Specialist Helicopter Solutions Limited v Rotor Lease Limited

[2018] NZHC 1552

IN THE HIGH COURT OF NEW ZEALAND PALMERSTON NORTH REGISTRY

I TE KŌTI MATUA O AOTEAROA TE PAPAIŌEA ROHE

CIV-2017-454-89

[2018] NZHC 1552

UNDER

Section 290 of the Companies Act 1993

BETWEEN

SPECIALIST HELICOPTER SOLUTIONS LIMITED

Applicant

AND

ROTOR LEASE LIMITED

Respondent

Hearing:	26 June 2018
Appearances:	Mr G Dewar for respondent
Judgment:	26 June 2018

JUDGMENT OF ASSOCIATE JUDGE JOHNSTON

[1]    On 14 November 2017 Rotor Lease Limited served a statutory demand on Specialist Helicopter Solutions Ltd. Rotor Lease’s demand was in respect of rent said to be due under an Aircraft Hire Agreement for the lease of a helicopter (ZK-IPN) between the parties dated 15 April 2016. Rotor Lease claimed $34,775.57 in rent.

[2]    By originating application dated 27 November 2017 supported by an affidavit made by one of its directors, Mr John Read, Specialist Helicopter Solutions applied pursuant to s 290(4) of the Companies Act 1993 to set the statutory demand aside.

[3]    At that stage, Specialist Helicopter Services had solicitors and counsel. They have since withdrawn. I gave them leave to do so when the matter was called in the Palmerston North commercial list on 18 May 2018.

SPECIALIST HELICOPTER SOLUTIONS LIMITED v ROTOR LEASE LIMITED [2018] NZHC 1552 [26 June 2018]

[4]    Rotor Lease did not file a notice of opposition within ten working days of service of the originating application to set aside the bankruptcy notice. However, it did so on 12 February 2018. This was supported by an affidavit made by one of its directors, Mr Joshua Russell-Gibbs.

[5]    The day before the matter was due to be heard Mr Read filed and served an affidavit in response.

[6]    The matter came on for hearing on 26 June 2018. At the conclusion of the hearing I dismissed the application and told the parties I would give my reasons as soon as I could. I now do so.

[7]    The first point that arose concerns Mr Read’s status to represent the company. Mr Dewar for Rotor Lease took a neutral stance but indicated that his wish was to address the merits. Mr Read sought leave to speak on the company’s behalf and I concluded that it was in the interests of justice that he should be allowed to do so.

[8]    Mr Read then raised Rotor Lease’s late filing of a notice of opposition. He suggested that I should refuse to entertain any argument against Specialist Helicopter Services’ application to set aside the statutory demand on that basis alone. Plainly that is not a good point:

(a)as Mr Dewar submits one of the technical difficulties in this area is that whilst the High Court Rules require a party intending to oppose an originating application to set aside a statutory demand to file a notice of opposition within 10 working days, that party receives no notice to that effect. In those circumstances, it is appropriate to grant a degree of latitude;

(b)Rotor Lease signalled some time ago its intention to oppose the application and since it did so the parties have been exchanging affidavits as to the merits;

(c)it would be completely artificial to suggest that there is any element of surprise in Rotor Lease opposing this application. Nor is there any sense in which Specialist Helicopter Services has been prejudiced.

[9]    In those circumstances, I have no hesitation in granting Rotor Lease leave to oppose the application.

[10]   In its original application Specialist Helicopter Services contended that the lease payments which Rotor Lease says are due were not in fact due for various reasons. However, that argument has fallen by the wayside.

[11]   Before me the only contention which was made by Mr Read on Specialist Helicopter Services’ behalf was that the company had claims against Rotor Lease.

[12]   I am not satisfied that any of the claims advanced by Specialist Helicopter Services have any merit.

[13]   The largest of these claims concerns an alleged sub-leasing arrangement between Specialist Helicopter Services as sub-lessor and a company by the name of Rotor Support Ltd as sub-lessee. Specialist Helicopter Services says that it leased hangar space to Rotor Support between 1 June 2016 and 31 December 2017 at a rate of $775.00 plus GST per month and that Rotor Support owes rent under that sub-lease totalling $16,042.50. It says that this should be set-off against the rent demanded by Rotor Lease.

[14]   There are two difficulties with this contention. First, there is no evidence for the existence of this sub-lease. Rotor Lease says that whilst there was a casual arrangement for a short period of time it never agreed to a sub-lease. I am not satisfied that Specialist Helicopter Services has established that this alleged debt exists. Second, even if I were, the alleged sub-lessee is to an entirely different entity. I explained to Mr Read in response to his submissions on this point, that the fact that the two companies may have the same shareholders and directors is neither here nor there.

[15]   The second largest claim which Specialist Helicopter Services says it has against Rotor Lease concerns the cost of insuring ZK-IPN. Mr Read tells me that although the lease came to an end on 6 May 2017 (this appears to be common ground) Specialist Helicopter Services felt obliged to continue to insure the helicopter because it did not want to leave it uninsured. On that basis Specialist Helicopter Services believes that it should be reimbursed the sum of $3,937.50 being the insurance premiums paid in respect of the period from 6 May 2017.

[16]   Rotor Lease’s response is two fold. First it says it entered into no arrangement with Specialist Helicopter Services that it should pay any insurance or that it would repay any premiums met by Specialist Helicopter Services. Second it says that in any event Specialist Helicopter Services has not established that it did pay any insurance premiums and it is true that there are no invoices exhibited to any of the affidavits.

[17]   Whilst I do not doubt that, as Mr Read told me, Specialist Helicopter Services paid some insurance premiums in respect of ZK-IPN for the period after 6 May 2017, I am not satisfied that those are costs which the company is entitled to pass on to Rotor Lease.

[18]   There were some minor costs which Specialist Helicopter Services says it incurred in respect of repairs and maintenance for the helicopter. These do not total much more than $500 and I do not propose therefore to spend any time analysing them.

[19]   The upshot is that Specialist Helicopter Services has been unable to establish that it has any legitimate claim against Rotor Lease or that there is any substantive dispute as to the latter’s claim for rent.

[20]   In those circumstances, I dismiss Specialist Helicopter Services’ application to set aside Rotor Lease’s statutory demand.

[21]Rotor Lease is entitled to its cost on a 2B basis together with disbursements

fixed by the Registrar.

Associate Judge Johnston

Solicitors:

Wadham Partners, Palmerston North for applicant

Thomas Dewar Sziranyi Letts, Lower Hutt for respondent