Mizeen Painters Ltd (in liq) v Tapusoa

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2014-404-2865 [2015] NZHC 826

UNDER

the Companies Act 1993

BETWEEN

MIZEEN PAINTERS LMITED (IN LIQUIDATION)

First Plaintiff

VIVIEN JUDITH MADSEN-RIES AND HENRY DAVID LEVIN as liquidators of MIZEEN PAINTERS LIMITED (IN LIQUIDATION

Second Plaintiffs

AND

MISIMOA TAPUSOA First Defendant

ENELEATA TAPUSOA Second Defendant

Hearing:	15 April 2015
Appearances:	K M Wakelin and J A O'Connell for the Plaintiff R K Nand for the Respondent
Judgment:	28 April 2015

JUDGMENT OF MUIR J

This judgment was delivered by me on Tuesday 28 April 2015 at 11.30 am pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date:………………………….

Counsel/Solicitors:

K M Wakelin, Meredith Connell, Auckland

J A O’Connell, Meredith Connell, Auckland

R K Nand, Patel Nand Legal, Greenlane, Auckland

MIZEEN PAINTERS LMITED (IN LIQUIDATION) v TAPUSOA [2015] NZHC 826 [28 April 2015]

Introduction

[1]      Mizeen Painters Ltd was incorporated on 9 February 2010, ceased trading in February  2014  and  was  placed  into  liquidation  on  28 February  2014  on  the application of the Inland Revenue.   The second plaintiffs were appointed as liquidators.

[2]      They and the company seek judgment by way of formal proof against the

company’s former directors, who are the first and second defendants.

[3]      The claims are in four broad categories:

(a)      A claim  for amounts  owed  by the defendants  on  their overdrawn current accounts;

(b)In the alternative to that cause of action, a claim that amounts taken by the defendants from the company were either transactions at an undervalue under s 297 of the Companies Act 1993 (“the Act”) or were for inadequate consideration under s 298 of the Act;

(c)      A claim under s 300 of the Act relating to the defendants’ failure to keep adequate accounting records for the company as required by s 194 of the Act; and

(d)A claim to compensation under s 301 of the Act for breaches of duties imposed on the directors under s 131(1) (obligation to act in good faith and in best interests of the company), s 135 (obligation not to carry on the business of the company in a manner that creates substantial  risk  of  loss  to  creditors),  and  s 136  (obligation  not  to continue trading notwithstanding absence of reasonable grounds for belief the company would be able to meet its obligations).

Entitlement to hearing by formal proof

[4]      The plaintiffs filed this proceeding on 28 October 2014 and it was served on the defendants on 22 November 2014.

[5]      Any statement of defence was due to be filed and served by 19 January 2015. No such defence having been filed, Ellis J directed on 22 January 2015 that the matter be set down for a formal proof hearing as requested by the plaintiffs.   In accordance with  the requirements  of r 15.9(4),  the plaintiffs have filed affidavit evidence of the liquidator, Mr Levin, in support of their seven (two alternative) causes of action.

[6]      The onus is on the plaintiffs to satisfy the Court that judgment should be…