Koura Mining Limited v Geotech Limited - [2016] NZHC 1926

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

CIV-2016-409-000191 [2016] NZHC 1926

BETWEEN
KOURA MINING LIMITED

Applicant

AND

GEOTECH LIMITED Respondent

Hearing: 10 August 2016

Appearances:

S D Munro for Applicant
A N Riches for Respondent

Judgment:

18 August 2016

JUDGMENT OF ASSOCIATE JUDGE MATTHEWS

[1] On 8 March 2016 the respondent, Geotech Limited (Geotech), issued a demand to the applicant, Koura Mining Limited (Koura), under s 289 of the Companies Act 1993. The demand was served on Koura on 11 March 2016. Koura applies to set the demand aside under s 290 of the Companies Act. It relies on two of the grounds on which the Court may so order, that there is a substantial dispute over whether or not the debt claimed in the demand is owing or is due and, alternatively, that Koura appears to have a counterclaim for a sum exceeding the amount claimed in the statutory demand. The application is opposed.

[2] The sum which Geotech demands is $224,082.84, being the balance of an invoice issued on 1 November 2015 (invoice 3597, $74,553.92) and the full amount of each of three invoices (invoices 3660, 3661 and 3662) dated 1 December 2015 but issued on 5 December 2015.

[3] Geotech owns heavy machinery for use in the mining industry. Koura is a mining company. In 2015 they entered several agreements by which Koura leased,

KOURA MINING LTD v GEOTECH LTD [2016] NZHC 1926 [18 August 2016]

or leased with a view to purchasing, certain items of plant and equipment from Geotech. The terms of the agreements were varied and it is not necessary to record each step in this process. It is common ground that the upshot was three agreements relating to different items of plant and equipment. These are referred to in this case as the first, second and third agreements. The first is a lease to buy agreement, the third simply a lease. The second was not recorded in a formal document but there is a letter in evidence from Geotech to Koura which sets out Geotech’s view of the contract terms. It appears from that letter that the agreement is simply an agreement for sale and purchase of equipment, with payment to be made by instalments. Nonetheless, Mr McDonald, a consultant working with Koura, describes it as a lease to buy agreement, as does the chief financial officer of Geotech, Mr Currie. Either way, the intention was that Koura would purchase the equipment to which the agreement applies (itself a point of contention to which I will refer later). Koura would pay monthly payments, as under the other two agreements. After all the rearrangements had been made, the total monthly payments to be made by Koura to Geotech amounted to $179,955.33 plus GST, a total of $206,944.88.

[4] The monthly payments in issue in this case are, respectively, $36,359.15,

$81,666, and $12,000, in each case plus GST. The demand relates to one monthly instalment under each of these agreements, together with invoice…

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 1926
Decision Date: 18 August 2016

CaseChat Overview and Summary

Koura Mining Limited, a mining company, has applied to the High Court of New Zealand to set aside a statutory demand issued by Geotech Limited, a heavy machinery owner, for $224,082.84, being the balance of an invoice issued on 1 November 2015 and the full amount of three invoices issued on 5 December 2015. The demand was served on 11 March 2016. Koura relies on two grounds to set aside the demand, that there is a substantial dispute over whether or not the debt claimed is owing or is due and, alternatively, that Koura appears to have a counterclaim for a sum exceeding the amount claimed in the statutory demand. Geotech opposes the application. The court had to determine whether there is a substantial dispute whether or not the debt is owing or is due, and whether Koura appears to have a counterclaim exceeding the total of the invoices. The court found that there is no substantial dispute that the debt is owing and is due, and that Koura does not have a counterclaim exceeding the total of the invoices. The court dismissed the application and ordered Koura to pay Geotech costs on a 2B basis with disbursements fixed by the Registrar.

Orders