Ingenious Limited v AP Chartered Accountants Limited [2024] NZHC 2546 (6 September 2024)

Last Updated: 15 October 2024

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2023-404-3067 [2024] NZHC 2546

UNDER	the Companies Act 1993, section 290 and Rule 11.9 of the High Court Rules 2016
BETWEEN	INGENIOUS LIMITED Applicant
AND	AP CHARTERED ACCOUNTANTS LIMITED Respondent

Hearing:	On the papers
Appearances:	Ms Pratibha Raj for the Applicant Andrew Gibbin-Price, director/shareholder of the Respondent
Judgment:	6 September 2024

JUDGMENT OF ASSOCIATE JUDGE C B TAYLOR

[Application for recall of judgment under r 11.9 of the High Court Rules 2016]

This judgment was delivered by me on 6 September 2024 at 3:30pm

pursuant to Rule 11.5 of the High Court Rules

............................... Registrar/Deputy Registrar

Solicitors:

Ormiston Legal (Pratibha Raj), Flat Bush, Auckland, for the Applicant

`

Copy for:

Andrew Gibbin-Price, AP Chartered Accountants Ltd, Auckland (the Respondent)

INGENIOUS LIMITED v AP CHARTERED ACCOUNTANTS LIMITED [2024] NZHC 2546 [6 September 2024]

Introduction

• [1] On 22 May 2024 the Court issued a judgment dismissing the applicant’s application to set aside a statutory demand issued by the respondent (the Judgment).¹

• [2] By notice of appeal dated 19 June 2024, the applicant has filed an appeal against the Judgment.

• [3] By memorandum dated 8 August 2024, the applicant has filed an application under r 11.9 of the High Court Rules 2016 seeking a re-call of the Judgment. At the date of the applicant’s application the Judgment has not yet been sealed.

• [4] In response to the applicant’s application, the respondent has filed a memorandum dated 12 August 2024, to which the applicant filed a reply dated the same date, and in response to which the respondent filed a further memorandum dated 13 August 2024.

Applicant’s submissions

• [5] Ms Raj refers to the Court’s minute of 24 July 2024 and then at [11] of her submissions sets out the oral exchange with Associate Judge Sussock which occurred on 8 February 2024 at the first callover of the application. Ms Raj submits that Associate Judge Sussock dealt with the issue relating to service and ruled that was resolved. She submits, therefore, as the issue of the service was resolved and settled and should not have been reopened at the hearing.

• [6] Ms Raj also refers to two emails from Mr Price, one dated 19 December 2023 in which he acknowledged receiving emails from Mr Jindal, a draft application for setting aside the statutory demand, and the unsigned affidavit of Ms Deepika Jindal, and a second email sent by Mr Price to the Court (and others including the applicant) on 21 December 2023.

¹ Ingenious Ltd v AP Chartered Accountants Ltd [2024] NZHC 1277.

• [7] Ms Raj submits, in summary:

(a) Mr Price on behalf of the respondent admits on several occasions that he has been served and handed over physical copies of the documents;

(b) Mr Price admitted before Associate Judge Sussock that he did say that service over email was acceptable, and being the director of the respondent was capable of agreeing to any mode of service on behalf of the respondent company and accepting service;

(c) Associate Judge Sussock categorically resolved the issues raised by Mr Price on the date of service and emailed service;

(d) Mr Price sent an email on 19 December 2023 to Mr Jindal acknowledging that he had received his emails, the draft application (physically), and an unsigned affidavit (physically);

(e) Mr Price emailed the High Court on 21 December 2024 acknowledging being served with an application to set aside a statutory demand that was issued by the respondent;

(f) Mr Price is a director of the respondent company, and his email acknowledging service of the documents satisfies the criteria set under s 387(1)(b) and/or s 387(1)(e) of the Companies Act 1993.

• [8] Ms Raj submits that the decision in Hyro Australia Pty Ltd v Commissioner of Inland Revenue,² was distinguished due to an error, namely that there was a lack of any acknowledgment from the respondent of receipt of the unendorsed copy within the 10-working day time period. Ms Raj submits this was due to an oversight on the applicant’s counsel’s part not to have included the emails from Mr Price and drawing the Court’s attention to the emails and discussions before Associate Judge Sussock.

² Hyro Australia Pty Ltd v Commissioner of Inland Revenue [2011] 25 NZTC 20-102.

• [9] Ms Raj submits that the respondent cannot point to any prejudice that it has suffered. She submits, in summing up, that Mr Price has acknowledged on behalf of the respondent receipt of the documents via email on 19 December 2023 (which is within the 10-day time period) and then again in his further email to the Court of 21 December 2023, and accordingly the respondent had sufficient notice of the application and accepted receiving the documents.

Respondent’s submissions

• [10] Mr Price, representing the respondent (with leave of the Court as he is not a lawyer) makes, in summary, the following submissions:

(a) the applicant is seeking to submit further evidence which was known and in the possession of the applicant prior to the hearing on 1 May 2024, and was in the possession of the applicant prior to 17 April 2024, the deadline for the applicant to submit its synopsis of submissions, bundle of documents and copies of any authorities for the hearing on 1 May 2024.³ The statutory demand did not contain or specify any email address for service but only the respondent’s physical address;

(b) at the call on 8 February 2024 before Associate Judge Sussock when he stated that the statutory demand did include an email address for service was obviously incorrect, and there was some confusion resulting in his mistaken comments to Associate Judge Sussock regarding the statutory demand;

(c) that he received a draft of the application by email on 14 December 2023 and, contrary to the applicant’s submission and the affidavit of service of Mr Jindal dated 5 February 2024, only an unaffirmed affidavit of Ms Deepika Jindal was handed to him physically on 18 December 2023;

³ Minute of Associate Judge Sussock dated 8 February 2024.

(d) points 13 and 14 of the applicant’s memorandum are misleading and are a mischaracterisation of Associate Judge Sussock’s comments as Associate Judge Sussock stated in the minute dated 18 June 2024 at point [6] that:

“To assist the applicant, I note that the reason for the service discussion at the callover was to check on a preliminary basis before setting the matter down that the application was not clearly served out of time. It was not to finally determine whether the requirements of the Companies Act 1993 had been met in terms of filing and service.”

(e) points 16 and 17 of the applicant’s memorandum are irrelevant as they were draft documents only, were not filed with the Court, and under r 7.22(1) of the Rules, service on the other party must occur after an application has been filed;

(f) the applicant’s application (after being filed) and affirmed affidavit of Deepika Jindal were emailed to the respondent outside the 10 working days requirement and the respondent had not explicitly consented to or agreed to legal service of documents via email prior to 3 January 2024 when the notice of opposition was filed;

(g) as to point 19 of the applicant’s memorandum stating that the respondent had acknowledged he had been served – as a non-lawyer he was not aware of the legal distinctions and the implications of this statement and did not explicitly agree to the documents being served via email prior to 3 January 2024.

Discussion

• [11] Having considered the applicant’s application for recall of the Judgment and respondent’s submissions in response, my views are as follows:

(a) Associate Judge Sussock did not make a final ruling as to the validity of service of the application at the callover on 8 February 2024. It was

a preliminary inquiry by Associate Judge Sussock as to whether the application was clearly served out of time or not, and therefore whether or not to set down the matter for a fixture;

(b) there was clearly some confusion by Mr Price as to whether an email address was stated in the statutory demand, when discussing the issue with Associate Judge Sussock at the callover. It transpires no email address was included in the statutory demand;

(c) I accept the applicant’s submission that the Hyro Australia decision⁴ was wrongly distinguished as acknowledging emails from Mr Price and the discussion with Associate Judge Sussock were not brought to the Court’s attention during the hearing on 1 May 2024. Also, it has come to my attention that since issuing the Judgment, that the Hyro Australia decision has not been followed, an unendorsed copy of the application to set aside a statutory demand without a hearing date does not mean the document cannot be served under the Rules.⁵ Consequently the fact that an endorsed copy was not served within the 10 working days does not mean non-compliance with the 10 working day time limit in s 290 of the Companies Act 1993.

• [12] However, notwithstanding the view I have expressed at [11](c), the following issues remain as to the validity of service of the application:

(a) There is factual dispute as to what was served on Mr Price on 18 December 2023. Mr Jindal’s affidavit states Mr Price was handed the notice of application to set aside the statutory demand and the unaffirmed affidavit of Ms Deepika Jindal. Mr Price maintains he was only handed Ms Jindal’s unaffirmed affidavit. The point is that if the application was not served on Mr Price on 18 December 2023 but only by email on 14 December 2023, then the application was not physically served within the 10 working day period (and s 387(1)(b) was not

⁴ Above, n 2.

⁵ GLW Group Ltd v Lepionka & Co Investments Ltd [2015] NZHC 3339 at [29] and [38].

complied with) and as there was no agreement by the respondent to accept email service on 14 December 2023 then s 387(1)(e) was not complied with. Mr Price’s acknowledgment by email on 19 December 2023 that he had received drafts of the notice of the application and the affidavit might be sufficient to overcome the issue of a document not containing a hearing date (following the GLW Group Ltd Group Ltd decision), but does not necessarily overcome the fact that the documents were unfiled drafts and his email, given his lay status, did not necessarily amount to retrospective acceptance of service by email (given his denial of receipt of a physical copy of the draft notice of the application on 18 December 2023).

(b) the issue of non-compliance with r 7.22(1), namely that the service of the application and affidavit must be after the application is filed in Court.

• [13] In my view, notwithstanding the matters put forward in the applicant’s memorandum, the issues identified in [12] means the Judgment does not meet the test in the third category of their being a very special reason which in the interests of justice requires recall of the judgment as set out by the Court in Horowhenua County v Nash (No.2):⁶

Generally speaking, a judgment once delivered must stand for better or worse subject, of course, to appeal. Were it otherwise there would be great inconvenience and uncertainty. There are, I think, three categories of cases in which a judgment not perfected may be recalled – first, where since the hearing there has been an amendment to a relevant statute or regulation or a new judicial decision of relevance and high authority; secondly, where counsel have failed to direct the Court’s attention to a legislative provision or authoritative decision of plain relevance; and thirdly, where for some other very special reason justice requires that the judgment be recalled.

(Emphasis added)

⁶ Horowhenua County v Nash (No.2) [1968] NZLR 632 at 633.

Result

• [14] As a result of my views set out at [12] and [13] above, I am of the view that the Judgment should not be recalled.

Orders

• [15] I make the following orders:

(a) the applicant’s application to recall the Judgment pursuant to r 11.9 of the High Court Rules 2016 is dismissed;

(b) costs are reserved.

................................... Associate Judge Taylor