel v Television Food) at [14]; Collendina Pty Ltd v ClarkeKann (NSW) Pty Limited (No 2) [2010] FCA 949 (Collendina) at [19].
[22] Accordingly, I conclude that the first ground advanced by JAFL in reliance on s 290(4)(a) of the Act must fail (in relation to both demands). JAFL is unable to raise a substantial dispute as to whether the two judgments debts are owing or due.
The solvency of a debtor
[23] JAFL as a ground of application asserts that it is not insolvent. For that proposition, Mr Peers refers to the affidavit of JAFL’s managing director. He first produces an (unaudited) balance sheet as at 31 July 2016 listing various assets and liabilities. It shows a positive equity. Secondly he states that JAFL is not insolvent, deposing, “Apart from the respondent’s judgments that are under appeal, the applicant has arrangements with his creditors [and a sum on deposit for security].”
[24] The solvency test under the Companies Act (contained in s 4(1)) requires both cash flow solvency and balance sheet solvency. The evidence adduced by
12 Corporations Act 2001 (Cth), s 459H (1)(a).
13 Remote Camps Australia Pty Ltd v Hazeldean Pty Ltd, above n 10, at [25].
JAFL, apart from its deponent’s bare (and ambiguous) statement that “the applicant is not insolvent”, rests on the exhibited balance sheet. On that basis alone, the evidence does not establish the ground of application – there is no evidence of cash flow solvency.
[25] Furthermore, within the balance sheet as exhibited the majority of “non- current assets” are stated to be “entitlements”. No evidence is provided in explanation of the term entitlements (other than an indication it is based on the contractual provisions as to the litigation funding). No evidence is provided as to their status (whether contingent or otherwise). In the absence of some proper assessment of the value of such entitlements, the balance sheet has no relevant evidential value. That conclusion stands independently of the fact that the lack of any independent confirmation that the exhibited balance sheet is objectively realistic further undermines the evidence.
[26] Finally, in relation to cash flow solvency, the bare assertion that “the applicant has arrangements with its creditors” is too general to permit the Court to draw any reliable evidential conclusion in that regard. At most JAFL’s solvency (rather than being a ground of application in itself), might be a factor to be taken into
account in the assessment of “other grounds” under s 290(4(c)).14 But it is a factor
which would cut two ways. If, as JAFL’s director deposes, JAFL is not insolvent, it is difficult to envisage a situation in which JAFL could not somehow finance the relatively modest payments (totalling $22,971.54) required to meet the two costs judgments.
“Other grounds” under s 290(4)(c)
[27] JAFL, in its application, invoked the residual grounds under s 290(4)(c) of the Act. It asserts, “It is in the interests of justice that the orders sought be granted”. Mr Peers developed the argument as to the justice of the case for three reasons, namely:
· JAFL has a good prospect of succeeding on its appeals from the costs
14 Birchfield Developments Ltd v Kent Prier Real Estate Ltd, above n 6, at 261,891.
judgments;
· through the particular circumstances of the litigation funding arrangements, enforcement of the costs judgments “could undermine the ability of JAFL to discharge its duties to the [claimants]”; and
· JAFL has the support of the majority of its creditors.
[28] An additional matter which appeared in Mr Peers’ written submissions but not in the grounds of application involved a suggestion that there might be a legitimate concern as to whether Mr Eichelbaum would repay any sum paid by JAFL on account of the demands. Mr Peers saw fit not to address that submission orally. I put no weight upon it both because it is not a reasonable fear in terms of the evidence adduced and it was not a ground raised in the amended notice of application.
[29] I then approach the exercise of the discretion under s 290(4)(c) in accordance with the observation of Tipping J in the Court of Appeal judgment in Commissioner of Inland Revenue v Chester Trustee Services Ltd.15 His Honour stated that all cases involving the s 290(4)(c) provision must in the end come down to a judgment by the Court as to whether the creditor’s prima facie entitlement is outweighed by some fact or factors making it plainly unjust for liquidation to ensue. Tipping J expressed his agreement also with the conclusions in the judgment delivered by Baragwanath J.16
The latter cited with approval the following passage from McPherson: The Law of
Company Liquidation:17
There are … certainly no more than five, and probably only four, reasons which will justify the Court in refusing to make an order on the application of an unpaid creditor. These are that (1) the applicant’s debt amounts to less than [the statutory minimum]; (2) the debt is bona fide disputed by the company; (3) the company has paid or attended payment of the applicant’s debts; (4) winding up is opposed by other creditors; and (5) the company is in the process of being wound up voluntarily.
15 Commissioner of Inland Revenue v Chester Trustee Services Ltd [2003] 1 NZLR 395 (CA) at
[3].
16 At [1].
17 At [47].
[30] In exercising the discretion under s 290(4)(c), I also remind myself that at the point an application of this nature comes before the Court, the creditor is not seeking the liquidation of the judgment debtor. Rather, the creditor is pursuing a course which, if the judgment debtor does not pay the debt, will provide evidence of the debtor’s insolvency.
[31] I then turn to the three matters by JAFL (the appeal, solvency and other grounds). None of them either individually or collectively is “compelling” in terms of Tipping J’s requirement. JAFL actively defended Mr Eichelbaum’s proceedings and failed. The first and second (costs) judgment followed. JAFL in conducting its defence (in the event it was unsuccessful) was at risk of awards of costs and disbursements which would become immediately payable. The costs awards are tiny in the context of JAFL’s operations, expenses and potential recoveries. What may or may not be required to be paid to or by JAFL under agreements which it has with various entities involved in the representative action, in the absence of agreement, is not in point. The shareholders of JAFL chose to establish it and to have it operate in New Zealand. JAFL then chose to defend the proceedings brought by Mr Eichelbaum.
[32] It is for JAFL to find its funding for the consequences of steps it takes. If it fails to find the funds for the modest sums involved in this litigation from litigation funders, then with the body of claimants which JAFL serves the individual contribution by each claimant to meet the costs awards would be minimal. If JAFL for some reason fails or refuses to access the funds necessary to meet the judgment debts, then the statutory demand process will be serving its purpose by providing evidence on JAFL’s insolvency. JAFL should not receive immunity from the insolvency regime of the Companies Act on account of the nature of its activities.
[33] The grounds advanced by JAFL fall short of compellingly establishing that an injustice will arise if the statutory demands are allowed to stand.
The second demand
[34] The grounds on which JAFL applied for the setting aside of the second demand mirror those of the application in relation to the first demand. I adopt in relation to the second demand the conclusions already stated in relation to the first.
[35] JAFL’s application included two additional grounds in relation to the second demand:
(a) service; and
(b) fixing of costs and disbursements by the Registrar.
Service
[36] JAFL asserted that the second demand had not been served at JAFL’s registered office and instead was taped to the lobby door of counsels’ chambers. Following an exchange between the Court and Mr Peers, Mr Peers responsibly abandoned reliance on this ground. I add only this. The ground was plainly untenable. JAFL chose to identify as its registered office a level of a particular building. Offices within the level are able to be accessed only by the ringing of a bell and waiting for an entrance door to be opened. The reference in the application to “taped to the lobby door of counsels’ chambers” was an inappropriate pleading as the door in question was the door which served the numerous offices on that floor (some of which happened to be barristers’ chambers).
Fixing of costs and disbursements by Registrar
[37] When the Court in the second judgment ordered JAFL to pay Mr Eichelbaum’s costs and disbursements, the Court directed that they be fixed by the Registrar. The Deputy Registrar (pursuant to his delegation) did so in August 2016. JAFL raised as a ground for setting aside the second statutory demand that the Registrar had fixed the costs without notifying JAFL or obtaining the agreement of JAFL “as required by r 2.5 of the High Court Rules”.
[38] Rule 2.5 High Court Rules provides:
A Registrar (not including a Deputy Registrar) has the jurisdiction and powers of a Judge to do the following:
…
(e) make an order in an interlocutory application on notice—
(i) if the consent of all relevant parties is endorsed on the application or filed; or
(ii) on receiving a draft order consented to in writing by all relevant parties or by their solicitor or counsel.
[39] This ground of application is misconceived. Neither the Registrar nor the Deputy Registrar (the latter having no powers in terms of r 2.5) was purporting to make an order on an interlocutory application under r 2.5(e). The Deputy Registrar was not in relation to an interlocutory application which generally can be dealt with only by a Judge attending to one of the steps permitted under r 2.5. Instead, the Deputy Registrar was acting on the direction of a Judge who had already made the relevant order on the interlocutory application, namely that it was dismissed with
costs (on a 2B18 basis) and reasonable disbursements to Mr Eichelbaum (to be fixed
by the Registrar).
[40] In the circumstances, it is unnecessary that I reach a conclusion in relation to whether it may be arguable that the order was sealed for a sum beyond that which was appropriate. There was provided in evidence an exchange of correspondence between Buddle Findlay and Mr Eichelbaum as to the circumstances in which the order was sealed and as to the sums involved. Buddle Findlay in late August suggested that there were grounds on which the sealed order might be set aside under r 7.5(1) or r 14.8 High Court Rules.
[41] Because the Deputy Registrar sealed the order pursuant to the direction of a Judge, I doubt that either rule has application. A rule which might have had application is r 14.23 High Court Rules which allows the Court on the application of the party dissatisfied with the Registrar’s decision to refer a matter back to the Registrar for any necessary amendments. Such a review can occur whenever the Registrar’s actions were done by a direction of the Court. But JAFL has not sought
to take advantage of that provision. The sealed order remains enforceable.
18 High Court Rules, Category 2 under r 14.3(1) and band B under r 14.5(2).
[42] There is no ground to set aside the statutory demand in this regard.
Period for payment
[43] When a statutory demand is issued under s 289 of the Act, the debtor has 15 working days after service (or such longer period as the Court may order) within which to make payment. In the event I was to dismiss the application, Mr Peers sought the specification of a further 15 working day period for payment. Mr Eichelbaum did not oppose that. Such is the order I will make.
Costs
[44] I heard from Mr Peers and Mr Eichelbaum in relation to costs. In the event I dismissed the application, Mr Peers accepted that the first principle – costs and disbursements to follow the event – would normally apply. Mr Peers submitted, for the same reasons as JAFL is pursuing on appeal, that the Court should not award costs in favour of Mr Eichelbaum – Mr Eichelbaum is a litigant in person.
[45] I view the Court of Appeal judgment in Brownie Wills v Shrimpton as applying to the present application (as it was found to apply to the first and second judgments).19 In Brownie Wills, the appellant law firm, having been represented by one of its employees, sought costs. In the plurality judgment, Gault and Blanchard JJ observed:
The long-established rule is that, as an exception to the general rule denying costs to a litigant in person, a practising barrister and solicitor who brings or defends a proceeding in person or by a partner or employee of the firm is entitled to the same costs as when acting on behalf of a client. So the lawyer litigant may have the same costs as if another lawyer had been instructed but cannot, of course, charge for consulting, instructing, or attending upon him or herself: London Scottish Benefit Society v Chorley (1884) 13 QBD 872. In New Zealand the exception is discussed or referred to in Hanna v Ranger (1912) 31 NZLR 159, Lysnar v National Bank of New Zealand Limited (No.
2) [1935] NZLR 557 and Re Collier (A Bankrupt) [1996] 2 NZLR 438.
[46] Their Honours expressly referred to the decision of the High Court of
Australia in Cachia v Haynes.20 That is the central case relied upon by JAFL in relation to its appeal from the costs judgments. The New Zealand Court of Appeal in
19 Brownie Wills v Shrimpton [1998] 2 NZLR 320 (CA) at 327.
20 Cachia v Haynes, above n 4.
Brownie Wills noted that Cachia v Haynes had cast some doubt on this exception to the litigant-in-person rule but stated that it would not depart from the practice of allowing costs to a solicitor/litigant. As such, until and unless the Court of Appeal reconsiders the approach, it is for this Court to apply the “long-established rule” stated by the Court of Appeal in Brownie Wills.
[47] Mr Eichelbaum is entitled to costs, together with his reasonable disbursements. It is appropriate that costs be on a 2B basis. Had the service issue raised by JAFL involved additional attendances, it would have been just to impose an element of increased or even indemnity costs under r 14.6 High Court Rules. Having regard to the fact that there were no distinct attendances required of Mr Eichelbaum in relation to the service issue, costs may justly be dealt with on simply a 2B basis.
Orders
[48] I order:
(a) The application of Joint Action Funding Limited as amended on 6
September 2016 is dismissed;
(b)The time for payment of each of the statutory demands issued by the respondent (respectively dated 22 July 2016 and 22 August 2016) is extended to 15 working days from the date of this judgment;
(c) In the event of non-satisfaction of one or both of the demands within the said 15 working days the respondent may make an application for an order liquidating the applicant;
(d)The applicant is to pay to the respondent the costs of the application on a 2B basis (hearing certified at two quarter days) together with the
respondent’s reasonable disbursements to be fixed by the Registrar.
Solicitors:
Buddle Findlay, Christchurch
Wilson McKay, Auckland
Copy to: J R Eichelbaum
P A B Mills
Associate Judge Osborne
10
0