PROVINCIAL FINANCE LTD V BIG SAVE CARS LTD HC AK CIV 2006-404-005-440

PROVINCIAL FINANCE LTD V BIG SAVE CARS LTD HC AK CIV 2006-404-005-440 14 December 2006IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY CIV 2006-404-005-440UNDER the Companies Act 1993 BETWEEN PROVINCIAL FINANCE LIMITED (IN RECEIVERSHIP) Plaintiff AND BIG SAVE CARS LIMITED Defendant Hearing: 14 December 2006 Appearances: Ms Russell for plaintiff Mr Khan for defendant Judgment: 14 December 2006ORAL JUDGMENT OF ASSOCIATE JUDGE J P DOOGUE [Costs]Solicitors: Rhodes & Co, P O Box 13 444, Christchurch Shafraz Khan, Wood Ruck Manukau, shafraz@woodruck.mku.co.nz[1] The plaintiff commenced proceedings for appointment of a liquidator against the defendant but has now discontinued them. The reason for the plaintiff not proceeding is set out in a memorandum which the plaintiff's counsel filed dated 14 December 2006. In that memorandum Ms Russell said that on the 13 th December 2006 the plaintiff was able to recover a car over which the debt which it was owed by the defendant was secured. Apparently on sale of that vehicle, its debt will be extinguished and there is no need therefore for the plaintiff to continue with the proceeding. Indeed, it will lose the necessary status of "creditor" which entitles it to seek and order appointing a liquidator. Ms Russell seeks costs against the defendant on the basis that the plaintiff was justified in taking proceedings against the defendant in the first place. [2] Mr Khan for the defendant opposes the making of an order for costs. He says that the defendant has no knowledge of the debt which the plaintiff claims it owes. He, in essence, submitted that it had never been established that the defendant was a debtor of the plaintiff company. [3] This matter has been called before me today and verification of the statement of claim establishes some evidence that the plaintiff is a creditor of the company or conversely that the defendant is its debtor. If that fact is established then the proceedings were arguably properly started. [4] However the documents that are on the Court record show only one side of the issue. The question is whether or not the defendant should be able to enter into a dispute concerning the status of the plaintiff as a creditor in the service and expiry of its statutory demand when it has taken no steps to that end? I have no basis for knowing whether or not a statement of defence may have been permitted by leave of the Court. However I suppose it is always possible that some proper defence could have been made out by the defendant. But significantly, the usual approach would require that if the defendant had been permitted by leave, to file a statement of defence then that would be regarded as an indulgence on the part of the Court, which itself would have attracted an order for costs against the defendant. So while it may be theoretically true that the defendant might have obtained leave, it would in any event have attracted an order for costs. Taking that matter into account, it seems to me that the overall justice of the case requires that an order for costs be made assought by the plaintiff and I order accordingly. The plaintiff will have costs on a 2B basis together with disbursements fixed by the Registrar. [5] The proceeding is to be withdrawn by leave. __________________________ J P Doogue Associate Judge