Speedy Snail Development Limited v Alien Home Limited - [2024] NZHC 2424

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2024-404-294

[2024] NZHC 2424

UNDER

AND
section 290 of the Companies Act 1993

IN THE MATTER

of an application to set aside a statutory demand

BETWEEN

SPEEDY SNAIL DEVELOPMENT LIMITED

Applicant

AND

ALIEN HOME LIMITED

Respondent

Hearing: On the papers

Appearances:

F Teh for the Applicant A Ho for the Respondent

Judgment:

28 August 2024

JUDGMENT OF ASSOCIATE JUDGE SUSSOCK

This judgment was delivered by me on 28 August 2024 at 3 pm pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar

Solicitors:
Millennium Lawyers, Auckland Crimson Legal, Auckland

SPEEDY SNAIL DEVELOPMENT LTD v ALIEN HOME LTD [2024] NZHC 2424 [27 August 2024]

Introduction

[1] The applicant, Speedy Snail Development Limited, applies for costs following its application to set aside a statutory demand served on it by the respondent, Alien Home Limited.

[2] The applicant discontinued the application but submits it is entitled to costs because the respondent failed to agree to a procedure that it says was likely to be easier, speedier and less expensive than this proceeding.

[3] I briefly set out the background below before considering the relevant cost principles and applying those to the circumstances of the case.

Background

[4] The statutory demand is for the amount of $28,957 and is dated 17 January 2024. It was served on the applicant on or around that date. The solicitor for the applicant wrote to the respondent on 25 January 2024 disputing liability for the debt and asserting that the applicant had been induced to enter into the contract from which the debt arises by a misrepresentation by the respondent. The letter sought the withdrawal of the statutory demand by 26 January 2024 or otherwise the applicant would file an application to set aside the demand. The statutory demand was not withdrawn and so an application to set aside was filed on 31 January 2024.

[5] The respondent filed a notice of opposition on 28 February 2024, two days prior to the first call on 1 March 2024. The applicant took issue with the late filing of the respondent’s opposition but as it was filed prior to the first call, timetable directions were made working towards a two-day hearing on 17 June 2024.1

[6] Both parties indicated they intended to cross-examine the deponents of the opposing party’s affidavit, necessitating a longer hearing than is usual for an application to set aside. As a result, the parties were directed to file a joint

1 Speedy Snail Development Ltd v Alien Home Ltd HC Auckland CIV-2024-404-294, 1 March 2024 (Minute of Associate Judge Sussock).

memorandum following the filing of notices to cross examine to confirm that two days were still required.

[7] A memorandum was filed by the respondent on 4 June 2024 recording that counsel had attempted to confer with counsel for the applicant but had received no response so was filing a separate memorandum confirming that only one…

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.

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Details

Case: [2024] NZHC 2424
Decision Date: 28 August 2024

CaseChat Overview and Summary

Speedy Snail Development Limited applied to the High Court of New Zealand to set aside a statutory demand served by Alien Home Limited, seeking to avoid paying a debt of $28,957. The applicant discontinued the proceedings but sought costs, arguing that the respondent's refusal to accept an offer to discontinue the proceedings and refer the dispute to the Disputes Tribunal was unreasonable. The respondent opposed the application for costs, arguing that it was entitled to choose the forum in which it wished to litigate the dispute and that the applicant's decision to discontinue the proceedings after paying the debt rendered the costs application futile.

The court considered the relevant cost principles under the High Court Rules 2016, particularly rule 15.23, which presumes that a party who discontinues proceedings must pay the other party's costs. The court noted that the presumption may be rebutted if it is just and equitable to do so, but found that there were no circumstances in this case that warranted rebutting the presumption. The court held that the applicant's offer to discontinue the proceedings and refer the dispute to the Disputes Tribunal was not reasonable as it did not guarantee a better outcome for the respondent and the applicant had already paid the debt. The court also found that the late filing of the respondent's opposition did not affect the outcome on costs.

The court ordered that the applicant pay the respondent's costs on a 2B basis in the amount of $8,604, plus disbursements of $743 excluding GST. The court considered the respondent's costs for preparing a memorandum on costs and sealing the costs order to be appropriate, and found the translator's fees to be reasonable and necessary. The court reduced the disbursements claimed by the respondent to exclude GST, as the respondent was registered for GST and the disbursements claimed were GST inclusive.

Orders