York Limited v Ultimate Temps Limited [2014] NZHC 3024 (28 November 2014)

Last Updated: 8 December 2014

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2014-404-002680 [2014] NZHC 3024

IN THE MATTER OF	Section 290 of the Companies Act 1993
BETWEEN	YORK LIMITED Applicant
AND	ULTIMATE TEMPS LIMITED Respondent

Hearing:	28 November 2014
Appearances:	P F Chambers for Applicant S Buckingham for Respondent
Judgment:	28 November 2014

_{ORAL JUDGMENT OF VENNING J}

Solicitors: Henley-Smith Law, Auckland

Dyer Whitechurch, Auckland

Copy to: P F Chambers, Auckland

Simon Buckingham, Auckland

YORK LIMITED v ULTIMATE TEMPS LIMITED [2014] NZHC 3024 [28 November 2014]

[1] This is an application to set aside a statutory demand. The demand claims

$99,033.71 for repayments of a term loan provided by Ultimate Temps Limited (UTL) to York Limited, (York) including interest. Ms Wilson is a director of York, the applicant. Mr McCall and Mr Ryan are directors of UTL, which issued the statutory demand.

[2] On behalf of York Ms Wilson denies it has any liability. In fact she denies that she has executed any loan agreement on behalf of York with UTL. She says the document that UTL relies on is a forgery or a fraud.

[3] There are a number of preliminary procedural points in this matter. The first

was service. The statutory demand was served at York’s registered office but at

8.32 am on 1 October 2014. In his submissions, Mr Chambers refers to HCR 6.5 which 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.

[4] The rule requires service between 9 am and 5 pm. There are two points in response. First, the rule applies to service at an address for service in accordance with or under the rules. The statutory demand, however, was served on York in accordance with s 387 of the Companies Act 1993 which provides for leaving documents at the registered address or address for service. It does not prescribe a time within which the documents must be left.

[5] Next, and in any event, if the rule applies then HCR 1.5 permits the Court to make any order including an order regularising service. In this case it is clear the statutory demand was received as it was signed for. If that was the only point service could be confirmed as regularised.

[6] The second preliminary point relates to the evidence. UTL had previously issued a statutory demand against York. An application was made to have that set aside. Ultimately, for reasons it is unnecessary for the Court to go into, that matter and the proposed liquidation proceedings following it, went no further.

[7] However, in the course of those earlier proceedings Mr Ryan swore an affidavit. He swore the affidavit on 16 July 2014. It is dated on the front cover 15

July 2014. UTL seeks to rely on that affidavit in these proceedings as Mr Ryan is apparently out of New Zealand and unavailable to give evidence again.

[8] Mr McCall, the other director of UTL, has sworn an affidavit in which he fairly acknowledges that Mr Ryan had dealt with the matter exclusively up until the date Mr McCall was required to swear the affidavit. For that reason he attached a copy of the earlier affidavit of Mr Ryan and sought to rely on that.

[9] Rule 7.32 applies in any event. If necessary, given the dispute is between the same parties and raises the same issue, I grant leave for that earlier affidavit of Mr Ryan’s to be considered in this proceeding and in this application to set aside the statutory demand.

[10] The third preliminary, and in my judgment fundamental, point is that, although there are a number of issues raised in counsel’s submissions and the affidavits as to agreements for sale and purchase, liquidations of earlier entities, previous dealings between Mr Ryan and Ms Wilson personally, this application fundamentally comes down to whether Ms Wilson, on behalf of York, did execute a loan agreement acknowledging a loan from UTL.

[11] In his affidavit sworn on 16 July, Mr Ryan said at paragraph [5]:

Attached and marked as exhibit A is the term loan agreement signed by Ms

Wilson and myself.

He then attaches as an exhibit to the affidavit the term loan agreement. It is a copy of the agreement and is not an original. It appears to have some initials at the bottom of each page and, on Mr Ryan’s evidence, was executed on behalf of York Limited by Ms Wilson.

[12] However, in her affidavit in reply, sworn on 24 November 2014, Ms Wilson deposes at paragraphs [10] - [12]:

[10] Refer paragraph 5 and exhibit ‘A’ of First Ryan Affidavit: Mr Ryan deposes to a Term Loan Agreement as having been signed by myself and Mr Ryan and attaches at exhibit “A” of his affidavit a document headed Term Loan Agreement and dated 2 May 2013.

[11] I have looked at those pages where it appears that my initial has been made and at the page where it appears that my signature has been made. I have never initialled those pages and I have never signed this document. The only conclusion I can make is that Mr Ryan (or someone associated with him) has forged my initial and my signature on this document, in order to enable Mr Ryan and/or the respondent to attempt to obtain some form of pecuniary advantage against the applicant and myself where none existed.

...

12.4 The signature purporting to be mine has not been witnessed and, in any event, I say again was not signed by me.

[13] At the outset of the hearing this morning I raised with counsel the difficulty that the contrasting and completely conflicting accounts of Mr Ryan and Ms Wilson posed for the Court. Both cannot be right. One must have made a false affidavit.

[14] Mr Buckingham presented to the Court a document which he said his instructions were was an original of the term loan agreement and also a further document, an original of the agreement for sale and purchase of the business which, on UTL’s case, lies beneath the loan agreement and supports it. It did not appear Ms Wilson had had an opportunity of seeing those documents, certainly not the term loan agreement.

[15] I stood the matter down until this afternoon on the basis that Mr Chambers was to arrange for Ms Wilson to attend Court, peruse the documents and then, if she wished, could give evidence on that point. Ms Wilson has done so. She has attended Court. The record of the discussion with the Court and her evidence will be available once typed back.

[16] In short Ms Wilson has confirmed her position essentially is as set out in her affidavit. She denies that she has signed the document called the term loan agreement on behalf of York.

[17] As I have said, the matter is serious because, either Mr Ryan has made a false affidavit and produced a false document for the purpose of these proceedings, or Ms Wilson has made a false affidavit and given false evidence to the Court.

[18] The Court is in no position to determine where the truth of the matter lies on the basis of the material currently before it. However, the Court has, on the basis of Ms Wilson’s evidence, if she is correct, evidence that the term loan document which supports the statutory demand is a false document and has not been executed by York.

[19] On that basis, and given the Court cannot resolve that issue on the evidence before it, the application to set aside the statutory demand must succeed. Mr Chambers suggested perhaps the matter be adjourned pending any further inquiries by other agencies but I see no point in that. The Court must proceed to deal with the matter on the basis of the information it has at present.

[20] Mr Buckingham submitted that Ms Wilson’s evidence amounted to no more than assertion. However, this is not a bare assertion of a defence. It is an absolute statement to the Court on more than one occasion that the document which underlies the statutory demand is a false document. Ms Wilson has made that statement aware of the consequences if ultimately she is proven to have misled the Court.

[21] For those reasons the Court is left in the position where it has to accept that there is at the very least an arguable dispute between the parties which cannot be resolved on the basis of the affidavit evidence and the material before the Court. The application to set aside the statutory demand is granted.

[22] However, in the circumstances I make an order that costs are to lie where they fall. I also make an order, for the sake of clarity, that it is without prejudice to the right of UTL to issue a further statutory demand in the event that further evidence comes to light to confirm that the term loan agreement relied on is a valid document.

[23] Because of the concerns the Court has, I am going to ask the Registrar to make a copy of this judgment, together with the notes of evidence, affidavits on file

and the term loan agreement which was produced in Court as exhibit A, available to the police and I ask the police to conduct an inquiry into whether either or both Mr Ryan or Ms Wilson have made a false deposition or given false evidence to the Court by way of affidavit.

[24] I also record that on the Court file there is an agreement for sale and purchase which purports to be an original document. That was produced to the Court through counsel, Mr Buckingham. It will remain on the Court file but, if necessary, the

_{police may also have access to that document in the course of their inquiries.}

Venning J