This time of year is full of landmines for lawyers- and not just the back to work blues. Court processes work to strict deadlines set down by either the Court, the legislation or the Court rules. Sometimes they don’t always say the same thing. I have had a client this week who caught the sharp end of that stick. My client was served with an application to place the company into liquidation during the Christmas and New Year holidays. After receiving that application, certain steps need to be taken by certain times i.e. 10 working days. Unfortunately, at this time of year, calculating the working day timeframes is complicated by contradicting legislation as to the duration of the Christmas holidays. The Companies Act section 2 (and the Interpretation Act 1999 section 29) provide that working days start running from close of business on Tuesday 3 January 2012. The Interpretation Act specifically states that this applies unless a specific enactment provides otherwise. The Companies Act contains no such provision except to say “unless the context otherwise requires”. The High Court Rules definition of “working day” in Rule 1.3 states that working days start running from close of business 15 January 2012, giving the client and the lawyer almost another two weeks leeway. But which one applies when? This comical situation was judicially considered by Master Venning in In McLellans Ltd v Lee (liquidator of A J De Reus Ltd) 21/4/98, Master Venning, HC Invercargill CP2/98. Master Venning (now His Honour Justice Venning of the High Court of Auckland) held that the term “working day”, used in s 294 in relation to the period within which notice objecting to a liquidator’s notice setting aside a transaction must be served on a liquidator, is to be defined in accordance with the Companies Act 1993 definition. The Court did not accept an argument that the term should be defined in accordance with a conflicting definition in the High Court Rules. Given this precedent, it is important to consider the matter carefully and err on the side of caution as often as possible. It is my opinion that where steps are provided for in the High Court Rules, they are subject to the High Court Rules working day definition, where they are provided for in the Companies Act, they are subject to the Companies Act. The problem with that is, as my client discovered this week, that at this time of year, on one file and about one subject matter, the sand can begin running through the hour glass on 4 January, when other steps still have until 16 January until the time even starts running! This is clearly an area in need of a tidy up by our legislators!
By Chris Patterson