Simple Engineering Limited v Ingenious 1 Limited - [2024] NZHC 1186

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2023-404-2787

[2024] NZHC 1186

BETWEEN
SIMPLE ENGINEERING LIMITED

Applicant

AND

INGENIOUS 1 LIMITED

Respondent

CIV-2023-404-2788

BETWEEN

GORDON & RYAN (2022) LIMITED
Applicant

AND

INGENIOUS 1 LIMITED

Respondent

Hearing: 7 May 2024

Appearances:

G Jindal for Respondent

D M Connor and H S Sakairi for Applicants

Judgment:

13 May 2024

JUDGMENT OF ASSOCIATE JUDGE LESTER

This judgment was delivered by me on 13 May 2024 at 4:00 pm pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar

………………………………….

SIMPLE ENGINEERING LIMITED v INGENIOUS 1 LIMITED [2024] NZHC 1186 [13 May 2024]

[1] This judgment concerns an application by Simple Engineering Limited (Simple) and Gordon & Ryan (2002) Limited (G&R) to set aside statutory demands issued to each company by Ingenious 1 Limited (Ingenious). While separate demands were issued and separate applications to set aside filed, both applications were dealt with in the one hearing on 7 May 2025 given the overlap in issues between the two proceedings.

[2] In this judgment, I intend to refer to the demand issued to Simple and not the demand issued to G&R, unless G&R’s demand warrants separate treatment. Accordingly, the comments and observations concerning Simple apply to G&R unless I state otherwise.

[3] Ingenious was incorporated on 27 September 2023. On 28 September 2023, a company called Best Air Conditioning Limited (Best), purported to assign to Ingenious debts that Best says it is owed by Simple and G&R. The assignment is not before the Court but given the date of incorporation, the assignment must have occurred on 27 or 28 September 2023. Ingenious gave notice of the assignment to Simple and G&R on 28 September 2023 and immediately issued statutory demands for the assigned debts.

[4] On 18 October 2023, Ingenious issued what purported to be payment claims under s 20 of the Construction Contracts Act 2002 (the CCA) in respect of the assigned debts.

[5] Payment schedules were issued in response to the payment claims. Ingenious asserts those payment schedules are invalid.

[6] On 6 November 2023, Ingenious withdrew the 28 September 2023 statutory demands and immediately issued new demands that relied on the purported payment

claims. The November 2023 statutory demand, while directed to Simple, gave as the address at which was being served as:

By email to David Connor (Barrister) at david.connor@davidconnor.co.nz

The demand, in relation to G&R, was addressed in the same way.

[7] Mr Jindal, counsel for Ingenious, confirms that the statutory demands were served by email to Simple’s counsel. Mr Connor, counsel for Simple, says he did not agree to accept service of the statutory demands by email, nor did Mr Jindal suggest such an agreement had been reached.

[8] While the application to set aside the demands did not refer to the validity of service, it does include what might be called a catch-all ground that the demand…

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.

Keep reading for free

Create a free CaseChat account to read Simple Engineering Limited v Ingenious 1 Limited and more:

Read every judgment in full
Ask AI and get answers linked to paragraphs
See how each paragraph was cited in later cases
Download judgments as PDF or Word

Continue with Google

One click creates your free account or signs you in.

By continuing you agree to the Terms and Privacy Policy.

Details

Case: [2024] NZHC 1186
Decision Date: 13 May 2024

CaseChat Overview and Summary

Simple Engineering Limited and Gordon & Ryan (2022) Limited (collectively the "applicants") sought to set aside statutory demands issued by Ingenious 1 Limited ("Ingenious"). The applicants argued that the demands were invalid due to issues with service, Ingenious' standing to issue the demands, and the validity of the payment claims and schedules. The court was required to determine four key issues: (a) whether the statutory demands were validly served; (b) if Ingenious had standing as an assignee of a debt to issue payment claims under the Construction Contracts Act 2002; (c) if the payment claims complied with section 20 of the Construction Contracts Act; and (d) if valid payment schedules were issued.

The court found that the statutory demands were not validly served as they were emailed to the applicants' counsel rather than the companies themselves, contrary to section 388 of the Companies Act 1993. The court also determined that Ingenious did not have standing to issue payment claims because it was not a party to the construction contracts, as required by section 20 of the Construction Contracts Act 2002. Furthermore, the payment claims did not contain sufficient details to identify the construction contracts to which they related, and therefore did not comply with section 20 of the Construction Contracts Act. Lastly, the payment schedules issued by the applicants contained reservations regarding the validity of the payment claims, which would have been an independent ground for setting aside the demands.

The court set aside the statutory demands issued by Ingenious to Simple Engineering Limited and Gordon & Ryan (2022) Limited, both dated 6 November 2023. The applicants were awarded costs, with an order for Ingenious to pay costs on a 2B basis plus 25% unless costs memoranda were filed within 10 working days. The court found that the circumstances of this case were unsuitable for resolution in a summary context due to the oral nature of the arrangements and the complexities of the relationships between the parties.

Orders