MFT Properties Limited v Country Club Apartments Limited

[2012] NZHC 440

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2012-404-1103 [2012] NZHC 440

BETWEEN  MFT PROPERTIES LIMITED Applicant

ANDCOUNTRY CLUB APARTMENTS LIMITED

Respondent

Hearing:         14 March 2012

Appearances: Mr Pidgeon for the Applicant

Mr L Turner for Respondent

Judgment:      14 March 2012

ORAL JUDGMENT OF ASSOCIATE JUDGE DOOGUE

Counsel:

Mr L Turner, P O Box 775, Auckland  -

Mr R S Pidgeon P O Box 6535, Auckland – [email protected]

MFT PROPERTIES LIMITED V COUNTRY CLUB APARTMENTS LIMITED HC AK CIV-2012-404-1103 [14 March 2012]

[1]      The respondent issued a statutory demand dated 16 February 2012 which was duly  served  upon  the  applicant.     The  statutory  demand  sought  payment  of

$66,094.77 being what was said to be the amount of debt owed by the applicant to the respondent.

[2]      Mr Pidgeon was instructed to file an application setting aside the statutory demand. The grounds in this application were:

“(1)     The applicant has a set-off and the amount specified in the demand less the amount of the set-off (once quantified) is less than the prescribed amount;

(2)       The applicant is solvent;

(3)The respondent, by its agents and /or its director Graeme Latta acting as Manager of the “Quest on Mount” Apartment Complex at 15 Mount Street, Auckland has failed to perform its/his duties in respect of the units owned by the applicant therein and said acts or omissions have detracted from the sale price reached for the said units, as sold by the applicant.”

[3]      That  application  was  opposed  by  the  respondent.    The  key issue  was  a question of whether the applicant in fact had a set-off which could be used in the proceedings to defeat the statutory demand and to be the basis for an order by the Court setting aside the statutory demand.   The ground was stated this way in paragraph 3(a) of the notice of opposition (dated 9 March 2012) to the application for order setting aside statutory demand:

(a)       The “set-off” relied on by [the applicant] self-evidently does not relate to the respondent but to its director Graeme Latta and so (regardless of the merit or otherwise of such claims) is no set-off at all.

[4]      When the matter was called before me today Mr Turner for the respondent said that there was a preliminary point which could be briefly disposed of and which

in turn may well lead to the application being dismissed today.  Mr Turner said that the point was that the alleged set-off was not between the applicant and respondent but between the applicant and Mr Latta who is referred to in the notice of opposition. As such, whatever the merits of that asserted set-off might be, it was not available to extinguish the debt upon which the statutory demand was based and therefore the application to set aside the statutory demand could not succeed.  Mr Turner referred

me to the authority of Grant v NZMC Ltd.[1]

[1] Grant v NZMC Ltd, Court of Appeal, Wellington [1989] 1 NZLR 8.

[5]      Following these matters being raised I suggested that counsel confer.  I asked Mr Pidgeon if he would look into the matter of whether the proposed set-off was in fact one which was mutual with the respondent’s debt.  Mr Pidgeon returned to the Court after he and Mr Turner had discussed matters and  agreed  that there was substance in the submission that Mr Turner had made and that it would not be possible for the applicant to raise the claim it had against Mr Latta by way of a set- off in this proceeding.  Responsibly, he then sought to withdraw the application.  In my view that decision was responsibly made.  I observe that had the application not been withdrawn there would have been formidable difficulties in the way of the applicant in attempting to set aside the statutory demand on this ground.

[6]      The application is therefore dismissed.  The respondent seeks costs on a 2B basis and disbursements to be fixed by the Registrar.  Given that the applicant has not been successful and that the respondent has prevailed, the presumption must be that an order for costs of the kind sought should be made.   Mr Pidgeon did not submit otherwise.   I therefore make an order that the applicant pay the costs and

disbursements in the terms sought by the respondent.

J.P. Doogue

Associate Judge