Ramp Contracting Limited v Scottish Pacific Business Finance Limited
[2025] NZHC 2716
•18 September 2025
IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY
I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE
CIV-2025-409-294
[2025] NZHC 2716
BETWEEN RAMP CONTRACTING LIMITED
Applicant
AND
SCOTTISH PACIFIC BUSINESS FINANCE LIMITED
Respondent
Hearing: 3 September 2025 Appearances:
K W Clay for Applicant
M J Tingey for Respondent
Judgment:
18 September 2025
JUDGMENT OF ASSOCIATE JUDGE LESTER
RAMP CONTRACTING LIMITED v SCOTTISH PACIFIC BUSINESS FINANCE LIMITED [2025]
NZHC 2716 [18 September 2025]
Background
[1] Scottish Pacific Business Finance Limited (ScotPac) provides what it calls “debtor financing facilities”, meaning it factors invoices for its clients.
[2] Ramp Contracting Limited (Ramp), on 6 August 2024, entered into a debtor finance facility contract with ScotPac (the facility). That facility was expressed to run for two years. However, the facility was cancelled by ScotPac on 13 May 2025.
[3] On 16 May 2025, ScotPac issued a statutory demand for $156,633.57, being the amount it claimed it was owed by Ramp under the facility as at that date. That sum comprises several components, which I refer to below.
[4] Ramp applied to set aside the demand, alleging that, if anything, it was owed money by ScotPac.
[5] The background facts are not in issue, save that at the hearing Mr Clay, counsel for Ramp, submitted that ScotPac was not entitled to cancel the facility. I will address that issue below.
[6] The issue in relation to the validity of the demand is one of quantum. Accordingly, the details of the parties’ views on quantum will have to be addressed.
Legal Principles
[7] The principles are not in dispute. The issue is whether there is a substantial dispute as to whether the debt claimed in the statutory demand is owing.1 If there are disputed issues of fact, it is not the role of the Court in the context of an application to set aside a demand, to resolve those disputes.
[8] Mr Clay’s submissions also sought that the demand be set aside under s 290(4)(c) of the Companies Act 1993, that is “on other grounds”. He submitted that by the time the application to set aside the demand came on for hearing, because of recoveries made by ScotPac, the outstanding debt had reduced to $101,727.31.
1 Companies Act 1993, s 290(4)(a).
Indeed, immediately prior to the hearing, ScotPac received an additional $35,984.53. The initial reduction of debt was due to Ramp invoices still held by ScotPac under its security arrangement. The further payment immediately before the hearing as a result of debtors of Ramp paying Ramp’s invoices to ScotPac in error. Mr Clay submits there had been a material mis-statement in the demand.
ScotPac’s calculation
[9] Mr Tingey, counsel for ScotPac, submitted the following reconciliation of the amount outstanding as at the date his submissions were filed:
Item/Description RCL’s calculation ScotPac as at 17/06/25 Funding 1,372,634.50 1,372,634.50 Less Customer collections 1,374,243.04 1,374,243.04 Plus Take on fee 0.00 1,201.31 Plus Disbursements 0.00 15,512.36 Plus Management fees 0.00 17,718.78 Plus Discount charges 0.00 16,796.04 Plus refactoring fees 0.00 504.80 Plus GST 0.00 2,865.57 Plus Liquidated damages 0.00 10,400.00 Plus Boost business loan 0.00 37,905.74 Plus PPSR release fee 0.00 431.25 Less Missing credit notes 9,338.15 0.00 -10,946.69 101,727.31 RCL’s total ScotPac total [10] The opening figures of funding and customer collections are not in issue. I say this because Ms Cameron, a director of Ramp, in her affidavit in reply (sworn 9 July 2025), submitted the following:
4.1 Invoices entered 06/08/24 – 23/04/25 totals $2,147,329.83 4.2 Funding to RCL 06/08/24 – 17/04/25: $1,372,634.50;
4.3 Collections to ScotPac 06/08/24 – 05/06/25: $1,374,243.04;
4.4Reassignments to RCL of $498,823.65. As at the date of this affidavit I am still undertaking a detailed breakdown of this;
4.5Credit notes showing in ScotPac Portal: $158,444.92;
4.6Missing credit notes from ScotPac Portal: $9,338.15;
4.7Actual credit notes supplied to ScotPac: $16,783.07;
4.8 Disapprovals: $156,361.34.
5. After all charges and adjustments, RCL claims an overpayment of
$10,946.69, not including anything found within the detailed breakdown which I am still undertaking.
[11] In a real sense, the different approaches above sum up the dispute between the parties.
[12] Ms Cameron, in her first affidavit (sworn 29 May 2025) referring to credit notes, says that “while credit notes were issued by Ramp”, these have not been taken into account by ScotPac.” Ms Cameron also refers to ScotPac having rejected invoices worth $18,712.22 due to verification issues. Ms Cameron suggests that these verification issues may have arisen because ScotPac was not able to get hold of Ramp’s client but she says: “these invoices should have been accepted under their system.” She says some of these invoices have been paid by the clients to ScotPac.
[13] The issues raised about credit notes and/or verification issues are subsumed into what might be called the “gross” starting point, being the amount paid by ScotPac to Ramp and the value of payments ScotPac received from Ramp’s clients. That starting point results in a minor credit in favour of Ramp. To arrive at a net position, the fees, disbursements and so on have to be taken into account and, as I have said, Ms Cameron does not do so.
[14] Frankly, Ms Cameron’s first affidavit is difficult to understand in terms of trying to arrive at a net position.
[15] While Ms Cameron asserts that Ramp does not accept liability for final release fees or termination fees, just why these are not payable is not explained. ScotPac’s running ledger referred to above at [9], setting out the debits and credits for the entire trading relationship, is what the application needed to focus on.
[16] As to the fees, disbursements, charges, GST, liquidated damages and business loan being the “debits” in Mr Tingey’s calculation, Mr Clay acknowledged those matters were not individually addressed by Ramp. Each of the items claimed are referred to in a ledger produced by ScotPac called “Client Account Transactions from 1 Jan 2024 to 16 June 2025”. That document is one of the sources of information used by Ms Cameron to arrive at her calculation set out at [10] above.
[17] The only item disputed by Mr Clay was the liquidated damages arising from cancellation of the facility. I note the disbursement figure of $15,512.36 in Mr Tingey’s schedule is higher than the disbursement figure of $13,628.72 in the ledger. Mr Tingey’s figure is at 17 June 2025 and the ledger figure is at 16 June 2025. However, as I have said, no dispute was taken with the figures in the schedule other than liability for liquidated damages.
[18] On that basis, the calculation adopted by ScotPac is not disputed. The real issue, therefore, is whether the approach adopted by Ms Cameron is arguably the correct way of calculating the balance between the parties, or discloses an arguable set-off. I am satisfied that it is not, for the following reasons.
[19] First, the ability of ScotPac to charge the various amounts set out in Mr Tingey’s schedule was not disputed. Ms Cameron’s schedule makes no allowance for those matters and in particular, does not include the “Boost business loan” included in Mr Tingey’s schedule, which was a separate advance made by ScotPac to Ramp.
[20]The reference to missing credit notes said to result in an arguable dispute of
$9,338.15 represents a misunderstanding by Ms Cameron of the significance of credit notes.
[21] Under the facility, ScotPac purchases Ramp’s approved invoices, and advances to Ramp 80 per cent of the invoice value, thereby providing Ramp with immediate working capital. Mr Fisher, who provided evidence for ScotPac, explains that ScotPac usually has access to the client’s accounting system, which is often Xero. As a result, ScotPac’s systems can see the invoices as they are generated and paid. Ramp’s
customers, that is Ramp’s debtors, pay the invoice amounts directly to a bank account controlled by ScotPac.
[22] Credit notes are from time to time issued by Ramp to its customers, that is, its debtors, resulting in an agreed adjustment to Ramp’s invoice. The credit note reduces the value of Ramp’s invoice. Assuming the credit note is issued before the invoice is assigned to ScotPac, it reduces the value of the invoice against which ScotPac will make its 80 per cent upfront payment to Ramp. It does not result in any alteration to the balance between Ramp and ScotPac because the value of Ramp’s credit note is reflected in the level of funding actually advanced by ScotPac to Ramp. If the credit note is issued after the assignment then Ramp has had the benefit of ScotPac paying 80 per cent of the original greater face value of the invoice. If the amount paid by Ramp’s client to ScotPac on the reduced invoice means ScotPac suffers a shortfall, then Ramp must meet that shortfall, as it had the benefit of the original payment. In short, credit notes are irrelevant to this proceeding.
[23] The remaining items in Ms Cameron’s figures are also irrelevant to determining the amount outstanding between the parties. What are called “reassignments”, that is, invoices acquired by ScotPac that are unpaid and reassigned by Ramp, and a category called “disapprovals”, do not alter the starting position which is “cash in cash out”. If ScotPac pays Ramp money on an assigned invoice but no recovery is made by ScotPac in respect of that invoice, for whatever reason, Ramp must repay that money to ScotPac. If no money is advanced from ScotPac to Ramp and the invoice is returned, that is, it is re-assigned to Ramp, the outcome is neutral. If a client of Ramp in error pays an invoice, whether reassigned or disapproved, to ScotPac, that receipt would be included in the “cash in” starting position.
[24] The difficulty in following Ramp’s submissions is that it does not attempt any form of running account. That presents a real difficulty in understanding Ramp’s submission.
Are liquidation damages payable by Ramp?
[25]Under cl 40.6 of the facility:
The client agrees that if the facility agreement ends following a default event, ScotPac is entitled to the compensatory administration charge specified in the letter of offer.
The clause goes on to recite that: “The client agrees that the amounts payable under this clause are a genuine pre-estimate of liquidated damages…”.
[26] The letter of offer records that the minimum management fee is $800.00 per month for a minimum period of 24 months. It was not submitted that this charge qualifies as an unrecoverable penalty. Accordingly, the real issue is whether an event of default occurred, entitling ScotPac to cancel the facility, triggering Ramp’s obligation to pay the liquidated damages. Ms Cameron, in her first affidavit, denies that Ramp is liable for termination fees, but she does not address the circumstances under which the facility was cancelled. Mr Fisher, in his affidavit sworn 23 June 2025, explains the event of default and cancellation on 13 May 2025.
[27] In Ms Cameron’s reply affidavit, under the heading “Incorrect charges included in claimed debt”, she refers to the amount claimed for early termination, noting that it was originally $12,800 and that no explanation for the reduction has been given. I see nothing in this point given, as Ms Cameron observes, the reduction is in Ramp’s favour. Other than noting the reduction in the level of the claim, the event of default outlined by Mr Fisher is not addressed by Ms Cameron nor is the entitlement to cancel. In the absence of any challenge to this evidence or to the quantum of liquidated damages, there is no dispute in respect of this sum.
The reduction in the level of demand debt
[28] The original statutory demand amount was $156,633.57. By the time ScotPac filed its submissions on 28 August 2025, the debt was $101,727.31 as set out at [8] above. Counsel advised that immediately prior to the hearing on 3 September 2025, a further $35,984.53 had been received.
[29] Mr Tingey submits that the amount claimed in the statutory demand was accurate on the day the demand was issued.
[30] Mr Fisher explains that under ScotPac’s security arrangements with Ramp, ScotPac has a charge over all current and future debts of Ramp regardless of whether funding was advanced on specific invoices or not.
[31]While the statutory demand calls upon Ramp to:
Otherwise compound with SCOTTISH PACIFIC BUSINESS FINANCE LIMITED or give a charge to SCOTTISH PACIFIC BUSINESS FINANCE LIMITED over its property to secure payment of the Debt, to the reasonable satisfaction of SCOTTISH PACIFIC BUSINESS FINANCE LIMITED
there was no submission that ScotPac’s security position meant it was unable to issue a demand.
[32] The point is, the quantum of the demand was correct as at the date it was issued. Accordingly, there was no prejudice to Ramp.
[33] As to the further payment of $35,984.53 apparently paid to ScotPac in error, those invoices which otherwise would have been paid directly to Ramp, were subject to ScotPac’s charge. These payments were not collected or recovered by ScotPac pursuant to its charge. The payments were made apparently in error by a debtor of Ramp not changing the account to which they made payments from the one controlled by ScotPac to Ramp’s own account. In any event, no issue was taken with ScotPac applying the amount received to the debt. Mr Tingey confirmed, in a memorandum the day after the hearing, that the sum received could be deducted from the
$101,727.31 to leave a balance of $65,742.31 remaining owing.
[34] The receipt of the “mistaken payment” does not mean the amount claimed in the statutory demand, either at the outset or the reduced amount in Mr Tingey’s submissions, was incorrect. The “mistaken payment” was essentially a windfall to ScotPac that it did not anticipate receiving. As a credit has been given for that amount, again, there can be no prejudice to Ramp.
[35] ScotPac was not obliged to wait until all possible sources of recovery were exhausted before issuing its demand. If it held security to its reasonable satisfaction, then the situation might be different. The test to be applied as to whether the security held was satisfactory is an objective one. A creditor reasonably protected by security may well have their demand set aside on that basis, but that is not the basis upon which ScotPac’s demand was challenged by Ramp.
[36] It follows that I am satisfied the application to set aside the demand, now for the reduced amount, must be declined.
[37] Both counsel sought that there be an extension of time to satisfy the outstanding amount if that was the decision I reached. Pursuant to s 291(1) of the Companies Act 1993, there is an order that Ramp is to pay to ScotPac the sum of
$65,742.31 within 15 working days of the date of this judgment. In default of payment, ScotPac may make an application to put Ramp into liquidation.
Costs
[38] ScotPac has an indemnity costs clause. If costs are not agreed, Mr Tingey may file a memorandum, with the usual supporting information, within 10 working days. Mr Clay may reply within a further five working days. Submissions, as opposed to supporting material, are not to exceed three pages.
Associate Judge Lester
Solicitors:
Lincoln Law Limited, Lincoln (for Applicant) Baker Meech, Auckland (for Respondent)
Copy to counsel:
K W Clay, Barrister, Christchurch (for Applicant) M J Tingey, Barrister, Auckland (for Respondent)
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