Wilding v Vango Limited HC Auckland CIV 2010-404-1161

[2010] NZHC 1512

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV 2010-404-001161

UNDER  The Companies Act 1993

IN THE MATTER OF     the Liquidation of VANGO LIMITED BETWEEN  ROBIN WILDING

Plaintiff

ANDVANGO LIMITED Defendant

Hearing:         1 June 2010

Appearances: J Moss for the Plaintiff

N Thinn for the Defendant

Judgment:      2 June 2010

JUDGMENT OF ASSOCIATE JUDGE CHRISTIANSEN

This judgment was delivered by me on

02.06.10 at 3:30pm, pursuant to

Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date……………

Solicitors/Counsel

J Moss, GCA Lawyers, Christchurch –  [email protected] / [email protected]

N Thinn, Thinn & Co, Parnell –  [email protected]

ROBIN WILDING V VANGO LIMITED HC AK CIV 2010-404-001161  2 June 2010

Introduction

[1]      At the conclusion of the hearing of this matter I advised counsel of my decision and explained that my fuller reasons would follow.

Reasons

[2]      Vango Limited (Vango) applies for a stay of the liquidation proceedings.  It also applied for a restraint of advertising but because Ms Wilding proceeded to advertise anyway, that application is no longer needed.

[3]      The Court has an inherent jurisdiction to stay liquidations where the debt upon which those proceedings are founded is the subject of a genuine dispute.  In my assessment there appears to be a genuine dispute which cannot, upon the evidence available, be determined at this time.   There is a significant dispute between the accounts of each party relating to the events.  There is a confusion of evidence to identify the true purpose of Ms Wilding’s payment of the sums of $10,000 and

$60,000 on 24 December 2004.  She says it was a loan to Vango.  There is evidence, supported by documents to show the payments were made pursuant to an investment proposal.  Regardless, the sum of $60,000 at least would appear to have the character of a loan advanced; that it was Ms Wilding’s investment in the set up of a business under a company recently created.

[4]      Ms Wilding’s evidence strongly disclaims association with an investment proposal.  This, despite the documentary evidence, adds to the confusion.  Recourse to contemporary documents is not always helpful.  Mr Moss for Ms Wilding submits that however characterised Ms Wilding’s payment was an advance that she was entitled to call for repayment of.  It is not, I think, that simple.  An entitlement to repayment usually depends upon the terms on which the money was advanced.  In this case if it was in furtherance of an investment then recourse to repayment might be difficult.

[5]      Ms Wilding claims it was a simple loan.  She relies in large part upon her meeting with Mr Paul Archibald (Mr Archibald) of Vango in June 2005 following a demand she issued for repayment.  She said at that time it was agreed the loan would be  repaid  and  that  all  the  terms  of  their  (hers,  Vango’s  and  Mr  Archibald’s) respective obligations were decided.   The meeting took place in Vango’s Penrose offices when Ms Wilding’s partner Mr Yortt was also present.  She said there was agreement in terms of a term loan agreement, a general security agreement and pursuant to Mr Archibald’s covenant by which the parties’ obligations were established.   It is upon these that the claim against Vango is advanced, and upon which the application for liquidation is now made.  But, there are difficulties with that assertion because the documents upon which Ms Wilding relies to pursue her claim were prepared after that meeting in Penrose.   They were prepared by Ms Wilding’s solicitor.  They were complex documents of a commercial nature and of a type seldom made without professional input.   Yet, they apparently reflected, in substance, the agreement Ms Wilding says was reached.

[6]      Ms Wilding’s claim refers to the sum of $30,000 being paid in May 2007. Previously she and Mr Archibald had signed a brief form of agreement by which it was recorded that her debt of $74,000 would be satisfied by a payment of $30,000 provided that payment was made by 21 April.   The payment was made about two weeks later than it should have been.   It was paid directly to Ms Wilding’s bank account.  She did not receipt it or acknowledge it but she did not return it.  For these reasons she contends she is within her rights to claim the balance she says is due.

[7]      Mr  Archibald’s  affidavit  evidence  contains  a  claim  that  his  brother,  in discussion with Ms Wilding, agreed that notwithstanding the payment was late it would be accepted in final settlement.  But the brother has not sworn an affidavit and otherwise the evidence of what it is he purportedly said is hearsay.

[8]      Ms Wilding did nothing in the ensuing 20 months also to pursue a claim for further payment until she was requested to release the general security agreement from registration.   Apparently two matters, arguably, persuaded to her to the viewpoint she now adopts in her claim:

(a)She had agreed to compromise only provided the sum of $30,000 was paid within the time specified and because it was not, she is at liberty to pursue a claim for the balance she says is due; and

(b)      She had agreed to compromise when it was explained to her by Mr Archibald’s brother that Mr Archibald was near bankruptcy and Vango’s business was failing.  She was now aware that the business of Vango was doing well.

[9]      Mr Moss argued that s 92 of the Judicature Act precludes consideration of a claim that there had been a settlement when by the terms of the parties’ agreement payment was made late.  I commented to Mr Moss that I did not think s 92 had that effect, if on the facts it was clear that notwithstanding the written terms of their agreement Ms Wilding nonetheless agreed to accept the late payment in full settlement.  That, I noted would be a matter for the drawing of reasonable inferences from available facts.  The evidence of Mr Archibald’s brother could be significant in that exercise.  He has not sworn an affidavit.  He is well known to Ms Wilding and Mr Yortt.  He may prefer to keep his distance from this dispute.  He has declined an opportunity to swear an affidavit for either side.  In the end he may be required to give evidence.  Arguably there is a case for a claim that the parties’ differences have been settled.  However, it may not be possible to reach any final assessment until all of the relevant evidence is available and has been tested.

[10]     Other issues raised upon the stay application include a claim on behalf of Ms Wilding that Vango had not provided evidence of its solvency.  Vango was one day late in its attempt to file an application to set aside Ms Wilding’s statutory demand. In that outcome a presumption of insolvency arises.   In his affidavit evidence Mr Archibald stated that Vango was solvent and able to meet it debts as they fell due. For Ms Wilding it is submitted that something more is required and usually in these cases  it  is.    But,  it  appears  that  even  from  Ms  Wilding’s  evidence  there  is  a concession that Vango’s business is doing well for she advanced that as a reason for bringing her claim for payment of more than the $30,000 she had earlier received.

[11]     In  my  assessment  this  case  is  not  really  about  solvency  but  about  Ms Wilding’s somewhat late attempts to recover a sum of money she believes is due to her and she believes Vango can pay.  Nevertheless I am concerned that in tandem with the liquidation proceeding Ms  Wilding has brought a District Court claim against Mr Archibald based upon his alleged covenant to be responsible for Vango’s debt.  There is, I think, some element of reality to Vango’s counsel’s claim of undue pressure being brought  to  bear to  extract  payment  from  Vango.    This  is  not  a straightforward case to recover a loan based on written documents prepared professionally for commercial partners.   Rather it is a claim based on unsigned documents prepared after the event when it was claimed that all terms including interest and penalty rates and a payment covenant were agreed.

[12]     Ms Wilding’s case has not been improved by the changing nature of her claims as evidence becomes available to undermine assertions previously made.  She asserted that she disputed entirely any suggestion of receiving income from Vango. Then, in the face of clear accounting evidence showing the contrary she acknowledged receipt of the payments that had been made.

[13]     The Court’s feeling is she has advanced funds to a joint venture project and that she has recovered about half in return.  Included in that half was the sum she agreed she would accept provided it was paid by due date.   She contends the late payment does not preclude her right to pursue the balance.  She may be right or she may be wrong but it is not a matter capable of determination on the basis of available evidence.

[14]     This  matter  does  not  belong  in  the  Companies  Court  for  determination. There appears strong evidence in support of the claim that any guarantee by Mr Archibald is not enforceable against him because it was not in writing or signed by him.   It is possible for a company to be held bound by an obligation to pay even though that is not recorded in writing.   But, there would be some dilemma for a Court being asked to hold for the one part the liability of a company to pay, but on the  other  part,  by  the  same  document,  to  declare  it  has  no  ability  to  require repayment.  The prospect is possible but it is also complex.  These matters are for resolution by other determination.

[15]     The application for stay is granted.

[16]     Costs upon the application are reserved and may be fixed upon application made no earlier than one month after the date of this judgment.

Associate Judge Christiansen