Robbies Bar & Bistro Limited v Robbies Bar & Bistro Franchising Limited (in liq)

[2020] NZHC 1491

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2018-409-245

[2020] NZHC 1491

BETWEEN

ROBBIES BAR & BISTRO LIMITED

First Plaintiff

AND

ALAN JOHN ROBERTS AND LOLA NEROLI ROBERTS

Second Plaintiffs

AND

ROBBIES BAR & BISTRO FRANCHISING LIMITED (in liq)

First Defendant

AND

PAUL MARTIN KOFOED AND ANN CATHERINE KOFOED

Respondents (in relation to the non-party costs application)

Hearing:	25 June 2020
Appearances:	J Shingleton for Plaintiffs
Judgment:	30 June 2020

JUDGMENT OF ASSOCIATE JUDGE LESTER

This judgment was delivered by me on 30 June 2020 at 4.00pm pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar

30 June 2020

ROBBIES BAR & BISTRO LIMITED v ROBBIES BAR & BISTRO FRANCHISING LIMITED (IN LIQ) [2020] NZHC 1491 [30 June 2020]

[1]        The first defendant in this proceeding, Robbies Bar & Bistro Franchising Ltd, was placed into voluntary liquidation on 16 January 2020.

[2]        The Court had, on 19 December 2019, made an unless order requiring the first defendant to serve its briefs of evidence by 20 January 2020, failing which its defence would be struck out. With liquidation, the first defendant has taken no further steps in the proceeding.

[3]        The plaintiffs, as required by s 248 of the Companies Act 1993, requested that the liquidators of the first defendant consent to the proceeding continuing against the company in liquidation. The liquidators would not give that consent and the plaintiffs bring this application seeking the leave of the court. The application has been served and counsel advises that the liquidators’ position is that they will abide the court’s decision in respect of the application.

[4]        The plaintiffs submit the controllers of the first defendant placed the company into liquidation when they did, in order to frustrate the plaintiffs’ ability to proceed by way of formal proof, given it seemed likely that the unless order would not be satisfied.

[5]        While the liquidators declined leave for the proceedings to continue, they also rejected the plaintiff’s proof of debt based on the claim in this proceeding. The liquidators have not advised the court why the plaintiffs claim in the liquidation was rejected or why having done so, they would not consent to their proceedings continuing:1

If the liquidator is likely to require the claim to be proved (because, for example, of the complexity of the proceedings), would not find it easy to determine and be likely to reject it, the most appropriate way of dealing with the matter is in an action with the leave of the court;

[6]        If leave is not granted, the plaintiffs will have to challenge the liquidators’ rejection of their proof of debt. Where the plaintiffs have complied with court directions as to the preparation of evidence and are ready to proceed by way of formal proof in this Court, it is more efficient to grant leave to the plaintiffs to continue their

1      Morison’s  Company  Law  (online  ed,  LexisNexis)  at  [59.4];  referring  to  Clarence  Holdings v Mt Albert TV (1993) Ltd (1999) 8 NZCLC 262,072; Hook v Gulf Harbour Development Ltd (in liq) HC Auckland CIV-2002-404-1931, 23 November 2005, at [56]-[60].

proceeding and to see if they can formally prove their claim, rather than to require them to commence a fresh process to challenge the liquidators’ rejection of their claim.

[7]        Given experienced liquidators do not oppose the application for leave and the appearance that the decision to place the company into liquidation was a tactical one designed to prevent the unless order coming into effect; I consider it appropriate that leave be granted under s 248 of the Companies Act 1993 for the plaintiffs to be able to pursue their claim against the first defendant in liquidation. There is an order accordingly. Ultimately, granting leave saves the liquidators the cost of dealing with a challenge to their rejection of the plaintiff’s claim in the liquidation.

[8]        With that leave granted, the plaintiffs seek that the unless order made in December 2019 be given effect to, the first defendant’s defence be struck out and  the claim be set down for formal proof. These applications were included in the application for leave to continue the proceeding and accordingly are also subject to the liquidators’ indication that they will abide the Court’s decision.

[9]        Given the first defendant’s repeated and persistent failure to comply with court directions, it is appropriate that the unless order be given effect to.

[10]Accordingly, there is an order striking out the first defendant’s defence.

[11]      The plaintiffs are to file affidavit evidence in support of their application for formal proof and a supporting memorandum so that the same can be referred to a Judge who will determine whether the application for formal proof can be dealt with on the papers or whether the application should be set down for a formal proof hearing.

Costs

[12]Costs are reserved.

Associate Judge Lester

Solicitors:

First Law Limited (John Shingleton), Christchurch

cc: The Director, Robbies Bar & Bistro Franchising Ltd, Christchurch