Consolidation would have forced the creditor to wait until a 2027 trial to resolve its demand
The Court of Appeal declined leave to appeal a refusal to consolidate a statutory demand dispute with separate guarantee proceedings.
The Court of Appeal of New Zealand delivered its decision in Lough Corrib Ltd v NZ Finance Group Ltd [2026] NZCA 254 on June 16, 2026.
NZ Finance Group Ltd (NZFG) lent money to Lough Corrib Ltd (LCL) under a loan guaranteed by a related company, Dilseacht Trustees Ltd. On August 5, 2024, NZFG served a statutory demand on LCL for $576,518.91, which it claimed was the loan owed. LCL applied to set the demand aside, then sought to consolidate that proceeding with two guarantee proceedings that the court had already consolidated – one in which Dilseacht sought to invalidate its guarantee, and one in which NZFG sought to enforce it.
An associate judge declined consolidation on February 20, 2025, finding insufficient commonality of facts and describing the statutory demand and any subsequent liquidation as a "totally different procedure and type of proceeding" from the guarantee dispute. The High Court declined leave to appeal that decision on October 14, 2025.
LCL then applied to the Court of Appeal for an extension of time, leave to appeal under s. 56(5) of the Senior Courts Act 2016, and leave to adduce fresh evidence. LCL argued that the High Court erred in finding insufficient commonality and placed excessive weight on procedural differences. LCL also submitted that it risked liquidation over a debt that the guarantee proceedings might later find was not due and owing.
The court granted the extension of time. A delay of 28 working days arose after the registry sent the leave judgment only to LCL's former counsel, who did not forward it. The court found the delay was not egregious and reflected a procedural irregularity, and it noted that LCL's new counsel made urgent enquiries once he learned of the judgment.
The court declined leave to appeal. It applied the high threshold for appeals from interlocutory decisions. The court found that, while the proceedings shared a common factual thread arising from the LCL loan, the guarantee proceedings concerned Dilseacht's guarantee. In contrast, the current proceeding concerned LCL's separate liability under the loan. That distinction meant little risk of inconsistent findings.
The court held that an application to set aside a statutory demand should proceed "as quickly as practicable" because such applications raised solvency questions important to the business community. It found that consolidation would have required NZFG to wait until the guarantee trial, scheduled for July 26, 2027, before resolving the demand.
The court concluded that the alleged error was not of general or public importance and did not meet the threshold for leave. Having declined leave, it found the application to adduce the amended guarantee pleadings pointless and declined it.
The court ordered LCL to pay NZFG one set of costs for a standard application on a band A basis, together with usual disbursements.
