Swire Bulk Pte Ltd v Rapid Build NZ Limited

[2025] NZHC 2346

IN THE HIGH COURT OF NEW ZEALAND TAURANGA REGISTRY

I TE KŌTI MATUA O AOTEAROA TAURANGA MOANA ROHE

CIV-2024-470-0020 [2025] NZHC 2346

UNDER

the Companies Act 1993

IN THE MATTER OF

the Liquidation of Rapid Build NZ Limited

BETWEEN

SWIRE BULK PTE. LTD

Plaintiff

AND

RAPID BUILD NZ LIMITED

Defendant

Hearing:	13 August 2025
Counsel:	S Cartwright / C Kwon for the Plaintiff T Refoy-Butler for the Defendant
Date of Judgment:	19 August 2025

JUDGMENT OF ASSOCIATE JUDGE BRITTAIN

This judgment was delivered by me on 19 August 2025 at 2 pm.

Pursuant to Rule 11.5 of the High Court Rules.

…………………..

Registrar/Deputy Registrar

Solicitors/Counsel: Hesketh Henry, Auckland Holland Beckett, Tauranga

SWIRE BULK PTE. LTD v RAPID BUILD NZ LTD [2025] NZHC 2346 [19 August 2025]

Introduction

[1]    The plaintiff, Swire Bulk Pte. Ltd (Swire), applies for an order putting the defendant, Rapid Build NZ Ltd (Rapid Build) into liquidation. Rapid Build failed to file a defence within the time prescribed by the High Court Rules 2016. Rapid Build now applies for leave to file a defence out of time.

Background

[2]    In 2022, Rapid Build engaged Swire to ship modular homes from Malaysia to Port of Tauranga. The modular homes suffered damage during the voyage.

[3]    Rapid Build had insured the modular homes under a marine insurance policy (the policy) with Ando Insurance (Ando). The sum insured under the policy is

$2 million.

[4]    On 3 June 2022, Ando advised Rapid Build that its claim for indemnity under the policy remained under investigation and Ando’s view was that the damage to the modular homes was the result of ordinary wind action and excluded under the policy. Other issues were raised by Ando.

[5]    Rapid Build’s then solicitors, Morris and Mallett, emailed Ando Insurance on 17 June 2022, providing further information to Ando in response to the issues that had been raised. The email asserted that Ando had no right to deny the claim.

[6]    Rapid Build instructed its solicitors and counsel to prepare a draft statement of claim against Ando to be filed in the High Court. It was not filed. There is no evidence of any further steps taken by Rapid Build to pursue indemnification under the policy.

[7]    After the modular homes were unloaded in Tauranga, Rapid Build obtained funds of approximately $453,000 from one of its customers. These funds were used to repair the modular homes and for a part payment to Swire, reducing the amount outstanding to Swire for the shipping to USD 147,611.45.

[8]    Rapid Build’s director, Sean O’Nuallain (Mr O’Nuallain), says that Ando’s failure to pay the insurance claim  has  caused  Rapid  Build’s  financial  difficulty. Mr O’Nuallain has confirmed that Rapid Build owes Port of Tauranga approximately

$2 million and the Malaysian supplier of the modular homes approximately $700,000. There is no evidence that Rapid Build has any assets, other than the claim against Ando.

[9]    Rapid Build has had difficulty paying other creditors. In November 2023, Plumbing World Ltd (Plumbing World) served a statutory demand on Rapid Build for approximately $13,000. The demand was not satisfied, and Plumbing World filed this proceeding in January 2024. The proceeding was advertised in the New Zealand Gazette and the Bay of Plenty Times in March 2024.

[10]   In April 2024, Bunnings Limited (Bunnings) filed an appearance in this proceeding claiming a debt of $40,747.42.

[11]   Mr O’Nuallain says that Rapid Build’s primary customer cancelled its contract to purchase modular homes from Rapid Build in June 2024, worth “nearly

$2,500,000” to Rapid Build.

[12]   On 5 August 2024, Swire served a  statutory demand on Rapid Build for  USD 147,611.45.

[13]   Rapid Build settled Plumbing World’s debt, and Plumbing World sought leave to discontinue this proceeding. On 12 August 2024, I granted leave to Plumbing World to discontinue as plaintiff, and substituted Bunnings as plaintiff.1 The proceeding was adjourned on several occasions while Rapid Build endeavoured to settle Bunning’s debt. The debt was paid by February 2025.

1      Plumbing World Ltd v Rapid Build NZ Ltd HC Tauranga CIV-2024-470-20, 12 August 2024 (Minute of Associate Judge Brittain).

[14]   Swire filed a notice of  appearance  in  this  proceeding  in  February  2025. In March 2025, Bunnings sought leave to discontinue as plaintiff. On 24 March 2025,

I granted Bunnings leave to discontinue and substituted Swire as plaintiff.2

[15]   Swire filed a statement of claim, notice of proceeding and an affidavit verifying the statement of claim. These documents were served on Rapid Build on 9 April 2025. Rapid Build’s statement of defence was due by 28 April 2025.

[16]   On 12 May 2025, Mr O’Nuallain appeared in Court when the proceeding was called, submitting that Rapid Build wished to defend the proceeding. I directed  Rapid Build to file an application for leave to file a statement of defence out of time by 20 June 2025.3 Rapid Build complied with that direction.

[17]   Mr O’Nuallain says that neither Port of Tauranga nor the Malaysian supplier are seeking to enforce their debts while Rapid Build’s insurance claim against Ando is pending. Rapid Build is no longer trading.

Legal principles — leave to file a defence out of time

[18]   The principles to be applied on an application for an extension of time to file a defence in a liquidation proceeding are well settled. The Court is exercising a discretion, and the Court will consider the following factors:4

(a)Is there an arguable basis that the defendant is not liable?

(b)Is the defendant solvent?

(c)Has the defendant advanced a reasonable explanation for failing to file a statement of defence?

2      Plumbing World Ltd v Rapid Build NZ Ltd HC Tauranga CIV-2024-470-20, 24 March 2025 (Minute of Associate Judge Brittain).

3      Plumbing World Ltd v Rapid Build NZ Ltd HC Tauranga CIV-2024-470-20, 30 June 2025 (Minute of Associate Judge Brittain).

4      Auckland City Council  v Stonne Ltd  HC Auckland CIV-2007-404-4208, 30 November  2007    at [21]; and NZ Commercial Property Maintenance Ltd v Soullight Painting & Plaster Ltd  [2022] NZHC 1401 at [64].

[19]Leave should generally not be granted if the defendant company is insolvent.5

[20]   If factors (a) and (b) justify a grant of leave, the absence of a convincing reason why the delay occurred will not be fatal to the application.6 The ultimate consideration that informs the exercise of the discretion is the overall justice of the case.7

The proposed defence

[21]   It is well understood that s 241(4) of the Companies Act 1993 (the Act) confers on the Court a discretion to put a company into liquidation when the company is unable to pay its debts. In this case, there is a presumption of insolvency under ss 287 to 290 of the Act, because Rapid Build failed to comply with a statutory demand.

[22]   Generally, the creditors of a company are entitled to a liquidation order where a company is clearly insolvent, and the Court is reluctant to allow an insolvent company to continue to trade.8 The discretion to decline to put a company into liquidation is exercised sparingly.9

[23]   The existence of a viable claim by a defendant company against a third party is a factor which can be taken into account when the Court exercises its discretion under s 241(4) of the Act.10 The considerations are similar to those that apply when the same ground is advanced in support of an application to set aside a statutory demand.

[24]   In Coljon Ltd v Riccarton Construction Ltd,11 Lang J held that there may occasionally be a good and sufficient reason for staying liquidation proceedings to allow a defendant to pursue collateral litigation. When this ground is advanced, the

5      Fresh Cut Flower Wholesalers Ltd v Living and Giving Gift Co Ltd (2001) 16 PRNZ 173 (HC).

6      Auckland City Council v Stonne Ltd, above n 4, at [49].

7      NZ Commercial Property Maintenance v Soullight Painting & Plaster Ltd, above n 4, at [65].

8      Bank of New Zealand Ltd v Rada Corp Ltd [1989] 1 NZLR 750 (CA).

9      Chesterfields Preschools Ltd (in liq)  v Commissioner of  Inland Revenue  [2020] NZCA 686 at [101].

10     Accident Compensation Corporation v Newbury Racing & Breeding Ltd [2015] NZHC 663 at [72] to [75].

11     Coljon Ltd v Riccarton Construction Ltd HC Christchurch CIV-2010-409-848, 9 November 2010 at [27].

Court may assess whether the defendant company’s claim has a reasonable chance of success in the near term.12

Analysis

[25]   Rapid Build has not raised any  dispute  in  respect  of  Swire’s  debt  for USD 147,611.45.

[26]   Rapid   Build   has   not  adduced   any   evidence   of   solvency.   Given  Mr O’Nuallain’s disclosure of creditors exceeding $2.7 million, I conclude that Rapid Build is insolvent. The starting point is that Swire is prima facie entitled to a liquidation order.

[27]   The only defence that Rapid Build seeks to advance is that the Court should exercise the statutory discretion in Rapid Build’s favour and permit Rapid Build to pursue its insurer, in the hope that a successful recovery against Ando would enable Rapid Build to pay its debts, which are significant. Mr O’Nuallain says that he intends to fund the claim against Ando. He would not be obliged to fund the claim, and there is no evidence of his ability to do so.

[28]   There is no evidence before the Court that enables the Court to assess the merit of Rapid Build’s potential claim against Ando. Rapid Build has not issued a proceeding against Ando, despite the dispute arising more than three years ago. There is no opinion from counsel on the merits of the potential claim. There is no basis to conclude that Rapid Build has a reasonable prospect of recovering sufficient funds from Ando to pay Rapid Build’s creditors.

[29]   The interests of Rapid Build’s creditors are best served by the appointment of a liquidator. If Rapid Build is put into liquidation, the liquidator can review the potential claim against Ando and pursue the claim if that is in the interests of creditors. A liquidator may well have easier access to litigation funding. Alternatively, the shareholders and/or creditors of Rapid Build could fund the liquidator’s pursuit of Ando.

12     Kroon v Westpac Bank Corp HC Auckland CIV-2006-404-4720, 24 April 2007 at [87].

[30]   There are no grounds that support an exercise of the discretion under s 241 of the Act in favour of Rapid Build. It is not reasonably arguable that the Court will exercise its discretion to decline a liquidation order. Therefore, this is not an appropriate case to grant leave to Rapid Build to file a defence out of time. Rapid Build should be put into liquidation.

Orders

[31]The defendant’s application for leave to file a defence out of time is declined.

[32]   The defendant company is put into liquidation. Raymond Paul Cox and Gareth Russel Hoole are appointed as liquidators.

[33]   The rates of remuneration of the liquidators and staff working under their supervision and control are fixed at the rates set out in the liquidators’ consent dated 12 May 2025.

[34]   The liquidators are to apply at the conclusion of the liquidation for approval of their overall remuneration.

[35]   The defendant shall pay the plaintiff’s costs of $13,384 (calculated on a 2B basis), plus disbursements of $1,060.13.

Associate Judge Brittain