WAIRARAPA RECYCLERS 2005 LIMITED V BURLING TRANSPORT LIMITED HC PMN CIV-2006-454-002

WAIRARAPA RECYCLERS 2005 LIMITED V BURLING TRANSPORT LIMITED HC PMN CIV-2006-454- 002 28 March 2006IN THE HIGH COURT OF NEW ZEALAND PALMERSTON NORTH REGISTRY CIV-2006-454-002IN THE MATTER OF the Companies Act 1993 BETWEEN WAIRARAPA RECYCLERS 2005 LIMITED Applicant AND BURLING TRANSPORT LIMITED Respondent Judgment: 28 March 2006 In accordance with r540(4) I direct the Registrar to endorse this judgment with a delivery time of 9.00am on the 28th day of March 2006.JUDGMENT AS TO COSTS OF ASSOCIATE JUDGE D.I. GENDALL[1] On 13 February 2006 I noted in a Minute that the respondent had agreed to withdraw a statutory demand for $2,920.00 it had issued against the applicant. Notwithstanding this, an order was sought. On 13 February 2006 the order was made that the statutory demand was set aside. [2] I noted in that 13 February 2006 Minute that as a consequence the applicant was also seeking costs against the respondent on either a solicitor/client or a category 2B basis. [3] Counsel for the applicant had filed a detailed memorandum dated 13 March 2006 as to this issue of costs. This was in response to a memorandum filed on 2 March 2006 from counsel for the respondent which had suggested that as the demand was both issued and withdrawn in good faith, costs should lie where they fall.[4] As I signalled in the 13 February 2006 Minute, I now decide this issue of costs. I do so on the basis of the material which is before the Court. [5] The statutory demand in question, which is dated 18 November 2005, required payment of the sum of $2,920.00 "being the amount unpaid for cartage undertaken for the company Wairarapa Recyclers 2005 Limited". It was served upon the applicant on 23 December 2005. [6] There seems to be no dispute that the debt in respect of which the statutory demand was issued represented balance moneys outstanding for cartage of recycled glass from Masterton to Auckland. This was outlined in invoices from the respondent dated 10 January 2005, 1 February 2005, and 4 February 2005. [7] The applicant contends that the debts in question were incurred by an entity called "Carterton Recyclers". It says this was a separate entity entirely from the applicant company Wairarapa Recyclers 2005 Limited, which itself was not incorporated until 7 February 2005. [8] There seems no question from the invoices for the cartage undertaken that each of the dates the respondent completed this work was prior to incorporation of the applicant company. [9] Notwithstanding this and perhaps curiously, it seems that in a letter dated 13 May 2005 completed on the applicant's letterhead under the reference "Re Wairarapa Recyclers 2005 Limited Account", there is discussion as to these outstanding accounts, and a request that the respondent "confirmed the account balance is $2,078.53". [10] On this basis apparently it was on 18 November 2005 that the respondent issued its statutory demand. The respondent also says the order for the cartage work undertaken seems to have been given by a Mr Lionel Duffy, who is the sole director of the applicant company. And a letter from the applicant's solicitors to the respondent's solicitor dated 18 October 2005 indicating that Mr Duffy was at all times trading as Wairarapa Recyclers, in my view, is also of relevance here.[11] There is some argument between counsel as to what should have happened once the statutory demand was served, given that this occurred close to christmas on 23 December 2005. [12] Notwithstanding this, and weighing up all the material before the Court, I am satisfied that once the respondent became aware of the true position concerning the date of incorporation of the applicant company, it acted properly in immediately giving notice that the statutory demand was to be withdrawn. [13] That said, despite submissions from counsel for the applicant that the demand was only withdrawn on a without prejudice basis, and that there was no alternative for the applicant but to issue these proceedings early in January 2006 to avoid the time consequences flowing from the issue of the statutory demand, I am of the view that this matter was one which was able to be readily resolved had some sensible discussion taken place between the parties and/or their counsel once the statutory demand was received. [14] Surely, it seems to me, that some communication at that point should have obviated the need for these proceedings to be issued. But clearly this did not occur. [15] As I see it, this is therefore an appropriate case to refuse an order for costs pursuant to R.48D(e) and (f) High Court Rules. It follows that this is an appropriate case for costs to lie where they fall. [16] Accordingly, there is to be no order as to costs in this matter. __________________________Associate Judge D.I. GendallSolicitors:P.C. Gilbert, Barrister & Solicitor, Wellington for Applicant Gold Walsh, Masterton for Respondent