Taj Construction Ltd (in liq) v Singh

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

CIV 2015-485-1058 [2016] NZHC 584

UNDER

the Companies Act 1993

IN THE MATTER

of the liquidation of Taj Construction
Limited (In liquidation)

BETWEEN

TAJ CONSTRUCTION LIMITED (IN LIQUIDATION)

First Plaintiff

AND

COLIN DAVID OWENS AND DAVID STUART VANCE, AS LIQUIDATORS OF TAJ CONSTRUCTION LIMITED (IN LIQUIDATION)

Second Plaintiffs

AND

SANJIT SINGH Defendant

Hearing:	5 April 2016
Counsel:	K C Francis and S K Shaw for Plaintiffs No appearance for Defendant
Judgment:	7 April 2016

JUDGMENT OF BROWN J

Introduction

[1]      Taj Construction Ltd was incorporated on 16 July 2010 and carried on the business of supplying building and  construction  services.   The company ceased trading in around May 2014 and was placed into liquidation on 5 May 2015 on the application of the Inland Revenue.   The second plaintiffs were appointed as liquidators.   The liquidators received creditors’ claims in the liquidation totalling

$137,964.99.

TAJ CONSTRUCTION LTD (IN LIQUIDATION) v OWENS AND VANCE, AS LIQUIDATORS OF TAJ CONSTRUCTION LTD (IN LIQUIDATION) [2016] NZHC 584 [7 April 2016]

[2]      The  plaintiffs  filed  the  current  proceeding  on  21 December 2015.    The proceeding  was  personally served  on  the  defendant  on  19 January 2016  but  the defendant   failed   to   file   a   statement   of   defence   by   the   required   date   of

24 February 2016.   Accordingly  the  hearing  proceeded  by  way  of  formal  proof pursuant to r 15.9 of the High Court Rules.

[3]      In the proceeding:

(a)      the first plaintiff claimed in the first cause of action that the defendant had an overdrawn shareholder’s current account of $262,318.87 which he had an obligation to repay to the first plaintiff;

(b)the first and second plaintiffs seek to recover in a second cause of action under s 301 of the Companies Act 1993 (the Act) compensation from the defendant for various breaches of duty imposed on him as a director under the Act, namely ss 131(1), 133 to 137 (inclusive) and

194;

(c)      in a third cause of action the first plaintiff alleged that the defendant had misapplied company funds in making certain mortgage payments on his family home, which payments were alleged to have been made in breach of the defendant’s fiduciary duties as a director of the first plaintiff.  A declaration is sought that the first plaintiff is entitled to trace those mortgage payments into, and has an equitable proprietary interest in, the property in the sum of $20,828.04.

[4]      In compliance with r 15.9(4) the plaintiffs filed in support of the claim an affidavit of Colin David Owens, one of the second plaintiffs.  Although the cover sheet and all the exhibit notes to the affidavit recorded that the affidavit was affirmed on  1 April 2016,  that  date  was  omitted  from  the  jurat  at  the  conclusion  of  the affidavit.  As the date of execution of the affidavit was readily apparent, I received the affidavit for use in the formal proof hearing despite the absence of the date in the jurat.  I direct under r 9.79 that a note be made…