HERZOG v MYRIAD INTERNATIONAL LIMITED & Anor [2017] NZHC 858

HERZOG v MYRIAD INTERNATIONAL LIMITED & Anor [2017] NZHC 858

The Court found there was a genuine and substantial dispute as to the 2016 invoice liability; accordingly the statutory demand was set aside under s290. There was insufficient evidence of insolvency to make a winding up order and no basis to stay the proceedings; interlocutory relief limited to directions and maintenance of an existing advertising restraint pending further steps.

Citation
[2017] NZHC 858
Parties
Plaintiff/respondent: Lawrence Herzog; Defendant/applicant: Myriad International Limited
Court
High Court
Jurisdiction
New Zealand
Judgment Date
2 May 2017
Procedural Posture
Companies Act 1993 – Liquidation, Set Aside Statutory Demand, Shareholder Oppression / Application to Set Aside Statutory Demand and Interlocutory Applications in Liquidation and S174 Oppression Proceedings; Directions Hearing
Outcome
Statutory demand set aside; no winding up order made at this stage; interlocutory directions given; existing advertising restraint to remain in place
Legal Topics
Set Aside Statutory Demand Under S290, Liquidation/winding Up, Just and Equitable Winding Up (s240/s241), Shareholder Oppression (s174), Shareholders' Agreement Dispute, Remuneration Dispute, Procedural Directions
Company Law Insolvency Law Civil Procedure Set Aside Statutory Demand Under S290 Liquidation/winding Up Just and Equitable Winding Up (s240/s241) Shareholder Oppression (s174) Shareholders' Agreement Dispute +2 more

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Parties

Lawrence Herzog

Plaintiff/respondent

Myriad International Limited

Defendant/applicant

Procedural Posture

Companies Act 1993 – Liquidation, Set Aside Statutory Demand, Shareholder Oppression / Application to Set Aside Statutory Demand and Interlocutory Applications in Liquidation and S174 Oppression Proceedings; Directions Hearing

Legal Issues

  1. 1 Whether a binding agreement existed obliging MIL to pay Herzog $40,000 + GST per annum or 20% of Phillip Jones' remuneration
  2. 2 Whether there is a substantial dispute as to the debt alleged in the statutory demand under s290 Companies Act 1993
  3. 3 Whether plaintiff has creditor standing to seek liquidation and whether company is insolvent

Ratio Decidendi

The Court found there was a genuine and substantial dispute as to the 2016 invoice liability; accordingly the statutory demand was set aside under s290. There was insufficient evidence of insolvency to make a winding up order and no basis to stay the proceedings; interlocutory relief limited to directions and maintenance of an existing advertising restraint pending further steps.

Court Disposition

Statutory demand set aside; no winding up order made at this stage; interlocutory directions given; existing advertising restraint to remain in place

Orders

  • Set aside the statutory demand issued by Lawrence Herzog to Myriad International Limited under s290
  • Existing interim order by Sargisson AJ restraining advertising of the claim to remain in place until further order