Northern Crest Investments Limited v Haywood HC Auckland CIV-2010-404-7741

[2011] NZHC 154

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2010-404-7741

UNDER  section 290 of the Companies Act 1993

BETWEEN  NORTHERN CREST INVESTMENTS LIMITED

Applicant

ANDROSS ERIC HAYWOOD Respondent

Hearing:         25 February 2011

Counsel:         AR Nicholls for applicant

DW Grove for respondent

Judgment:      25 February 2011

(ORAL) JUDGMENT OF ASSOCIATE JUDGE JP DOOGUE

Solicitors:           Edwards Clark Dickie, PO Box 105 629, Auckland 1143

Ellis Law, PO Box 4516, Auckland 1140

NORTHERN CREST INVESTMENTS LIMITED V HAYWOOD HC AK CIV-2010-404-7741 25 February

2011

[1]      This is an originating application to set aside a statutory demand which the applicant on 25 November 2010.  It came before me on 28 January 2011.  There was no appearance by the respondent and I made the orders sought setting aside the statutory demand.  Thereafter, Mr Grove who apparently had instructions from the respondent who did not attend at the hearing filed a memorandum inviting me to recall my order.  He has expanded upon his reasons for seeking such an order in a subsequent memorandum.  The matter was listed for call again today so that I could hear from counsel.  Mr Nicholls, for the applicant, opposed the making of a recall order.

[2]      The relief that the respondent seeks is pursuant to r 7.4 which envisages that an application is required and not just a memorandum.   That, however, is not a matter of sufficient weight to defeat the application by the respondent.  Even though no affidavit has been filed for the respondent there is no dispute that the reason why the respondent did not appear by counsel when this matter was first called.   That was because counsel or staff in his chambers had mis-diaried the date when the matter was to be called.  As a consequence, counsel did not realise that the matter was to be dealt with on 28 January 2011.  Since that time the respondent has taken steps to file a notice of opposition and affidavit.

[3]      Rule 7.40 gives the court power to make various orders in the event that a party is neither present nor represented at the hearing of an application.  The judge may make orders if he/she thinks it is just to do so.  The rule empowers the court to “recall the order at any time before formal record of it has been drawn up and sealed”.  In this case the position is as the rule states.  No order has been drawn up and sealed.

[4]      Mr Nicholls  told  me that  the  statutory demand,  if  it  stands,  will  lead  to liquidation proceedings which will cause considerable difficulties for the applicant which,  he  told  me,  is  attempting  to  raise  capital  in  some  form  in  Australia. Mr Nicholls told me that even if the position was as Mr Grove submitted (namely, that if the present application is not granted a further statutory demand will be

issued) that his client was not particularly concerned about that.   It would still be advantageous, I gather, for the applicant to hold on to the present order even though if it does the consequence will be a further statutory demand will follow.

[5]      I am clear that this problem came about because of inadvertence on the part of counsel.  That is the type of situation that the rule is designed to cover.  Unless there was some weighty countervailing matter I consider it would be just to make the order which the respondent seeks.  I do not consider that the fact that ultimately there may  be  liquidation  proceedings  following  from  a  successful  defence  of  an application to set aside the statutory demand is a ground for declining relief.  The rule is more concerned with procedural fairness in getting to a hearing of the originating application.  Procedural fairness to the applicant will not be prejudiced if I now permit the respondent to oppose the application to set aside the statutory demand.  I therefore consider that it is reasonable for an order to be made and I do so.

[6]      I next deal with issues of timetabling.  Mr Nicholls considers this matter will taken in excess of ½ a day and Mr Grove was not prepared to dissent from that. Accordingly a one day hearing is required which will take place at 10am on 2 June

2011.

[7]      The other timetabling issues  are  first,  that  the  applicant  is  to  have until

18 March 2011 to file any affidavits in reply.

[8]      The following directions are made with respect to the hearing:

(a)      The Plaintiff is to file and serve a paginated, bound indexed bundle containing  copies  of  all  relevant  pleadings  and  affidavits  filed by plaintiff and defendant/s together with synopsis and chronology under r 7.39 6 working days   before the hearing and defendant to file and serve synopsis 3 working days before hearing;

(b)As well as filing hardcopies of their synopses  parties are at the same time to send an electronic version in “Word” editable format to the Registrar.

[9]      Mr  Nicholls,  for  the  applicant,  has  made  an  application  for  costs.    He correctly points out there has been an additional hearing occasioned by the failure of the respondent to appear when this matter was first called.  Mr Grove, on the other hand, says that he had proposed that the respondent should consent to the judgment being  recalled  and  if  that  had  happened  no  additional  costs  would  have  been incurred.

[10]     I consider that the question is one of reasonableness of the conduct of the respondent.   Mr Nicholls no doubt acted on instructions from the respondent to oppose the recall.   I am not persuaded that there are any weighty or good reasons why the applicant opposed application to reinstate.  I therefore direct that costs are to

lie where they fall.

JP Doogue

Associate Judge