Lister v Hornby Construction Limited - [2015] NZHC 2127

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

CIV-2015-409-000314 [2015] NZHC 2127

BETWEEN
THOMAS NORMAN LISTER

Plaintiff

AND

HORNBY CONSTRUCTION LIMITED Defendant

Hearing: 3 September 2015

Appearances:

M K Prendergast for Plaintiff
Mr W van Beek, self representing defendant company

Judgment:

3 September 2015

JUDGMENT OF DUNNINGHAM J

[1] This is an application to liquidate Hornby Construction Limited (HCL). It is opposed by HCL.

[2] Mr William van Beek, HCL’s director, appeared in Court today. The company has not at any stage appointed a lawyer.

[3] Mr van Beek was made aware, prior to this hearing, that the accepted position is that, unless permitted by the Court to do so, no-one has the right to present a case in Court for another party, including a company, unless that person is a qualified lawyer.1 However, I granted leave for Mr van Beek to speak to the statement of
defence filed, and the hearing proceeded on this basis.

1 Re G J Mannix Ltd [1984] 1 NZLR 309 (CA).

LISTER v HORNBY CONSTRUCTION LIMITED [2015] NZHC 2127 [3 September 2015]

Background

[4] The application has its genesis in a contract HCL had to buy a house located on a farm near Hinds in South Canterbury. The vendor was Rylib Dairies Limited (Rylib), and it was undertaking a dairy conversion on the farm.

[5] HCL agreed to purchase the house via Trade Me on 12 February 2014 for

$1.00. A condition of the contract was that the house had to be removed by

16 March 2014.

[6] On 23 February 2014, HCL on-sold the house to Mr Lister, the plaintiff in these proceedings. Mr Lister paid $25,000 to HCL on 27 February 2014. Mr van Beek says that Mr Lister was told the house had to be removed by
16 March 2014.

[7] However, in the interim, Mr van Beek says Mr Lister colluded with Rylib’s directors to arrange to take the home off later, so Rylib cancelled the contract with HCL. Rylib then sold the house directly to Mr Lister. While Mr Lister claims he paid $20,000 to Rylib to procure the house, Mr van Beek protests that he has never seen any evidence that this payment was made.

[8] Mr Lister then filed a statement of claim on 29 September 2014 suing HCL for the $25,000 he had paid for the house which HCL had not been able to transfer to him.

[9] HCL did not engage lawyers to respond to the claim. Instead it filed a document entitled “Private Written Notice” which responded to the claim, along with an affirmation by Mr van Beek in response. These documents were not accepted for filing by the Timaru District Court on the basis they were non-complying documents.

[10] In the absence of a formal statement of defence being filed, on

4 December 2014 default judgment was entered in Mr Lister’s favour for $25,000 plus costs and disbursements.

[11] HCL then filed an appeal on 15 January 2015 relying on information given…

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: [2015] NZHC 2127
Decision Date: 3 September 2015

CaseChat Overview and Summary

The High Court of New Zealand considered an application by Thomas Norman Lister to liquidate Hornby Construction Limited (HCL). The application arose from a contractual dispute over the sale of a house. The vendor, Rylib Dairies Limited, had a contract with HCL, but on-sold the house directly to Lister. Lister sued HCL for the $25,000 he paid for the house which HCL could not transfer to him. HCL failed to file a proper defence, leading to a default judgment in Lister's favour. HCL's attempts to appeal were unsuccessful. Lister then issued a statutory demand, which HCL did not respond to, leading to the application for liquidation.

The legal issues before the Court included whether HCL was unable to pay its debts, whether the default judgment was correctly entered, and whether HCL had a valid defence to the claim. The Court considered the statutory presumption of insolvency under section 287 of the Companies Act 1993 and whether there were grounds to rebut this presumption. The Court also examined the adequacy of HCL's defence and its failure to challenge the default judgment at appropriate times.

The Court held that HCL was unable to pay its debts as it had not complied with the statutory demand and had no means to repay the judgment debt. The Court accepted that the default judgment was correctly entered as HCL had failed to file a proper defence. The Court further noted that HCL had not taken any steps to challenge the default judgment despite being advised of the correct procedures. The Court concluded that the appointment of liquidators was appropriate as there was no evidence to rebut the presumption of insolvency.

The Court ordered the liquidation of HCL, appointed Lynda Jane Smart and Paul Vlasic as liquidators, approved their remuneration, and awarded costs to Lister on a category 2B basis. The Court also noted that the orders were to be effective from 3 September 2015 at 3.30 pm.

Orders