Onestop Projects Limited (in liquidation) v Corin - [2022] NZHC 2824

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2021-404-001030

[2022] NZHC 2824

UNDER High Court Rules 2016 and Companies Act 1993

IN THE MATTER OF

An application to set aside judgment and stay of execution

BETWEEN

ONESTOP PROJECTS LIMITED (IN LIQUIDATION)

First Plaintiff

DAMIEN GRANT
Second Plaintiff

AND

ANTHONY RONALD DAMIAN CORIN

First Defendant

VIVIENNE CORIN

Second Defendant

Hearing: 17 October 2022

Appearances:

B D Gustafson and K A Cocks for Plaintiffs P J Napier and M G Orange for Defendants

Judgment:

31 October 2022

JUDGMENT OF ASSOCIATE JUDGE P J ANDREW

This judgment was delivered by Associate Judge Andrew on 31 October 2022 at 1.00 pm
pursuant to r 11.5 of the High Court Rules Registrar / Deputy Registrar

Date………………………………

ONESTOP PROJECTS LTD (IN LIQ) v CORIN [2022] NZHC 2824 [31 October 2022]

Introduction

[1] Mr Anthony Corin1 is a director and shareholder of Onestop Projects Ltd (in liquidation).2 In November 2021, Onestop Projects and its liquidator, Mr Grant,3 obtained a formal proof judgment against Mr and Ms Corin for an overdrawn company current account. The judgment debt is $237,932.23, plus interest pursuant to s 10 of the Interest on Money Claims Act 2016 and costs.4

[2] An endorsed copy of the proceedings was sent by email to the solicitor for the defendants. However, the Corins say that they had no knowledge of the proceedings until after the default judgment had been sealed. They now seek an order pursuant to rr 15.10 and 6.1 of the High Court Rules 2016 setting aside the default judgment.

[3] The Corins say that the judgment was irregularly obtained because service had not been effected and that there has been a miscarriage of justice.

[4]In addressing the central issue of miscarriage of justice, I need to address:

(a)Was the judgment irregularly obtained because service had not been effected in accordance with r 6.7 (agreement in writing to method of service)?

(b)Do the defendants have a substantial ground of defence?

Factual background

[5] Onestop Projects operated as a project management business before being placed into liquidation in August 2018.

[6] In December 2018, the liquidator, Mr Grant, wrote to Accounting Plus Solutions Ltd (the firm he believed prepared the company’s financial accounts)

1      The first defendant.
2      Onestop Projects.
3      The second plaintiff.
4      Onestop Projects Ltd (in liq) v Corin [2021] NZHC 3170.

requesting the financial accounts of the company. That same day the accountants provided to Mr Grant the financial accounts for the year ending 2016.

[7]On 14 January 2019, Mr Grant wrote to Mr Corin demanding the sum of

$237,932.23 for what was claimed to be an overdrawn current account with the company (based on the analysis carried out by Mr Grant).

[8] On 28 May 2019, Mr Grant wrote to Ms Vivienne Corin demanding the sum of $138,653.08 for what was claimed to be her overdrawn current account with the company. A further letter of demand was sent to…

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: [2022] NZHC 2824
Decision Date: 31 October 2022

CaseChat Overview and Summary

Onestop Projects Limited (in liquidation) and its liquidator, Damien Grant, sought to set aside a default judgment against Anthony Corin and Vivienne Corin for an overdrawn company current account amounting to $237,932.23, plus interest and costs. The Corins argued that the judgment was irregularly obtained due to improper service and that there had been a miscarriage of justice. The court had to decide whether the judgment was irregularly obtained and if the Corins had a substantial ground of defence.

The court found that the judgment was irregularly obtained because service was not properly effected in accordance with rule 6.7 of the High Court Rules. The court held that while the defendants' solicitor had confirmed in writing that he was authorised to accept service, there was no clear agreement that service would be by email. The essential purpose of service, to bring the proceedings to the Corins' attention, was not achieved, as they were unaware of the proceedings until after the default judgment was entered. The court noted that the defendants had a substantial ground of defence, as the Corins argued that the payments in question were actually salary payments to Anthony Corin and that the liquidator had miscalculated the amount owed. The court concluded that there had been a miscarriage of justice and set aside the judgment.

The court granted the Corins' application to set aside the formal proof judgment and ordered that the proceedings be called in the Chambers List. The court also fixed costs on a 2B basis plus disbursements in favour of the Corins, with payment deferred pending the judgment of the trial judge.

Orders