Arjang v NF Global Limited - [2021] NZHC 903

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2020-404-778

[2021] NZHC 903

UNDER the Companies Act 1993, section 241

IN THE MATTER OF

an application to put a company into liquidation

BETWEEN

MICHAEL MOSHE ARJANG

Plaintiff

AND

NF GLOBAL LIMITED

Defendant

Hearing: 23 April 2021

Appearances:

Shane Campbell and William Porter for the Plaintiff,

ABT Services Ltd, Imperium Trust Company (UK) Ltd, Flarmont LP and Luxcast Ltd (creditors in support)

William Potter (on his own behalf) for Meredith Connell No appearance for NF Global Ltd and Starboard Capital SA

Brian Henry for Mr Oberto (former director of NF Global Ltd) Harriet L Quinlan for Sky Management Ltd

George Bogiatto for LD Drago Met srl Luke Sizer for Eleonora Sport Ltd Jason A Zwi for Giuseppe Zandona

Judgment:

23 April 2021

ORAL JUDGMENT OF ASSOCIATEJUDGE R M BELL

Solicitors:
Wynn Williams (Shane D Campbell), Auckland, for the Plaintiff and four supporting creditors Meredith Connell (W Potter/W Fotherby) formerly for NF Global Ltd and Starboard Capital SA Anthony Harper (Harriet L Quinlan), Auckland, for Sky Capital Management Ltd
George Bogiatto, Auckland, for LD Drago Met srl
Buddle Findlay (Bridie McKinnon/Luke Sizer/S Bisley), Wellington, for Eleonora Sport Ltd (UK) Morrison Mallett (Jason Zwi), Auckland, for Giuseppe Zadona

Copy for:
William L Porter/Jeremy W A Johnson, Bankside Chambers, Auckland, for the Plaintiff Brian P Henry, Auckland, for Mr Oberto (former director of NF Global Ltd)

ARJANG v NF GLOBAL LTD [2021] NZHC 903 [23 April 2021]

[1] After I gave my interim decision, I adjourned the matter to today to give the company and its shareholder the opportunity to pay the debts of the creditors who appeared at the defended hearing.1 No payment has been made. I have received a certificate from the plaintiff’s solicitors that the debt owed to Mr Arjang remains unpaid. Proof of advertising has been provided. There is no reason why a liquidation order ought not to be made now.

[2] Accordingly, I make an order that NF Global Ltd is to be put into liquidation. The time of the order is 12.31 pm. I appoint John Howard Ross Fisk and Marcus James McMillan as liquidators. I approve their rates of remuneration on the normal terms. I record that they are permitted to act as liquidators under the Insolvency Practitioners Regulation Act 2019.

Meredith Connell

[3] Meredith Connell applied for a declaration that they have ceased acting as solicitors on the record for NF Global and its shareholder, Starboard Capital SA. Mr Potter has kindly appeared this morning. I am grateful to him for his appearance. While Meredith Connell are no longer being paid, I requested their assistance to deal with “wash-up” matters. The declaration that Mr Potter has ceased acting for NF Global and Starboard Capital SA will take effect on the close of business on 27 April 2021. That is to allow the liquidation order to be sealed and served on an address for service…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2021] NZHC 903
Decision Date: 23 April 2021

CaseChat Overview and Summary

In the case of Arjang v NF Global Limited, the plaintiff, Michael Moshe Arjang, sought to have the defendant company, NF Global Limited, put into liquidation. The court had to determine whether the company was insolvent and, if so, whether liquidation was the appropriate course of action. The plaintiff and several creditors provided evidence of the company's insolvency and the failure to pay debts. The defendant company and its shareholder did not appear, and no payments were made to the creditors. The court found that the company was insolvent and ordered its liquidation, appointing liquidators and allowing the media access to the court file. The court also addressed the issue of costs, awarding costs to the plaintiff and several creditors on a solicitor/client basis. The plaintiff's costs amounted to $92,732.51, which the court deemed reasonable given the complexity of the case and the need for extensive evidence from overseas. The court also awarded costs to other creditors who had actively supported the plaintiff's claim. The court ordered that the costs be paid out of the company's assets, and also ordered that the shareholder, Starboard Capital SA, pay scale costs from the outset of the proceeding.

The court found that the defendant company's conduct during the litigation was vexatious and abusive, particularly in making unfounded allegations of criminal activity against the plaintiff. The court increased the scale costs against the shareholder by 20% due to this conduct. The court also awarded costs to other creditors who had taken part in the proceeding, including Sky Capital Management Ltd, Eleonora Sport Ltd, and LD Drago Met srl. The court noted that the costs claimed by Eleonora Sport Ltd were higher than those of comparable creditors, but accepted them given the intensity of the work required and the higher amount of the claim. The court awarded scale costs to the other supporting creditors who had entered appearances only for the hearing. Overall, the court's decision was to liquidate the defendant company, appoint liquidators, and award costs to the plaintiff and several creditors.

Orders