PAUA POPPETTS EARLY CHILDHOOD HOME BASED CARE SERVICE LIMITED v POPPETTS NANNY BUREAU LIMITED [2016] NZHC 309

PAUA POPPETTS EARLY CHILDHOOD HOME BASED CARE SERVICE LIMITED v POPPETTS NANNY BUREAU LIMITED [2016] NZHC 309 [29 February 2016]IN THE HIGH COURT OF NEW ZEALANDCHRISTCHURCH REGISTRYCIV-2015-409-000720[2016] NZHC 309BETWEEN PAUA POPPETTS EARLY CHILDHOODHOME BASED CARE SERVICELIMITEDPlaintiffAND POPPETTS NANNY BUREAULIMITEDDefendantHearing: 29 February 2016Appearances: JWC Nicolle for PlaintiffNo Appearance for DefendantNo Appearance for Chief Executive Ministry of SocialDevelopment - Subsequent PartyJudgment: 29 February 2016ORAL JUDGMENT OF GENDALL J[1] Before the Court is a claim by the plaintiff against the defendant seeking an order under s 323 Companies Act 1993 that the defendant company not be removed from the Companies Register.[2] This proceeding was filed in this Court by way of a statement of claim filed 9 November 2015.[3] The proceedings were served upon the defendant company on 20 November 2015.[4] No statement of defence has been filed. Nor has any indication been made in any way on behalf of the defendant that it has any opposition or defence to the claim which is before the Court.[5] Accordingly, the plaintiff now seeks judgment from the Court by way of formal proof in terms of r 15.9 High Court Rules.[6] By way of background to the plaintiff's claim, on 10 September 2015 theRegistrar of Companies gave notice to the defendant company under s 318 of the Companies Act 1993 of her intention to remove the defendant from the New Zealand Companies Register.[7] On 8 October 2015 the plaintiff delivered to the Registrar an objection to the plaintiff's removal from the Companies Office Register. This objection was advanced on grounds set out in s 321(d) of the Companies Act 1993 that the plaintiff is a creditor of the defendant or a person who has an undischarged claim against the defendant.[8] Turning now to this claim that the plaintiff is a creditor or someone who has an undischarged claim against the plaintiff, the background to this aspect relates to an Agreement for Sale and Purchase entered into between the parties on 22 February 2012. By this agreement the plaintiff effectively agreed to purchase a business involving provision of home based care services and nanny services previously operated by the vendor from premises in Eden Terrace, Auckland. This purchase was at a total purchase price of $100,000 and settlement, it seems, was effected on or about 1 March 2012.[9] In terms of the Agreement for Sale and Purchase between the parties, clause 20.1 stated:20. Apportionments.1 For the avoidance of doubt, all:c. Incomings of a periodic or recurring nature which relate directly to the business including, Early Childhood Education payments from Work and Income New Zealand subsidy payments,must be apportioned between the vendor and purchaser as at 5 p.m. on the day immediately preceding the settlement date.[10] And, paragraph 20.4 of the Agreement for Sale and Purchase which dealt with rebates/discounts stated:Rebates/discounts.4 For the avoidance of doubt, the parties agree that such part of all discounts, rebates and other sums receivable in respect of the business which relate to a period commencing before and ending on the day immediately preceding the settlement date will be for the benefit of the vendor and such part of all discounts, rebates and other sums receivable in respect of the business which relate to a period commencing on or after the settlement date will be for the benefit of the purchaser.[11] The plaintiff's allegation in its statement of claim, supported by the affidavit of Raewyn Overton-Stuart dated 5 November 2015 filed herein, makes clear that Work and Income New Zealand (WINZ) throughout was paying the defendant a subsidy for early childhood care which had been provided initially by the defendant and then following settlement in March 2012 by the plaintiff. Under the Agreement for Sale and Purchase between the parties and, in particular, paragraphs 20.1 and .4 noted above, those WINZ subsidy payments from settlement date of the sale ought to have been paid to the plaintiff.[12] By error, however, after the date of settlement of the sale, it appears that WINZ continued to make these subsidy payments to the bank account of the defendant. The plaintiff's statement of claim and supporting affidavit indicate that the total WINZ payments which were made to the defendant's bank account in error following settlement were $172,487.72.[13] Perhaps somewhat surprisingly, it took some time for the plaintiff to realisethat these WINZ subsidy payments were being made to the defendant's bank accountand not its own. This realisation, it seems, occurred only in July 2015.[14] In the meantime, presumably as a result of a belated request, the defendant began on-paying some of the amounts it had received to the plaintiff's bank account.[15] What is clear from the plaintiff's pleadings and the evidence before the Court is that the plaintiff had received from the defendant only the sum of $112,07.15 from these WINZ payments made to the defendant in error.[16] This left a shortfall of $60,480.57 which the plaintiff claims is due to it from the defendant.[17] The crux of the plaintiff's claim in this proceeding therefore is that this$60,480.57 net amount was mistakenly paid to the defendant when in terms of the Agreement for Sale and Purchase it should clearly have been paid to the plaintiff. The plaintiff says also that despite a number of requests to the defendant to pay this amount it has not been paid to the plaintiff.[18] On this basis, the plaintiff seeks an order from this Court that the defendant company not be removed from the Companies Register so the plaintiff can continue these proceedings for recovery of the claimed amount against the defendant and possibly also directors of the defendant.[19] In this regard s 323(2) Companies Act 1993 addressing the powers of the Court when, as here, a person has given notice objecting to the removal of a company from the New Zealand Companies Office Register, states in part:323 Powers of court...(2) On an application for an order under subsection (1), the court may, if it is satisfied that the company should not be removed from the register on any of those grounds [the grounds set out in s 321(1)(d), (e) or (f)], make an order that the company is not to be removed from the register.[20] In this regard I am satisfied that s 321(1)(d) Companies Act 1993 applies here and that grounds exist for the defendant company not to be removed from the Register on the basis that the plaintiff is a creditor or a person who has an undischarged claim against the company.[21] For all these reasons the plaintiff's claim for an order that the defendant company not be removed from the Companies Register succeeds.[22] An order is now made under s 323 Companies Act 1993 that the defendant company, Poppets Nanny Bureau Limited not be removed from the Companies Register.[23] As to costs, the plaintiff has succeeded in this claim and I see no reason why costs should not follow the event in the normal way. Costs with respect to this claim are therefore awarded to the plaintiff against the defendant company on a category 2B basis together with disbursements as fixed by the Registrar....................................................Gendall JSolicitors:Anderson Lloyd, ChristchurchAuld Brewer Mazengarb & McEwen, New PlymouthCopy to Defendant and Subsequent Party