New Zealand Greyhound Racing Association Incorporated v Manuwatu Greyhound Racing Club Incorporated HC Palmerston North CIV-2011-454-529

[2011] NZHC 1759

IN THE HIGH COURT OF NEW ZEALAND PALMERSTON NORTH REGISTRY

CIV-2011-454-529

BETWEEN  NEW ZEALAND GREYHOUND RACING ASSOCIATION INCORPORATED

Plaintiff

ANDMANAWATU GREYHOUND RACING CLUB INCORPORATED

Defendant

Hearing:         17 November 2011

(Heard at Palmerston North) Judgment:  17 November 2011

ORAL JUDGMENT OF ASSOCIATE JUDGE D.I. GENDALL

Solicitors:           J.T. Law, Solicitors, PO Box 25443, Wellington

Loughnans, Solicitors, PO Box 1257, Palmerston North

NEW ZEALAND GREYHOUND RACING ASSOCIATION INCORPORATED V MANAWATU GREYHOUND RACING CLUB INCORPORATED HC PMN CIV-2011-454-529 17 November 2011

[1]      This proceeding involves an application by the plaintiff seeking an order to place the defendant society into liquidation.

[2]      Nearly two months ago on 21 September 2011 the liquidation application which was opposed by the defendant was set down for a two hour hearing commencing today, 17 November 2011 at 11.45 am.

[3]      In addition, on 21 September 2011 directions were made for the defendant to file and serve any further affidavit in support of its Notice of Opposition to the present application by 5 October 2011 with the plaintiff having until 19 October

2011 to file and serve any affidavit in reply.

[4]      Subsequently, on 5 October 2011, in response to requests made on behalf of the defendant, amended time table orders were made giving the defendant until 11

October 2011 to file and serve any further affidavits in support of its opposition with the  plaintiff  in  turn  having  until  25  October  2011  to  file  and  serve  any  reply affidavits.  No such further affidavits have been filed by the defendant.

[5]      The opposed application was called before me today, 17 November 2011 at

11.45 am.

[6]      Mr Grant appeared as counsel for the plaintiff.  Mr Mahuta Coyle appeared as counsel for the defendant.

[7]      In a memorandum he has filed in this matter dated 16 November 2011 Mr Mahuta Coyle seeks an adjournment of the hearing today.  This is effectively on the basis that the defendant chose to instruct him as counsel only some two days ago on

15 November 2011, and he seeks some time for filing and serving a statement of defence and proper supporting affidavits on behalf of the defendant.

[8]      This adjournment application is opposed by Mr Grant for the plaintiff. [9]     I now give my decision with respect to that adjournment application.

[10]     Before I do so, however, one preliminary matter arose at the hearing before me today.

[11]     This was what I regard as in effect a request from Mr Mahuta Coyle as counsel for the defendant that henceforth I should recuse myself from hearing this matter in any respect.  The basis for this application advanced by Mr Mahuta Coyle as  I  understand  the  position,  is  a  contention  that,  as  I  had  earlier  heard  the defendant’s application to set-aside the statutory demand issued against it by the plaintiff and dismissed that application, it would be difficult for me to consider matters with an open mind when the liquidation application itself came before the Court.    It  goes  without  saying that  there are  many instances  in  this Court  and elsewhere   where   Judges   and   Associate   Judges   make   decisions   to   dismiss applications to set-aside statutory demands issued against debtors and then go on to hear substantive liquidation applications which follow.  In my almost 10 years as an Associate Judge in this Court, no application to have me recuse myself has been made in similar circumstances to those applying here.

[12]     I reject any contention that I would not be able to consider matters on the present liquidation application with an open mind.   This situation arises on a reasonably frequent basis and I am quite satisfied that liquidation applications are and have been dealt with often in the past on an entirely proper basis, both by myself and other Judicial Officers in the High Court.

[13]     I  therefore  decline  to  recuse  myself  with  regard  to  this  matter  and  the liquidation application before the Court.

[14]     To do otherwise in my view would not be in the interests of justice here, nor would it assist this busy Court in dealing with its day-to-day business in a proper manner.

[15]     That effectively disposes of the preliminary matter before the Court.

[16]     Turning now to the adjournment application by the defendant this is opposed by Mr Grant for the plaintiff.

[17]     In doing so, Mr Grant contends that matters must be brought to a head, the defendant society is effectively insolvent, and that in the past it has acknowledged that this is the case.

[18]     Mr Mahuta Coyle for the defendant appeared to take issue with this and, as an  Officer  of  the  Court  in  response  to  my invitation,  assured  the  Court  in  the following terms.  On this, I quote Mr Mahuta Coyle directly as far as I can properly recall:

Based on the information I have sighted so far, I (Mr Mahuta Coyle) submit that, if the defendant club had the benefit of proper legal representation at the time, it may have been able to establish that the debt claimed against it by the plaintiff was the subject of a substantial dispute and further that the evidence of that substantial dispute  has  not  to  date  been  properly put  before  the  Court.    It  is  simply  an opportunity to put that evidence before the Court which the defendant seeks here with its adjournment request.

[19]     So far as the defendant’s financial position is concerned, there is no evidence of any kind before the Court as to this.  In his submissions before me, Mr Mahuta Coyle contended (without endeavouring to give any evidence from the bar) that he understands the defendant is a viable organisation, it has assets which include a range of improvements at the greyhound racing track, associated buildings and infrastructure and it says it has other assets including debts owing to it by the Wanganui  Greyhound  Racing  Club  and  Greyhound  Racing  New  Zealand.    In response to a question from me, Mr Mahuta Coyle indicated that as far as he is instructed, no further debts are being incurred by the defendant at present other than perhaps a small amount for wages of one employee.  Where funds to cover this are derived from is uncertain however.

[20]     Mixed up in all of this as I understand the position is an appeal which the defendant has lodged with the Court of Appeal against my earlier decision to decline its application to set-aside the statutory demand issued against it by the plaintiff here. On that appeal a range of difficulties it seems have arisen and it seems that the defendant has failed to comply with various directions made by the Court of Appeal with regard to that matter. The hearing of that appeal has therefore not occurred.

[21]     Notwithstanding this, Mr Mahuta Coyle indicates today that his instructions are that if the liquidation application does not succeed then the appeal to the Court of Appeal is to be pursued.

[22]     Many of the matters I have outlined above are unsatisfactory to say the least.

[23]     Notwithstanding this, the fact remains however and I accept that Mr Mahuta

Coyle was instructed to appear for the defendant only on Tuesday last, 15 November

2011.   He simply seeks some additional time to place before the Court a proper Notice of Opposition and affidavit evidence in support of this on behalf of the defendant.

[24]     As I have noted above, Mr Mahuta Coyle has also assured the Court that, as far as he can tell at this point, the defendant may have some proper defence to the debt claim by the plaintiff which forms the subject of the present liquidation application against it.

[25]     There is no doubt in my mind that the defendant has failed in a major way to take advantage of the various indulgences this Court has granted to it over previous months concerning its opposition to the present application.  Notwithstanding this, and only by a rather fine margin however, I take the view that, as it is critical the Court should have before it all proper evidence before it is able to properly consider the plaintiff’s liquidation application, the defendant should be given one last brief opportunity through its recently appointed counsel to provide detailed affidavit evidence in support of its claimed defence.

[26]     That said the following directions are now made:

(a)      The defendant is to have until 5.00 pm on 24 November 2011, that is one week from today, to file and serve a proper and detailed statement of defence and comprehensive supporting affidavit or affidavits in response to the plaintiff ’s liquidation application before the Court.

(b)The plaintiff is then to have until 5.00 pm on 1 December 2011 to file and serve any affidavit or affidavits in reply.

(c)      The opposed liquidation application for the Court is now set down for hearing (1 hour is allowed) commencing at 9.00 am on 9 December

2011.

(d)The provisions of r 7.39 regarding filing of synopses of submissions in advance for that hearing are to apply.  The hearing is to take only 1 hour  as  an  existing  fixture  will  commence  at  10.00  am  on  9

December 2011.

(e)      The Registrar is directed however to liaise with counsel for the parties to indicate if any further time may become available on 9 December

2011 for the hearing of this matter.

[27]     In any event at worst the 1 hour scheduled for hearing of this application at

9.00 am on 9 December 2011 is to be utilised and a decision given at the conclusion of this hearing.

[28]     It will be apparent from what I have indicated above, that the defendant’s adjournment application today has been successful.  This is yet another significant indulgence granted to the defendant.  The plaintiff has been put to some expense and trouble in preparing for and coming to this hearing today.

[29]     Costs are accordingly awarded to the plaintiff on this hearing today on a category 2B basis together with disbursements as fixed by the Registrar.

‘Associate Judge D.I. Gendall’