Birchfield v Birchfield

[2020] NZHC 1516

IN THE HIGH COURT OF NEW ZEALAND GREYMOUTH REGISTRY

I TE KŌTI MATUA O AOTEAROA MĀWHERA ROHE

CIV-2019-418-29

[2020] NZHC 1516

UNDER

the Companies Act 1993

IN THE MATTER

of an application for orders under s 174

BETWEEN

ALLAN JOHN BIRCHFIELD, LEIGH ELLEN BIRCHFIELD, CHRISTOPHER PAUL BIRCHFIELD, PAULETTE MICHELLE BIRCHFIELD and NGAIRE

ELIZABETH BIRCHFIELD, as trustees of the PLC Trust

First Plaintiff

AND

ALLAN JOHN BIRCHFIELD

Second Plaintiff

AND

BIRCHFIELD HOLDINGS LIMITED

First Defendant

continued…

Hearing:

12 June 2020

Appearances:

K G Davenport QC and A M Cameron for Plaintiff

S O Munro and A L Davidson for First to Fourth Defendants
R J Hollyman QC and G K Riach for Fifth to Ninth Defendants

Judgment:

30 June 2020

JUDGMENT OF ASSOCIATE JUDGE LESTER

This judgment was delivered by me on 30 June 2020 at 4.45pm pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar 30 June 2020

BIRCHFIELD v BIRCHFIELD HOLDINGS LIMITED [2020] NZHC 1516 [30 June 2020]

AND

AND

AND

BIRCHFIELD COAL MINES LIMITED

Second Defendant

BIRCHFIELD ENERGY AND RESOURCES LIMITED

Third Defendant

NORTH WEST COAL COMPANY LIMITED

Fourth Defendant

AND

GARY PAUL BIRCHFIELD

Fifth Defendant

AND

KAREN ANNE BIRCHFIELD

Sixth Defendant

AND

EVAN RAYMOND BIRCHFIELD

Seventh Defendant

AND

JOELENE ANNE JAMIESON, KAREN ANNE BIRCHFIELD and STEFFAN

NIGEL JAMIESON, as trustees of the SJC Trust

Eighth Defendants

AND

DONNA JOYCE BIRCHFIELD, EILISH PAULINA BIRCHFIELD and GARY PAUL

BIRCHFIELD, as trustees of the EMB Trust Ninth Defendants

[1]                This proceeding arises from a falling out between siblings who between them own Birchfield Holdings Ltd, the first defendant. In turn, Birchfield Holdings Ltd owns the second, third and fourth defendants.

[2]                The plaintiff, Allan Birchfield (Allan), says his removal as a director of the defendant companies by his siblings is conduct that was oppressive, or unfairly discriminatory, or unfairly prejudicial to  him  in  terms  of  s 174  of  the  Companies Act 1993 (the Act). Allan also complains of other actions of the company and/or his siblings, which I will refer to below.

[3]                Allan seeks to rely on the full flexibility of s 174(2) of the Act and seeks the following orders (assuming he can establish that the conduct he complains about qualifies for relief):

(a)declaring invalid the directors’ and shareholders’ resolutions [removing him as director];

(b)reinstating the second plaintiff as a director of the first to fourth defendants so as to give the first plaintiffs proper representation on the first to fourth defendants;

(c)directing the directors to obtain:

(i)a business plan;

(ii)a full review by a suitably qualified person/company of the companies’ health and safety procedures;

(iii)a review of the companies’ business plan, practices and procedures and a remuneration review of all senior staff; and

(d)to implement such changes as identified in the report(s);

(e)requiring the directors and shareholders or any one of them to pay compensation to the first and/or second plaintiffs (including an account of profits in relation to any inappropriate remuneration/benefits from their positions);

(f)regulating the future conduct of the first defendant’s affairs by…