Angland v Game Ranch International Limited HC CHCH CIV 2008 409 432

[2008] NZHC 2424

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

CIV 2008 409 432

BETWEEN  JOHN SHEARER ANGLAND Plaintiff

ANDGAME RANCH INTERNATIONAL LIMITED

Defendant

Hearing:         29 July 2008

Appearances: JS Angland in Person - Plaintiff

T J Twomey for Mr P B Wilson as a Director of the Defendant

Judgment:      29 July 2008 at 3pm

JUDGMENT OF ASSOCIATE JUDGE CHRISTIANSEN

[1]      Mr J S Angland is applying to place Game Ranch  International  Limited

(Game Ranch) into liquidation.

Background

[2]      Mr Angland and Mr Wilson are the only directors and shareholders of Game

Ranch.  They are equal shareholders.

[3]      Mr Angland says that at a directors’ meeting on 17 August 2006 he and Mr Wilson resolved to wind up Game Ranch.   Since then each has made serious allegations concerning the other party’s conduct in respect of the management of the

company.

JOHN SHEARER ANGLAND V GAME RANCH INTERNATIONAL LIMITED HC CHCH CIV 2008 409

432  29 July 2008

[4]      Mr Angland says Game Ranch has not actively traded since 17 August. 2006. Further, that Mr Wilson has been passing off and using Game Ranch’s name and goodwill for his personal benefit.  He has a complete lack of trust and confidence in Mr Wilson.  He says Mr Wilson has refused to authorise Game Ranch to honour two calls for funds made on it by Kiwi Safaris Limited since 17 August 2006.

[5]      Mr Angland says there is a deadlock.   Therefore, it is just and equitable Game Ranch be placed into liquidation.  On 18 March 2008, and upon Mr Wilson’s application, Panckhurst J made orders restraining advertising of the liquidation proceeding, and staying any further proceedings in relation to the liquidation.  Also leave was reserved to Mr Angland to apply on short notice to have the stay lifted.

[6]      On 12 May 2008 Mr Angland applied to lift the stay.   That application is opposed.  Lengthy affidavits have been filed in support of the respective positions.

[7]      The background is complex.  The following facts appear undisputed:

•   At all times Mr Angland was a practising barrister and solicitor.

•   He had previously acted for N.Z. Hunt Limited, a company operated by Mr

Wilson.  He also acted for Mr and Mrs Wilson.

•   Mr Angland acted for Kiwi Safaris Limited as purchaser of the business carried on by N.Z. Hunt Limited.  He prepared the contract for sale and purchase of N.Z. Hunt to Kiwi Safaris Limited.

•   During the period of the sale of N.Z. Hunt from September 2005 to the day before settlement on 16 December 2005, Mr Angland and Mr Wilson were in business relationships.

•   On the date of the sale of N.Z. Hunt to Kiwi Safaris Limited, Mr Angland was the sole director of Kiwi Safaris Limited.

•   It was a condition of the sale of N.Z. Hunt to Kiwi Safaris Limited that:

…Game  Ranch  continued  to  be  provided  with  the  ability  to  exhibit  its services at all U.S.A. shows and conventions that Game Ranch currently enjoys access to through N.Z. Hunt …

•   Mr Angland and Mr Wilson were directors and shareholders of Game Ranch  when  N.Z.  Hunt  was  sold,  and  upon  that  sale  Game  Ranch received a consultancy fee of $225,000.00 in which Mr Angland and Mr Wilson had an equal interest by virtue of their equal shareholding.

•   There are various other civil proceedings extant in which Mr Angland and Mr Wilson (individually or in representative capacities) are on opposite sides.  One of these includes a District Court proceeding brought by Mr Angland against Mr Wilson for payment of purported legal fees of more than $134,000.00.

•   Until N.Z. Hunt Limited’s business was sold to Kiwi Safaris Limited, Mr Angland and Mr Wilson had been friends as well as in a business relationship.     At  the  time  of  the  sale  Mr  Wilson/N.Z.  Hunt  was represented by another firm of solicitors.   Issues arose shortly after whether, notwithstanding a Deed of Restraint of Trade, Mr Wilson was permitted  to  continue  operating  under  the  Game  Ranch  banner.    His ability to do so was, he says, vital to the deal he struck for the sale of N.Z. Game.   Independently of the separate legal advice he was receiving he says he accepted Mr Angland’s personal assurances and advice in the matter.

[8]      The affidavits clearly demonstrate a huge level of mistrust has developed between the parties over the last 18 months.  Each side is forthright in their criticism of the other.

[9]      Mr Angland, by reference to previous judicial statements, has endeavoured to portray Mr Wilson as dishonest and devious.  He has branded Mr Wilson as litigious and of poor reputation.

[10]     The impression I get from Mr Wilson’s affidavits is he is no less ill disposed towards Mr Angland.

Discussion

[11]     The opposing affidavits provide a great deal of conflicting factual analysis and comment.  Mr Angland wants to continue with his liquidation proceedings for what is clearly a commercial purpose, albeit says Mr Angland for appropriate legal reasons.

[12]     The present application seeks the ability to continue with those proceedings. As the case has been presented in support of the application for the lift of the stay, this Court is being asking to determine whether, in effect, there is good reason to liquidate the defendant.

[13]     Even if Mr Angland is correct in all that which he presents as facts in support of  case,  his  case  is  clearly  not  an  appropriate  one  for  determination  by  the Companies Court.   The reason is that the Court is quite unable to permit the liquidation process to be used in a dispute where there may be genuine reasons for a proper assessment of the account of the person wanting to use the process.   If the dispute is genuine, and is substantial, then it should be resolved through action commenced in the ordinary way.  It should not be resolved in the Companies Court.

[14]     This is not a case, I think, where one party merely asserts there is a dispute for the purpose of obtaining refuge from summary disposal of his claims.  Rather, and is evident from the affidavits, there is a need to hear evidence to examine the various conflicting claims, the nature of which could clearly impact on the outcome.

[15]     The  overview  of  undisputed  facts,  previously  adverted  to,  refers  to  a business, professional and personal relationship which, in combination, is always likely to promote the need for detailed analysis, particularly where, as in this case, the lawyer in that combination accuses the other person of fraud.

[16]     On the other side of the case there are allegations of breach of fiduciary duty and professional misconduct.   Whether these amount to nothing more than empty threats is a matter of trial, not a matter for risky inference drawn from the reading of affidavits.

[17]     Mr Angland has, in his submissions, systematically  and energetically set about to dismantle Mr Wilson’s claims against him of conflict of interest and breach of fiduciary duty.  He perceives he should provide to the Court there is no foundation to these claims.   At the end of the day, he relies upon his own evidence.   That evidence is challenged by Mr Wilson’s claims to the contrary.   A primary issue concerns  the  background  and  substance,  including  representation  claims  that surround the purchase of N Z Hunt Limited’s business.  Each side claims the other is more likely to benefit if the defendant is placed into liquidation.

[18]     The Court is not here to decide the truth of the conflicting claims – rather whether there is a substantial dispute concerning them which should be tested by ordinary process.  It is not just and equitable to allow the liquidation proceeding to continue at this time.

Conclusion

[19]     This is an application to lift a stay of proceedings.  More than that it has, by the papers filed, become an application which asserts there is no proper basis for refusing to allow a liquidation to proceed to the appointment of liquidators.

[20]     It is apparent from the view I have expressed, the parties’ dispute is not appropriate for the Companies Court.  The foundation of Mr Angland’s claim is the breach of the agreement reached on 17 August 2006.  He clearly has the basis for a claim in which the same outcome could be obtained, but which requires prosecution by different process.

[21]     It is apparent from the view I have expressed that the orders made on 18

March by Panckhurst J should remain in force.

Costs

[22]     These are fixed on a Category 2B basis, and are payable to Mr Wilson