Stellaria NZ Limited v Waere Developments Limited - [2018] NZHC 2110

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2018-404-1061

[2018] NZHC 2110

BETWEEN
STELLARIA NZ LIMITED

Plaintiff

AND

WAERE DEVELOPMENTS LIMITED

Defendant

Hearing: 3 August 2018

Appearances:

T L Utuma for the Plaintiff

BMK Pamatatau for Grant Reynolds, Liquidator

Judgment:

17 August 2018

JUDGMENT OF ASSOCIATE JUDGE R M BELL

This judgment was delivered by me on 17 August 2018 at 2:00pm
pursuant to Rule 11.5 of the High Court Rules.

…………………………………
Deputy Registrar

Solicitors:
Holland Beckett Law (James McDougall), Tauranga, for the plaintiff Malcolm Whitlock, Auckland, for the liquidator of the defendant company

Copy for:
Bruce Pamatatau, Auckland, for the liquidator

STELLARIA NZ LIMITED v WAERE DEVELOPMENTS LIMITED [2018] NZHC 2110 [17 August 2018]

[1] Stellaria NZ Limited applies for Waere Developments Limited to be put into liquidation on the ground that it is unable to pay its debts. It is a creditor of Waere Developments for $25,810.12. Waere Developments Limited is presumed to be insolvent because it did not comply with a statutory demand served on its registered office on 18 April 2018. Mr Reynolds, however, says that the court cannot make a liquidation order because he was appointed liquidator by shareholders' resolution under s 241(2)(a) of the Companies Act 1993 at 11.45 am on 26 June 2018. Stellaria NZ Limited says that Mr Reynolds' appointment as liquidator is invalid because it was out of time under s 241AA of the Companies Act. That allows shareholders to appoint a liquidator when a liquidation application is pending under s 241(2)(c) of the Companies Act, so long as the appointment is made within 10 working days of service of the liquidation application. Stellaria NZ Limited says that the proceeding was served on 11 June 2018 and therefore Mr Reynolds' appointment is too late, because it was made on the eleventh working day. In response, Mr Reynolds says that service by Stellaria NZ Limited was invalid, because it did not comply with any of the requirements under s 387 of the Companies Act 1993. Accordingly, the issue is whether Stellaria NZ Limited served the liquidation application on Waere Developments Limited on 11 June 2018.

[2] Stellaria NZ Limited raises another issue. It says that even if Mr Reynolds was validly appointed, the court should review his appointment under s 283(4) of the Companies Act. I do not, however, need to consider that question, as I find that service on 11 June 2018 was valid and effective. Mr Reynolds' appointment as liquidator is void for having been made out of time.

[3] According to the companies register, when Waere Developments Ltd was incorporated on 15 June 2016, its registered office and address for service of Waere Developments Limited were the offices of RSM Accountants, 22 Amersham Way, Manukau, Auckland. On 9 March 2017, the registered office and the address for service were changed to the offices of RSM Accountants, 86 Highbrook Drive, East Tamaki, Auckland.

[4] A process server served the statutory…

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 Stellaria NZ Limited v Waere Developments 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: [2018] NZHC 2110
Decision Date: 17 August 2018

CaseChat Overview and Summary

Stellaria NZ Limited applied for Waere Developments Limited to be put into liquidation. Stellaria NZ Limited claimed that Waere Developments Limited was unable to pay its debts and that it was a creditor of Waere Developments for $25,810.12. Grant Reynolds was appointed liquidator by shareholders' resolution under s 241(2)(a) of the Companies Act 1993. Stellaria NZ Limited argued that Mr Reynolds' appointment was invalid because it was out of time under s 241AA of the Companies Act. The issue was whether Stellaria NZ Limited served the liquidation application on Waere Developments Limited on 11 June 2018.

The court found that service on 11 June 2018 was valid and effective. Mr Reynolds' appointment as liquidator was void for having been made out of time. The court found that the registered office and the address for service of Waere Developments Limited were at the offices of RSM Accountants, not at 86 Highbrook Drive. The process server correctly interpreted the information she was given as to the company’s registered office and served the documents for the proceeding on the registered office of Waere Developments Limited on 11 June 2018.

The court made an order that Waere Developments Limited be put into liquidation and appointed David Thomas liquidator. Stellaria NZ Limited was entitled to costs on the liquidation application. Leave was reserved to apply for further directions for Mr Reynolds' remuneration while he was acting as liquidator.

This case highlights the importance of ensuring that the correct address for service is used when serving legal proceedings on a company. It also shows the court's willingness to exercise its discretion in favour of one party when it is clear that documents for a proceeding have come to the notice of those in charge of a company, even if service does not come under s 387 of the Companies Act. However, the court noted that it would not be right to make backdated orders which to retrospectively alter substantive rights.

Orders