Sanson v Ebert Construction Limited - [2015] NZHC 3046

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2014-404-2977 [2015] NZHC 3046

BETWEEN
CRAIG ALEXANDER SANSON AND

DAVID JOHN BRIDGMAN Applicants

AND

EBERT CONSTRUCTION LIMITED Respondent

Hearing: 7 and 8 September 2015

Appearances:

M J Tingey and N Moffatt for Applicants
A Van Ammers and R J Gordon for Respondents

Judgment:

17 December 2015

JUDGMENT OF ASSOCIATE JUDGE J P DOOGUE [on Payment of Interest]

This judgment was delivered by me on
17.12.15 at 4.30 pm, pursuant to

Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date……………

SANSON AND ANOR v EBERT CONSTRUCTION LIMITED [2015] NZHC 3046 [17 December 2015]

[1] On 6 October 2013, I entered judgment against the respondent in this proceeding on the application for an order under s 294(5) of the Companies Act 1993 in relation to payments which the company in liquidation had made to the respondent and in regard to a transfer of a property that was transferred to the respondent.

[2] I reserved leave to the parties to seek further directions on the matter of what, if any, interest ought to be paid on the judgment amount.

[3] The matter of costs was also reserved for further argument but counsel advised me that they have now resolved that issue and therefore this judgment is concerned solely with the question of payment of interest.

[4] Counsel for the respondent, Mr Gordon, submitted that the Court should defer consideration of the interest point until the appeal against my judgment has been determined. I do not accept that submission. Given the nature of the arguments that the respondent has put forward on the proper basis for calculation of the interest in this case, and the amount that is at stake, there would be a high probability of an appeal against any decision in that regard as well. To adopt the respondent’s suggestion would mean that if the principal judgment remained in place following the Court of Appeal’s decision, it would then be likely that the matter would have to come back to this Court for resolution of the interest question. In the absence of a decision by this Court on the interest point now, there may be difficulties in the Court of Appeal being able to decide the question of interest itself.

[5] The position which Mr Tingey, for the applicant, takes is that interest is payable and that it ought to be payable on the judgment sum from the date when the liquidators in this proceeding were appointed. Mr Gordon, on the other hand, contends that the payment of interest ought not to start any earlier than the date when the liquidators gave notice of claim to the respondent on 24 February 2014. Both counsel are agreed that whatever period is selected, interest should be payable at the rate provided for under s 87 of the Judicature Act 1908.

[6] In my view, the principle governing the payment of interest in a situation of the present kind reflects the elements identified in…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Sanson v Ebert Construction Limited

Details

AGLC: Sanson v Ebert Construction Limited [2015] NZHC 3046
Case: [2015] NZHC 3046
Decision Date: 17 December 2015

CaseChat Overview and Summary

Sanson v Ebert Construction Limited is a case before the High Court of New Zealand concerning the liability of Ebert Construction Limited for certain payments made to it by a company in liquidation. The applicants, Craig Alexander Sanson and David John Bridgman, sought an order under section 294(5) of the Companies Act 1993 regarding payments made by the insolvent company and a property transfer to Ebert Construction Limited. The court had previously entered judgment against Ebert Construction Limited but reserved the issue of interest on the judgment amount. The primary legal issue before the court was the determination of whether interest should be payable on the judgment sum and, if so, from which date. The applicants argued that interest should accrue from the date the liquidators were appointed, while Ebert Construction Limited contended that interest should only commence from the date the liquidators notified them of the claim.

The court examined the principles governing the payment of interest in similar circumstances, referencing the judgment of Somers J in Day v Mead, which emphasised that the discretion to award interest is exercised as the justice of the case requires. The court noted that generally, justice may require interest to accrue from the date the cause of action arose to the date of judgment, to compensate the plaintiff for being out of the money to which they are entitled. The court also considered the submissions of Ebert Construction Limited that their lack of knowledge of the claim until the liquidators notified them should limit their liability for interest. However, the court found that Ebert Construction Limited had knowledge of the risk of the transactions being set aside and had not demonstrated any detriment from using the funds for their operations. The court concluded that interest should be payable from the date of liquidation, resulting in a sum of $693,922.17 being owed. The parties agreed on costs, and Ebert Construction Limited was ordered to pay $29,172.16 in costs and disbursements.

Orders