CLUTHA TRANSPORT LTD v HEARTLAND BANK LTD [2019] NZHC 745 .

CLUTHA TRANSPORT LTD v HEARTLAND BANK LTD [2019] NZHC 745 [9 April 2019].IN THE HIGH COURT OF NEW ZEALANDDUNEDIN REGISTRYI TE KŌTI MATUA O AOTEAROAŌTEPOTI ROHECIV-2018-412-96[2019] NZHC 745IN THE MATTER OF An application to set aside a statutorydemandAND IN THE MATTEROFthe Companies Act 1993BETWEEN CLUTHA TRANSPORT LIMITEDApplicantAND HEARTLAND BANK LIMITEDRespondentHearing: (Determined on the Papers)Appearances: A W Belcher for ApplicantH D Morrison and K M Wakelin for RespondentJudgment: 9 April 2019JUDGMENT OF ASSOCIATE JUDGE LESTER(in respect of costs)[1] In November 2018, this application to set aside a statutory demand was setdown for a hearing on 5 March 2019. In late February 2019 counsel for the respondentfiled a memorandum advising that the statutory demand in issue was withdrawn,resulting in the Court issuing a minute recording that the acknowledgement made theapplication to set aside redundant. There was an order dismissing the application forsummary judgment with costs reserved.[2] The statutory demand in issue was dated 18 October 2018. The application toset aside, amongst other grounds, referred to related proceedings which were arguedon 23 October 2018 and resulted in a judgment dismissing Heartland Bank Ltd's("Heartland Bank") application for summary judgment in that proceeding.[3] The application to set aside also raised an issue concerning the nature of thedebt subject to the statutory demand, being whether the debts were for accountsreceivable or not, which was relevant to whether Heartland Bank was entitled to relyon an assignment of debt.[4] Clearly, Heartland Bank considered the issue was not one capable of genuinedispute given that it had related summary judgment proceedings touching on the sameissues. That application for summary judgment was dismissed. Costs in respect ofthat proceeding were reserved.[5] I see nothing in the circumstances of the application to set aside statutorydemand as to why costs should not follow the event in the ordinary way. It is noanswer for Heartland Bank to suggest that somehow its ability to advance its responseto the application to set aside the demand was dependent upon the provision ofinformation from the applicant. While in some circumstances the failure by an allegeddebtor to provide material to the Court in the course of an application to set asidea statutory demand will allow inferences to be drawn against the debtor, that is not theposition Heartland Bank, as alleged creditor, asserts here. If a creditor can only meeta challenge to their demand with something akin to discovery, then the claimed debtis probably not one that is suitable for a statutory demand.[6] Accordingly, there will be an order of costs in favour of the applicant. I note,however, the papers filed were relatively brief and the order of costs is on a 2A basistogether with disbursements as fixed by the Registrar.____________________________________Associate Judge LesterSolicitors:O'Malley & Co. BalcluthaGrove Darlow & Partners, AucklandCopy to counsel: A W Belcher, Barrister, Dunedin