Lough Corrib Limited v NZ Finance Group Limited
[2025] NZHC 3009
•14 October 2025
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2024-463-103
[2025] NZHC 3009
BETWEEN LOUGH CORRIB LIMITED
Applicant
AND
NZ FINANCE GROUP LIMITED
Respondent
Hearing: 17 September 2025 Appearances:
Simon Cogan for the Applicant Aimee Elia for the Respondent
Judgment:
14 October 2025
JUDGMENT OF ASSOCIATE JUDGE C B TAYLOR
[Application for leave to appeal]
This judgment was delivered by me on 14 October 2025 at 3:00pm
Pursuant to Rule 11.5 of the High Court Rules 2016
……………………………………… Registrar/Deputy Registrar
Solicitors:
Hunwick law Limited (Michael Hunwick), Hamilton, for the Applicant Brookfields (Aimee Elia/David Neutze) Auckland, for the Respondent Counsel:
Simon Cogan, Mills Lane Chambers, Auckland, for the Applicant
LOUGH CORRIB LIMITED v NZ FINANCE GROUP LIMITED [2025] NZHC 3009 [14 October 2025]
Introduction
[1] The respondent, NZ Finance Group Ltd (NZFG), served a statutory demand on the applicant, Lough Corrib Limited (LCL) on 5August 2024 demanding payment in the sum of $576,518.91, being the principal debt owing under the loan advanced by NZFG to LCL.
[2] By memorandum dated 7 November 2024, LCL applied to consolidate this proceeding with proceedings in the High Court at Auckland in CIV-2024-404-998 (the 998 proceeding) and CIV-2024-404-1843 (the 1843 proceeding) (the Guarantee Proceedings). The Guarantee Proceedings have been set down for a 5-day trial commencing 26 July 2027.
[3] Following an exchange of memoranda by counsel, the Court directed the parties to file submissions on LCL’s consolidation application. On 20 February 2025 the Court issued a judgment dismissing LCL’s application for consolidation (the Judgment).1
[4] On 20 March 2025, LCL applied for leave to appeal the Judgment. On 7 May 2025, NZFG filed a notice of opposition to LCL’s application for leave to appeal.
[5]The application was heard on 17 September 2025.
Background
[6] The proceedings relate to a loan by NZFG to LCL (the LCL Loan). The funds advanced to LCL under the LCL Loan were raised from Dilseacht Trustees Limited (Dilseacht) in accordance with the following transactions:
(a)On 31 March 2023 Dilseacht invested $4 million in Kiwi Funds No.1 Ltd (Kiwi Funds No.1) for the purpose of Kiwi Funds No.1 investing the funds in NZFG and NZ Trade Finance Ltd (NZFT).
1 Lough Corrib Limited v NZ Finance Group Limited [2025] NZHC 221.
(b)Kiwi Funds No.1, NZFT and NZFG are related companies and are in business together;
(c)Kiwi Funds No.1 procures investment from wholesale investors, and those investments were advanced by Kiwi Funds No.1 to NZFT and NZFG. NZFT provides finance to trade creditor by factoring debts, and NZFG provides finance by mortgage-backed lending.
[7]In about April 2023:
(a)NZFG made loan advances of approximately $800,000 to Dilseacht;
(b)NZFG advanced the LCL Loan to LCL. LCL is a related company of Dilseacht and Dilseacht guaranteed the repayment of the LCL Loan (the Dilseacht Guarantee)
[8] LCL and Dilseacht, and Kiwi Funds No.1, NZFT and NZFG are parties to the proceedings in the High Court at Auckland which have been consolidated:
(a)The 998 proceeding, proceeding brought by Dilseacht seeking to invalidate the Dilseacht Guarantee given in respect of the LCL Loan. The defendants are Kiwi Funds No.1, NZFT and NZFG;
(b)the 1843 proceeding brought by NZFG seeking to enforce the Dilseacht Guarantee in respect of the LCL Loan against Dilseacht and Mr Jean Michele Renee Poulot and Ms Susan Anne Poulot.
[9]On 31 October 2024 in the Guarantee Proceedings the High Court:
(a)Granted summary judgment to Dilseacht in respect of part of its claim on its first cause of action in the 998 proceeding;2 and
2 Dilseacht Trustees Ltd v Kiwi Funds No.1 [2024] NZHC 3190 at [89].
(b)ordered the sum of $806,000 be retained by Kiwi Funds No.1, the purpose of the order being to preserve that sum pending determination of the substantive proceedings.
[10]In making the order, Associate Judge Brittain said:3
[86] Dilseacht proposes that a further sum of $600,000 be deducted from the judgment sum and retained as an investment by Kiwi Funds No.1 in NZFG, comprised of the amount allegedly due under the Dilseacht guarantee of $576,518.91, and a further allowance of approximately $24,000 to account for interest that continues to accrue under the Lough Corrib loan.
[87] Mr Neutze took no issue with the figure of $576,518.91, noting that interest continues to accrue on the Lough Corrib loan at the rate of 22.95 per cent per annum. Interest in the vicinity of $115,000 per year might accrue for two years before the issues in respect of the Dilseacht guarantee go to trial.
[88] An appropriate allowance for the issues in respect of the Dilseacht guarantee is $806,518.91, allowing $230,000 for interest that might accrue before the remaining issues in the proceedings are determined at trial.
Legal principles
Leave to appeal
[11] No appeal4 lies from any order or decision of the High Court made on an interlocutory application in respect of any civil proceeding unless leave to appeal to the Court of Appeal is given by the High Court or by the Court of Appeal following the High Court’s refusal of leave.5
[12] The relevant principles are set out in the decision of the Court of Appeal in Greendrake v District Court where the Court of Appeal identified the following considerations:6
(a)a high threshold exists;
(b)the applicant must identify an arguable error of law or fact;
3 Above n 2, at [86]-[88].
4 Except for those appeals provided for under s 56(4) of the Senior Courts Act (the Act).
5 Section 56 of the Act.
6 Greendrake v District Court of New Zealand [2020] NZCA 122 at [6].
(c)the alleged error should be of general or public importance warranting determination or otherwise of sufficient importance to the applicant to outweigh the lack of general or precedential value;
(d)the circumstances must warrant incurring further delay; and
(e)the ultimate question is whether the interests of justice are served by granting leave.
[13] The Court of Appeal in that decision also approved the observations of Fitzgerald J in Finemore Upholstery Ltd v Vaughan to the effect that the requirement for leave was a filtering mechanism to ensure that unmeritorious appeals of no great significance do not unnecessarily delay the proceedings in which the orders had been made.7
Consolidation
[14]Rule 10.12 of the High Court Rules 2016 provides:
10.12 When order may be made
The court may order that 2 or more proceedings be consolidated on terms it thinks just, or may order them to be tried at the same time or one immediately after another, or may order any of them to be stayed until after the determination of any other of them, if the court is satisfied –
(a)that some common question of law or fact arises in both or all of them;
(b)that the rights to relief claimed therein are in respect of or arise out of -
(i)the same event; or
(ii)the same transaction; or
(iii)the same event and the same transaction; or
(iv)the same series of events; or
(v)the same series of transactions; or
7 Greendrake v District Court of New Zealand, above n 4, referring Finemore Upholstery Ltd v Vaughan [2017] NZHC 1679 at [13].
(vi)the same series of events and the same series of transactions; or
(c)that for some other reason it is desirable to make an order under this rule.
[15] One or more of the circumstances in r 10.12(a), (b) or (c) should be engaged.8 However, r 10.12(c) (“that for some other reason it is desirable to make an order under this rule”) provides a “catch all”.
[16] In Regan v Gill the Court of Appeal confirmed the power to consolidate proceedings is a wide discretion, to be exercised broadly in the interests of justice.9
[17]The following principles emerge from the case law:10
(a)The aim should be to avoid a multiplicity of proceedings11 and to avoid “inconsistent approaches to, and/or outcomes from, cases dealing with the same event(s) and/or transaction(s)”.12
(b)Consolidation is desirable where it will lead to savings in time and cost to the parties, and in judicial resources.13 Having to call the same evidence on more than one occasion is costly and inefficient.14 Where factual and legal issues overlap, a concurrent hearing permits common legal and factual issues to be addressed in the most logical, efficient and coherent way.15
(c)Differences between the issues in two sets of proceedings does not prevent consolidation if there is a “sufficient common thread” that makes it desirable and efficient to hear the cases together.16
8 100 Investments Ltd v Walker [2022] NZHC 1379.
9 Regan v Gill [2011] NZCA 607 at [10].
10 See Lisk v Lisk [2024] NZHC 3360 at [28].
11 Callplus Ltd v Telecom New Zealand Ltd (2000) 15 PRNZ 14 (HC) at [17]; and Medlab Hamilton Ltd v Waikato District Health Board (2007) 18 PRNZ 517 (HC) at [8].
12 Callplus Ltd v Telecom New Zealand Ltd, above n 6, at [17].
13 At [17] and [37].
14 Gair v Newnham [1974] 1 NZLR 662 (CA) at 664–665.
15 Medlab Hamilton Ltd v Waikato District Health Board, above n 6, at [9] and [15].
16 At [9], [12] and [15]; and Callplus Ltd v Telecom New Zealand Ltd, above n 6, at [16].
Applicant’s position
Arguable errors of law.
[18]Mr Cogan, for LCL, submits that the Court erred in the Judgment:
(a)in finding that there was insufficient commonality of facts between the Guarantee Proceedings and this proceeding. There was extensive commonality and in particular the relief sought in all three proceedings arise out of the same events/or transactions, namely the LCL Loan:
(i)the Guarantee Proceedings would decide whether the LCL Loan is enforceable;
(ii)this proceeding will determine whether there is a bona fide dispute as to whether the LCL Loan is enforceable.
In any event, commonality of facts is not an essential requirement and it is sufficient that:
(i) there are common issues of law, namely enforceability or otherwise of the LCL Loan;
(ii) there is some other reason why it is desirable to make an order for consolidation, which in this case is that it is undesirable a company should be put at risk of liquidation over a debt that may be found not to be due and owing.
(b)in finding that the “statutory demand process in the liquidation proceedings which may follow from it are a totally different procedure and type of proceeding to the Guarantee Proceedings. This is not a relevant factor under r 10.12;
(c)in finding that by consolidating this proceeding with the Guarantee Proceedings would cause unwarranted delay, giving excessive regard
to the risk of delay over the risk of inconsistent findings of fact and/or law. Any delay would not be unwarranted and would avoid the risk of inconsistent findings and inefficient use of judicial resources;
(d)in failing to have regard under r 10.12(c) to the fact that if this proceeding is determined before the Guarantee Proceedings, there is a risk that LCL is liquidated over an alleged debt that was found in the Guarantee Proceedings to not in fact be due and owing and the statutory demand process will have been abused by NZFG to circumvent the Guarantee Proceedings. In particular:
(i)pursuant to the judgment in the Guarantee Proceedings, Kiwi Funds No.1 and NZFG are already holding sufficient funds to satisfy the entirety of the disputed liability under the LCL Loan and associated guarantees, in the event that the guarantee argument is ultimately determined against the guarantors;
(ii)by now seeking to pursue the parallel proceedings through the statutory demand process, Kiwi Funds No.1 and NZFG are pursuing an amount they already hold;
(iii)if the proceedings are not consolidated, and the statutory demand proceeding proceeds separately, this will have the practical effect of coercing LCL to pay the funds that are already preserved for NZFG, overtaking the substantive determination of the disputes as to whether those funds are in fact payable.
Importance to the applicant
[19] Mr Cogan submits that the application is important to LCL as, if this proceeding is determined without the Guarantee Proceedings first being determined, there is a risk that LCL is liquidated over an alleged debt that is subsequently found in the Guarantee Proceedings to not in fact be due and owing.
General and/or public interest
[20] Mr Cogan submits that the appeal raises issues of general and/or public importance, namely:
(a)avoiding inconsistent findings of fact and/or law and decisions of the same Court in respect of substantially the same subject matter;
(b)the efficient use of judicial resources;
(c)the statutory demand process not being abused by creditors to circumvent extant substantive proceedings.
Delay
[21] Mr Cogan acknowledges that if the three proceedings are consolidated, there will be some delay in the determination of the application to set aside the statutory demand. However, he submits:
(a)In the overall scheme of the life-span of this proceeding to date, any such delay will not be material;
(b)even if the application to set aside the statutory demand is dismissed, it would still be necessary for NZFG to commence liquidation proceedings, and if those liquidation proceedings are defended, then the liquidation process would take some time and accordingly prejudice to NZFG from the delay is minimal;
(c)to the extent there is any prejudice to NZFG, such prejudice is outweighed by the prejudice to LCL of incurring the time and expense of these proceedings, being subjected to the risk of liquidation proceedings, which the Guarantee Proceedings may determine were, at best, without merit and at worst, an abuse of process.
[22] Mr Cogan concludes that it is in the interests of justice that leave is granted to LCL to appeal a decision of this Court declining to consolidate the proceedings.
Respondent’s position
Disputed and undisputed debt
[23] Ms Elia, for NZFG, submits that the alleged “dispute” concerning NZFG’s ulterior motives in making the LCL Loan to allow to acquire an interest in Farmers First Group Limited (Farmers First) (the FFL Dispute) cannot be raised by LCL in respect of the loan funds retained by LCL (including repayment of the $100,000 earlier advanced by Mr and Mrs Poulot to Farmers First), or funds used by LCL for the purchase of equipment for its trade centre. She submits that LCL applied for and obtained the LCL Loan for the dual purpose of funding the purchase of equipment for its new trade centre in Taupo and buying into Farmers First, and LCL has not challenged the evidence of NZFG that LCL applied a portion of the LCL Loan, estimated to be $250,000, for its own purposes in respect of the equipment for its trade centre (the Undisputed Debt).
[24] Ms Elia submits, on the basis of contemporaneous evidence, there is an Undisputed Debt of $250,000 which has nothing to do with the Guarantee Proceedings and can and should be dealt with in the context of statutory demand proceedings. She submits further that LCL’s Loan application for the LCL Loan refers to $100,000 already having been advanced by Mr and Mrs Poulot to Farmers First, and a decision was made by them that these loan funds may have been used to repay that advance and consequently can have nothing to do with any of the other allegations made by the guarantors against NZFG in the Guarantee Proceedings. She submits accordingly there are no common facts or law in respect of the Undisputed Debt portion of the LCL Loan.
No arguable error of law
[25] Ms Elia submits that the Guarantee Proceedings as they stand will not result in any determinations relating to the LCL Loan, including whether the LCL Loan is due and owing. She submits:
(a)If consolidated, the consolidated proceedings will determine whether or not the FFL Dispute is substantial enough to warrant the setting aside of the statutory demand, or whether NZFG can rely on that demand to issue liquidation proceedings. They will not determine the Undisputed Debt issues;
(b)the fact that the LCL Loan is guaranteed does not release LCL from its contractual obligations under the loan agreements. Guarantees are only engaged when a borrower fails to meet its obligations under the principal agreement; it is common for a principal debtor to be liquidated before a guarantor’s liability is determined; and the fact that the creditor may subsequently recover all of the debt owing from the guarantor does not relieve the principal debtor from its liability for the principal debt;
(c)LCL has not identified any legal basis on which it could sustain its position that the guarantees and the funds set aside by the Court in the Guarantee Proceedings have the effect of rendering its own obligations in respect of the Undisputed Debt nugatory.
No general importance
[26] Ms Elia submits that the conduct of LCL in relation to the Guarantee Proceedings in this proceeding does not justify granting leave to appeal. She points to the following:
(a)The factual matrix that Dilseacht relies on to avoid liability under the Dilseacht Guarantee is the same as the FFL Dispute, and LCL has not given any explanation for the fact that it failed to dispute liability for the LCL Loan until it was served with the statutory demand, nor has it provided any reasons why it did not join LCL in the 998 proceedings at
the outset. Accordingly, it is reasonable to infer that the FFL Dispute lacks bona fides;
(b)LCL had every opportunity to join the 998 proceedings as a plaintiff to determine FFL Dispute, but opted not to do so. Nor has it challenged that the evidence put forward by NZFG (which emanated from Ms Poulot), that it used part of the LCL Loan funds for its own purposes, namely the purchase of the equipment for LCL’s own trade centre and/or repayment of the $100,000 advanced by the Poulots to Farmers First before the LCL Loan was taken out. In reality, there is an undisputed debt owing by LCL to NZFG for at least $250,000 which has never been challenged by LCL, and this is plainly sufficient to justify the issue of the statutory demand and liquidation of LCL;
(c)the interest of justice will not be met if the application to set aside the statutory demand, which is interlocutory in nature, is consolidated with the Guarantee Proceedings, which will be heard in a 5-day trial late in July 2027.
Delay
[27] Ms Elia submits that the Court was plainly correct to find the difference between an application to determine whether a statutory demand can be relied on is a totally different procedure and type of proceeding to the Guarantee Proceedings, and to rely on those differences, in part, when determining that the proceeding should not be consolidated. She submits that consolidation would result in a confusion of issues, and cause injustice to NZFG by requiring it to wait two more years to determine LCL’s interlocutory application, in circumstances where at least $250,000 is an undisputed debt.
[28] Ms Elia submits that no further delay is warranted as, by hearing the application to set aside the statutory demand, the Court will determine whether LCL’s dispute is substantial and needs to be tested at trial. If the Court determines it is not, then it is appropriate that the statutory demand be upheld.
Interests of justice
[29] Ms Elia submits that it is in the interests of justice that leave to appeal is not granted as:
(a)consolidation is not required to determine LCL’s liability in respect of the Undisputed Debt portion of the LCL Loan, and there is no risk of inconsistent findings if these proceedings are heard separately. If LCL successfully demonstrates it has a substantial dispute as to whether all of the LCL Loan is owing (and it must be all of the LCL Loan and not part of it), the statutory demand will be set aside;
(b)if the statutory demand is not set aside, then it is appropriate that NZFG seeks an order for liquidation given there is an Undisputed Debt of at least $250,000;
(c)if NZFG ultimately succeeds in the Guarantee Proceedings, it will be able to call on the guarantees to meet any shortfall following the liquidation of LCL;
(d)the interests of justice are best served by requiring LCL to establish the bona fides of its dispute by arguing its interlocutory application to set aside the statutory demand;
(e)LCL’s application and evidence does to meet the high threshold a grant of leave to appeal the decision to refuse LCL’s interlocutory application to set aside the statutory demand with the Guarantee Proceedings involving parties other than LCL, and which will not determine LCL’s liability to repay the LCL Loan, and where a substantive hearing will not be heard and determined for at least two years.
Result
[30] I am of the view that LCL’s application for leave to appeal the Judgment should be dismissed. The reasons for this view are as follows:
(a)The Judgment did not err in finding that there was insufficient commonality between the Guarantee Proceedings and this proceeding. The Guarantee Proceedings deal with whether the Dilseacht Guarantee is enforceable by NZFG and do not determine the validity of the LCL Loan being repayable by LCL. If the two proceedings are successful in favour of Dilseacht, then the guarantees may be set aside. However this will not determine the liability of LCL under the LCL Loan. The relief sought in the statement of claim filed by Dilseacht on 30 April 2024 is setting aside of the Dilseacht Guarantee. Even the relief sought of re-opening the credit contract (which arguably includes the LCL Loan) under the Credit Contracts and Consumer Finance Act 2003 is for the purpose of the setting aside of the Dilseacht Guarantee, not cancelling the LCL Loan itself.17
(b)it is arguable that at least part of the LCL Loan is unaffected by the FFL Dispute, and if this is established, that portion of the LCL Loan will arguably be repayable by LCL regardless if the Dilseacht Guarantee is set aside. Accordingly, this portion of the LCL Loan should be tested in the application to set aside the statutory demand prior to the Guarantee Proceedings being determined;
(c)a delay of at least two years in determining the validity of the statutory demand is unwarranted and the LCL’s allegations in the FFL Dispute should be tested at least to the interlocutory level required in the application to set aside the statutory demand. If the FFL Dispute is sufficiently established to satisfy the test that there is a substantial and genuine dispute that the LCL Loan is owing, then the statutory demand will be set aside. In addition, even if the statutory demand is not set aside, NZFG will then need to apply for liquidation of LCL and LCL
17 Statement of claim dated 30 April 2024 – prayer for relief under the seventh cause of action.
can defend the liquidation application, with the Court in the liquidation application, having the wider discretion to take into account relevant issues than in relation to the application to set aside the statutory demand. LCL, if the FFL Dispute is genuine, then should be successful in resisting the liquidation application;
(d)r 10.12 requires the rights of relief claimed to arise out of the same transactions. The rights of relief in respect of the statutory demand are for NZFG to pursue the liquidation proceedings if it is not set aside. The rights of relief in the Guarantee Proceedings arise from declarations, if Dilseacht is successful, under the various causes of action pleaded in the statement of claim. There is not sufficient commonality of rights of relief to consolidate the different types of proceedings;
(e)in the overall interests of justice, NZFG should be entitled to have LCL’s argument that the LCL Loan is not due and owing due to the FFL Dispute tested under the interlocutory procedure relating to the setting aside of the statutory demand without waiting two years for the Guarantee Proceedings to be determined.
Orders
[31]I make the following orders:
(a)LCL’s application for leave to appeal the Judgment is dismissed;
(b)NZFG has been the successful party, and costs should follow the event NZFG is entitled to 2B costs and disbursements in respect of opposition to the application for leave to appeal.
……………………………………
Associate Judge C B Taylor
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