Queensland Maintenance Services (Pty) Limited (in liquidation) v Queensland Maintenance Services (NZ) Limited

[2015] NZHC 2699

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2015-404-717 [2015] NZHC 2699

UNDER

the Companies Act 1993

IN THE MATTER OF

the liquidation of Queensland
Maintenance Services (NZ) Limited

BETWEEN

QUEENSLAND MAINTENANCE SERVICES (PTY) LIMITED (IN LIQUIDATION)

Plaintiff

AND

QUEENSLAND MAINTENANCE SERVICES (NZ) LIMITED Defendant

Hearing:	2 November 2015
Counsel:	A W Johnson and A W Akroyd for the Plaintiff M Heard and L Clews for the Defendant
Judgment:	2 November 2015

ORAL JUDGMENT OF ASSOCIATE JUDGE SMITH

[1]      The plaintiff’s liquidation application was called this morning.

[2]      Arrangements had been made for the cross-examination of two witnesses, Mr Whimp and Mr Zullo, by audio-visual link from Brisbane.  The defendant had made application to have today’s hearing adjourned on the basis that the cross- examination arrangements for Mr Zullo and Mr Whimp were not convenient for those witnesses, but the adjournment application was dismissed by Heath J in an oral judgment given on Thursday 29 October 2015.

[3]      By memorandum dated 30 October 2015 Mr Heard advised the Court that he wished to withdraw as counsel.   He indicated that there would be no appearance

today for the defendant by any other counsel.

QUEENSLAND MAINTENANCE SERVICES (PTY) LIMITED (IN LIQUIDATION) v QUEENSLAND MAINTENANCE SERVICES (NZ) LIMITED [2015] NZHC 2699 [2 November 2015]

[4]      When the video link to the conference room in Brisbane was established this morning, neither Mr Zullo nor Mr Whimp was present.  Only Mr Bull, an Australian solicitor for the plaintiff, was present in the conference room.

[5]      There  being  no  objection  from  the  plaintiff,  I  granted  Mr  Heard  and Ms Clews  leave  to  withdraw  as  counsel  for  the  defendant.    As  neither  of  the witnesses had appeared for cross-examination, I also advised Mr Bull that he was free to leave the Brisbane conference room.

[6]      The result of the failure of Mr Whimp and Mr Zullo to attend for cross- examination is that their affidavits cannot be used in evidence, absent exceptional circumstances and with the leave of the Court.1   No exceptional circumstances have been drawn to my attention in this case, and I accordingly rule that the affidavits of Mr Zullo and Mr Whimp cannot be used in opposition to the liquidation claim.

[7]      After hearing from Mr Johnson for the plaintiff, I am satisfied that there is a substantial  debt  owing  by the defendant  to  the  plaintiff,  and  that  it  is just  and equitable that an order for liquidation should be made.  If the affidavits of Mr Zullo and Mr Whimp are not before the Court (as I have ruled to be the case), Mr Lucas’ evidence sufficiently establishes that there is a very substantial debt owing by the defendant to the plaintiff.  As at 30 June 2013, the defendant’s own financial statements put the amount of that debt at $629, 341, and there is nothing in the other affidavits filed (i.e. additional to those of Mr Whimp and Mr Zullo) which suggests that a figure in that order is not due and owing.  I note that those financial statements were signed by Mr Zullo, who was a director of the plaintiff and is also a director of the defendant.  Mr Zullo also acknowledged the existence of the $629,341 debt in a report prepared by him in January 2012 in the liquidation of the plaintiff company in Australia (the debt acknowledged (as an asset of the Australian company) in that report was AUD$495,641).

[8]      Quite apart from the inter-company loans from the plaintiff to the defendant, Mr  Johnson  tells  me  that  costs  of  approximately  $13,000  awarded  against  the

defendant  on  the hearings  relating to  the application  to  set  aside  the  plaintiff’s

1      Rule 9.74(3), High Court Rules.

statutory demand, and the defendant’s application to stay the liquidation proceeding, remain outstanding.

[9]      I note that the defendant’s application to set aside the statutory demand was the  subject  of  an  appeal  to  the  Court of Appeal,  but  that  that  appeal  was  later abandoned.  The defendant did not comply with the Court’s direction relating to the filing of written submissions in opposition to the liquidation claim, and of course Mr Heard and Ms Clews withdrew when the case was called this morning.

[10]     Having regard to all of those factors, I make the following orders: (1)           The defendant company is put into liquidation.

(2)      Gareth Russel Hoole and Clive Robert Bish are appointed liquidators.

(3)The rates of remuneration of the liquidators and staff working under their supervision  and  control  are  fixed  at  the  rates  set  out  in  the liquidators’ Consent dated 10 July 2015.

(4)The liquidators are to apply at the conclusion of the liquidation for approval of their overall remuneration.

(5)The costs of the liquidation proceeding are reserved.   Counsel may file a memorandum within 14 days of today’s date setting out the plaintiff’s claim for costs.   I record Mr Johnson’s advice that the plaintiff is contemplating seeking an order for costs against Mr Zullo personally.  Mr Johnson is to consider that possibility further, and file any necessary application within 14 days of today’s date.

(6)      The foregoing orders are timed at 11.35am.

Solicitors:

Martelli McKegg, Auckland for the plaintiff

Edmund Lawler & Associates, Auckland for the defendant

Associate Judge Smith