Te Anau Pharmacy (1997) Limited (in liq) v Price HC Christchurch CIV 2009-409-2226

[2010] NZHC 967

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

CIV-2009-409-002226

BETWEEN  TE ANAU PHARMACY (1997) LIMITED (IN LIQUIDATION)

Plaintiff

ANDJULIAN TREVOR PRICE Defendant

Hearing:         28 May 2010

17 June 2010 (by telephone)

Appearances: H C Matthews for Plaintiff

P Ross for Defendant

Judgment:      18 June 2010

JUDGMENT OF ASSOCIATE JUDGE DOHERTY

on Application for Summary Judgment

Introduction

[1]      The plaintiff seeks summary judgment for an amount alleged to be overdrawn in the defendant’s shareholder current account with the plaintiff.

[2]      The original sum claimed was $215,204.   Since the issue of proceedings, “genuine and credible explanations” have been given as to various mistakes in the accounts of the company faced by the liquidator and the quantum and scope of the claim have been reduced.  The residual amount sought ($67,910 plus interest on that sum  from  31  March  2008)  relates  to  the  accounting  treatment  and  disputed

ownership of an E-type Jaguar.

TE ANAU PHARMACY (1997) LIMITED (IN LIQUIDATION) V PRICE HC CHCH CIV-2009-409-002226

18 June 2010

[3]      The  application  was  first  called  for  hearing  on  28  May  2010.     An adjournment was sought and granted to enable counsel to deal with some late evidence  concerning  the  E-type  Jaguar  and  its  treatment  in  the  accounts.    The plaintiff did not oppose an adjournment for that purpose, it was granted and leave given to file further affidavit evidence.  Two affidavits have been filed.

Principles

[4]      The legal principle for determination is whether or not the plaintiff has shown the defendant has no arguable defence (Pemberton v Chappell [1987] 1 NZLR 1), and more specifically whether a determination can be made on the evidence currently before the Court.

[5]      The specific issue for determination is whether or not the plaintiff can show that the plaintiff, and not the defendant, was the owner of the E-type Jaguar.

The facts/evidence

[6]      The defendant claims that he was the owner of the E-type Jaguar and that when it was sold it late in 2007, he introduced the proceeds of sale amounting to

$102,500 into the company.

[7]      Since 2004 the accounts of the company have shown an E-type Jaguar with a cost value of $27,766 and a personalised plate – JAGUAR – with a cost value of

$444, as assets.  Contrary to his original assertion, the defendant now accepts he (as a  director)  signed  copies  of  the  accounts  for  each  year  since  2004,  up  to  and including the year ended 31 March 2007.

[8]      As to the E-type Jaguar, the defendant says:

i)        The company never owned it.

ii)The registration records show that he imported it from Great Britain in 2004, whereas the journal entry of the company shows it being introduced in April 2003.

iii)That he had purchased it when in England in 1991 or 1992 and paid approximately £6000 for it.  He spent a further £28,000 restoring it, and another £15,000 or so in parts.   Its cost on importation was thus £49,000, and it makes no sense to have introduced it into the accounts at approximately $27,000.

iv)He  did  talk  to  his  accountant  about  the  possibility  of transferring it to the company at some stage.

v)He provided an explanation for the sale proceeds of $102,500 not showing in the company’s accounts in that some of the proceeds had to go to replacing a motor and $56,000 was paid to a secured creditor of the plaintiff.

vi)The registration details showed it registered in his name personally.

New evidence

[9]      As to the new evidence, that comes from both a purchaser of a 1928 Ford Model A Roadster, and from the initial restorer of that vehicle.  The relevance of the Model A is that the defendant instructed counsel that he now realised the entry in the account of the E-type must have been in error and in reality it should have been the Model A.

[10]     Regrettably for the defendant, the new evidence does not go in any way towards proving who owned the E-type.  It merely confirms that the restorer restored the Model A on behalf of the defendant, and the purchaser purchased a Model A Ford from the defendant for $15,000.  The purchaser deposed that from his recall he paid the deposit into an account in the name of “New Generation Pharmaceuticals Limited”.

[11]     There is no evidence from either the defendant or from the accountant who prepared the accounts for the plaintiff over the years going to the issue of whether or

not the E-type was really a Model A in the sense that the wrong vehicle was listed in the accounts of the company.

Discussion

[12]     I am not persuaded by this evidence or the submissions of counsel, because:

i)The accounts for each year from 2004-2007 show an E-type Jaguar and a personalised Jaguar plate as being an asset of the company.

ii)It is irrelevant that the E-type Jaguar was domiciled in England at the time it was introduced into the assets of the company

iii)There is no evidence from the defendant (or anyone else) that the accountant had mistakenly included an E-type Jaguar in the accounts as opposed to a Model A Ford.

iv)      It    would    be    implausible     that    the    personalised    plate

(“JAGUAR”) related to a Model A Ford.

v)The defendant, as a director of the company, on four separate occasions signed the accounts containing the E-type Jaguar as an asset, thus certifying their correctness.

vi)There is in evidence a copy of the journal entry showing the introduction of an E-type Jaguar into the company in the records of the company for the year ended 31 March 2004.

[13]     I am satisfied that the plaintiff has shown the defendant has no arguable defence.

Judgment

[14]     The application is granted.  There is judgment for the plaintiff in the sum of

$67,910, together with interest on that sum at the Judicature Act 1908 rate from the date of filing of the statement of claim (23 September 2009) to date of judgment and disbursements as set by the Registrar.

Costs

[15]     The defendant is legally aided.  There are no awards of costs.

ASSOCIATE JUDGE DOHERTY

Solicitors:

White Fox & Jones, Christchurch
McKay Hill, Napier