Main Rd Holdings Ltd v Thor Construction Group Ltd - [2020] NZHC 745

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE

CIV-2019-485-738

[2020] NZHC 745

BETWEEN
MAIN RD HOLDINGS LTD

Plaintiff/Respondent

AND

THOR CONSTRUCTION GROUP LTD

Defendant/Applicant

Hearing: 12 March 2020

Appearances:

J McDougall and M Chester for the plaintiff/respondent D Abricossow for the defendant/applicant

Judgment:

15 April 2020

JUDGMENT OF ASSOCIATE JUDGE JOHNSTON

Introduction

[1] This is a winding up proceeding in which the plaintiff, Main Rd Holdings Ltd (“MRH”), is seeking an order under pt 16 of the Companies Act 1993 appointing a liquidator over the defendant, Thor Construction Group Ltd (“TCG”). TCG has filed and served an interlocutory application for an order staying the proceeding (and prohibiting advertising) under r 31.11 of the High Court Rules 2016. This judgment deals with TCG’s interlocutory application.

[2] I mention at the outset that both parties sought to introduce late evidence. For its part, TCG filed and served a supplementary affidavit prior to the hearing in order to update the evidence relating to its financial position. I allowed this affidavit in on the basis that TCG had already included in its affidavit evidence in chief earlier versions of the financial statements in question and expressly signalled that it anticipated putting in an updated version prior to the hearing. That is all it has done.

MAIN RD HOLDINGS LTD v THOR CONSTRUCTION GROUP LTD [2020] NZHC 745 [15 April 2020]

There are no material changes between the earlier versions and the most recent version (which is still not in final form). MRH sought to put in further affidavit evidence relating to exchanges between the parties. I was not prepared to allow this evidence in. As described to me by Mr McDougall, it was evidence that was available at the time MRH filed its evidence in chief and it should have been included at that stage.

Background

[3] MRH is a single project property development company. Its sole shareholder and director is Mr Arthur Shew.

[4] TCG is a building company. Its sole shareholder and director is Mr Kumar Vasist.

[5] In December 2017 the parties entered into a contract pursuant to which MRH engaged TCG to build a residential dwelling house on a property owned by MRH at 120 Main Road, Titahi Bay, Porirua.

[6]The only aspects of the contract that need to be recorded here are the following:

(a)The build was to take place over a 6-month period with an expected completion date of 30 June 2018;

(b)The total fixed price for the build was $480,000 (incl of GST) which was payable on the achievement of various milestones over the term of the build;

(c)The contract was only variable by written agreement between the parties.

[7] Whilst I do not perceive this to be relevant other than contextually, it is fair to say that the build did not go smoothly. It is entirely unnecessary in this judgment to attribute blame for this. However, the impression I have from the affidavit evidence is that…

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: [2020] NZHC 745
Decision Date: 15 April 2020

CaseChat Overview and Summary

The matter before the Court was an application by Thor Construction Group Ltd (TCG) for an order staying the winding up proceeding brought by Main Rd Holdings Ltd (MRH). MRH sought to wind up TCG on the basis of an alleged debt of over $155,000, which TCG had not paid in response to a statutory demand. The Court was required to determine whether TCG had a reasonably arguable case that it would be able to pay the undisputed component of the debt, and whether the balance of the debt was not payable. The Court concluded that there was a genuine dispute over whether the late completion payments were properly recoverable by MRH against TCG. Additionally, the evidence regarding TCG's solvency was inconclusive, and it was common ground that an amount in excess of $1,000 was payable to MRH by TCG. The Court made an order that if TCG paid the undisputed debt of $18,885.64 within ten working days of the date of judgment, then there would be an order staying MRH’s winding up proceeding permanently and prohibiting the advertising of the same. If the payment was not made within ten working days, then MRH’s application would be dismissed. Costs were reserved.

Orders