Kooger v Popuphome.nz Limited

[2019] NZHC 3303

IN THE HIGH COURT OF NEW ZEALAND ROTORUA REGISTRY

I TE KŌTI MATUA O AOTEAROA

TE ROTORUA-NUI-A-KAHUMATAMOMOE ROHE

CIV-2019-463-000064

[2019] NZHC 3303

BETWEEN

CHRISTINE KOOGER

Plaintiff

AND

POPUPHOME.NZ LIMITED

Defendant

Hearing:

10 December 2019

Appearances:

C Hallowes for the Plaintiff

No appearance for the Defendant

Judgment:

16 December 2019

COSTS JUDGMENT OF ASSOCIATE JUDGE SARGISSON

This judgment was delivered by me on 16 December 2019 at 11.30 a.m. pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar Date.......................................

Solicitors:

Barter Law, Auckland

KOOGER v POPUPHOME.NZ LTD [2019] NZHC 3303 [16 December 2019]

[1]                 The judgment creditor’s application for an order for liquidation came before the court earlier this week when it was withdrawn by leave. This was on the basis that it was the second application in the list seeking an order for the defendant’s liquidation, and liquidators were appointed on the first application.

[2]I have reserved the issue of costs on the application, because:

(a)When the matter came before the Court on 5 November 2019 I wished to be satisfied that there was proper proof of service of the statutory demand. (The method of service relied upon was personal delivery at the company’s registered office; and without proper proof, it was unclear whether there was a valid basis for the application for an order for liquidation).

(b)Counsel advises that he is unable to provide further affidavit evidence relating to service as, with the passage of time, the courier driver responsible for service is unable to recollect the details of service.

[3]                 Counsel submits that I should treat service of the statutory demand as having been properly effected by the alternative means of email, recounting from the bar that the statutory demand had also been emailed to the defendant company. He relies in support on s 388 of the Companies Act 19931, which finds support in a recent decision of Associate Judge Lester in Upright Scaffolding Ltd v Pinnies Painters & Plasterers Ltd.2 Judge Lester declined to follow an earlier decision of Master Faire (as he then was) in Delta Installations Ltd v Hamilton Joinery Ltd.3Master Faire held that statutory demands must be served in accordance with the requirements of s 387 on the basis that a statutory demand is properly treated as “a document in a proceeding”; and therefore that service by email is not permitted.

1      Which permits service of documents on a company in specified ways, including by email.

2      Upright Scaffolding Ltd v Pinnies Painters & Plasterers Ltd [2019] NZHC 1495.

3      Delta Installations Ltd v Hamilton Joinery Ltd [M 1/03], CIV-2003-419-000210.

[4]                 I do not find it necessary to determine which of the two judgments is correct. This is on the basis that there is in fact nothing before me to establish that the statutory demand was “served” by email. (The evidence concerning the emailing of documents relates to the application for an order for liquidation and related documents).

[5]                 However, I am satisfied there is a proper basis on which to order costs on the application itself, for these reasons:

(a)As I ruled on 5 November 2019, service of the order for liquidation, the notice of proceeding and verifying affidavit was properly effected.

(b)Though the statement of claim relies on non-compliance with a statutory demand, that is simply to support the ground for liquidation – that the company is insolvent.

(c)It is now clear that the company is insolvent. That has been established by evidence in support of the first application and the order for liquidation I made on that application. I see no reason why the plaintiff in this case cannot rely on that order; or indeed the failure to comply with the statutory demand (properly served) in relation to the first application.

[6]                 I am therefore also satisfied that it is appropriate to make an order for costs plus disbursements as fixed by the Registrar but with the proviso that there should be no costs in relation to the statutory demand. The result is that I allow costs for other steps in the proceeding on a 2B basis plus disbursements as fixed by the Registrar. Counsel is to file a brief memorandum for the Court’s approval setting out the quantum of costs and disbursements sought.

[7]                 I add  a postscript.  Without  expressing a determinative view on  the matter,  I am inclined to think Delta is correct. It can be no accident the itemised time allocations in Schedule C of the High Court Rules provide for the steps in a liquidation proceeding as including the issuing of a statutory demand. But whichever approach is right, the safe course is to serve a statutory demand by personal service on the registered office (as Judge Lester observed, but for different reasons that Judge Faire).

Associate Judge Sargisson