GLW GROUP LIMITED v LEPIONKA & COMPANY INVESTMENTS LIMITED [2016] NZHC 1380

GLW GROUP LIMITED v LEPIONKA & COMPANY INVESTMENTS LIMITED [2016] NZHC 1380

Lepionka misused the statutory demand procedure by issuing it despite a clear, substantial dispute arising from existing contested Auckland litigation and allegations against Lepionka's exercise of mortgagee powers; that conduct caused GLW unnecessary expense and justified increased (but not indemnity) costs. Accordingly GLW awarded $20,000 for the setting aside application inclusive of disbursements; no costs awarded for the liquidation claim as factors including GLW's solvency questions and subsequent payment and supporting creditors made costs award inappropriate.

Citation
[2016] NZHC 1380
Parties
Plaintiff (civ 2015 441 99) / Defendant (civ 2015 441 104): GLW Group Limited; Defendant (civ 2015 441 99) / Plaintiff (civ 2015 441 104): Lepionka & Company Investments Limited
Court
High Court
Jurisdiction
New Zealand
Judgment Date
23 June 2016
Procedural Posture
Statutory Demand Setting Aside (s 290 Companies Act 1993) and Associated Liquidation Proceeding Under Companies Act 1993 / Costs Application and Judgment Following Withdrawal of Statutory Demand and Withdrawal of Liquidation Proceeding
Outcome
Lepionka ordered to pay increased costs of $20,000 to GLW for the setting aside application; no costs awarded to either party on the liquidation claim
Legal Topics
Statutory Demand, Setting Aside Statutory Demand S290, Liquidation, Increased and Indemnity Costs (r14.6 High Court Rules), Mortgagee Duties, Redemption of Mortgage, Abuse of Process, Land Transfer Act Fraud Allegations
Company Law Insolvency Civil Procedure Property Law Costs Law Statutory Demand Setting Aside Statutory Demand S290 Liquidation +5 more

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Parties

GLW Group Limited

Plaintiff (civ 2015 441 99) / Defendant (civ 2015 441 104)

Lepionka & Company Investments Limited

Defendant (civ 2015 441 99) / Plaintiff (civ 2015 441 104)

Procedural Posture

Statutory Demand Setting Aside (s 290 Companies Act 1993) and Associated Liquidation Proceeding Under Companies Act 1993 / Costs Application and Judgment Following Withdrawal of Statutory Demand and Withdrawal of Liquidation Proceeding

Legal Issues

  1. 1 Whether applicant entitled to costs for setting aside application
  2. 2 Whether increased or indemnity costs should be awarded under r14.6
  3. 3 Whether service and use of statutory demand constituted abuse of process or unnecessary step

Ratio Decidendi

Lepionka misused the statutory demand procedure by issuing it despite a clear, substantial dispute arising from existing contested Auckland litigation and allegations against Lepionka's exercise of mortgagee powers; that conduct caused GLW unnecessary expense and justified increased (but not indemnity) costs. Accordingly GLW awarded $20,000 for the setting aside application inclusive of disbursements; no costs awarded for the liquidation claim as factors including GLW's solvency questions and subsequent payment and supporting creditors made costs award inappropriate.

Court Disposition

Lepionka ordered to pay increased costs of $20,000 to GLW for the setting aside application; no costs awarded to either party on the liquidation claim

Orders

  • Lepionka is to pay $20,000 in costs to GLW, covering both proceedings.