Roberts v Burns Group 2018 Limited

[2023] NZHC 420

IN THE HIGH COURT OF NEW ZEALAND DUNEDIN REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTEPOTI ROHE

CIV-2023-412-6

[2023] NZHC 420

UNDER

the Companies Act 1993

IN THE MATTER

of a company liquidation

BETWEEN

JEFFREY PHILIP ROBERTS, ROSSLYN VALERIE ROBERTS and COOK ALLAN GIBSON TRUSTEE COMPANY LIMITED

Plaintiffs

AND

BURNS GROUP 2018 LIMITED

Defendant

Hearing:

2 March 2023

Appearances:

J W Cowan for Plaintiff

M G McKenzie for Defendants

Judgment:

7 March 2023

REASONS JUDGMENT OF ASSOCIATE JUDGE LESTER

ROBERTS v BURNS GROUP 2018 LIMITED [2023] NZHC 420 [7 March 2023]

[1]    On 2 March 2023, the liquidation proceeding brought by the plaintiffs was heard in the Dunedin High Court.

[2]    The day before the hearing, the solicitors acting for the defendant company filed an application for leave to extend time for filing a statement of defence.

[3]    That application was essentially pro forma, asserting: “It is in the interests of justice to allow the Defendant to defend the Application”. It also said there was no prejudice to the plaintiff because the delay in seeking leave was minor, and relied on grounds said to be contained in the affidavit filed in support of the application to extend time.

[4]    The plaintiffs, in issuing this winding up proceeding, relied on the defendant failing to meet a statutory demand for not quite $900,000. The statutory demand upon which the liquidation proceeding was based, relied on an arbitral award, the arbitrator’s final award being dated 23 November 2022.

[5]    Mr Burns, in his affidavit in support of the application for leave to extend time, asserted that the defendant disputed the debt but gave no details whatsoever of the nature of the dispute or of any possible defence.

[6]    Mr Burns referred to the defendant company having a barrister “lined up” to deal with this proceeding and to advise on the arbitrator’s award, but he said that the barrister had pulled out last  week  “without  having  done  what  was  expected”.  Mr Burns did not say what he was expecting the barrister to do.

[7]    Mr Burns said he had only recently engaged the defendant company’s current solicitors to assist with the statement of defence.

[8]    A draft statement of defence was not filed with the application and as noted, no details of any defence was raised.

[9]    When the matter was called, I enquired of Ms McKenzie, counsel for the company, what the defence was. Ms McKenzie was unable to identify a defence.

[10]   Mr Cowan, counsel for the plaintiffs, advised that Ms McKenzie’s firm had been involved in the arbitration and so ought to have been aware of matters that could give rise to a defence. I asked Mr Cowan if he was aware of any cross-claim that the defendant company may want to raise, or any other defence. Mr Cowan was not aware of any defences.

[11]   Mr Cowan also advised that the arbitration agreement did not extend the three month appeal period to appeal the award. The time limit for an application to have the award set aside is also three months.

[12]   Accordingly, any challenge  to  the  arbitration  award  was  out  of  time  by 2 March 2023.

[13]   The note I made on the file and read out in Court on 2 March 2023 when declining the application for leave to file a defence out of time was as follows:

Ms McKenzie said all she could in support of application to extend time to file defence but there has been no challenge to the award and it is now too late to make such a challenge. In the absence of even an outline of a defence I am not prepared to extend time for a defence – especially given the size of the debt. Application to file defence out of time declined.

[14]   Mr Burns, the managing director of the defendant company, in an email to the High Court Registry on 6 March 2023, asked for a copy of my Minute of the hearing. This Reasons Judgment is intended to serve that purpose.  Mr Burns also requested   a transcript of the hearing “for the purpose of appealing the decision”. I do not intend to direct the preparation of a transcript at this time, having set out in this Reasons Judgment the discussions that occurred on the day.

[15]   If Ms McKenzie considers there were other matters raised which I have not covered in this judgment, then she may request a copy of the transcript.

Associate Judge Lester

Solicitors:

Anderson Lloyd, Queenstown (for Plaintiffs) Webb Farry, Dunedin (for Defendant)