Simpson Family Trust v Andcabs Limited

[2025] NZHC 1133

IN THE HIGH COURT OF NEW ZEALAND INVERCARGILL REGISTRY

I TE KŌTI MATUA O AOTEAROA WAIHŌPAI ROHE

CIV-2025-425-010

[2025] NZHC 1133

UNDER

the Companies Act 1993

IN THE MATTER

of the liquidation of ANDCABS LIMITED

BETWEEN

SIMPSON FAMILY TRUST

Plaintiff

AND

ANDCABS LIMITED

Defendant

Hearing:	8 May 2025
Counsel:	S W R Jones for Plaintiff J G French for Defendant
Judgment:	12 May 2025

JUDGMENT OF ASSOCIATE JUDGE PAULSEN

This judgment was delivered by me on 12 May 2025 at 4.00 pm pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar Date:

SIMPSON FAMILY TRUST v ANDCABS LIMITED [2025] NZHC 1133 [12 May 2025]

[1]    The plaintiff applies for an order liquidating the defendant company on the ground that it is insolvent and unable to pay its debts.1 Although the case has been before the Court on two prior occasions no statement of defence has been filed. It was only on the third occasion the application came before the Court that the defendant company’s counsel opposed the making of an order for liquidation on the basis the defendant company had not been validly served.

[2]This judgment deals with two issues:

(a)Was the defendant company validly served?

(b)Should an order be made putting the defendant company into liquidation?

Background

[3]    The proceeding was filed on 31 January 2025. There was correspondence between  counsel  that  Mr  French  was  acting  for  the  defendant  company.  On  13 February 2025, documents were sent to Mr French attached to an email that read:

Good morning

Please find attached by way of electronic service in the above matter:

·Notice of Proceeding

·Statement of Claim

·Affidavit of Teresa Ann Anderson

·Affidavit of Service of Statutory Demand

[4]    The plaintiff’s lawyers understood that Mr French was authorised to accept service on behalf of the defendant company. There is nothing to suggest that Mr French represented he was so authorised, although neither did he take any issue concerning service at that time.

1      Companies Act 1993, s 241(2)(c)(iv) and (4).

[5]    The first hearing was on 13 March 2025. Mr French entered an appearance for the defendant company and Mr Jones appeared for the plaintiff. There had been some discussion between counsel prior to the hearing as the Court was advised they had agreed to seek an adjournment for one month to allow the defendant company to put a proposal for payment to the plaintiff. Associate Judge Lester granted the adjournment to 10 April 2025.

[6]    On 10 April 2025, Mr Hitchcock appeared for the plaintiff and advised he had been authorised by Mr French to appear also for the defendant company to obtain a further adjournment. Mr French was attending a funeral that morning and could not attend in person. Mr Hitchcock advised that the adjournment was sought to the next available date so the application to liquidate the defendant company could be advertised. I adjourned the application to 8 May 2025.

[7]    When the matter was again called on 8 May 2025, Mr Jones advised that the plaintiff wished to proceed with the application but Mr French had raised an issue concerning service. Mr French advised that the defendant company’s position was that emailing the documents to him was not valid service.

The submissions

[8]    Mr French argues that an application for liquidation of a company must be served in accordance with s 387 of the Companies Act 1993.2 He says sending the documents by email to the defendant company’s lawyer is not one of the means by which service can be effected under the section and the defect in service that occurred in this case cannot be cured.

[9]    Mr French referred me to Invercargill City Council v Hamlin, but upon my reading of that case I do not see how it assists the defendant company’s position as the Court of Appeal was prepared to overlook non-prejudicial irregularities in the manner of service of documents where the interests of justice required that.3

2      See also High Court Rules 2016, r 6.12(1).

3      Invercargill City Council v Hamlin (1994) NZPC 243, (1994) 7 PRNZ 674 (CA).

[10]   Mr Jones referred me to a decision of Associate Judge Brittain in Commissioner of Inland Revenue v Brak Burns Ltd, where the Associate Judge found on the evidence before him that a lawyer had agreed to accept service on behalf of his client by email which amounted to an agreement under s 387(1)(e) of the Companies Act.4 He also said he would have been prepared to make an order pursuant to s 387(1)(d), retrospectively approving service on the defendant company by email to the lawyer. Mr Jones invited me to infer the existence of an agreement to accept service by counsel in this case.

Analysis

[11]   Rule 6.12(1) provides that a document may be served on a company incorporated under the Companies Act in accordance with s 387 of that Act. On what is before me, the plaintiff has not proven that the proceeding was served in any manner set out in that section. That, however, is not the end of the matter, as I do not accept Mr French’s position that the defect in the manner of service is fatal.

[12]   While the defendant company did not file any documents in the proceeding, there were two appearances made by its counsel or on his behalf prior to the hearing at which the issue of service was raised. There must have been discussion between counsel as to the orders/directions that would be sought at those hearings on a consent basis. On the first occasion the parties agreed to seek an adjournment to allow the defendant company to pay the debt. That having apparently failed, on the second occasion the Court was asked, again by consent, to grant an adjournment to allow advertising. To my mind this second request is particularly important in the present context, as under rr 31.9 and 31.10 of the High Court Rules 2016 advertising can only occur at least five working days after the date on which the statement of claim is served. A request for an adjournment to advertise necessarily implies service has occurred.

[13]   While s 387 of the Companies Act specifies the manner in which legal proceedings are to be served, such requirements can be waived. I consider that waiver will occur in a case such as this, where the defendant company, by its counsel, must

4      Commissioner of Inland Revenue v Brak Burns Ltd [2023] NZHC 2144.

be taken to have been aware that the manner in which the plaintiff purported to serve the proceeding did not comply with the requirements of s 387 and by words or conduct makes an unequivocal representation that the defendant company accepts service has occurred.5 Here, the words and conduct I am referring to is the totality of failing to raise any objection to service upon receipt of the documents and making appearances before the Court, including seeking on a consent basis a direction in respect to advertising without at least reserving its position in relation to service. In my view, having taken those steps the defendant company could not thereafter choose to rely upon non-service as a ground for opposing the plaintiff’s application.

[14]   An example of where a party was held to have waived non-compliance with a requirement of the High Court Rules is AG & LA Thomson Ltd v Victor Industries Ltd, where Hardie Boys J held that the filing of a statement of defence by a defendant amounted to a waiver of any objection that the proceeding had been filed in the wrong registry of the court.6 Hardie Boys J referred to the case of Richards v New Zealand Newspapers Ltd where Ostler J had pointed out that the rules of the court’s procedure as to the place of filing were for the benefit of the defendant and as such it was competent for a defendant to waive them.7

[15]   Accordingly, I consider the defendant company waived its right to insist on service in the manner prescribed by s 387 of the Companies Act. I note also that there is no suggestion of any prejudice to the defendant company and as the Brak Burns case demonstrates, there are other routes to the same result I have arrived at in this case.8

[16]   The next issue is whether the plaintiff company is entitled to the order it seeks. The file is in order and the defendant company has taken no steps in the proceeding. I am advised by Mr French that there is a dispute as to some part of the debt claimed only, but the defendant company has not put anything before the Court in relation to that. I am satisfied the plaintiff has made out its case for the order sought.

5      For the elements common to all forms or waiver see Wilken and Ghaly The Law of Waiver, Variation, and Estoppel (3rd ed Oxford University Press) at [4.45].

6      AG & LA Thomson Ltd v Victor Industries Ltd (1989) 1 NZPC 283, (1989) 3 PRNZ 581.

7      Richards v New Zealand Newspapers Ltd [1931] NZLR 623 (SC).

8      Commissioner of Inland Revenue v Brak Burns Ltd, above n 4.

Result

[17]There will be an order putting the defendant company into liquidation.

[18]The Official Assignee shall be appointed liquidator.

[19]   There shall be costs to the plaintiff on a 2B basis plus disbursements as fixed by the Registrar.

[20]The order is timed at 4.00 pm on 12 May 2025.

O G Paulsen Associate Judge

Solicitors:

AWS Legal, Invercargill

French Burt Partners, Invercargill