Snap Internet Limited v Tasman Solutions Limited HC Nelson CIV 2010 442 85

[2010] NZHC 727

IN THE HIGH COURT OF NEW ZEALAND NELSON REGISTRY

CIV 2010 442 000085

BETWEEN  SNAP INTERNET LIMITED Plaintiff

ANDTASMAN SOLUTIONS LIMITED Defendant

Hearing:         18 May 2010

Appearances: P M James for Plaintiff

C J C McLean for Defendant

Judgment:      18 May 2010

JUDGMENT OF ASSOCIATE JUDGE OSBORNE

[1]      This proceeding is the plaintiff’s proceeding to have the defendant placed in liquidation.  Following the issue of the proceeding the defendant filed an application in March 2010 for an order restraining publication of advertisement and for an order staying further proceedings in relation to the liquidation.   The application was opposed by the plaintiff and was allocated with appropriate timetabling a hearing today.

[2]      As the hearing approached Mr McLean on 13 May 2010 was constrained to give notice to the Court and to Mr James that the defendant was no longer intending to pursue its application and he recorded his position to the Court by a memorandum. He indicated on behalf of his client that the defendant expected that an order for liquidation would be made and he sought that his appearance be excused on the

hearing date.

SNAP INTERNET LIMITED V TASMAN SOLUTIONS LIMITED HC NEL CIV 2010 442 000085  18 May

2010

excused as I apprehended the possibility that the director of the company may wish to appear notwithstanding the cessation of Mr McLean’s instructions and the possibility was therefore that the director would wish to make submissions.  It was appropriate that Mr McLean appear.

[4]      Mr McLean has appeared today after having filed a further memorandum clarifying the position of the defendant.  I now formally given Mr McLean leave to withdraw and I express the appreciation of the Court to him for continuing courteously to inform the Court of the position.

[5]      In the further memorandum Mr McLean filed in response to a Minute issued by the Court he was able to indicate that the director of the defendant consents to the winding up order sought by the plaintiff.  He further recorded that on his instructions the debt is still the subject of a substantial dispute as to quantum and he addressed those remarks in the context of any orders which the Court may wish to make as to costs.

[6]      The   plaintiff   in   these   circumstances   asked   that   the   Court’s   normal requirement for advertising be waived.  Mr James has addressed submissions to me under two heads and as I am satisfied that the operation of r 1.5 High Court Rules allows the waiving of advertising I proceed on that basis today.  I refer also to the decision in the Registrar of Companies v First Investments Limited (In Liquidation) [1998] 2 NZLR 352 as an example of a case where the jurisdiction has been exercised specifically in relation to advertising.

[7]      I take into account the following facts:

i.The   plaintiff’s   application   proceeded   upon   the   basis   of   the defendant’s  deemed  insolvency by reason  of  its  failure to  meet  a statutory demand.   Nothing has altered in that regard and the Court must treat the defendant as insolvent by virtue of the deeming provision.

there is a substantial dispute as to quantum there is nothing from the defendant to suggest that a significant portion of the claimed indebtedness is not due and owing.

iii.Thirdly, and fundamentally for the justice of the case, the defendant’s director who is clearly best placed to know whether this company should continue to function has himself consented to the winding up order.

[8]      In  these  circumstances  there  is  an  overwhelming  public  interest  in  this company immediately being liquidated without further cost to this creditor or potential risk to other creditors who may be waiting for an orderly resolution of the affairs of the company.

[9]      I order that the requirement for the advertising of the winding up proceeding be waived.

[10]     That step taken I am satisfied that the plaintiff is entitled on the evidence before the Court to the order seeks.  There is therefore an order that the defendant be placed into liquidation.   The Official Assignee, Southern Region, is appointed liquidator.  I time this order at 11.20am today.

[11]     Turning  to  costs.     I  had  signalled  in  a  Minute  to  counsel  following Mr McLean’s advice to the Court that he would no longer be instructed, that this appeared to me to be an appropriate case for costs on an increased basis.   The plaintiff has been put to significant and unnecessary costs in this proceeding.   In particular, while Mr McLean has noted in his memorandum that the defendant’s position is that its defence was neither frivolous nor lacking in merit, the defendant had not taken steps to resist a statutory demand and was deemed throughout to be insolvent.  When it had its opportunity to challenge advertising and restraint on the proceeding it did so and put the plaintiff to additional unnecessary expense in the proceeding.   It has now abandoned the application within days of the hearing.   In these circumstances it is appropriate for an award of increased costs: r 14.6(3)(b)(ii)

disbursements.  I certify for the costs of Mr James’s travel to attend Court today.