Training Contract 2002 Limited (in liq) v McKay HC Auckland Civ-2009-404-006875

[2011] NZHC 1666

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2009-404-006875

BETWEEN  TRAINING CONTRACT 2002 LIMITED (IN LIQUIDATION)

Plaintiff

ANDANDREW RUTHERFURD MCKAY AND SARA STUART MCKAY

Defendants

Hearing:         21 November 2011

Counsel:         RJT Robertson for the Plaintiff

No appearance for the Defendants

Judgment:      21 November 2011

(ORAL) JUDGMENT OF WOODHOUSE J

Solicitors / Parties:

Mrs RJT Robertson, Stace Hammond, Solicitors, Hamilton

Mr A R McKay and Mrs S S McKay, Jakarta, Indonesia

TRAINING CONTRACT 2002 LIMITED (IN LIQUIDATION) V MCKAY AND MCKAY HC AK CIV-2009-

404-006875 21 November 2011

[1]      This is a claim by a company in liquidation against the two shareholders, Mr and Mrs McKay.  The claim is for the sum recorded in their current account for the financial year ending 31 March 2006. This is a sum of $208,875.

[2]      A statement of defence of Mr and Mrs McKay was filed in response to an amended statement of claim.   Since then the plaintiff was granted leave to file a further amended claim.  This leave was granted during a phone conference in which Mr McKay participated on behalf of Mr and Mrs McKay.  The essential purpose of the further amended claim was to reduce the sum claimed from Mr and Mrs McKay as first defendants, following settlement with the second defendants.  It was accepted that there was no need for a further statement of defence from Mr and Mrs McKay as their existing statement of defence sufficiently responded to matters.

[3]      Mr McKay indicated at the last telephone conference that he and, implicitly, his wife would not appear to defend the claim.  He advised that he was then living in Indonesia, and I understand he lives there with his wife and children.  Mr McKay sent  an  e-mail  to  the  Court  early  this  morning  advising  that  he  would  not  be attending.

[4]      The claim has accordingly proceeded by way of formal proof.  I have heard evidence from Mr Levin, one of the liquidators of the company.   His evidence is contained in a written brief of evidence which he read and which he has now signed.

[5]      The  essential  aspect  of  this  evidence  is  that  financial  statements  for  the plaintiff company for the year ended 31 March 2006 record a debt owed by Mr and Mrs McKay to the company in the sum claimed of $208,875.  This is recorded in the shareholders’ and directors’ current accounts.  On the face of the document produced in evidence the accounts have been signed by a director and dated 31 January 2007. At that date, according to the records of the Companies Office, the sole director was Mr McKay and I can reasonably infer that the signature is that of Mr McKay.

[6]      Mrs McKay, according to the records of the company, was a director during the financial year ending 31 March 2006.  She resigned on 1 June 2006.

[7]      I am satisfied that the claim is proved on the basis of the unchallenged evidence of Mr Levin.  The financial statements for the year ending 31 March 2006 were amongst the records of the company when it was placed into liquidation.  The directors, including Mrs McKay for the period she was a director, are obliged under s 194 of the Companies Act to maintain proper accounting records for the company. It may therefore be readily inferred that these are accurate records with the responsibility of preparing them being the responsibility of the McKays as directors but also in respect of a liability of the McKays as shareholders.  To the extent that any authority is required for these conclusions (and I do not consider that authority is required) I refer to the decisions referred to me by Mrs Robertson: New Zealand

Game Exports (In Liq) v Lau;[1]  Samarang Developments Ltd (In Liq) v Campbell;[2]

Chesterton  Holdings  Ltd  (In  Liq)  v  Durney  (aka  Crosby);[3]   Trans  Otway  Ltd  v

Shephard;[4] and Thom Contractors Ltd (In Liq) v Thom.[5]

[1] New Zealand Game Exports (In Liq) v Lau HC Whangarei, CP 34/98, 19 March 1999, Master Gambrill.

[2] Samarang Developments Ltd (In Liq) v Campbell HC Christchurch, CIV-2003-409-2094, 30 September 2004, John Hansen J.

[3] Chesterton Holdings Ltd (In Liq) v Durney (aka Crosby) HC Napier, CIV-2011-441-007, 19 May 2011, Gendall A J.

[4] Trans Otway Ltd v Shephard [2006] 2 NZLR 289.

[5] Thom Contractors Ltd (In Liq) v Thom HC Auckland, CIV-2008-404-006829, 28 April 2008, Keane J.

[8]      Accordingly,  there  is  judgment  for  the  plaintiff  in  the  sum  of  $208,875 together with interest at the appropriate rate under the Judicature Act from the date of demand,  19  May  2009,  together  with  costs  on  a  2B  basis  and  reasonable

disbursements.

Woodhouse J