Best Invest NZ Company Limited (in interim liquidation) v East Wind Company Limited (in interim liquidation)

[2019] NZHC 1160

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2019-404-000879

[2019] NZHC 1160

UNDER

the Companies Act 1993

IN THE MATTER OF

the liquidation of Japan Business Consulting Company Limited

BETWEEN

BEST INVEST NZ COMPANY LIMITED (IN INTERIM LIQUIDATION)

Plaintiff

AND

EAST WIND COMPANY LIMITED (IN INTERIM LIQUIDATION)

Defendant

CIV-2019-404-000872

BETWEEN

BEST INVEST NZ COMPANY LIMITED (IN INTERIM LIQUIDATION)

Plaintiff

AND

EAST WIND HOLDINGS LIMITED (IN INTERIM LIQUIDATION

Defendant

CIV-2019-404-000873

BETWEEN

BEST INVEST NZ COMPANY LIMITED (IN INTERIM LIQUIDATION)
Plaintiff

AND

EAST WIND NOMINEE COMPANY

LIMITED (IN INTERIM LIQUIDATION)

Defendant

BEST INVEST NZ COMPANY LTD (IN INTERIM LIQ) v EAST WIND COMPANY LTD (IN INTERIM LIQ) [2019] NZHC 1160 [24 May 2019]

CIV-2019-404-000874

BETWEEN

BEST INVEST NZ COMPANY LIMITED (IN INTERIM LIQUIDATION)

Plaintiff

AND

EAST WEST MEDICARE LIMITED

Defendant

CIV-2019-404-000876

BETWEEN

BEST INVEST NZ COMPANY LIMITED (IN INTERIM LIQUIDATION)
Plaintiff

AND

EAST WIND PROGRAMME LIMITED

Defendant

CIV-2019-404-000870

BETWEEN

BEST INVEST NZ COMPANY LIMITED (IN INTERIM LIQUIDATION)
Plaintiff

AND

JAPAN BUSINESS CONSULTING COMPANY LIMITED

Defendant

Hearing:	24 May 2019
Appearances:	R Sussock and T E Bielby for Plaintiffs
Judgment:	24 May 2019

ORAL JUDGMENT OF ASSOCIATE JUDGE P J ANDREW

Solicitors:
Lowndes Jordan, Auckland

Introduction

[1]                 The plaintiffs seek orders for liquidation and the appointment of Messrs Timothy Downes and Michael Moore as liquidators in respect of all six defendant companies.

[2]                 The background to the proceedings is set out in the judgment of Associate Judge Bell of 13 May 2019. The plaintiff, Best Invest NZ Company Limited, and the defendant companies, are related companies under s 2(3)(c) of the Companies Act 1993. Mr Masatomo Ashikaga was the sole director of the plaintiff, Best Invest NZ Company Ltd (in liquidation), and all of the six defendant companies.

[3]                 Mr Ashikaga died on 21 February 2019. Since his death none of the defendant companies has had a director and no steps have been taken to obtain a grant of administration for his estate. As Associate Judge Bell noted in his decision, in the absence of any grant of administration, the shares are presumably vested in the Crown under s 22(1) of the Administration Act 1969. No papers have been filed by the Crown and Ms Sussock advises me that it is unlikely that the Crown is going to take any steps. No-one has taken any steps to appoint a director to replace Mr Ashikaga. He is survived by his widow, Ms Siu Tai Tsai. There is no suggestion that she has any interest in any of the companies or holds any office in them. Because none of the defendant companies have a director, they do not meet one of the critical requirements for a company under s 10 of the Companies Act 1993.

[4]                 I note also that there are related proceedings. In a judgment Ohara v Best Invest NZ Company Ltd,1 I appointed interim liquidators for Best Invest NZ Company Ltd.

[5]                 In his decision of 13 May 2019, Associate Judge Bell dismissed the applications in relation to the following companies:

(a)East Wind Programme Ltd (CIV-2019-404-876);

(b)East Wind Holdings Ltd (CIV-2019-404-872);

(c)East Wind Medicare Ltd (CIV-2019-404-874);

1      Ohara v Best Invest NZ Company Ltd [2019] NZHC 850.

(d)Japan Business Consulting Company Ltd (CIV-2019-404-870).

[6]                 The applications were dismissed by His Honour on the basis that there was insufficient evidence to show that the plaintiff, Best Invest NZ Company Ltd (in interim liquidation), had standing as a creditor to apply for those companies to be put into liquidation. However, leave was reserved to apply again if further information came to hand showing that the plaintiff was a creditor. Now I address the question of the additional plaintiffs in these proceedings.

Proceedings as additional plaintiffs

[7]                 The interim liquidators of Best Invest NZ Company Ltd (in liquidation) say they now have clear evidence that other companies for which they, as interim liquidators have been appointed, namely East Wind Company Ltd (in interim liquidation) and East Wind Holdings Ltd (in interim liquidation) are creditors of some of the companies, the subject of these proceedings.

[8]                 Statements of claim, notices of proceeding and verifying affidavits have been filed (on 21 May 2019) in accordance with r 31.24 of the High Court Rules.

[9]                 I am satisfied on the basis of the further documents filed and the updating affidavit of Mr Timothy Wilson Downes dated 23 May 2019 that the additional plaintiffs have established that they are creditors of the relevant companies and they thus have standing to bring the applications for liquidation.

Advertising

[10]             The liquidation proceedings were advertised on 20 May 2019 as set out in the affidavit of Mr Timothy Downes. The scheduled call of the applications, namely today, is at a much earlier time than would ordinarily be the case. I am satisfied, however, in the circumstances here that there are grounds for abridging time and accordingly I find there is no obstacle in the advertising process to my making liquidation orders today.

[11]             Ms Sussock has referred me to the decision of Associate Judge Gendall in Lines v Wakefield Buildings Ltd.2 I am satisfied that there is proper authority for me to proceed in the manner that I do.

Decision

[12]             I now turn to consider the grounds of the liquidations. I am satisfied that the plaintiffs have established that there are grounds under s 241 of the Companies Act 1993 for placing all six defendant companies into liquidation. The grounds are as follows:

(a)The companies and their boards have persistently or seriously failed to comply with the Act at s 241(4)(b);

(b)The companies do not comply with s 10 of the 1993 Act at s 241(4)(c);

(c)In all the circumstances I find it is just and equitable that all six companies be put into liquidation, s 241(4)(d).

[13]             I note that the Court has received an updating affidavit from Mr Timothy Downes which confirms there are urgent and compelling reasons for the companies to be placed into liquidation as soon as reasonably practicable.

Result

[14]             I make orders therefore placing all six defendant companies into liquidation. In respect of each company, Mr Timothy Wilson Downs and Mr Michael Moore are appointed as final liquidators. I also order that the reasonable costs of the plaintiffs for applying to put the companies into liquidation are to be paid out of the assets of the defendant companies at the rates of remuneration as set out in the consent to act as interim and final liquidators filed in these proceedings and dated 8 May 2019, except that the maximum rates for partners and liquidators is adjusted to $550 per hour exclusive of GST and I note that is in accordance with the judgment of Associate Judge Bell of 13 May 2019. I refer to his paragraph [27](c).

2      Lines v Wakefield Buildings Ltd CIV-2005-441-825, 18 July 2006.

[15]             I also order costs to be paid on a scale 2B basis to the plaintiffs as set out in the six memoranda dealing with costs as filed by Ms Sussock today. The timing of my orders in respect of all six defendant companies is 10.50 am today, Friday, 24 May 2019.

Associate Judge P J Andrew