Pacific Plumbing Services Limited (in liquidation) v Archibald

[2022] NZHC 907

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2021-409-540

[2022] NZHC 907

BETWEEN

PACIFIC PLUMBING

SERVICES LIMITED (IN LIQUIDATION)
Plaintiff

AND

AYLIN ARCHIBALD

First Defendant

MATTHEW ARCHIBALD
Second Defendant

STEPHEN ARCHIBALD

Third Defendant

Hearing:

24 March 2022 (and on the papers)

Counsel:

G J Ryan for Plaintiff

No appearance for Second Defendant

Judgment:

3 May 2022

JUDGMENT OF ASSOCIATE JUDGE LESTER

(Summary Judgment application against Second Defendant)

PACIFIC PLUMBING SERVICES LIMITED (IN LIQUIDATION) v ARCHIBALD [2022] NZHC 907 [3 May 2022]

[1]                  In  this  proceeding  the  plaintiff,   Pacific   Plumbing   Services   Limited  (in liquidation), (the company) seeks summary judgment against the second defendant in respect of amounts received by them from the company.

[2]To date only the second defendant, Mr Matthew Archibald, has been served.

[3]                  When  the  proceeding  against  the   second   defendant   was   called   on   24 March 2022, the plaintiff sought judgment against the second defendant in the sum of $481,204.37.

[4]                  The plaintiff’s claim against the first and second defendants is said to be in debt, on the basis the first and second defendants maintained an account with the company in the nature of a shareholders’ current account whereby amounts were paid by the company for their benefit from time to time.

[5]                  When the matter was called before me on 24 March 2022, I raised an issue as to whether it was appropriate to enter judgment against the second defendant for the full sum claimed. In my view, the evidence did not necessarily support the proposition that all of the advances were for the benefit of the first and second defendants. I was concerned that the second defendant was not a shareholder or director of the company. The real issue was the extent to which the second defendant had received funds from the company which he should repay.

[6]                  There is no suggestion that the second defendant was receiving payments as an employee. The evidence from the liquidator of the plaintiff is the company was not registered for PAYE therefore the payments to the second defendant cannot be wages or salary. There is no suggestion that the second defendant was a contractor to the company.

[7]                  The liquidator, having re-examined the records of the company, has identified payments made by the company which with confidence can be said to be for the benefit of the second defendant. Transactions solely for the benefit of the second defendant were identified by examining the narrations in the company’s ANZ Bank statements

which refer only to the name of Matthew Archibald. The amount of those payments total $194,053.84.

[8]                  The second category of payments identified by the liquidator for the joint benefit of the first and second defendants is also based on the narrations contained in the ANZ Bank statements which refer to “M & A Archibald”. There are a large number of transactions which are narrated “M & A Archibald rent, loan repayment”, “M & A Archibald loan repayment”, “M & A Archibald Prado loan repayment” and similar. The amount for which the second defendant is said to be jointly liable for these amounts is $92,436.16 making a total claim against the second defendant of $286,488.

[9]                  The plaintiff acknowledges that it cannot, in the context of a summary judgment application, prove that the second defendant has benefitted from all of the

$481,204.37 claimed in the statement of claim and therefore seeks judgment for the amount it has been able to identify as being received directly by the second defendant or for his benefit.

[10]              I am satisfied that is an appropriate way for the liquidator to approach this claim.

[11]The second defendant has taken no steps.

[12]              The second defendant has benefitted from company money to which he was not contractually entitled, that is, he was not an employee or a contractor. The only commercially realistic alternative is that the payments were an advance. The liquidator requires those amounts to be repaid to the company in liquidation.

[13]              I am satisfied, on the material provided by the liquidator, that the second defendant does not have a reasonably arguable defence to the liquidator’s adjusted claim of $286,488 and I enter judgment against the second defendant in that sum, together with interest on that sum from the date the proceeding was served on the second defendant, being 5 January 2022, pursuant to s 10 of the Interest on Money Claims Act 2006, to the date of payment.

[14]              The plaintiff is also entitled to costs on a 2B basis and disbursements as set out at para [6] of the memorandum of counsel dated 14 April 2022.

[15]              The remainder of the proceeding is to be called on Thursday 9 June 2022 at 11am. Whether the plaintiff wishes to pursue the balance of its pleaded claim against the second defendant can be addressed at that time.

Associate Judge Lester