Reynolds v Downtown Localito Limited

[2024] NZHC 1057

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2023-404-654

[2024] NZHC 1057

IN THE MATTER

of the liquidation of LOCALITO BRITOMART LIMITED (in liquidation) under the Companies Act 1993 (the Company)

BETWEEN

GRANT BRUCE REYNOLDS (the

Liquidator) Plaintiff

AND

DOWNTOWN LOCALITO LIMITED

First defendant

AND

MAHMOUD ALHARDAN

Second defendant

Hearing:	2 May 2024
Appearances:	BMK Pamatatau for plaintiff
Date of judgment:	2 May 2024

JUDGMENT OF JAGOSE J

This judgment was delivered by me on 2 May 2024 at 3.30pm.

Pursuant to Rule 11.5 of the High Court Rules.

………………………… Registrar/Deputy Registrar

Counsel/Solicitors:

BMK Pamatatau, Barrister, Auckland Craig Griffin & Lord, Auckland

REYNOLDS v DOWNTOWN LOCALITO LIMITED [2024] NZHC 1057 [2 May 2024]

[1]                  In this proceeding, the liquidator alleges the defendants (the second defendant being a director and shareholder serially of the company and the first defendant) continued to operate the company’s business after it ceased trading in February 2022, without payment of any consideration for transfer of the business to them, the principal asset of which was the fitout of the leased property from which the business operated.

[2]                  At the time the company ceased trading, it was insolvent in an amount of approximately $150,000, owing a third party some $109,000 (plus costs and interest) for completing the fitout. It was put into liquidation on 17 May 2022.

[3]                  Under ss 297 or 298 of the Companies Act 1993, the liquidator seeks to recover the value of the transfer to the defendants, occurring within the specified period, calculated as either the value of the fitout at $165,000 or the fitout’s book value at  31 March 2022 as a leasehold improvement at $92,922. No defence is filed.

[4]                  The liquidator now claims payment of the lesser amount, being his “liquidated demand  in  money”  for  the  purposes  of  judgment  by  default.1    He  has  filed     a memorandum claiming costs in the amount of $4,849.50. He disclaims interest.

[5]I am satisfied the relief claimed by the liquidator falls within r 15.7. I therefore

authorise sealing of a judgment under r 15.7(1).

—Jagose J

1      High Court Rules 2016, r 15.7.