Sanson v Ebert Construction Limited - [2015] NZHC 2402

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2014-404-2977 [2015] NZHC 2402

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:

6 October 2015

JUDGMENT OF ASSOCIATE JUDGE J P DOOGUE

This judgment was delivered by me on
06.10.15 at 4.00 pm, pursuant to

Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date……………

SANSON AND ANOR v EBERT CONSTRUCTION LIMITED [2015] NZHC 2402 [6 October 2015]

Introduction

[1] The applicant liquidators seek to set aside $1,603,891.90 in transactions between Takapuna Procurement Ltd (In Liquidation) (“TPL”) and Ebert Construction Ltd (“Ebert”) pursuant to ss 292 and 295 of the Companies Act 1993.

Background

[2] The transactions comprise (together, the Transactions):

a) a payment of $499,226.50 to Ebert on 18 November 2008;

b)the transfer of apartment B401 and accessory unit AU40 (certificate of title 341326 (North Auckland registry)) (the Property) to Ebert on
20 November 2008 for reduction in indebtedness of TPL in the sum of

$540,000; and

c) a payment of $564,665.40 to Ebert on 21 November 2008.

[3] It is uncontroversial that the two monetary payments in (a) and (c) occurred in the four days before TPL was placed into liquidation on 21 November 2008. There is contention between the parties as to whether transaction (b) occurred at that time or at an earlier point. This will have to be resolved in the course of this judgment.

[4] The claim which Ebert makes is for the balance of amounts which it was owed for the construction of an apartment complex, the Shoalhaven Apartments, located in Takapuna on the North Shore of Auckland (Shoalhaven Apartments).

[5] The Court appointed liquidators to TPL on the application of the Commissioner of Inland Revenue (the Commissioner). The Commissioner alleged that TPL was insolvent and that it had failed to pay $2,272,575.80 in GST payments to the IRD.

[6] It is not in dispute that TPL could not pay the debt owed to the Commissioner or the $17,496,821.61 that it owed to another creditor, Strategic Nominees Ltd (Strategic).

[7] The claim which the liquidators make is that because TPL had failed to make a preferential payment to the IRD of over $3,000,000, Ebert would never have received any of the $1,603,891.90 in liquidation.

Financing and payment arrangements

[8] In October 2005, TPL entered into a construction contract with Ebert to construct the Shoalhaven Apartments (the Construction Contract). The contract was for a lump sum of $32,497,188 (plus GST) (the Construction Sum).

[9] The funding of TPL obtained for the development of the Shoalhaven Apartments came from two lenders, BOS International (Australia) Limited (BOSI) and Strategic (the Financiers). BOSI was the senior lender of the two and its lending arrangements with TPL are those that have some bearing on the present application.

[10] The funding provided by BOSI was under a Senior Facility…

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 2402
Case: [2015] NZHC 2402
Decision Date: 6 October 2015

CaseChat Overview and Summary

Sanson and Bridgman, the liquidators of Takapuna Procurement Ltd (TPL), sought to set aside transactions between TPL and Ebert Construction Limited (Ebert) pursuant to ss 292 and 295 of the Companies Act 1993. The transactions comprised two cash payments to Ebert and the transfer of an apartment and accessory unit to Ebert. The transactions occurred within four days of TPL’s liquidation. Ebert opposed the application. The court found that the two cash payments made by BOSI, a financier, were in fact payments made by TPL. The payments were made at a time when TPL was unable to pay its debts. Ebert had not acted in good faith when it accepted the payments and transfer of the apartment. The court granted the liquidators’ application and ordered Ebert to repay the funds to TPL.

Orders