Teak Construction Group Limited v KMJB Harris Limited

[2025] NZHC 1466

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2024-404-3290

[2025] NZHC 1466

BETWEEN

TEAK CONSTRUCTION GROUP LIMITED

Applicant

AND

KMJB HARRIS LIMITED

Respondent

Hearing:	29 May 2025
Appearances:	Antony J B Holmes for the Applicant Finn Collins for the Respondent
Judgment:	11 June 2025

JUDGMENT OF ASSOCIATE JUDGE C B TAYLOR

[Service of application pursuant to s 290, Companies Act 1993

This judgment was delivered by me on 11 June 2025 at 3:00pm

pursuant to Rule 11.5 of the High Court Rules

…………………………. Registrar/Deputy Registrar

Solicitors:

Hesketh Henry, Auckland, for the Applicant

Ford Sumner (Jaesen Sumner), Wellington, for the Respondent

Counsel:

A J B Holmes, Richmond Chambers, Auckland, for the Applicant Finn Collins, Lambton Chambers, Wellington, for the Respondent

TEAK CONSTRUCTION GROUP LIMITED v KMJB HARRIS LIMITED [2025] NZHC 1466 [11 June 2025]

Introduction

[1]                  Teak Construction Limited (Teak) applies to set aside the statutory demand served on it by KMJB Harris Limited (KMJB) in respect of disputed amounts which KMJB claims are due and owing for construction works undertaken for Teak under three different construction contracts.

[2]                  The notice of opposition to the application to set aside statutory demand raises a jurisdictional issue in relation to whether the application was filed and served within the 10-working day period required by section 290(2)(b) of the Companies Act 1993 (the Act). KMJB submits that the application was served outside the statutory timeframe and is therefore a nullity. This decision addresses that issue only.

Legal principles

[3]                  The Court’s power to set aside a statutory demand derives from s 290 of the Act. It states that the application to set aside must be:1

(a)made within 10 working days of the date of service of the demand; and

(b)served on the creditor within 10 working days of the date of service of the demand.

[4]  The Act defines working day as a day of the week other than a weekend or national public holiday.2 It does not give any reference to time or limit a working day to only being between the hours of 9:00 am to 5:00 pm.

[5]                  The Act also sets out an exhaustive list of six methods by which documents relating to legal proceedings may be served on a company:3

(a)by delivery to a person named as a director of the company on the New Zealand register; or

1      Section 290(2).

2      Section 2.

3      Section 387(1).

(b)by delivery to an employee of the company at the company’s head office or principal place of business; or

(c)by leaving it at the company’s registered office or address for service; or

(d)by serving it in accordance with any directions as to service given by the court having jurisdiction in the proceedings; or

(e)in accordance with an agreement made with the company; or

(f)by serving it at an address for service given in accordance with the rules of the court having jurisdiction in the proceedings or by such means as a solicitor has, in accordance with those rules, stated that the solicitor will accept service.

[6]Rule 19.12A(2) of the High Court Rules 2016 specifies that:

An originating application under section 290 of the Companies Act 1993 to set aside a statutory demand may be served, in accordance with rule 6.5, at the address shown in the statutory demand as the creditor’s address or the address for payment.

[7]Rule 6.5 provides:

A document may be served at an address for service by leaving the document at that address at any time between 9 am and 5 pm.

[8]Rule 6.12(1) provides:

A document may be served on a company incorporated under the Companies Act 1993 in accordance with section 387 of that Act.

[9]Rule 1.5 provides:

(1)A failure to comply with the requirements of these rules—

(a)    must be treated as an irregularity; and

(b)    does not nullify—

(i)the proceeding; or

(ii)any step taken in the proceeding; or

(iii)any document, judgment, or order in the proceeding.

(2)Subject to subclauses (3) and (4), the court may, on the ground that there has been a failure to which subclause (1) applies, and on any terms as to costs or otherwise that it thinks just,—

(a)set aside, either wholly or in part,—

(i)the proceeding in which the failure occurred; or

(ii)any step taken in the proceeding in which  the  failure occurred; or

(iii)any document, judgment, or order in the proceeding in which the failure occurred; or

(b)exercise its powers under these rules to allow any amendments to be made and to make any order dealing with the proceeding generally as it thinks just.

What happened?

[10]It is common ground that:

(a)The statutory demand by KMJB was served on Teak on 4 December 2024.

(b)The application to set aside the statutory demand was filed and served on 18 December 2024 (after 5:00 pm), both by being delivered to a solicitor for KMJB at the offices of the firm Ford Sumner, which was specified in the statutory demand as the address for service, and by being left at KMJB’s registered office (after 5:00 pm).

(c)18 December 2024 was 10 working days from the date of service of the demand.

Submissions for KMJB

[11]              At the commencement of his submissions, Mr Collins noted that the issues relating to service of the application by email were not being pursued and the arguments presented in the hearing related only to physical service at KMJB’s solicitors and at KMJB’s registered office.

[12]              Mr Collins, for KMJB, submits that the application to set aside the statutory demand was served after 5:00 pm on the 10th working day and accordingly must be

deemed as having been served on the 11th working day and therefore the application is out of time and is null and void.

[13]              Mr Collins refers to Aotearoa Forests Ltd v Land Haul Contractors Ltd,4 which concerned purported service by email served on the 10th working day at 4:53 pm. He notes that the statutory demand in that case had not provided for service by email and Associate Judge Sussock commented:

[37] I do not consider the discretions in the High Court Rules can be relied on to cure the defects in mode and timing of service …

…

[43] This means that even if the statutory demand had specified the solicitors’ email address as the address at which Land Haul was to be served, service would not have been in time because s 392 expressly deems service to have occurred on the day following the email. Therefore, even if rr 1.5 or 1.9 of the High Court Rules were able to be relied on to cure service by email, rather than physically to the solicitors’ offices, an extension of time would still be necessary. Section 290(3) of the Companies Act prohibits an extension of time being granted for the filing or service of applications to set aside statutory demands. If the application to set aside was not served within time, there is therefore no ability to cure that defect through the application of rr 1.5 or 1.9 of the High Court Rules. Unfortunately, this means the application is not able to proceed.

[14]              Mr Collins acknowledges that the Act is silent on a time range during a working day for service of documents served at a physical address, and submits that:

(a)as the Act is silent, the High Court Rules as to service apply; and

(b)the effect of r 6.5 is that service after 5:00 pm is deemed to be service the following day.

[15]              In response to Teak’s submission that there are no provisions which state physical service must occur between 9:00 am and 5:00 pm because “working day” is not defined by the Rules or the Act, Mr Collins submits that argument ignores r 6.5 and is inconsistent with the authorities where parties have asked the Court to “regularise service” —  or,  cure the defect in service — when service has been   after 5:00 pm.

4      Aotearoa Forests Ltd v Land Haul Contractors Ltd [2023] NZHC 1256.

[16]              Mr Collins refers to Burgered Restaurants5 in which Gendall J noted that despite service not happening until 5:03pm, the service agent had been at the premises at 5:00pm but found the reception area unattended and was not able to draw the documents to the attention of an employee until three minutes later.

[17]              Mr Collins relies on Templeton UQ Ltd v Watts and Hughes Ltd6 and submits that the Court in that case considered Burgered Restaurants and distinguished the Judge’s view that service could be regularised.

Submissions for Teak

[18]              Mr Holmes, for Teak, submits that although the application was served at KMJB’s   offices  after  5:00  pm,  service  was  nevertheless  in  accordance  with     s 387(1)(c), and therefore the service requirements of s 290 have been met. He also submits serving the application at the offices of KMJB’s solicitors, Ford Sumner, after 5:00 pm was valid service under s 387(1)(f).

Service at KMJB’s registered office

[19]              Mr Holmes submits that there is no provision in the Act to deem a service after 5:00 pm as service the following day and had Parliament intended for such, then those provisions could have been included in s 392, either when it was enacted in 1993, or amended in 2015. Consequently, he submits, service of the application after 5:00 pm on the registered office of KMJB was valid service under s 387(1)(c).

Service on Ford Sumner

[20]Mr Holmes submits:

(a)The statutory demand provided an address for service as the offices of Ford Sumner, and provided that documents for service on KMJB could be left at that address. It is common ground that this occurred in the evening of 18 December 2024 (after 5:00 pm). KMJB’s own evidence

5      Burgered Restaurants Auckland Ltd v Chunilal [2022] NZHC 1903.

6      Templeton UQ Ltd v Watts & Hughes Ltd [2024] NZHC 1072 at [15]–[17] and [24].

is that the process server handed the application to one of the lawyers at Ford Sumner.

(b)Although r 19.12A(2) provides that applications to set aside a demand may be served, in accordance with rule 6.5, at the address for service shown in the demand itself between 9:00 am and 5:00 pm, it does not have any deeming function to the effect that  documents left after  5:00 pm are to be treated as having been served the following day. This is in contrast to r 6.6, which sets out deeming provisions that apply in respect of service via post, document exchange, fax or email to the effect that documents served after 5:00 pm are deemed to be served on the following working day (or subsequent working days depending upon the mode of service). Accordingly, had a deemed service provision been intended in relation to r 6.5, it would have been expressly provided for.

[21]              Mr Holmes refers to Burgered Restaurants Auckland Ltd7 in which an application was delivered by a process server to the solicitor’s firm named as the address for service in the demand. The application was handed to an employee at 5:03pm. The Court held that the argument that it was not served within 10 working days was “without foundation”8 and therefore, Mr Holmes submits, applying Burgered Restaurants to the present case, service of the application on Ford Sumner was valid service in accordance with s 387(1)(f) of the Act, having been served in accordance with rr 19.12A(2) and 6.5.

Rules 1.5 and 1.19

[22]              Mr Holmes submits that even if service in this case was required before 5pm, r 1.5 allows the Court to cure it. While accepting that r 1.5 cannot provide the Court with broad powers to avoid the statutory 10 working day deadline set out in s 290 or to change the statutory modes of service set out in s 387, the Court’s discretionary

7      Above, n 5.

8 At [25].

powers do engage where there is service in accordance with the High Court Rules under s 387(1)(f). He submits accordingly:

(a)As service under s 387(1)(f) is in accordance with r 6.5, the Court’s powers under rr 1.5 or 1.19 allow the Court discretion to cure any defect by service after 5pm;

(b)The decisions in Aotearoa Forests, Templeton UQ Ltd and Ingleburn Developments,9 are inapplicable as those cases involved attempts to persuade the Court to exercise its discretion to validate service by a mode which was not provided for in the statutory demand (via email in the case of Aotearoa Forests and Templeton UQ, and via facsimile in the case of Ingleburn Developments).

Result

Service at the registered office

[23]              To dispose of this proceeding, I do not need to decide whether service of the application at the registered office of KMJB after 5:00 pm was valid service under    s 387(1)(c), as I have reached the view below that service under s 387(1)(f) was valid or can be validated by the Court using rr 1.5 and 1.19.

Service on Ford Sumner

[24]              In my view Teak’s service of its application to set aside the statutory demand is validly served under s 387(1)(f) and any irregularity by service after 5:00 pm can be cured by the Court under rr 1.5 and 1.19.

[25]The reasons for my view are;

(a)It is accepted that the Court’s discretion does not allow the Court to extend 10 working day time limits set out in s 290(2)(b) or otherwise alter modes of service set out in s 387 of the Act.

9      Ingleburn Developments Ltd v BRC Ltd (2008) 10 NZCLC 264,325.

(b)In relation to service in accordance with s 387(1)(f), as the Companies Act is silent as to the time of service (as opposed to the day of service), the time of service is regulated by r 6.5 of the Rules. As time of service is regulated by the Rules, the provisions in rr 1.5 and 1.9 allowing the Court discretion to correct irregularities under the Rules apply. Consequently, and consistently with the decision in Burgered Restaurants, the irregularities in service can be cured by the Court using those Rules.

(c)There is no provision which applies to deem an application served personally after 5.00 pm to be served the following working day. This is in contrast to the deeming provisions in r 6.6 which deem service by other methods such as post, email or document exchange to be served a certain number of working days following depending on the mode of service.

(d)There has been no material prejudice demonstrated to KMJB by service occurring after 5.00 pm and accordingly the Court should use rr1.5 and

1.19 to cure any irregularity. How late after 5:00pm service occurs is, in my view, a relevant factor which should be taken into account by the Court in deciding whether to exercise its discretion to use rr 1.5 and

1.19 to cure the defect. In the present instance, service on Ford Sumner was at 5:45pm, and being soon after 5:00pm weighs in favour of the Court curing the defect.

(e)The decisions of Aotearoa Forests, Templeton UQ and Ingleburn Developments are all distinguishable as they are instances where the Court was asked to vary the statutory requirement as to the mode of service, as opposed to correcting an irregularity under one of the Court’s own Rules. In this case, service was in accordance with the statutory demand at the address stated in the statutory demand.

Orders

[26]I make the following orders:

(a)Service of Teak’s application for set aside the statutory demand is valid for the purposes of s 290(2) of the Act. To the extent there is any irregularity in service occurring after 5:00 pm on 18 December 2024, the irregularity is cured under rr 1.5 and 1.19 of the High Court Rules 2016.

(b)As Teak is the successful party, cost should follow the event. Counsel are directed to endeavour to agree costs, and failing agreement being reached within a period of 20 working days from the date of this judgment, counsel for Teak will file a memorandum as to costs (not to exceed five pages) within five working days  after the expiry of the  20 working day period, and counsel for KMJB will file a memorandum (not to exceed five pages) in response within five working days of receipt of counsel for Teak’s memorandum. A decision as to costs will then be made on the papers.

…………………………….. Associate Judge Taylor