Safari Vervaardinging CC v Safari BBQ Products Limited

[2023] NZHC 2303

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2022-404-002309

[2023] NZHC 2303

UNDER

the Companies Act 1993

BETWEEN

SAFARI VERVAARDIGING CC

Plaintiff

AND

SAFARI BBQ PRODUCTS LIMITED

Defendant

Hearing:	27 July 2023
Appearances:	J Marcetic and H S Yang for the Plaintiff H Erasmus for the Defendant
Judgment:	23 August 2023

JUDGMENT OF ASSOCIATE JUDGE GARDINER

This judgment was delivered by me on 23 August 2023 at 4.00 p.m. pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date.......................................

Solicitors:

Chapman Tripp, Auckland Copy to: H Erasmus

SAFARI VERVAARDIGING CC v SAFARI BBQ PRODUCTS LTD [2023] NZHC 2303 [23 August 2023]

Introduction

[1]    Hein Erasmus is the sole director and majority shareholder of Safari BBQ Products Ltd (SNZ). Mr Erasmus also owns 50 per cent of the shares in a company called Safari Holdings Limited. His son holds the other 50 per cent. Both companies are incorporated in New Zealand.

[2]    Since June 2017, SNZ has imported South African BBQ briquettes for traditional South African braii from Safari Vervaardiging CC (SVC). The companies ceased trading together in early 2021, with the date of the last invoice issued by SVC to SNZ being 12 January 2021.

[3]    On  14  April  2022,  SVC  served  a  statutory  demand   on   SNZ   for   ZAR 1,007,162.36 plus interest. The total demanded was ZAR 1,147,061.35 (approximately NZD 103,000) and related to amounts allegedly owing under four unpaid invoices. SNZ applied to this Court to  set  aside  the  statutory  demand.  SVC opposed that application.

[4]    SNZ challenged the statutory demand on three grounds: that there was a substantial dispute as to whether the debt was owing; that it had a counterclaim arising from SVC supplying contaminated charcoal and mouldy briquettes; and that the statutory demand was an abuse of process having been used to obtain a collateral advantage in a dispute between the parties regarding the ‘Safari’ trademark.

[5]    In a reserved judgment delivered on 21 October 2022, Associate Judge Lester set  aside  the  statutory  demand  in  respect  of  SVC’s interest claim and  arguable overcharging of ZAR 44,000. The Judge found that a ‘no set-off’ clause in SVC’s Credit Application Form (the Terms) prevented SNZ from raising its counterclaim against SVC for supplying defective product to set aside the statutory demand. The Judge held that SNZ had not demonstrated that the issue of a statutory demand by SVC was an abuse of process.

[6]    Consequently, the statutory demand was upheld in the sum of approximately ZAR 963,162.36, or NZD 83,000.

[7]    On around 21 November 2022, Mr Erasmus filed a notice of appeal in respect of the judgment and an application for leave to appear on behalf of SNZ as a director. In a judgment delivered  on  5  December  2022,  the  Court  of  Appeal  declined  Mr Erasmus’s application for leave to appear. The Court said that his justification fell well short of the exceptional circumstances required.1 Mr Erasmus then abandoned the appeal.2 He now says that he did so because he could not afford a lawyer to represent SNZ in the Court of Appeal.

[8]    In the meantime, on 29 November 2022, Associate Judge Lester delivered a costs judgment in relation to the statutory demand hearing. The Judge ordered SNZ to pay SVC’s solicitor/client costs under the Terms, an amount of NZD 36,771.13. SNZ has not appealed this costs judgment or sought a stay of enforcement.

[9]    On 21 December 2022, SVC served this liquidation proceeding on SNZ. On 28 February 2023, Mr Erasmus applied as a creditor, director, and shareholder of SNZ to restrain advertising of the application and stay the proceeding on the grounds that:

(a)SNZ had filed an appeal of  the  statutory  demand  judgment,  and  Mr Erasmus was applying to the Supreme Court for leave to appear for SNZ in the appeal.

(b)SNZ was filing proceedings in the District Court to claim damages from SVC for the defective products supplied of at least NZD 100,000.

(c)The Terms require any dispute between SVC and SNZ to be heard by a Magistrate’s Court in South Africa.

(d)Advertising the liquidation proceeding would be detrimental to the creditors and shareholders of SNZ. SNZ intended to file a statement of

1      Safari BBQ Products Ltd v Safari Vervaardiging CC [2022] NZCA 603 referring to Re G J Mannix Ltd [1984] 1 NZLR 309 (CA) at 314 per Cooke J and 316—317 per Somers J, and Commissioner of Inland Revenue Chesterfields Preschools Ltd [2013] NZCA 53, [2013] 2 NZLR 679 at [25]—

[27] and [34].

2      On 16 March 2023, Mr Erasmus’s appeal of the statutory demand judgment was deemed abandoned.

defence, but first required a decision on Mr Erasmus’s application to appear for SNZ in the liquidation proceeding.

(e)There are three separate general security agreements registered over the assets of SNZ, a company with limited assets.

(f)SVC’s application to the Intellectual Property Office of New Zealand (IPONZ) to have SNZ’s ‘Safari’ trademark declared invalid was ready for hearing, and if the liquidation proceeding was not stayed and SNZ was put into liquidation, the liquidator may elect not to defend the trademark application (or continue the proceedings in the District Court), to the detriment of SNZ’s creditors.

(g)SNZ trades profitably and the debt that is the subject of the statutory demand is primarily for defective and unsaleable stock that SVC supplied to SNZ between 2016 and 2021.

[10]   Due  to  miscommunication  between  the  Court  and  counsel  for  SVC,   Mr Erasmus’s application for a  stay  and  restraint  of  advertising  was  called  on 17 March 2023 without counsel for SVC present. Associate Judge Lester made interim stay and restraint orders pending SVC filing any opposition.3 It seems that the Associate Judge was not aware that SVC had already advertised the liquidation proceeding on 9 March 2023. Counsel for SVC explains that it was not clear to them whether SNZ’s application had been processed by the Court, given that it had not been made by a lawyer on behalf of SNZ. Subsequently, SVC filed its opposition.

[11]   As  the  liquidation  proceeding  has  already  been  advertised,  I  consider Mr Erasmus’s application to be for a stay of the liquidation application.

[12]   It is noted that Mr Erasmus’s application was not filed within the required five working day timeframe prescribed by r 31.11 of the High Court Rules 2016. However, the Court’s inherent jurisdiction to prevent an abuse of process is not limited by this

3      Safari Vervaardiging CC v Safari BBQ Products Ltd HC Auckland CIV-2022-404-2309, 17 March 2023 at [8]–[9].

rule.4 Further, by making the interim stay and restraint order, Associate Judge Lester must be taken to have excused the non-compliance with r 31.11.

[13]   At a further call of the application, Mr Erasmus confirmed that he applied for the  stay in his  capacity as a creditor of SNZ (i.e., not a director  or shareholder).     A creditor requires the leave of the Court to apply for a stay and restraint of advertising.5 Therefore, an issue that must be decided is whether Mr Erasmus, as a creditor of SNZ, should have leave to bring the application.

[14]   During the hearing, Mr Erasmus refined his reasons for why the liquidation application should be stayed to these:

(a)The Court does not have jurisdiction to decide the issues between SNZ and SVC.

(b)The liquidation proceeding is an abuse of process.

(c)Liquidation of SNZ will not benefit creditors, and SVC will not be prejudiced by a stay until the trademark dispute is determined.

(d)SNZ has a counterclaim against SVC for losses arising out of SVC supplying defective product.

[15]   I will address each of these grounds, after discussing the relevant legal principles.  I   prefer   to   address   these   grounds   before   considering   whether Mr Erasmus should have leave to bring the application as a creditor of SNZ.

4      High Court Rules 2016, r 31.11(3).

5      High Court Rules 2016, r 31.11(1).

Legal principles

[16]   The Court has the power under r 31.11 of the High Court Rules and its inherent jurisdiction to stay liquidation proceedings and restrain advertising.6 The relevant principles are:7

(a)The Court has an inherent jurisdiction to stay liquidation proceedings where there is a genuine dispute about the debt.

(b)The inherent jurisdiction is to prevent an abuse of process.

(c)The governing consideration is whether the proceedings suggest unfairness or undue process.

(d)The onus is on the applicant to establish a strong prima facie case of the existence of a genuine dispute on substantial grounds, or that there are clear and persuasive grounds for a stay.

[17]   As noted, creditors need leave from the Court to apply for a stay of liquidation proceedings.8 The applicant creditor must satisfy the Court that its legal rights have been, or are likely to be, infringed by the liquidation proceeding.9

Does the Court lack jurisdiction?

[18]   In his written submissions Mr Erasmus argues that this Court does not have jurisdiction to determine a dispute under the Terms about the debt claimed in the statutory demand. Mr Erasmus relies on cl 5.1 of the Terms, which says that the purchaser consents to the jurisdiction of the Magistrate’s Court, or at the seller’s option, the Supreme Court of South Africa, in respect of any matter or claim arising from the sale. Clause 5.2 of the Terms states that the law of the seller’s domicile shall

6      High Court Rules 2016, r 31.11.

7      Nemesis Holdings Ltd v North Harbour Industrial Holdings Ltd (1989) 1 PRNZ 379 (HC); and

Taxi Trucks Ltd v Nicholson [1989] 2 NZLR 297 (CA).

8      High Court Rules 2016, r 31.11(1); and Cambridge Clothing Co Ltd v Hire Suits Ltd (1991) 4 PRNZ 393 at 394.

9      Cambridge Clothing Co Ltd v Hire Suits Ltd (1991) 4 PRNZ 393 at 395.

apply to the interpretation and enforcement of any contract, and to any dispute between the parties.

[19]   SNZ, which was represented by counsel at the statutory demand hearing, did not raise any jurisdictional issues at that time. Associate Judge Lester noted that the Terms contain a clause that the contract should be interpreted and enforced in accordance with South African law, but that both counsel confirmed that the hearing could proceed on the basis of New Zealand law.10 The Associate Judge considered SNZ’s dispute about the amount claimed and confirmed that around NZD 83,000 was indisputably owing.

[20]   Having conceded to the statutory demand hearing being determined according to New Zealand law, Mr Erasmus cannot now object to the statutory demand judgment on the basis that the Court did not have jurisdiction. Even if it was open for SNZ to challenge the statutory demand judgment on that basis, it ought to have done so on an appeal. SNZ abandoned its appeal and cannot now argue that the Court lacked jurisdiction to determine the dispute between SNZ and SVC over the debt.

[21]   As I explained to Mr Erasmus during the hearing, the matter now before the Court is an application to have SNZ placed into liquidation. That application is based on the unsatisfied statutory demand confirmed by the statutory demand judgment in the amount of NZD 83,000. This Court undoubtedly has jurisdiction to hear and determine the liquidation application. SNZ is a company registered and incorporated in New Zealand under the Companies Act 1993. The High Court of New Zealand is empowered to make liquidation orders in respect of the company.11

Abuse of process or undue pressure?

[22]   In his affidavit supporting the interlocutory application, Mr Erasmus deposes that he considers that SVC is trying to force SNZ into liquidation before the trademark hearing by IPONZ can take place.

10     Safari BBQ Products Ltd v Safari Vervaardiging CC [2022] NZHC 2741 at [2], n 1. Associate Judge Lester also noted that SVC purported to preserve its entitlements under the clause.

11     Companies Act 1993, s 241.

[23]   The background  to  this  trademark  dispute  is  that  in  2014,  another  of  Mr Erasmus’s companies, Kiwi Biltong Limited, registered the ‘Safari’ trademark in New Zealand. Subsequently, Kiwi Biltong Ltd assigned the ‘Safari’ trademark to Deno Group Limited. It seems that the trademark was then assigned to SNZ.

[24]   In early 2022, SVA applied to IPONZ for a declaration that SNZ’s registration of the ‘Safari’ trademark was invalid.

[25]   Mr Erasmus alleges that SVC is deliberately prolonging resolution of the trademark application by IPONZ with the objective of having SNZ placed in liquidation in the interim.

[26]   SNZ advanced this argument as the third ground for its application to set aside the statutory demand. SNZ’s counsel emphasised the timing of SVC’s demand for the debt, occurring approximately one month after its demand that SNZ stop using the ‘Safari’ trademark.

[27]   Associate Judge Lester did not accept that the issue of the statutory demand was an abuse of process, emphasising that SVC is entitled to take steps to collect a debt it has been owed since 2021 at the latest.12

[28]   Mr Erasmus has not presented any further evidence to support the assertion that SVC is pursuing these liquidation proceedings for an ulterior purpose related to the trademark. It is an inference he asks the Court to make from the circumstances.

[29]   Peter Reinstorf, SVC’s director, has deposed that the company did not issue the statutory demand and liquidation proceeding to gain some advantage in the trademark dispute with SNZ. He deposes that the outstanding debts of approximately NZD 119,000 are having a significant impact on SVC and its ability to run its business, a debt of that size being approximately 5 per cent of its annual turnover.

[30]   I cannot discount the possibility that the trademark dispute may be a factor behind SVC bringing the application for liquidation of SNZ. Yet at the same time,

12     Safari BBQ Products Ltd v Safari Vervaardiging CC [2022] NZHC 2741 at [63]–[64.

SNZ owes SVC around NZD 83,000 for goods supplied and a further NZD 36,771.13 in costs. Associate Judge Lester determined that the trade debt is not reasonably disputable. It cannot be an abuse of process for SVC to seek to enforce this indisputable debt, especially when it relates to goods supplied in 2020/2021 and SVC demanded payment some 18 months ago.

Liquidation no benefit to creditors, stay will not prejudice SVC

[31]   Mr Erasmus submits that there will be no benefit to SVC (or other creditors) if SNZ is placed into liquidation because the company has no assets. He claims that the company cased trading in April 2023 and therefore creditors are not prejudiced if the liquidation application is stayed until after the trademark hearing, as the company is not accumulating any more debt.

[32]   Conversely, Mr Erasmus submits that creditors’ interests will be adversely affected if the liquidation proceeding is not stayed and SNZ is put into liquidation before the trademark determination. He attributes significant value to the ‘Safari’ trademark. He submits that a liquidator may choose not to defend the trademark for SNZ and that this will be to the detriment of creditors. By creditors, he seems to refer to Safari Holdings Ltd which he says is owed around NZD 60,000 by SNZ and which holds a general security over SNZ’s assets, including the ‘Safari’ trademark. At the hearing, Mr Erasmus elaborated that his main reason for wanting to prevent SNZ being placed into liquidation is to protect the ‘Safari’ trademark, which he intends to transfer to Safari Holdings Ltd once the trademark dispute is determined.

[33]   I am not persuaded by these submissions. For one, I am unable to conclude on information before me that there will be no recovery for unsecured creditors (including SVC) in the liquidation. Mr Erasmus has (with leave) filed a further affidavit in which he identifies the secured and unsecured creditors of SNZ. They are significant. He has deposed that there are no assets in the company (except, it must be assumed, the ‘Safari’ trademark), but he has not filed any evidence to corroborate this claim.     Mr Erasmus essentially asks the Court to conclude based on bare assertions that the liquidation would serve no purpose. I am unable to reach that conclusion.

[34]   It follows that SVC is potentially prejudiced by a stay. A stay will postpone a hearing of SVC’s application for liquidation, the potential appointment of a liquidator and their investigation into the affairs of SNZ. There exists the potential for SVC to recover some or all of the debt if the company is placed into liquidation. A stay delays that possibility. The fact that SNZ is apparently not trading so its financial position is not worsening does not address the potential prejudice to SVC from delay.

[35]   It is relevant that there is no known date for the trademark hearing. During the hearing, Mr Erasmus said he had been advised by IPONZ that the hearing would take place within 12 months of February 2023, but there is no evidence of this. There remains the possibility that SNZ or SVC may appeal the Commissioner’s decision. This uncertainty about when the trademark issue will be resolved counts against a stay.

Counterclaim relating to defective goods?

[36]   In his interlocutory application, Mr Erasmus claims that the statutory demand debt is primarily for defective and unsaleable stock that SVC supplied to SNZ between 2016 and 2021. It appears from his application and affidavits that he relies on this claim in two ways. First, he appears to dispute the debt, deposing that while SVC processed some credits for damaged and undersupplied stock, and wasted space, it is unclear whether SNZ still paid for some of the damaged stock. Second, he claims that SNZ suffered damage to its brand and company value because of complaints made to the Ministry for Primary Industries and bad publicity arising out of the poor quality of SVC’s products.

[37]   SNZ’s claim that SVC supplied it with contaminated and mouldy stock was plainly before the Court  in  the  application  to  set  aside  the  statutory  demand.  Mr Reimstorf detailed the exchanges he had with Mr Erasmus about credits and reimbursements for damaged stock, deposing that SVC agreed to reimburse SNZ ZAR 88,119 and give a credit of ZAR 96,517 in February 2021. Associate Judge Lester upheld SNZ’s dispute over the amount claimed in the statutory demand in two respects: the interest claimed and possible overcharging in the amount of ZAR 44,000. Otherwise, he found that there was no genuine and substantial dispute over the debt.

[38]   Where a statutory demand has been challenged on the basis the debt is genuinely disputed, it is generally inappropriate for the Court to consider the same matters again when determining an application for stay.13 I do not consider it open to me to revisit the issue of whether there is a genuine dispute about the debt of     NZD 83,000. To challenge that judgment, SNZ needed to pursue its appeal to the Court of Appeal.

[39]   However, I do not consider that I am precluded, in considering whether to exercise my discretion to stay the liquidation proceeding as an abuse of process, from considering SNZ’s purported counterclaim against SVC arising out of the supply of defective stock. This is distinct to any potential dispute over the debt and is a counterclaim by SNZ for loss allegedly sustained because of harm to the ‘Safari’ brand in New Zealand. As noted, Associate Judge Lester held that SNZ could not raise this counterclaim or set-off as a ground for setting aside the statutory demand because of the ‘no set-off’ clause in the Terms. Consequently, he did not consider the merits of that counterclaim.

[40]   SVC submits that it is well established that a set-off or counterclaim cannot be used as a ground for stay of an application to appoint a liquidator if a company is prevented from relying on a set-off or counterclaim as a ground for setting aside a statutory demand under s 290(4)(b) of the Companies Act. SVC relies on a decision of this Court — Gill Construction Co Ltd v Butler.14 In that case, Mallon J declined  to restrain the advertising of, and stay of a liquidation application based on an asserted counterclaim where the debtor was prevented from raising the counterclaim to set aside the statutory demand by s 79 of the Construction Contracts Act 2002.15

[41]   In my view the Court’s discretion to prevent an abuse of process is not fettered in the way described by SVC. The overarching consideration is whether the liquidation proceeding is an abuse of process and suggest unfairness or undue

13     Robertson v Ko Farm Co Ltd HC Christchurch M327/96, 5 November 1996 at 3.

14     Gill Construction Co Ltd v Butler [2010] 2 NZLR 229 (HC).

15     At [11] and [14], discussing Laywood v Holmes Construction Wellington Ltd [2009] NZCA 35, [2009] 2 NZLR 243.

pressure. As this Court said in Nemesis Holdings Ltd v North Harbour Industrial Holdings Ltd:16

The decisions make it clear that the jurisdiction to stay is an inherent one to prevent an abuse of process and that there is no inflexible rule. The governing consideration is whether the proceedings savour of unfairness or undue pressure. It is, however, a serious matter to stay winding-up proceedings so that the decision to do so is never made lightly. The onus is on the applicant and it is normally necessary to demonstrate “something more” than the balance of convenience considerations which it is usually appropriate to consider on an application for interim injunction.

[42]   Indeed, in Gill Mallon J expressed her statement as being subject to there not being anything unfair or improper about the liquidation proceeding:17

If Gill’s asserted counterclaim is not a basis for setting aside the statutory demand, it cannot in my view be a basis for preventing the liquidation application from proceeding to a hearing. There is an unsatisfied statutory demand and Mr Butler is entitled to proceed absent anything unfair or improper about the proceeding.

[43]   At the hearing, I invited Mr Erasmus to file further evidence of the steps taken to bring the counterclaim against SVC in the District Court, and to provide the Court with the draft statement of claim.

[44]   In response, Mr Erasmus filed an affidavit providing a “File and Pay” receipt dated 9 March 2023 indicating that a statement of claim was filed, and an email from the North Shore District Court Registry dated 3 April 2023 requiring further documentation and amendments to the claim. Mr Erasmus deposes that he did not proceed with refiling the proceeding because the Terms provide that any dispute between SVC and SNZ must be determined by the courts in South Africa. He deposes that he has, however, since the stay hearing, decided to refile the proceeding.

[45]   I do not have enough information before me to make any sort of assessment of the merits of that intended counterclaim. Mr Erasmus describes the basis for the counterclaim in his further affidavit. Essentially, he claims that the ‘Safari’ brand has been damaged by the supply of defective product by SVC, and SNZ has lost value in

16     Nemesis Holdings Ltd v North Harbour Industrial Holdings Ltd (1989) 1 PRNZ 379 (HC) at 385.

17     Gill Construction Co Ltd v Butler [2010] 2 NZLR 229 (HC) at [21].

the region of NZD 2,000,000. This is based on the intended public listing of SNZ. Mr Erasmus has not provided a draft statement of claim.

[46]   Against this uncertain counterclaim is the fact that SNZ is indebted to SVC in the sum of approximately NZD 103,000, with around NZD 83,000 of that relating to trade debts from over two years ago. Associate Judge Lester’s decision confirming that debt dates to  October  2022,  and  the  costs  judgment  to  November  2022.  Mr Erasmus has had around 16 months (since service of the statutory demand) to bring the counterclaim, and he has not done so.

[47]   For these reasons, I am not persuaded that it is an abuse of process for the liquidation proceeding to continue because of Mr Erasmus’s indicated counterclaim against SVC.

Leave to apply as creditor

[48]   It is not strictly necessary for me to decide this issue when I have determined that the liquidation application should not be stayed.   It is important however that     I record some observations should Mr Erasmus want to take further steps in the liquidation proceeding.

[49]   I have the impression that Mr Erasmus may have become confused about how to advance his opposition to the liquidation proceeding. I have some sympathy with Mr Erasmus, as it appears that he filed, or attempted to file, an application for leave to represent SNZ in the liquidation proceeding in December 2022. Mr Erasmus refers to this application in his interlocutory application for a restraint and a stay. The minute of the first call of that application in March 2023 records that Mr Erasmus referred to the application again then. The Court has no record of this application, and it remains unclear whether the application was filed or not.18

[50]   When   the   application   was   called   a   second   time,   in   April   2023,     I noted that Mr Erasmus had made the application in several capacities and required him to confirm in which capacity he advanced the application. I reminded Mr Erasmus

18     Mr Erasmus has since provided a copy of this application.

that if SNZ made the application, the company needed to be represented by qualified counsel. I was unaware that Mr Erasmus considered that he had applied for leave to represent the company and was awaiting a decision on that application. Subsequently, Mr Erasmus confirmed to the Court that he applied in his capacity as creditor.

[51]   As noted, a creditor requires the leave of the Court to apply for a restraint on advertising and for a stay of a liquidation proceeding. That is a function of r 31.11 of the High Court Rules. That requirement for leave is distinct from the requirement that an individual, who is not a practising barrister and solicitor, must have the leave of the Court to appear for a company in court proceedings.

[52]    It follows that to have standing to make the application in the capacity of a creditor, Mr Erasmus must first establish that he is a creditor of SNZ. Mr Erasmus has sought to establish that Safari Holdings Ltd is a creditor of SNZ, deposing in his further affidavit that SNZ owes Safari Holdings Ltd NZD 60,000 for products supplied, and providing evidence of a general security agreement held by Safari Holdings Ltd over SNZ’s assets.

[53]   Even if I was satisfied with the veracity of this evidence, it does not assist  Mr Erasmus. At best, the evidence would establish that Safari Holdings Ltd is a creditor of SNZ. Yet as Safari Holdings Ltd is a company, Mr Erasmus does not have the right to represent its interests without the leave of the Court.

[54]   Mr Erasmus also asserted at the hearing that he was personally a creditor of SNZ. He sought to establish this in his further affidavit by deposing that SNZ owes him NZD 16,000 in unpaid wages. To be satisfied that Mr Erasmus is a personal creditor of SNZ, the Court would need to see the company’s underlying records.

[55]   These issues are moot because I have found, on the merits, that a stay of the application is not warranted. However, I thought it important to record this background should SNZ want to take further steps in the proceeding. If so, the following options present themselves:

(a)SNZ instructs counsel to represent it;

(b)Mr Erasmus files a fresh application with the Court for leave to appear for SNZ;

(c)Mr Erasmus files an appearance in his capacity as a shareholder or creditor of SNZ under rr 31.18 and 31.19 of the High Court Rules (no later than two working days before the new hearing date allocated by the Registrar) and if he wishes to defend the proceeding files a statement of defence under  r  31.16  of  the  High  Court  Rules.  If Mr Erasmus takes this course of action he will be personally liable for costs.

Conclusion and result

[56]The application to restrain advertising and stay the liquidation proceedings

is dismissed.

[57]   The Registrar will list the liquidation proceeding for call in four weeks’ time to allow SVC the opportunity to advertise the application with the new hearing date and Mr Erasmus time to take legal advice and instruct counsel if he so wishes.

[58]   According to the usual principle that costs follow the event, my preliminary view is that SNZ should pay SVC’s costs on a scale 2B basis plus reasonable disbursements. If costs cannot be agreed, submissions of not more than four pages may be filed within 20 working days.

Associate Judge Gardiner