TI RAKAU DRIVE LIMITED V ASCOT AUCKLAND LIMITED HC AK CIV 2008-404-006257

TI RAKAU DRIVE LIMITED V ASCOT AUCKLAND LIMITED HC AK CIV 2008-404-006257 4 June 2009IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY CIV 2008-404-006257IN THE MATTER OF THE COMPANIES ACT 1993 BETWEEN TI RAKAU DRIVE LIMITED Plaintiff AND ASCOT AUCKLAND LIMITED Defendant Hearing: on papers Counsel: M Pitch for plaintiff L Nicholson for defendant Judgment: 4 June 2009 at 5:00pmJUDGMENT OF ASSOCIATE JUDGE ABBOTTThis judgment was delivered by me on 4 June 2009 at 5:00pm, pursuant to Rule 11.5 of the High Court Rules. Registrar/Deputy RegistrarSolicitors: Malcolm Whitlock, PO Box 105 725, Auckland 1143 for plaintiff Dyer Whitechurch & Bhanabhai, PO Box 5547, Auckland 1141 for defendant[1] The plaintiff (Ascot) has applied for an order staying any steps pursuant to an order for liquidation made yesterday pending hearing of an application for termination of the liquidation, or alternatively for an order terminating the liquidation. [2] For the reasons I am about to give, I am prepared to make an order, with the consent of Ti Rakau, terminating the liquidation pursuant to s 250 of the Companies Act 1993.Background[3] Late yesterday, after a defended hearing, I made an order on Ti Rakau's application putting Ascot into liquidation. The order was made on the grounds that Ti Rakau had a clearly established judgment debt that Ascot had failed to pay following a statutory demand. [4] Ascot had contended that it had paid the debt prior to the date of the judgment. I found that it had failed to establish that it had done so. [5] Ascot failed to put any evidence before the Court to show that it was solvent, and thereby rebut the presumption of insolvency arising from non payment of the statutory demand. [6] Ascot filed its application this morning. In a memorandum in support, counsel stated that Ascot was solvent. Although no evidence was adduced at that point in support of that statement, a bank cheque for the amount of the debt to Ti Rakau plus a further sum representing the estimated costs payable on the application was tendered. In addition, counsel advised that Ascot would pay any further costs properly payable and not covered by that provision. [7] Since filing the application counsel for both parties have conferred and agreed that Ti Rakau will consent to termination of the liquidation upon payment of the debt plus the Court filing fee on the application for liquidation, and anundertaking to pay legal costs on a scale 2B basis (still to be calculated). Counsel for Ascot has filed an exchange of correspondence setting out this agreement, and evidencing payment of the debt plus the filing fee. [8] Counsel for Ascot has also sent to the Court a fax copy of an affidavit sworn by Ascot's chartered account in which he states that: a) Ascot is solvent; b) the debt to Ti Rakau is Ascot's only liability; and c) Ascot at all times had sufficient funds to meet Ti Rakau's claim. [9] The order for liquidation has not been sealed nor promulgated in any way.Decision[10] As recorded in my judgment yesterday, counsel for Ascot asked at the hearing for the commencement of any order for liquidation to be deferred to allow Ascot opportunity to pay the debt. Counsel for Ti Rakau opposed that course. [11] I declined to defer commencement of the order because there was no evidence before me as to Ascot's solvency or its ability to pay the debt. In the absence of such evidence, I also had to take into account the possibility of other creditors. [12] The tender of the amount of the judgment debt and the estimated costs (together with the undertaking to pay any additional costs) is tangible evidence from which I can infer solvency. The application for liquidation was advertised and no other creditors have filed notice of appearance. Although the affidavit by Ascot's chartered accountant has not yet been filed I will take into account the content of the fax copy that has been sent to the Court. That confirms Ascot's solvency and that it has no other unpaid creditors.[13] I also take into account that it is likely to be some days before any application for termination of liquidation could be heard, and that significant further costs could be incurred by the liquidator in the course of the carrying out his statutory duties in the meantime. Given the comparatively small amount of the debt in this case, such costs will quickly match if not exceed that debt. [14] Weighing all of these factors I have come to the view that it would be just and equitable to make an order terminating the liquidation at this point. I so order. ____________________Associate Judge Abbott