MARCH CONSTRUCTION LIMITED V RFD INVESTMENTS LIMITED HC CHCH CIV 2009-409-001237 [2009] NZHC 989 (11 August 2009)

IN THE HIGH COURT OF NEW ZEALAND
CHRISTCHURCH REGISTRY
                                                          CIV 2009-409-001237
                                                          CIV 2009-409-001238
                                                  
       CIV 2009-409-001240
                                                          CIV 2009-409-001241
                       
                                  CIV 2009-409-001243




             BETWEEN                   MARCH CONSTRUCTION LIMITED
    
                                  Applicant

             AND                       RFD INVESTMENTS LIMITED
                    
                  Respondent

                                                          CIV 2009-409-001244




             AND
BETWEEN               MARCH CONSTRUCTION LIMITED
                                       Applicant

             AND             
         PROPERTY VENTURES INVESTMENT
                                       LIMITED
                                       Respondent

                                                          CIV 2009-409-001245



             AND BETWEEN               MARCH CONSTRUCTION
LIMITED
                                       Applicant

             AND                       TE ANAU VENTURES LIMITED
      
                                Respondent


Hearing:     10 August 2009
             (Heard at Christchurch)

Counsel:     A N Riches
for Applicant
             J E Butler for Respondents

Judgment:    11 August 2009

MARCH CONSTRUCTION LIMITED V RFD INVESTMENTS
LIMITED HC CHCH CIV 2009-409-001237
11 August 2009

               JUDGMENT OF ASSOCIATE JUDGE OSBORNE
                   (as to
setting aside statutory demands)



[1]     These seven matters were for hearing before me on 10 August 2009. For
convenience I heard
them together. This judgment relates to all seven applications.


[2]     On 21 May 2009 the respondent companies sent a series of
invoices to the
applicant company. The applicant instructed its solicitors, Saunders and Co, who
responded to the invoices explaining
disputes by letter dated 27 May 2009. The
respondent then chose to issue seven notices of statutory demand, each dated 29 May
2009.


[3]     This caused the applicant to again instruct its solicitors and to file the
necessary applications for orders setting aside
the statutory demand in each case.
Those seven applications were in each case filed on 12 June 2009 with supporting
affidavit evidence
relating to each application. While the contemporaneous receipt
of seven statutory demands and the consequential need for the issuing
of seven
separate proceedings within ten working days entailed some brevity of affidavit
evidence, the affidavit evidence in each
case is clearly sufficient to indicate a
genuine dispute in relation to each demand. In his evidence Mr March refers to the
steps
the applicant company is taking against the respondents and deposes to his
belief that the respondents' statutory demands:

    
   ... are merely another attempt to divert attention from the statutory
        demand we have issued against them some time ago
and which is
        now before the Courts.

[4]     Mr Butler sought leave to be heard on behalf of the respondents although no
notice of opposition or other appearance had been filed by any of the respondents. In
advance of the hearing none of the respondents
filed any application to be heard.
None submitted any draft or other evidence setting out why the respondents
considered (notwithstanding
the Saunders and Co letters of 27 May 2009) why the
respondents considered that the claims the respondents were making against the
applicant amounted to undisputed debts.
MARCH CONSTRUCTION LIMITED V RFD INVESTMENTS LIMITED HC CHCH CIV 2009-409-001237
11 August
2009

[5]     Mr Butler explained that the statutory demands issued by March Construction
Limited had themselves been the subject
of hearings before this Court last week.
Mr Butler explained that those hearings had taken the focus of the respondents.
Mr Butler further explained that the respondents for the
present matters had hoped to
instruct the same counsel retained on last week's hearings but it had emerged that
counsel engaged in
those hearings would not receive instructions in relation to these
proceedings.


[6]     None of what Mr Butler was able to say
was a sufficient explanation for the
failure to file notices of opposition in any timely way. The respondents' actions had
by reason
of the statutory time limits put the applicant to the urgent task of filing and
serving its applications in early June 2009. If the
respondents considered their
demands indisputable, they must have equally done so on 29 May 2009 when the
statutory demands were
issued. There is no satisfactory explanation before the Court
as to why their grounds of opposition and evidence in opposition could
not have
been filed at some time in the weeks following the service of the applications upon
them. Their failure to do so is inexcusable
and remains unjustified even having
regard to a possible focus on other litigation in the last week. The respondents had
ample time
well before then to have dealt with these matters through any number of
solicitors.


[7]     On this basis alone I decline to hear
Mr Butler on behalf of the respondents.


[8]     Had it been necessary to do so I would have also declined to hear Mr Butler
as
regards the merits of any points which Mr Butler wished to make with regard to
the substance of the alleged debts. I stood the proceedings
down to the afternoon
when they were called on 10 August 2009 to enable Mr Butler to put before me a
summary of the points which
the respondents would have wished to advance had
they been providing evidence to the Court. He did not have such information
available
when proceedings were called in the morning. The summaries presented
with regard to each proceeding were in no instance such as to
lead me to a view that
this might otherwise have been an appropriate case for granting leave to file
opposition and have a hearing
as to the alleged debt. The material which Mr Butler
was able to provide to the Court more than two months after the statutory demands

were issued was cryptic, unconvincing and unsupported by documentation.                  I
emphasise that that is no fault of Mr
Butler ­ he was only able to provide to the
Court what he in turn had been given.


[9]       Accordingly, I was not satisfied on
the information provided that the
respondents had any tenable evidence of indisputable debts to put before the Court.


[10]    
 Therefore, in each proceeding I order:


          1.       Leave to file a notice of opposition or other document in opposition
is
                   declined;


          2.       The statutory demand referred to in each proceeding is set aside;


       
  3.       The respondent is to pay the applicants costs of and incidental to each
                   application.


[11]      I
grant leave to the respondents in each proceeding to be heard on the limited
issue of costs and disbursements payable. I invite counsel
(Mr Riches and Mr
Butler) to confer before referring the matter back to the Court for the fixing of costs.
My preliminary view is
that this may be a case for the payment of indemnity costs
by analogy to r 14.6(4) High Court Rules. Applications of the present
kind are
required in order to deal with statutory demands issued under s 290 Companies Act
1993. The applicant, if faced with a demand
for payment of a sum which is
genuinely in dispute, has no choice but to incur the cost of an application of this
nature.       
If the application is necessitated by reason of a vexatious, frivolous,
improper or unnecessary statutory demand, the Court should
consider seriously its
jurisdiction to order indemnity costs.        If no agreement is reached between the
applicant and the respondent
in each proceeding as to costs, counsel for the applicant
should file and serve its application for costs (with any additional evidence) within
four working days (with service
to be upon Mr Butler) and the respondent in each
case is to file and serve any submissions and evidence within four working days
thereafter. I reserve leave to counsel for the applicants to file any submissions or
evidence strictly in reply within two working
days thereafter. Counsel may file a

single memorandum (or separate memoranda if they prefer) as to all seven
proceedings. I will
then determine costs upon the papers (unless either counsel
requests an oral hearing).




Solicitors:
Saunders & Co, P O Box 18,
Christchurch, for Applicant
J E Butler, Level 3, SOL Square, Christchurch, for Respondents