Unico Seating Limited v SRB Limited HC Wellington CIV 2006-485-2966

[2007] NZHC 2069

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

CIV 2006-485-2966

UNDER  section 290 of the Companies Act 1993

BETWEEN  UNICO SEATING LIMITED Applicant

AND  SRB LIMITED Respondent

Hearing:         29 August 2007

Appearances: T J Anderson for applicant

PSJ Withnall for respondent

Judgment:      29 August 2007

ORAL DECISION BY ASSOCIATE JUDGE D.I. GENDALL

Solicitors / Counsel:

PRW Chisnall/T J Anderson, Gibson Sheet, PO Box 2966, Wellington

PSJ Withnall, Barrister, PO Box 10201, Wellington

UNICO SEATING LIMITED V SRB LIMITED HC WN CIV 2006-485-2966  29 August 2007

[1]      The application to set aside the statutory demand brought by the applicant originally on 22 December 2006 was scheduled to have a reconvened hearing before me today 29 August 2007.

[2]      When this matter was called this morning Mr Withnall addressed the court. He set out in some detail the recent history of this proceeding.   In particular he outlined events, which have occurred over the last week or ten days with regard to the application.

[3]      I do not intend to set out all those matters at length.   Suffice to say that it appears to me Mr Withnall as counsel for the respondent has been taken somewhat by surprise with regard to what seems to be a changed position adopted by Mr Gerrard a director of the applicant company over the last 24 hours.

[4]      This has resulted  in the need  for the hearing of this  matter today to  be adjourned.

[5]      Mr Anderson for the applicant confirmed before me that the applicant does not oppose this adjournment request.

[6]      That said a direction is now made that the hearing of this matter today is adjourned.

[7]      I turn now to a second matter, which arose today.

[8]      Before me Mr Withnall for the respondent made an oral application for an order consolidating the present proceeding with a related proceeding filed in this Court by Mr Gerrard a director of Unico Seating Limited against Mr Bryant, a co- director of that company.

[9]      As I understand the position from Mr Anderson, his instructions are that any application for a consolidation of the two proceedings is to be opposed.  He was not, however, ready to put argument before me today with respect to this consolidation issue in any detailed way.

[10]     That said the following directions are now made:

a)       Counsel for the applicant is within 15 working days of today to file and serve a memorandum on behalf of the applicant putting to the court its submissions with respect to the respondent’s request to consolidate the present proceeding with the related proceeding in this court between the parties.

b)       Within a further 10 working days of service of that  memorandum counsel for the respondent is to file and serve any reply memorandum.

c)       Those memoranda are to be referred to me and in the absence of either counsel indicating they wish to be heard on the matter I will decide the  question  of  consolidation  based  upon  the  material  before  the Court.

[11]     The third matter before me today relates to the issue of costs.  Mr Withnall indicated that the respondent seeks costs against the applicant or more particularly against Mr Gerrard the director of the applicant with respect to the adjourned hearing today.

[12]     Mr Withnall set out at some length what he described as an unfortunate series of events which he characterised as “gamesmanship” on the part of Mr Gerrard.  He says this has resulted in not only the forced adjournment of this proceeding today but also the earlier hearing adjournment on 27 April 2007.

[13]     That earlier adjournment according to Mr Withnall was caused by the very late filing of a reply affidavit from Mr Gerrard which was provided on 26 April 2007 the day before that scheduled hearing 27 April 2007.  So far as the hearing today is concerned Mr Withnalls’ point, as I understand it, is that Mr Gerrard at the 11th hour has effectively countermanded his instructions which had resulted in an earlier understanding between counsel in the matter which had obviated the need for him to

be available today to be cross-examined on his latest affidavit.

[14]     So far as these contentions from Mr Withnall are concerned, as I understand the position taken by Mr Anderson for the applicant today, a number are the subject of some contest by the applicant.

[15]     Notwithstanding  that,  what  is  clear  to  me  in  this  matter  is  that  what  is effectively a heated and acrimonious dispute between shareholders in the applicant company (who I understand are also shareholders in other related companies) has reached the point of a statutory demand being issued on behalf of one against the company for what is effectively shareholder loan advances.

[16]     That said and with some degree of reluctance, I reach the position that the appropriate course is simply to reserve costs at this point.  The ultimate outcome of the various disputes between Mr Gerrard and Mr Bryant may take some time to resolve.   In the meantime as I have noted costs are reserved with respect to the present proceeding.

[17]     Simply as a next event this matter is to be called in the list on 29 October

2007.  This call can be vacated if appropriate memoranda for this purpose are filed in advance of that date.   And leave is reserved for either party to apply earlier on 2 days’ notice.

Associate Judge D I Gendall